Best Personal Loans for Bad Credit
A low credit score doesn't make you a bad person, and it shouldn't lock you out of every financial option. Life happens — medical bills, job loss, a divorce, or simply not having anyone teach you about credit when you were younger. Whatever brought you here, the fact that you're researching your options instead of turning to predatory lenders is already a smart move.
We've reviewed dozens of lenders to find those that genuinely serve borrowers with credit scores of 580 and below. These aren't consolation prizes — they're real financial products with competitive terms for their category, from lenders who've built their business around helping people in your situation.
The rates will be higher than what someone with a 750 score would get. That's the honest truth, and any site that tells you otherwise is misleading you. But higher doesn't mean unreasonable, and every on-time payment you make is a step toward the credit score you want.
Before you apply: what you need to know
Your score matters, but it's not everything. Lenders also look at income stability, debt-to-income ratio, and employment history. A 560 score with steady income and low existing debt can outperform a 620 score with three maxed-out credit cards.
Pre-qualify before you apply. Every lender below offers soft-pull pre-qualification. Use it. Check your rates with 3-4 lenders before committing to a full application. This protects your score and gives you real numbers to compare.
Watch out for origination fees. With bad credit loans, origination fees of 3-10% are common. On a $5,000 loan with a 6% fee, you receive $4,700 but owe $5,000. Factor this into your true cost calculation.
Our picks for bad credit borrowers
Ranked by overall value for borrowers with scores below 620. We weigh approval accessibility, total loan cost, and credit-building potential.
The honest guide to getting approved with bad credit
Getting approved for a personal loan with bad credit isn't about tricks or hacks — it's about presenting the strongest possible application to lenders who are already designed to work with your credit profile. Here's what actually moves the needle:
1. Know your actual score before you start
Not the range, not the estimate — your actual FICO score from each bureau. You can get free reports at AnnualCreditReport.com and free scores through most banks and Credit Karma. Why this matters: a borrower at 579 faces very different options than one at 620, and many people are surprised to find their score is higher (or lower) than they assumed. Also review your reports for errors — about 25% of consumers have material errors that could be dragging down their score. Disputing inaccurate late payments or collections can boost your score within 30-45 days.
2. Don't apply to the wrong lenders
This is the most common and most damaging mistake. Applying to a lender like LightStream (minimum 660) with a 550 score doesn't just get you rejected — it generates a hard inquiry that temporarily lowers your already fragile score. Every point matters at this level. Stick to lenders that explicitly state they serve your credit tier: Avant, Upgrade, Best Egg, Universal Credit, and Upstart are all realistic options for sub-600 scores.
3. Strengthen what you can control
If you're not in an emergency and can wait 30-60 days before applying, use that time wisely. Pay down credit card balances below 30% of their limits (utilization drops are reflected quickly). Don't close old accounts — length of credit history helps. Become an authorized user on a responsible family member's card. And make sure every bill is paid on time for those two months. These small moves won't turn a 520 into a 720, but they could push you from 570 to 610, which opens significantly better options.
4. Consider a co-signer or secured loan
A co-signer with good credit can dramatically improve your rate and approval odds. Upgrade, SoFi, and LendingClub all offer co-signed loans. The catch: your co-signer is equally responsible for the debt, and a missed payment damages both your credit scores. Only go this route if you're confident in your ability to repay. A secured loan — where you pledge a savings account, CD, or other asset as collateral — is another strong option. Best Egg offers secured personal loans that often come with significantly lower APRs than their unsecured equivalents for the same credit profile.
5. Borrow less than the maximum
When a lender approves you for $15,000, it's tempting to take the full amount. Resist that urge. Borrow exactly what you need, and not a dollar more. With bad-credit APRs, the interest cost on that extra cushion is substantial. A $10,000 loan at 28% APR over 3 years costs about $4,800 in interest. At $15,000, that jumps to $7,200. The extra $5,000 costs you $2,400 in interest alone. Calculate your actual need, add a modest buffer, and stop there.
Using a personal loan to rebuild your credit
Here's something most people don't realize: a personal loan can actually be one of the fastest ways to improve a bad credit score. Credit scoring models reward what's called “credit mix” — having different types of credit (revolving accounts like credit cards, and installment loans like personal loans). If your credit history is mostly credit cards, adding an installment loan can boost your score even before you make the first payment.
Then, every on-time monthly payment builds positive history. After 12 months of consistent payments, many borrowers see score increases of 40-80 points. After 24 months, borrowers who started in the 550 range often find themselves above 650 — a threshold that unlocks much better rates for their next financial need.
The key is to set up autopay on the day your paycheck hits, so there's zero chance of missing a payment. One missed payment on a thin credit file can undo months of progress. Most lenders on this page offer autopay, and some (like Upgrade) give you a rate discount for enrolling.
Red flags: loans to avoid
Bad credit makes you a target for predatory lenders. Watch for these warning signs:
- “Guaranteed approval” claims. No legitimate lender guarantees approval. If they don't check your ability to repay, it's because the terms are so punishing they profit regardless.
- Upfront fees before funding. Legitimate origination fees are deducted from loan proceeds. If someone asks you to wire money, send gift cards, or pay a “processing fee” before receiving your loan, it's a scam. Full stop.
- APRs above 36%. Most consumer advocacy groups consider 36% the upper boundary of reasonable lending. Many states cap personal loan APRs at this level. If you're being offered more, explore other options first.
- Balloon payments or short terms. A loan that requires you to pay off the entire balance after 30-60 days is a payday loan in disguise. Real personal loans have installment terms of 2-7 years.
Ready to check your options?
Pre-qualify in 2 minutes. Soft credit check only — your score won't be affected.
See My Pre-Qualified RatesRelated Categories
Frequently Asked Questions
Lauren Vasquez is a Certified Financial Planner with over 12 years of experience in personal lending and consumer finance. She spent eight years as a senior loan officer at Wells Fargo before joining Fast Loan Express to help everyday borrowers cut through the noise and make smarter decisions.
Read Lauren's articles →