The average personal loan amount in the U.S. was $11,548 in Q2 2023. However, sometimes, a smaller loan can make a big difference in helping you cover an unexpected expense. Whether you want funds for medical bills, debt consolidation, or a small home improvement project, a personal loan can help.

“When taking out a smaller loan of $1,000 or less, it can be relatively easy for the average borrower to pay off the loan on time if you’re just a little creative and put in just a little bit of effort,” encourages Brad Reichert, founder and managing director of Reichert Asset Management LLC. “Even with a relatively short repayment period of 12 months, most $1,000 loans require a monthly payment of around $100/month,” Reichert explains. 

While there are several loan options available to help you out when you’re facing financial troubles, they can be hard to access for borrowers with less-than-perfect credit. If you’re looking for $1,000 loans with bad credit, we’ve listed the three best options available right now, along with tips on how to find the best lenders.

Can You Get a $1,000 Loan if You Have Bad Credit?

It can be difficult to get short-term loans for bad credit, but it’s not impossible. Most lenders don’t want to risk lending to borrowers with poor credit scores. The key is to find lenders that require no credit check or ones with a lower minimum credit score requirement.

Keep in mind that you’ll be paying a higher interest rate on $1,000 loans for bad credit compared to traditional personal loans. There also may be additional fees, such as late fees, origination fees, and prepayment penalties. Compare your loan options carefully and make sure you’ll be able to afford repayment.

Top 3 $1,000 Loans for Bad Credit

We compared ten different lenders catering to borrowers with bad credit and selected our top three recommendations based on their minimum credit score requirements, APR ranges, and repayment terms.

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

2. Oportun

Loan amount: $300 to $10,000

APR: 29% to 35.95%

Repayment Terms: 12 to 60 months

Minimum Credit Score: None

3. Universal Credit

Loan amount: $1,000 to $50,000

APR: 11.69% to 35.99%

Repayment Terms: 36 to 60 months

Minimum Credit Score: 560

What To Consider Before Applying for a Bad Credit Loan 

Before you apply for a $1,000 loan for bad credit, it’s important to keep a few things in mind, such as the borrowing costs and the risks involved.  

Bad Credit Loans Cost More

Lending to borrowers with bad credit is a risk for lenders. For this reason, they charge a higher interest rate to compensate. They may also charge additional fees, which can drive up the total cost of borrowing.

For example, the estimated APR for borrowers with bad credit is 22.20%. In comparison, borrowers with good credit pay an estimated APR of 17.00% on personal loans. Be aware of these costs to know if you’ll be able to afford repayment.

Here’s an estimate of how much you’ll pay on a $1,000 loan with a 12-month term based on your credit profile.

Monthly Payment
Bad Credit$93.69
Fair Credit$92.61
Good Credit$91.20
Excellent Credit $89.89

Bad Credit Loans May Be Limited in Loan Amount and Repayment Term

Bad credit loans may also be issued for lower amounts and may be less flexible when it comes to repayment terms. When you have a lower credit score, you’re less likely to qualify for a larger loan amount.

With a lower amount, the repayment term is also likely to be shorter. This means that your monthly installment may be higher. When comparing your loan offers, check to see if the loan payments are affordable and fit in with your income and expenses in both the short-term and the long-term.

How To Find Lenders That Offer $1,000 Loans to People With Bad Credit

There are many lenders that offer bad credit personal loans. These online loans are usually processed quickly, with funding on the next business day. Many of these lenders don’t even require a credit check. Here are a few tips to follow to find the right lenders to work with.

Know Your Credit Score

Start by getting a copy of your credit report from all three credit bureaus (Experian, Equifax, and TransUnion). Check your credit report for any errors and to see what your current score is. This will make it easier for you to identify lenders that are likely to approve your online application.  

Compare Loan Options

Depending on your needs, there are several types of loans you can apply for, such as unsecured loans, secured personal loans, hardship loans for bad credit, car title loans, cash advances, and payday loans.

Learn how each type of loan works, repayment terms, eligibility requirements, average APR, and fees. Select a type of loan you’d like to apply for based on this information.

Prequalify With Multiple Lenders

It’s worth the extra effort and time to prequalify with multiple lenders to find the best possible rate on $1,000 loans for bad credit. It only takes a few minutes, and prequalifying involves a soft credit check, not a hard credit inquiry, meaning that doing so will not negatively impact your credit score.

A pre-qualification will allow you to preview the loan amount, rate, and loan terms you qualify for. This will make it easier for you to compare several loan offers to select the most affordable one.

Determine the Total Cost

Be sure to compare the annual percentage rate (APR) instead of the interest rate offered by different lenders. APRs include the interest rate as well as the applicable fees and charges to provide you with the total and true cost of borrowing for that loan. Calculate the total interest charges and fees you’ll pay over the life of the loan to check if it’s affordable and use the APR percentage to compare it to other loan options on an “apples-to-apples” basis.

Once you determine the total loan cost, review your budget to determine if the payment fits your current financial situation.

Consider a Co-Signer

co-borrower or co-signer can make it easier for you to qualify for a small personal loan and get competitive rates. A co-signer won’t have access to the loan funds, while a co-borrower does. Keep in mind that if you (and your co-borrower, if any) fail to repay the loan, the co-signer will be responsible for making payments on the loan.

Alternatives to $1,000 Loans for People With Bad Credit

Other than the top three $1,000 loans for bad credit we’ve listed above, there are a few other options available for you to consider.

Payday loans are easier to qualify for and provide quick access to cash, but they’re risky because of their extremely high interest rates. Payday lenders may also use predatory lending practices, so it’s best to avoid them. In some states, payday loans are illegal altogether.  A car title loan is another option if you have a fully paid-off car, but this option can also be expensive and risky due to the short repayment term.

If you have a credit card, you can get a cash advance for an emergency. Be sure to check the cash advance rates offered by your credit card provider before you do so.

You may also want to consider borrowing from friends and family as a less risky option. Be sure to discuss the repayment terms, interest rates, and other loan details clearly before you borrow. We also recommend having a written loan contract to avoid misunderstandings later.

$1,000 Loans vs Traditional Loans

Traditional loans usually refer to unsecured personal loans. These are installment loans with a fixed monthly installment and repayment period. Interest rates depend on the borrower’s credit score. For example, borrowers with excellent credit scores (720 to 850) can qualify for an estimated APR as low as 14.21%.

$1,000 loans for bad credit are usually targeted to borrowers with poor credit scores (300 to 629), so they’re usually more expensive at an estimated APR of 22.20%. Loan amounts are smaller, and repayment terms are typically shorter, so monthly installments can be quite expensive.

Get a $1,000 Loan for Bad Credit Today

Finding a $1,000 loan for bad credit can be more challenging compared to when you have a good credit score. The best personal loans and lower interest rates are usually reserved for borrowers with good credit. Explore some of the options we’ve listed in this guide, but know that you’ll likely pay a higher interest rate.

We recommend carefully comparing your options, prequalifying with a few loan lenders, and carefully reviewing your budget to ensure you’ll be able to repay the loan. If you can wait, it’s always better to improve your credit score before applying for a loan to qualify for a better rate.