Best bad credit personal loans of December 2024

Getting a personal loan when you have bad credit or no credit history can be tough. However, some lenders can still work with you, helping you borrow money for emergency expenses including medical bills and auto repairs, refinancing high-interest debt or even consolidating debt payments.

CNBC Select rounded up the top bad credit personal loans, looking at fees, interest rates and flexible repayment options for different credit scores. We tried to prioritize loans with no origination or sign-up fees, but since this list is for borrowers with lower credit scores, many of the loans you see below come with added costs. (Read more about our methodology to see how we chose the best bad credit personal loans.)

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Who's this for? OneMain Financial Personal Loans is a solid contender if you want different options when it comes to the length of the repayment period. OneMain doesn't determine the terms of your loan just based on your credit score and there is no minimum credit score. The company looks at credit history, income, expenses, and if applicable, collateral.

Standout benefits: You can see if you prequalify for a loan without undergoing a hard inquiry. While most personal loans are unsecured, OneMain offers people the option of using collateral to receive better loan terms. Collateral may be trucks, RVs, boats and campers. There are also no early payoff penalty fees.

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Who's this for? Avant Personal Loans can be a good option if you need money in a pinch. If your credit score isn't great, you can still get approved as Avant looks at both your credit score and income. However, most of its customers have a credit score of 600 to 700, according to Avant.

Standout benefits: You can also check if you prequalify without harming your credit score. If you're approved by 4:30 p.m. CT Monday through Friday, you'll receive your funds the next day. You can use the Avant Credit app to manage your account and pay your balance.

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Who's this for? LendingPoint is a good option if you want a loan with a decent APR. While LendingPoint doesn't have the lowest APRs, interest rates start at a relatively low rate of 7.99% to a high 35.99%. When determining eligibility for a loan, LendingPoint considers credit score, loan term, credit usage, loan amount and other factors. Once you provide all the required information, the company will provide you with loan offers in seconds.

Standout benefits: Much like other personal loans, LendingPoint offers pre-qualification so you can check the terms of your potential loan without harming your credit score. LendingPoint will also inform you of the approval decision within seconds of applying. Generally, it will take one business day to receive the funds.

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Who's this for? Upstart is one of the few companies that look at factors beyond your credit score when determining eligibility. It also offers fairly low interest rates. It considers factors like education, employment, credit history and work experience. Generally, you'll need a credit score of about 300 to qualify for a loan, but you can qualify even if you have an insufficient credit history.

Standout benefits: If you want to find out your APR before you apply, Upstart will perform a soft credit check. Once you apply for the loan, the company will perform a hard credit inquiry which will temporarily ding your credit score. Plus, Upstart has fast service  — you'll get your money the next business day if you accept the loan before 5 p.m. EST Monday through Friday. 

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OneMain Financial provides access to credit to nonprime customers — borrowers with less-than-perfect credit. The company advertises products such as unsecured and secured personal loans and credit cards.

Credit required

Minimum credit score isn't advertised, but the company indicates it works with nonprime customers

Loan amounts

$1,000 to $50,000

Loan terms

24 to 60 months

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Avant, formerly AvantCredit, is an online fintech platform with the mission to improve the borrowing experience for middle-income consumers. It provides access to products such as credit cards and personal loans.

Credit required

According to Avant, most customers who receive loans have a credit score of at least 600

Loan amounts

$2,000 to $35,000

Loan terms

24 to 60 months

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LendingPoint is a provider of personal loans that uses proprietary technology to allow more borrowers to qualify for financing. It evaluates data beyond credit scores to assess customers' eligibility.

Credit required

LendingPoint doesn't list a minimum credit score in its eligibility criteria

Loan amounts

$1,000 to $36,500

Loan terms

2 to 6 years

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Upstart is an online lending platform that connects borrowers with lenders using AI technology to provide improved access to credit. The company advertises various types of personal loans, debt consolidation products and car loan refinancing.

Credit required

Credit score of 300 on at least one credit report (but will accept applicants with insufficient credit history)

Loan amounts

$1,000 to $50,000

Loan terms

3 and 5 years

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Here is how lenders classify "fair" and "poor" credit scores:

FICO Score

• Very poor: 300 to 579
• Fair: 580 to 669
• Good: 670 to 739
• Very good: 740 to 799
• Excellent: 800 to 850

VantageScore

• Very poor: 300 to 499
• Poor: 500 to 600
• Fair: 601 to 660
• Good: 661 to 780
• Excellent: 781 to 850

A good credit score starts at 670 on the FICO scale and 661 for VantageScore. Anything over 740 is considered very good, and above an 800 FICO® score (or 781 VantageScore) is considered excellent.

Scores lower than 670, and certainly scores lower than 600, will most likely disqualify you for the most affordable personal loans. But if you're in a pinch, it's not all-out impossible to get a loan with a credit score in the high 500s or low 600s.

Qualifying for a loan if you have bad credit may be tricky but you can take steps to improve your chances of approval, including:

• Checking your credit: While you might already know your credit requires some work, knowing your score can help you weed out personal loan lenders whose credit requirements you aren't likely to meet. Plus, checking your credit report for errors and disputing them might have a positive effect on your scores.
• Pre-qualifying: Pre-qualification can help you determine whether you're likely to be approved for a loan. Additionally, you'll see your estimated loan terms, which will allow you to shop around for the best rates.
• Using a co-signer or co-borrower: If a family member or trusted friend has a good credit score, you can ask them to be a co-signer or co-borrower on your loan. Co-signers have no access to loan funds or payment information but agree to repay the loan if the borrower fails to make payments. Co-borrowers, on the other hand, can access the funds and payment information and are also responsible for the loan and any missed or late payments. Note that if you don't repay the loan as agreed, your co-borrower's or co-signer's credit will be negatively impacted along with yours.
• Adding collateral: You can secure your personal loan by adding collateral. For example, you might be able to pledge your car or money in your savings account as collateral. If you fail to repay the loan, the lender has the right to take your collateral. This makes a secured personal loan risky but also more accessible to borrowers with low credit scores.
• Including additional income: Many lenders allow you to add non-employment income on your loan application, such as Social Security payments, alimony or child support. A higher income can improve your chances of getting approved.

Bad credit might stop you from qualifying for credit products like 0% APR credit cards or low-interest personal loans. If you want to avoid paying high interest rates, you can look into the following alternatives:

• Peer-to-peer (P2P) loans: P2P loans are offered by individual investors rather than financial institutions. These lenders might be more willing to work with borrowers with lower credit scores and offer lower interest rates.
• Life insurance policy loan: If you have life insurance, you can borrow from its cash value using your policy as collateral. Typically, this type of loan doesn't require a credit check and might offer more favorable terms than a personal loan.
• 401(k) loan: You may be able to borrow money from your workplace retirement account. You'll have to repay it with interest, but the interest will go back into your 401(k) account along with balance payments. This type of loan also usually doesn't have a minimum credit requirement. Note, however, that a 401(k) loan should be one of the last resort options as the money you borrow from your retirement account loses the potential to keep growing over time, decreasing your future retirement savings.

A secured loan is a loan backed by collateral. The most common types of secured loans are mortgages and car loans, where the collateral is your home or car. But really, collateral can be any kind of financial asset you own. And if you don't pay back your loan, the bank can seize your collateral as payment. A repossession stays on your credit report for up to seven years.

An unsecured loan requires no collateral, though you're still charged interest and sometimes fees. Student loans, personal loans and credit cards are all examples of unsecured loans.

Since there's no collateral, financial institutions give out unsecured loans based in large part on your credit score, income and history of repaying past debts. For this reason, unsecured loans may have higher interest rates (but not always) than a secured loan.

Potential borrowers should always carefully consider the type of loan they're seeking as well as the loan terms. While bad credit personal loans can be a great tool if used wisely, there are still some advantages and disadvantages to consider.

Pros

• You gain access to an unsecured personal loan. These types of loans can give you the financial flexibility to see you through a rough patch or cover an emergency, provided you manage the debt with care.
• You can (sometimes) get a lower rate with a co-signer. Some lenders specializing in borrowers with bad credit will let you take on a co-signer to improve your qualification chances. A co-signer may also help you get better interest rates.
• You can potentially improve your credit score. Paying back your loan on time each month can also help improve your credit score since payment history accounts for 35% of it.

Cons

• Applying for a new loan can temporarily lower your credit score. Because the lender will perform a hard credit check on you, your credit score will take a small dip. This is temporary and practicing positive credit habits will help you raise your credit score.
• You may get a high rate. Typically, lenders offer the lowest interest rates to individuals with higher credit scores. So if you apply with a low credit score, be prepared for higher interest rate offers.
• You may only qualify for a small loan amount. Many lenders consider your credit score when determining the loan amount to offer you. If you need significantly more money, you may have a hard time qualifying for a larger loan with a low credit score.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal loan list is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best bad credit loans.

To determine which personal loans are best for bad credit, CNBC Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions. We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.

When possible, we chose loans with no origination or sign-up fees, but we also included options for borrowers with lower credit scores on this list. Some of those options have origination fees.

When narrowing down and ranking the best personal loans, we focused on the following features:

• Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan's term, which means your monthly payment won't vary, making your budget easier to plan.
• Flexible minimum and maximum loan amounts/terms: Each lender provides more than one financing option that you can customize based on your monthly budget and how long you need to repay your loan.
• No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
• Streamlined application process: We considered whether lenders offered same-day approval decisions and a fast online application process. 
• Customer support: Every loan on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
• Fund disbursement: The loans on our list deliver funds promptly through either an electronic wire transfer to your checking account or in the form of a paper check. Some lenders (which we noted) offer the ability to pay your creditors directly.
• Autopay discounts: We noted the lenders that reward you for enrolling in autopay by lowering your APR by 0.25% to 0.5%.
• Creditor payment limits and loan sizes: The above lenders provide loans in an array of sizes, from $1,000 to $100,000. Each lender advertises its respective payment limits and loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be for such an amount.

The rates and fee structures advertised for personal loans are subject to fluctuate in accordance with the Fed rate. However, once you accept your loan agreement, a fixed-rate APR will guarantee your interest rate and monthly payment will remain consistent throughout the entire term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To take out a loan, many lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

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