bad Credit

Bad Credit Loans of December 2022

Bad Credit Loans of December 2022
Written by Publishing Team

Final verdict

Contrary to what many people think, there are many loan options available to individuals with bad credit. For this reason, it is important to compare all options rather than turning to a predatory payday lender when emergency expenses arise. In many cases, a more expensive solution may be available, even if you have bad credit.

We chose Avant as the best overall personal loan for bad credit because you can borrow up to $35,000 with a repayment period of up to 60 months. In addition, Avant uses a facilitated credit check to determine the loan options available to you, which means you can see if you qualify without compromising your credit score. Furthermore, loan funds can be deposited into your account as soon as the next business day.

Compare the best bad credit loans

the lender April range Minimum loan amount Maximum loan amount Conditions Recommended credit score
Before Best online loan 9.95% – 35.99% 2000 dollars $35,000 24-60 months 600+
First Tech Federal Credit Union Best loan amount Starts at 6.7% 500 dollars $50,000 24 to 84 months 580+
Naval Federal Credit Union Best for Small Loans and Veterans 7.49% -18.00% $250 $50,000 up to 60 months 580+
Lending Point Best personal loan after bankruptcy 9.99% – 35.99% 2000 dollars $36,500 24-60 months 585+
OneMain Finance Best personal loan experience 18% – 35.99% 1500 dollars $20,000 24-60 months 580+
PenFed Credit Union Best credit union starting from 4.99% 600 dollars $50,000 up to 60 months 580+
missile loans Best for quick financing 5.97%–29.99% 2000 dollars $45,000 36 or 60 months 580+
LendingClub Best Peer-to-Peer Lending 7.04%-35.89% 1000 dollars 40 thousand dollars 36 or 60 months 600+
Development Best personal loan with co-signer 5.94% – 35.97% with automatic payment 1000 dollars $50,000 24 – 84 months 620+
local credit unions Best alternative payday loan up to 28% $ 200 up to $1,000 1 – 6 months
Loan amounts, annual interest rate, and repayment period may vary depending on the purpose or type of the loan.

What are bad credit loans?

Bad credit loans are financing options offered to individuals with low credit scores of 669 or less. Although there are many types of bad credit loans, the most common are unsecured personal loans. Unsecured personal loans for bad credit often carry monthly repayment terms of no more than two to seven years at a fixed interest rate. In addition, this type of bad credit loan is obtained quickly, as many lenders offer next day financing.

What are the types of loans for bad credit?

Before choosing a loan for bad credit, it is essential to understand the types of loans you may be able to get, what it takes to qualify, and how much it will cost. Just because bad credit doesn’t mean you can’t get financing. Be sure to look for a lender with transparent pricing and reasonable repayment terms that will allow you to repay the balance in no more than five to seven years. The types of loans available for bad credit vary based on why you need the money, just like any other loan. Some of the most common types of bad credit loans include:

  • Secured Loans: There are many loans secured for bad credit, including mortgages, auto loans, home purchase loans, and equity lines of credit. A secured bad credit loan is suitable if you need to use the money to buy a car or house, or if you want to use the money to repair or improve your home. Secured loans are usually the least expensive type of bad credit loan because they are backed by collateral.
  • Unsecured Loans: Many lenders offer unsecured personal loans for bad credit, including banks, credit unions, online alternative lenders, and peer-to-peer (P2P) lenders. You will not need to provide any collateral for this type of loan (for example, your car or house), and these loans are usually repaid in no more than two to seven years. However, since there are no collateral, an unsecured loan is often more expensive than a secured loan.
  • credit cards: There are many different credit cards for bad credit. Some of these credit cards come with features to help you rebuild your credit. This type of bad credit loan can come in handy if you need to have a credit card on hand that you can pay off in full every month. Keep in mind that the APR on credit cards is usually high, and so you should do your best to pay off the balance as quickly as possible to avoid high borrowing costs.
  • cash advances: If you need cash, many credit card issuers offer cash advances so you can access the cash you need quickly. Banks and other alternative online lenders sometimes offer short-term cash advance loans. Cash advances are more expensive than secured or unsecured personal loans and often carry very high interest rates.

Keep in mind that payday loans come with very high interest rates, which makes them risky loans that are very difficult to pay off. It’s easy to fall into a cycle of using payday loans. For these reasons, it is best to avoid payday loans and look for another financing option.

How to choose a loan for bad credit?

Before choosing a bad credit loan, it is necessary to consider why you need money, how quickly you can pay off the debt, what you can afford, and how quickly you can ask for money. Some additional details about the things you need to consider when choosing a loan for bad credit are:

  • Why do you need a loan: The first thing to consider when looking for a loan is why you need the funds. One of the main reasons for this is that the type of loan that is right for you largely depends on how you use the money. For example, if you want to buy a car, then a secured loan is right for you. In contrast, if you need to repair your car and do not want to use it as collateral, an unsecured loan is the best option.
  • How quickly will the loan be repaid: Once you have determined why you need the funds, the next step is to figure out how quickly you will be able to pay the money back. The faster you can pay off the money you borrow, the less the monthly interest fee will cost. For example, if you can pay for a car repair after getting your next paycheck, a credit card might make sense. However, if you think that it will take you a year or two to pay for repairs, an unsecured personal loan for bad credit will be a better option.
  • How much can you afford: It is not only important to determine how quickly to pay off the loan, but also to think about how much you can afford. This can be done by making a monthly budget that includes all the money you earn and spend. If you don’t know how to budget, a credit counselor is an excellent place to get help. Credit counseling agencies may be able to offer this type of financial education for free.
  • When you need the money: Finally, it’s important to think about when you need the funds. While you may be able to get paid quickly in some cases (for example, many unsecured personal loans offer next-day financing), this is not always the case. For example, it may take 45 to 60 days or more to finance a home loan. To the extent possible, plan ahead to ensure that you are able to get the financing you need when you need it.

How do you know what credit score range you are in?

  • Excellent Credit: 800-850
  • Very good credit: 740 – 799
  • Good credit: 670-739
  • Fair Credit: 580 – 669
  • Poor credit: less than 580

What interest rate can I expect if I have bad credit?

As a reminder, when you have a FICO score of less than 670, you are considered a high-risk borrower. If your FICO score is less than 580, your score falls into the “very poor” range.

Each lender sets its own criteria (including credit score thresholds) for loan approval and pricing. This makes it difficult to accurately predict what annual percentage rate (APR) you will be offered for a personal loan if you have bad credit. Interest rates on personal loans can range from around 4.99% to 36%. If your credit rating is poor, you should expect a quote on the higher end of this scale.

You may also come across lenders who promise “secured approval” or “no credit checks” for personal loans for bad credit. Such promises should be a red flag. Legitimate lenders never give these guarantees, according to the Federal Trade Commission, or even say you’re likely to qualify for a loan before you apply.

Where can I get a personal loan with bad credit?

Getting a personal loan with bad credit can be a challenge. However, you may find many lenders willing to do business with you (albeit usually at a higher interest rate). If you are looking for personal loan options with bad credit, there are two main loan sources that you may want to consider.

  • Online personal loans for bad credit: Online lending networks take your loan application and connect you with lenders who may be willing to approve you for a personal loan. Oftentimes, you can submit one prototype and compare offers from several lenders.
  • Direct Lenders for Bad Credit Personal Loans: Direct personal loans come directly from the approved financial institution. This may include local banks, credit unions, online banks, and direct online lenders. If you have bad credit, it is generally best to apply only with direct lenders who are willing to do business with credit-challenged borrowers.

You can find a collection of the best personal loans for bad credit from both types of sources in the above guide.

Personal Loans Vs. loan payday

When you have poor credit, it may be easier to qualify for small payday loans. But they come at a very high cost. The average annual percentage rate for a typical two-week payday loan of $100 is roughly 400%, according to the CFPB.

If you qualify for a personal loan with bad credit, you may be able to borrow money at a reasonable cost instead of using a payday loan. Even an interest rate near 36% — the upper end of the range for most personal loans — costs significantly less than the average fee a payday lender would charge.

In addition, many local credit unions now offer alternative payday loans (PALs). These loans may help borrowers with poor access to credit with affordable short-term financing. The maximum interest rate on PAL is 28%.

Personal Loans Vs. Personal Installment Loans

In most cases, a personal loan and a personal installment loan are one and the same. Although it is possible to get a personal line of credit (LOC) when you need to borrow money, a LOC is a revolving account. Most financial experts will not classify a LOC as a personal loan. (Also, if you have poor credit, you may have a hard time qualifying for a LOC.)

Installment loans, like personal loans, get their name because of the way they work. You borrow a fixed amount of money and repay the money you borrow (plus interest and fees) in fixed payments or installments to the lender. If the lender reports the account to the credit bureaus, the personal loan will generally appear on your credit reports as an installment account.

Personal Loans Vs. Peer to Peer Loans

A peer-to-peer (P2P) loan is another way to borrow money similar to a traditional personal installment loan. If you qualify for a P2P loan, the money you borrow is not necessarily issued by a bank or lender. Instead, the money is usually lent to you by an investor or group of investors. Like personal loans, many P2P lenders will report your account to credit bureaus. Additionally, you may need a credit score of 600 or higher to be approved (although each P2P network and investor may have its own approval criteria).

To apply for a P2P loan, you will need to apply through a website that connects potential borrowers with potential investors. However, before you commit (or even apply), you should do some research. It is wise to learn more about the rates, fees, and terms that may be offered to you and compare them with your other available options. Although P2P loans can sometimes feature more relaxed approval criteria than traditional bank loans, you may encounter higher interest rates and fees as a trade-off.


We collected over 25 data points from over fifty lenders before settling on our list of the best personal loans for bad credit. Some of the most important factors we took into account included the interest rates, fees, loan amounts, and repayment terms offered by each lender. In addition, we assessed the reputation of all the lenders on our list by reviewing a variety of sources.

All bad credit personal loans we have selected are from reputable lenders who offer transparent rates and terms.

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Publishing Team

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