5 Best Bad Credit Loans of 2024

Getting a loan when you have no credit history or bad credit can be challenging. However, you can get a bad credit loan from a lender that specializes in working with borrowers with less-than-perfect credit histories. 

Lenders prefer working with borrowers with a higher credit score because they’re more likely to repay the loan on time. Regardless of which lender you choose, be sure to compare your options because many of these loans come with higher interest rates and fees.

In this guide, we provide you with a list of the five best bad credit loans of 2024, as well as tips on how to compare the loans before you sign the agreement.  

Can You Get a Loan When You Have Bad Credit?

If you’re wondering, “How do I get a loan with bad credit,” know that there are options available for borrowers of all credit profiles. Even if you have a poor credit score, usually 579 or less, getting a loan is possible.

In most cases, these are unsecured personal loans with fixed interest and monthly payments. However, you can also boost your chances of getting approved if you apply for a secured loan.

Bad Credit Loans vs Traditional Loans

Before you apply for a bad credit loan online, it’s important to understand how they’re different from traditional loans. Loans for people with bad credit are available for those with a credit score of 579 or less.

Although you can get several types of loans with bad credit, unsecured loans are the most common. There’s no collateral, and you’ll have a fixed monthly payment for a predetermined term. However, when compared to traditional loans, you’ll generally pay higher APRs and fees on unsecured loans for bad credit.

Qualifying for traditional loans is usually difficult because they’re targeted to borrowers with good or excellent credit.

What Are the Risks of Bad Credit Loans?

Before you apply for a loan online with bad credit, it’s important to know that there are a few risks involved. Weigh your options carefully and be sure to borrow only as much as you need because these loans can be expensive.

Likelihood of High Interest Rates

Bad credit loan lenders take on significant risk when lending to borrowers with lower credit scores. To compensate, they charge higher interest rates. In many cases, these loans also come with fees and penalties, including origination fees, late payment fees, prepayment penalties, and processing fees.

You’ll need a clear understanding of how these loans work and the terms you should avoid so as to ensure the total loan cost is not unaffordable.

“Make sure you read about all fees associated with these types of loans before deciding to take one.,” warns Teresa Dodson, debt expert and founder of Greenbacks Consulting. “You have to look out for more than just high interest rates,” says Dodson.

Potential Credit Score Damage 

While it’s tempting to get easy loans for bad credit, the high costs may sometimes make monthly payments unaffordable. If you fail to make payments on time, you’ll have to pay a late fee, and your credit score can suffer.

If you find yourself stuck with an expensive loan that you can’t repay and default, the credit score damage can be significant. Recovering your creditworthiness can take years, and it may be difficult to qualify for new credit.

5 Best Bad Credit Loans of 2024

If you’re wondering, “Where can I get a loan with bad credit,” we’ve put together a list of the five best loan companies for bad credit for 2024.

1. Upstart

• Loan amount: $1,000 to $50,000
• APR: 6.40% to 35.99%
• Repayment Terms: 36 to 60 months
• Minimum Credit Score: 300
• Best For: Borrowers with thin or no credit history

2. Upgrade

• Loan amount: $1,000 to $50,000
• APR: 8.49% to 35.99%
• Repayment Terms: two to seven years
• Minimum Credit Score: 600
• Best For: Loans with longer repayment periods

3. Avant

• Loan amount: $2,000 to $35,000
• APR: 9.95% to 35.95%
• Repayment Terms: 12 to 60 months
• Minimum Credit Score: 580
• Best For: Loans with quick funding

4. OneMain Financial

• Loan amount: $1,500 to $20,000
• APR: 18% to 35.99%
• Repayment Terms: 24 to 60 months
• Minimum Credit Score: 500
• Best For: Secured loan options

5. Best Egg

• Loan amount: $2,00 to $50,000
• APR: 8.99% to 35.99%
• Repayment Terms: three to five years
• Minimum Credit Score: 600
• Best For: Debt consolidation loans

How We Chose the Best Loans for Poor Credit

We reviewed over 12 online loan companies for bad credit to determine the five best options available to borrowers in 2024. We prioritized online loans for bad credit based on the following criteria:

• Loans that are easily accessible, offer funding within one or two business days and are available in most parts of the country were prioritized.
• Lower minimum credit score requirements and eligibility requirements were ranked higher.
• Quick loan approvals and fast funding were two important criteria we considered. We prioritized online lenders offering same-day or next-business-day approvals.
• Lenders with an online application process for pre-approved loans with bad credit were prioritized.
• We ranked financial institutions offering fewer fees, lower interest rates, and flexible repayment terms higher on our list.
• We also considered each lender’s online reviews, customer service options, and reputation.    

Types of Loans for Bad Credit

If you’re looking for online loans with bad credit, your options are not limited just to unsecured personal loans. Here are a few other options you may want to consider.

Secured Loans

If you have an asset, such as a car, savings account, or home, you can offer it as collateral to get a secured loan for bad credit. These installment loans are easier to get since they’re less risky for lenders. You may also be able to get better loan rates on them compared to unsecured loans.

Unsecured Loans

Unsecured loans don’t require collateral, but lenders will evaluate your credit history, debt-to-income ratio, and income to determine eligibility. Unsecured loans are widely available and easy to find but may cost you more if your credit score is low.

Joint Personal Loans

If you’re unable to get approval due to a low credit score, consider asking a family member or friend to be a co-signer. A bad credit loan with a co-signer may be easier to qualify for if the co-signer has a good credit score.

Keep in mind that if you fail to make payments on the loan, the co-signer will be responsible for repayment.

Payday Loans

Payday loans don’t usually require credit checks, so they’re usually attractive for borrowers who need an urgent loan for bad credit. However, lenders may sometimes charge interest rates as high as 400%.

It’s also easy to get trapped in a debt cycle with these loans because of the shorter repayment term, which is when you get your next paycheck.

Cash Advances

If you’re looking for bad credit loans no credit check, another option is a cash advance. These are short-term loans that you can withdraw against your credit card’s balance. Keep in mind that cash advance fees are quite high, so you should only use this option if it’s an emergency and you have no other options available.

Car Title Loans

If you own your car outright, you can get a car title loan against it, which is typically up to 50% of the car’s value. These loans usually have a shorter repayment period of around 30 days, and the interest rates can be high, so it’s best to do your due diligence before you sign the loan agreement.

Home Equity Loans

If you’re a homeowner, you may be able to cash out the equity in your home with a bad credit home equity loan. You may be able to borrow up to 80% of your home’s value but know that your home is collateral. If you default on the loan, you risk losing your home.

Student Loans

If you need funds to pay for college and have bad credit, you may be able to qualify for a student loan for bad credit. Some lenders may also allow you to use a personal loan toward education. Check to see if the lender has any deferment or forbearance programs available.

How To Compare Bad Credit Loans

When looking for online loans for bad credit, you’ll likely find many options and lenders. However, not all loans are the same; some may come with very high borrowing costs. Here’s how to compare your loan offers:

• Search “bad credit loans near me” online and make a list of lenders that offer the type of loan you’re looking for based on your financial needs.
• Compare the annual percentage rate (APR) offered by different lenders instead of the interest rate. The APR includes the interest rates as well as any additional fees.
• Read reviews of the lenders you’ve shortlisted.
• Compare the loan terms offered by the lender. A shorter repayment term can make your monthly payments higher, but you’ll pay less in interest over the life of the loan.
• Check to see if the lender offers an option to prequalify online.

Weigh Your Bad Credit Loan Options Carefully

If you’re wondering how to get a loan with bad credit, consider the options we’ve outlined in this guide. While your credit score is important, it’s not the only criterion that lenders consider.

You’ll still be able to get fast loans with bad credit, but you may have to pay higher interest rates and fees. We recommend avoiding predatory lending products like payday loans and doing your research to ensure you’re working with a reputable lender and can afford the loan payments.

Once you compare the best personal loans and borrow funds, use it as an opportunity to build credit. Set up autopay to ensure you don’t miss any payments. Your payment history will be reported to the credit bureaus, and in time, you’ll be able to improve your FICO score with on-time payments.