Online Personal Loans for Bad Credit
Learn more about applying for a personal loan online with bad credit. When you’re ready to request funding, you can click the “Get Started” button at the bottom of the page.
Your credit score affects many parts of your life including your ability to rent a house or apartment, the cost of your insurance, whether certain employers will hire you, and the affordability of financial products like loans.
The full range of FICO credit scores is between 300 and 850. A bad credit score is anything below 620. These numbers take some factors into account, like your payment history, debts, credit history length, new credit you’ve applied for, and the different types of credit you use.
Credit Options for Those with Bad Credit
If you have a lower score, lenders may view you as a greater risk of defaulting on a loan. With a credit score below 620, it can be difficult to qualify for loans, credit, and financial products. The loans that you do qualify for may come with higher interest rates.
Sample Interest Rates
The interest rates for lenders and lending partners we work with start at 4.84 percent and go up to 35.99 percent. Those who have a bad credit score will be more likely to receive a higher APR. If you take out a loan, the lender will dictate your specific rate in your loan agreement.
Although it can be difficult to get a loan with a bad credit score, some lenders might work with you. Some of the loan products that may be available to you are:
- Personal Installment – A loan for people with bad credit or a short credit history that usually has higher interest and fees than traditional bank loans. However, if you pay it off on time, you might be able to improve your credit score.
- Bank Personal – Loans from your local bank which sometimes have lower interest rates than other types of loans. With bad credit, but these can be a harder to get. Approval for these loans can also be difficult if you are younger and have less experience with debt.
- Peer to Peer (P2P) – Loans that come directly from a company or business, not a bank. Typically done online, these loans sometimes have lower interest rates than bank loans. Qualifying for a P2P loan with bad credit may be difficult.
Raising Your Credit Score
Although having a bad credit score can be discouraging, it is possible to raise it to the level of fair credit, good credit, or even excellent. It might take a few years, but many people successfully repair their credit. Below are a few things that may help your credit score:
- Pay off overdue accounts - Focus on paying those off outstanding bills or accounts.
- Settle collections - Work with creditors to settle issues if there are collections actions against you.
- Pay bills on time - Continue to pay other bills on time, including student loans, credit cards, medical bills, and others.
- Check your credit report - Request a free copy of your credit report, and then review it to make sure it is accurate. If anything is incorrect, file a dispute.
- Be careful with credit cards - Stop using them or limit their use and try to pay off your balance monthly.
- Don’t apply for new credit - Until your score improves, don’t apply for new accounts.
It will take time and effort on your part, but if you put in the work, there is reason to believe that you will be able to improve your credit score.
Checking Your Credit Score
According to the FCRA (Fair Credit Reporting Act), you are entitled to one free annual credit report from each of the three nationwide credit reporting agencies (Equifax, Experian, and TransUnion).
Requests for your free annual reports can be made at annualcreditreport.com. You can also call 1-877-322-8228 or complete the Annual Credit Report Request Form. Some people request a report from a different agency every few months allowing them to get up to three free reports each year.
Credit Monitoring Services
You can also check your credit score with a subscription to a monthly credit monitoring services. For a minimal monthly fee (as low as $10 to $15), the service monitors your score at one, two, or all three major credit agencies. There are both pros and cons to using these services.
One of the main advantages is receiving regular updates. Because of this, you can stay on top of your credit activities and be notified of suspicious activity or errors. On the other hand, although these services alert you to fraud or errors, they cannot prevent them. You might not know until it is too late that someone used your name or SSN to open an account.
Before signing up for a credit monitoring service, you should check and make sure the company charges a reasonable rate. As we mentioned, suitable options exist at around $15 a month. If a company is charging two or three times that amount, you might be able to get their services for less elsewhere.
Request a Loan Through LoanStart
If you are considering taking out a personal loan, you can request a loan through LoanStart.com. To find a lender who can get you the funds that you need, use our free loan connection service today. We work with a variety of affiliate lenders who make loans to all types of borrowers, even those with bad credit. Fill in our form today, and we will do our best to connect you with one of our partners.
There are other types of personal loans, but we don’t recommend all of them. If you need more than $1,000, then don’t sign up for a cash advance. Most states limit the amount you can apply for with a cash advance anyway. Technically, you could combine several cash advances to reach your loan target amount, but the interest would be overwhelming. We recommend that you stick to the three types of loans listed above.
Note: You also should stay away from secured loans. These are loans that require you to offer collateral, such as your house (home equity loan) or car (auto title loan). If you can’t pay off the loan, you lose whatever you offered against it. It’s better to avoid that risk and instead apply for an unsecured loan.
Find a Co-Signer
If you have bad credit, a lender might be more willing to offer you a loan if you have a co-signer. What's a co-signer? It's someone who agrees to pay off your loan for you if you are unable to pay the loan off yourself. This person will need to have excellent credit to make up for your bad credit.
When I purchased my first car, the dealership had a great deal going on: a 1.9-percent interest rate if I financed the car through the company's loan department.
I'd saved up enough to pay in cash, but I wanted to have it financed to boost my credit history.
(Remember, your credit history gets better the more times you prove you can pay off a significant amount of debt, but that's only true if you take the time to pay off the debt. So, if you buy a new car, you should get a loan and make regular payments for at least two-and-a-half years, so it counts as a good credit experience. If you do this, your credit history will get you a lower interest rate when you apply for a mortgage.)
I didn't have any negative marks in my credit history, and my score was pretty high. But I still wasn't qualified for the loan.
They told me that I didn't have enough experience.
The only way I could get the 1.9-percent interest rate was if I had a co-signer. Well, my wife's parents happened to be visiting that weekend, and they had come to the car dealership with me. I didn't want to ask my father-in-law to co-sign, though. I wanted to buy the vehicle on my own.
Still, it made sense to have the car financed. He was willing to co-sign, even though he'd had a bad experience co-signing in the past when he had to pay for the item he'd co-signed, and so we pulled the trigger and got the car financed at the 1.9-percent interest rate.
Chances are if you try hard enough you'll be able to find a co-signer, too.
Work with the Lender
Lenders are a stubborn bunch. You can trust them to try everything in their power to get you qualified for a loan. You just have to be willing to work with them. Here are some tips for when you're dealing with a lender:
- Give them the information they need. We only work with reputable lenders, so you can feel safe giving them your information. We understand that it can be difficult to hand out sensitive information, like your Social Security number.
- Be honest with them. Don't try to hide any big financial mistakes. Remember, they want to sign you up for a loan. They will help you through the process, but they need to have accurate information to do so.
- Go ahead and offer suggestions. If you want to negotiate your rates or suggest adding a co-signer to the loan, then go ahead and do it. They'll let you know what's possible and not possible.
In the case that you find a loan, your lender will offer you a loan agreement. Read over the contract and make sure it includes the price points you expected. Don’t sign it until you have read it thoroughly and agreed with everything in the agreement. You can always call your lender if you have any questions.
How to Save on a Personal Loan
The best way to save on your loan is to pay it off as quickly as you can. The sooner you pay off your loan, the less interest you will pay. First, though, make sure there's no penalty for paying back your loan before the due date. If there’s not, you should pay back your loan as fast as you can.
Your lender will set the fees and interest for your loan. These charges can be affected by state regulations and your credit history. There’s not much you can do about your state laws, but you can bump up your credit score. Improving your credit score will also improve the chances that you’ll get the loan in the first place. A recent Forbes article listed several great tips for improving your credit score.
- Contact the people in charge of your credit score and dispute any errors. The three major credit bureaus are Equifax, TransUnion, and Experian.
- Apply for another credit card. As long as you pay your bills on time, having a couple of credit cards can bump up your credit score.
- If you have more than one credit card, it's smart to spread your debt between the cards. If you max out a credit card, that'll be bad for your credit score. But if you use less than 30-percent of your limit spread across a few credit cards, then you'll likely have a better overall credit score.
- You should also increase your credit limit on all of your credit cards. (Just don't also increase your spending.) This tip helps you in a couple of different ways. When you have a higher limit, it’s easier to stay below the suggested 30-percent usage level. Also, just having a higher credit limit will improve your credit score.
- Grab your phone, call your creditors, and negotiate. Remember, they want money and you want a better credit score. Sometimes they'll offer a compromise, like erasing the accounts that went to collection on the condition that you pay the debt off. If you can't get them on the horn, then we suggest writing them a letter. Forbes says that you should request a "good-will adjustment,” which is pretty much a mulligan for credit mistakes.
Beware of credit repair companies that promise to improve your credit rating by getting negative information taken from your credit report. Most of the time the bad stuff can’t be removed unless it’s old. According to the Credit Repair Organizations Act, it is illegal for these companies to make false promises or bill you before completing their services.
Beware of Bad Loans
It's sad, but not all sites that offer “personal loans for bad credit” actually follow through. Here are a few products that won't help you get a personal loan.
- Avoid refillable debit cards. When you search online for credit solutions for people with bad credit, you're bound to find sites offering refillable debit cards (often branded as credit cards). These will be useless to you. These cards require you to use your money to fill them up. Sometimes they have a monthly fee, upwards of $15. That means you are paying to have a place to keep the money you already have. They might be useful if you need to buy something online and you don't have a credit card. But they won't help you if you require a personal loan.
- Don't bother with low-limit loans. If you need less than $1,000, then you probably shouldn't be applying for a personal loan. In fact, you should be a little wary if a lender offers you a personal loan for less than $1,000. Also, stretching your debt across several low-limit credit cards can be dangerous. If you forget to pay just one payment, your credit score will sink even lower.
- Stay away from scam sites. When you fill out our secure form, we will try to help you find a reputable lender. This free service helps you avoid the Internet's many scam sites. All of our lenders are licensed and allowed to lend money to borrowers. You should never enter your information into a site that doesn't guarantee that their lenders are licensed.
Don’t believe the adage, “Beggars can’t be choosers.” You are allowed to search for the best loan for your circumstances. Try to avoid the unsavory ones. The Federal Trade Commission offers tips on how to recognize an advance-fee loan scam.
Basic Loan Requirements
There are a few basic requirements that you have to meet to be approved for a personal loan with bad credit. They are less strict than you might think. As long as you are at least 18 years old, a U.S. resident with a valid ID and Social Security number can show proof of income and have a bank account; there’s a good chance that you’ll qualify for a personal loan. Of course, we can't guarantee that you will be eligible. We are not a lender, and it's up to the lender to decide how much you'll get or if you'll get anything at all.