Best Personal Loans for Bad Credit for May 2022 – CNET

LendingClub is a digital lender that offers credit card consolidation loans, balance transfer loans, debt consolidation loans and home improvement loans. It has a minimum credit score requirement of 600, making its loans accessible to those with below average credit. LendingClub does charge late fees.
Upgrade is a 100% online neolender (an online only lender) that can be used for credit card refinancing, debt consolidation, home improvement and major purchases. Upgrade might not have the lowest APR relative to other neolenders, but it does make loans available to those with poor credit history. Upgrade also offers a 0.5% discount for users who opt for autopay.

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Upgrade

APR: 5.94% to 35.97%
Loan amount: $1,000 to $50,000
Loan terms: 24 to 84 months
Time to receive funds: 1 business day
Prequalification: Yes
Origination fee: 2.9% to 8%.
Co-signer/joint applicant option: Joint applicant
Prepayment penalty: No
Minimum credit score: Not disclosed

What is prequalification?

Trying to secure a personal loan but worried your credit score (or lack thereof) will bar you from one? Personal loans are a great option if you need a loan to consolidate debt, finance home improvements, pay for a medical emergency or cover larger expenses. Although it can be difficult to be approved for a personal loan if you have a low credit score or limited credit history, there are several good options to get the cash flow you need.

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Upstart

APR: 5.35% to 35.99%
Loan amount: $1,000 to $50,000
Loan terms: 36 and 60 month loans
Time to receive funds: 1 business day
Prequalification: Yes
Origination fee: 0% to 8%
Co-signer/joint applicant option: No
Prepayment penalty: No
Minimum credit score: No minimum requirement

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A personal loan consists of funds usable for any purpose except educational expenses or investments. They’re mostly to consolidate debt, finance home improvements or pay for family-related expenses or emergencies.

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Happy Money

APR: 5.99% to 24.99%
Loan amount: $5,000 to $40,000
Loan terms: 24 to 60 months
Time to receive funds: 2 to 5 days
Prequalification: Yes
Origination fee: 0% to 5%
Co-signer/joint applicant option: No
Prepayment penalty: No
Minimum credit score: 550

Prequalification is offered by many lenders to allow potential applicants to view their payment plan, interest rates and monthly payment prior to actually submitting an application for the loan. Prequalification requires a soft credit pull, through which lenders view a limited portion of your credit history. Notably, a soft credit pull will not have any impact upon your credit score.

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LendingClub

APR: 7.04% to 35.89%
Loan amount: $1,000 to $40,000
Loan terms: 36 or 60 month terms
Time to receive funds: 2 days
Prequalification: Yes
Origination fee: 3% to 6%.
Co-signer/joint applicant option: Joint applicant
Prepayment penalty: No
Minimum credit score: 600

There are two types of personal loans: An unsecured loan allows you to borrow money and pay it back at regular intervals at a fixed interest rate. A secured personal loan requires you use an asset as collateral in order to access funding. Unsecured loans are viewed as riskier, and so will likely have a higher interest rate. Personal loans are generally unsecured.
Keep in mind that the majority of lower rates will go to users who want smaller loans under ,000. Upgrade also charges late fees, and its origination fees are on the higher end (ranging up to 8%).

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LendingPoint

APR: 9.99% to 35.99%
Loan amount: $2,000 to $36,500
Loan terms: 24 to 60 months
Time to receive funds: 1 business day
Prequalification: Yes
Origination fee: 0% to 6%
Co-signer/joint applicant option: No
Prepayment penalty: No
Minimum credit score: Not disclosed

What is a personal loan?

Best personal loans for bad credit lenders, compared

	Upgrade	Upstart	Happy Money	LendingClub	Lending Point
Best for	Best Overall	Borrowers with limited credit history	Credit card debt	Joint applicants	Next day funding
APR	5.94% to 35.97%	5.35% to 35.99%	5.99% to 24.99%	7.04% to 35.89%	9.99% to 35.99%
Loan amount	$1,000 to $50,000	$1,000 to $50,000	$5,000 to $40,000	$1,000 to $40,000	$2,000 to $36,500
Term lengths	24 to 84 months	36- and 60-month loans	24 to 60 months	36- or 60-month terms	24 to 60 months
Time to receive funds	1 business day	1 business day	2 to 5 days	2 days	1 business day
Prequalification	Yes	Yes	Yes	Yes	Yes
Origination fees	2.9% to 8%	0% to 8%	0% to 5%	3% to 6%	0% to 6%
Co-signer/joint applicant option	Joint applicants	No	No	Joint applicants	No
Minimum credit score	Not specified	No minimum requirement	550	600	N/A

FAQs

LendingClub is a great option for those who want to apply with a joint applicant: If you don’t have long-standing credit history, or if your credit score is too low for you to apply, you can ask someone with good or excellent credit history to act as a co-borrower. As a co-borrower, they would hold equal ownership of the loan and equal responsibility for paying back the loan.

What is a ‘low’ credit score?

Upstart charges late fees and relatively high origination fees, in addition to a fee for every requested paper copy of your loan agreement. Upstart does not offer loans to West Virginia or Iowa residents.

LendingPoint is open to borrowers with fair credit. It also requires a minimum annual income of ,000. It’s a great option for borrowers who need funds fast but don’t want to apply for a payday loan. LendingPoint may charge late fees.

There are a few different credit scoring models. FICO scores dictate that a ‘very poor’ score is in between 300 and 579 and a ‘fair’ score is between 580 to 669, while VantageScore dictates that a ‘very poor’ score is between 300 and 499, a ‘poor’ score is between 500 and 600 and a ‘fair’ score is between 601 and 660.
An origination fee is a one-time, loan processing fee. It is a percentage of your total loan: A loan of ,000 with a 5% origination fee will require you to take out ,500.

The factors that determine your origination fee amount and APR are the same that determine your eligibility for a personal loan: Your credit score, credit history, income, loan amount, loan terms and status as a single applicant or co-applicant will likely have an impact. As always, applicants with higher credit scores and established credit histories will qualify for the lowest rates. Shorter loan terms and larger loan amounts also usually have lower rates.

What is the lowest credit score you can have while still being eligible for a loan?

Upstart is an artificial intelligence lending platform built on the premise of improving consumers’ access to credit. It is one of the only lenders to make loans available to those with limited credit history, with no minimum credit score requirement. Instead, Upstart considers alternative factors such as a job history and requires proof of a regular source of income.

We’ve evaluated major personal loan providers and highlighted the best options for low credit below. We’ll update this list regularly as terms change and new loan products are released. Note that all of the starting annual percentage rates, or APRs, that are listed are based on a high credit score of 800 or above.

Though numbers vary between companies, many lenders set their minimum credit score qualification between 600 and 640.

Happy Money’s Payoff Loan is specifically for credit card debt. With a minimum credit score requirement of 550, it’s a great option for those with lower credit. Happy Money will also consider your debt-to-income ratio, age of credit history, lines of credit opened and credit utilization while deciding your rates. Happy Money does not offer loans in Massachusetts or Nevada.