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With so much economic turmoil, there's never been a time where bad credit loans have been more in demand. No matter what caused your credit score to be below 600 - the typical threshold for a "bad" credit rating - you're far from alone.
Out of approximately 230 million Americans who qualify for a credit score, almost 70 million have poor credit. Some of the most common reasons for low credit scores are expected financial hardships (like job loss or medical expenses), not using credit responsibly, or simply being unaware of the factors that contribute to having a healthy credit history.
Tuesday, December 5th
Founded by former Google employees, Upstart wants to make credit affordable to borrowers while reducing risk for banks. Upstart earns our top rating for bad credit loans. Why? It's the only lender in our review that looks far beyond your actual credit score when deciding if you're eligible to borrow money. Do you have a degree, in a solid field of study? Do you have a strong work history? How many years of credit are on your record? Upstart takes all of this into account, making it more likely that you'll qualify.
Minimum credit requirements
Your minimum credit requirements to be eligible for an Upstart bad credit loan depend on where you live. Generally speaking, you'll need a minimum credit score of 580. In some states, that minimum score is 620. However, if you don't have a sufficient credit history, you can still apply for funding through Upstart - which you probably won't find with many other lenders. You also can't have any bankruptcies or accounts in collections/delinquent currently on your credit report.
Easy application process
The online application takes just 5 minutes, but expect to answer more in-depth questions about your employment and educational background. Although educational information is collected as part of Upstart's rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan. A "soft pull" of your credit history will be done, to verify your credit score and information. The initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, they do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information will be reported to the credit bureaus. Of course, this is true whenever you take out a loan, regardless who it's from.
Get your money fast
If your application is approved and you accept your loan terms, you could have your loan money deposited by the next business day. If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.
Loans up to $50,000
Loans are available in amounts ranging from $1,000 to $50,000. Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.
Competitive terms and fees
Upstart advertises a range of interest rates, and we found them to be very competitive with other lenders in the industry. All loans funded through this service have repayment terms of either 3 or 5 years. Upstart's origination fee ranges from 0-8% of the loan amount, and is deducted from the proceeds of your loan. In other words, if you request a $10,000 personal loan and you're charged an origination fee of 4%, you'll get $9,600 deposited to your bank account.
Upstart has a phenomenal reputation. The Better Business Bureau continues to give this lender an "A+" rating and accreditation. And, over nearly 6,000 independently-verified client reviews, Upstart earned a 4.9 out of 5 stars. We were especially encouraged to see reviews from repeat customers - it's always a plus to see that people like a business enough to come back for more, especially in an industry that can be as tricky as loans/finance.
If you have not-so-great credit (or no credit history at all) and want a lender that will look at the whole picture of your life, start with Upstart. There's no other institution that takes your education and earning potential into consideration when deciding if you qualify to borrow money. Upstart is trustworthy and efficient, and they easily earned our highest recommendation among providers of bad credit loans.
If you prefer to get a bad credit loan from a company with a long history in the industry, OneMain Financial fits the bill. Since 1912, this business has been connecting borrowers with funding with personal and auto loans, and their service includes nearly 2,000 in-person branches throughout the United States.
One of the things we appreciate about OneMain Financial is their transparency. If you click on the "Loan Amounts & Fees" link at the bottom of the site, you'll find a fairly detailed list of specifics that are important to consider if you're looking for a bad credit loan. Here are some of the most critical:
Prequalified loan offers
Another plus with using OneMain Financial for a bad credit loan is that you can check for offers without affecting your credit score. On their main page, enter your desired loan amount and click the button. On the next page, you'll enter your basic contact information, the last four digits of your SSN, your monthly net income and source, and then you'll be connected with any prequalified loan offers.
No minimum credit score
Naturally, your specific terms will depend on your unique situation. But, you can expect that OneMain will probably be able to offer you a loan - they're one of the few services available that don't have a minimum credit score to qualify as a borrower. Based on what we found in customer comments, your APR will probably range from 18% to 35.99%, which is as high as (or even higher than) most credit cards. Be sure you understand the terms of your loan before you make a commitment.
While the BBB gives OneMain a flawless "A+" rating, we noticed that the company had received hundreds of complaints in the 12 months prior to our most recent evaluation. Of course, most large businesses with multiple brick-and-mortar locations encounter their fair share of complaints, and the solid rating indicates that the BBB is confident that OneMain is handling those issues professionally and in a timely fashion.
Another issue worth noting is that there was an alert in place at the time of our review, listed on the BBB site. It indicated that the OneMain name was being used by scammers to solicit fraudulent "advance fees" for loans after telling people they had been approved for funding. So, if your interest in OneMain began with any kind of unsolicited contact (phone call, fax, or email), we strongly recommend you go directly to OneMain's site or toll-free number instead.
Checks all the boxes
We think that OneMain Financial checks all of the most important boxes when it comes to bad credit loans: no minimum score required, transparency with respect to fees, and a fantastic reputation across more than a century in business. While their loans won't come cheap, they're definitely a possibility for most people with credit history issues.
LendingClub has completely restructured their lending model, changing from a peer-to-peer platform where investors both individual and corporate could choose to fund loans requested by borrowers like you, to a funding format like you'd get with any traditional bank. All loans come through LendingClub's bank of the same name, backed by "A+" -rated WebBank, so applying for money here doesn't involve jumping through the hoops of getting offers from many different lenders and choosing one.
Standard application process
You won't find any surprises when applying for a bad credit loan through LendingClub. You can enter a desired amount from $1000 to $40,000, though some states have minimum loan amounts of more than $1,000. You'll also choose the purpose of your loan in the dropdown box; that helps LendingClub match you with any financing that may apply specifically to your situation, like debt consolidation or auto loans. You'll be asked for your name, address, date of birth, as well as the same information if you're using a co-applicant (which could make it more likely that you'll be offered a loan). With those details, LendingClub will do a "soft pull" and try to locate your credit report. If no match comes back, expect to provide your full Social Security Number. Your credit score won't be impacted until you accept a loan offer and complete the process later.
Average interest rates, fees
As you'd expect, your bad credit loan will probably come with higher-than-average origination fees and interest rates: the max you'll pay in origination fees is 6% and 35.89% APR. Their site no longer specifies whether the one-time fee will be deducted from your loan proceeds or spread out over the lifetime of the loan, which will be at least 36 months. You could theoretically get a loan with better terms - LendingClub's average is 5% in fees and 15.95% APR across all of their borrowers - but that will ultimately depend on exactly how bad your credit is.
BBB still gathering info
Because of the big changes made in LendingClub's structure, the Better Business Bureau changed their rating from an "A" to "NR" (for "not rated" ). That isn't an indicator of anything being amiss: it just reflects the time needed to get updated feedback from consumers before determining how well (or poorly) LendingClub is doing now. We noticed that WebBank is the funding source behind LendingClub's loans after this overhaul - and that company has both accreditation and an "A+" from the BBB, all good signs.
Strong positive customer response
On the LendingClub site itself, there are plenty of current customer reviews to consider while waiting for the BBB's update. We were very happy to see comments, especially from repeat clients, that said the service received here was top-notch. Borrowers said the loan process was straightforward and fast, and that they were able to get a loan despite having bad credit.
Still a good choice
Even though they no longer have a unique funding model, LendingClub maintains its ranking among providers of bad credit loans. We're glad that so many people say that there's been no decline in service and that it's just as easy as ever to apply and be approved for funds. Though we'd like to see LendingClub be a little more specific about how their origination fees are charged and whether or not they have a minimum credit score requirement for eligibility, we still think this is a good option for most consumers with less-than-perfect credit.
LendingTree serves as a connection between borrowers and lenders, allowing prospective customers to comparison shop among banks and other institutions to get the loans they need. In fact, two of the lenders you'll probably find through LendingTree have been reviewed individually in our rankings, showing that this service does a great job of offering a wide spectrum of options.
The application process is pretty straightforward: enter your basic information, including the purpose of your loan (paying off debts, medical expenses, etc.) and your employment status. LendingTree will use the last four digits of your SSN to do a "soft pull" on your credit history and verify your identity. Then, you'll get a list of any lenders who are willing to offer you a bad credit loan.
From there, you'll work directly with any lenders that catch your interest. Because LendingTree is paid by their lending partners for passing prospective customers along to them, you aren't charged anything for using the referral service.
LendingTree gets high marks from both customers and from the BBB, who rates this service with a perfect "A+" and accreditation. While they do a great job of connecting customers to potential lenders, their options for individuals with poor-to-fair credit shrink. This means you will probably receive few offers from LendingTree's partners.
Bad credit loan specialization
LendingTree does partner with some companies who specialize in bad credit loans. However, looking at LendingTree's statistics for the average credit scores held by the people who successfully get loans through their site, they don't even mention a single loan given to people with credit scores lower than 640.
LendingTree enjoys a great reputation within the industry and their customers alike. It's for this reason that they receive good marks in our review. When it comes to bad credit loans, it won't hurt you to apply with LendingTree, but you may have to temper your expectations regarding the number of offers you'll get.
Even though Avant has only been around since 2012, they've already funded more than $6.5 billion in loans. With headquarters in Chicago, this company seeks to provide access to funding, including bad credit loans, to "middle-income borrowers". So far, that represents more than 800,000 people who have been helped by loans through Avant.
Credit score and income
Avant doesn't specify a minimum credit score necessary to qualify for one of their loans, but they state that the majority of their clients have scores between 600-700, and we found several third-party sites that said you'll need a minimum score of 580 to be eligible. (For reference, Avant considers anything less than 580 as "poor".) To find out what loan options you have, you'll have to allow them to do a soft pull by entering your information, including your full Social Security number, monthly net income, and your current credit score. Expect to need at least $20,000 in gross annual income to qualify for a bad credit loan with Avant.
What does Avant charge in fees? Most customers pay an administrative fee of up to 4.75%. APR's range from 9.95% to 35.99%, with loan terms from 24 to 60 months. You can borrow anywhere from $2,000 to $35,000, depending on your overall situation (for example, your income, whether you own or rent, and so on).
Postpone payment rule
At first, we found only positive things to say about Avant. Over 10,000 independently-verified customer reviews, the company received nearly 9,500 4- or 5-star reviews. Borrowers said that they got their money very quickly, the process was simple, and that even with bad credit they were still able to get a loan. And, although we didn't find it referenced on the Avant site, we found customers referring to a "postpone payment rule" that's allowed once a year (which we encourage you to ask about if you decide to use this lender).
But, since the time of our last review, the company's rating with the BBB dropped from an "A+" to an "A-" (while still maintaining accreditation). Unfortunately, in April 2019 Avant agreed to settle on charges made by the Federal Trade Commission regarding "deceptive and unfair loan servicing practices". Those charges included failing to credit loan repayments in a timely way, giving consumers incorrect information with respect to payoff amounts, and charging borrower's accounts multiple times in a month. (One customer had his monthly amount debited more than 10 times in one day!)
For all of those reasons, Avant winds up in the middle of our rankings. We're glad to see so many customers who have had great experiences with this lender, especially those who might not qualify for a bad credit loan elsewhere. However, having charges brought by the FTC is no laughing matter. We hope that Avant continues to shore up their reputation moving forward.
Personal Loans is one of several services in our review that acts as a third-party connection between borrowers and lenders. In order to qualify for a bad credit loan, you'll need to meet certain minimum criteria, like being at least 18 years old and having some form of reliable income.
Not many specifics
While Personal Loans does have a Rates and Fees page, they don't offer many specifics. When it comes to your APR, costs or loan terms, you'll only find those out when you complete the application process and get matched with a lender. Example loans on that page show interest rates from 12-24%, but our research shows that you can expect a range that's actually between 5.99% (fantastic!) to 35.99% (not as fantastic). Repayment timeframes stretch between 3 and 72 months, depending on the size of your bad credit loan.
Short online form
To get started in your search for a lender willing to give you a bad credit loan, start with the short online form. Enter the amount you're requesting, your credit score range (this site uses "Below 500" as their criteria for poor credit, for what it's worth), and why you need a loan (emergency situation, pay down debt, and so on). On the second page, you'll have to get much more personal, including your driver's license number and full SSN. That always makes us pause a minute, especially if we're not sure of a provider's reputation.
So, how does this company's reputation stack up against the rest? Personal Loans had a "C+" rating from the BBB at the time of our most recent visit. The explanation was that the company had failed to respond to one customer complaint in the past 3 years. That doesn't seem like it would result in such a low grade, but it's worth keeping in mind. We found a few inconsistencies on the site (one page saying we should see their coverage map to see if our state is one they service, but not finding any maps on the page we were told to visit), but nothing too bad.
On the other hand, we noticed that Personal Loans used the exact same online form as our lowest-ranked source of bad credit loans. That did cause some concern, because that service is known for doing little more than giving away people's information to telemarketers. Plus, clicking on the "Positive Reviews" link on the page that says the service has been trusted by over 500,000 people in the last 15 years... only took us back to Personal Loan's "About Us" page. There was nothing else on the site to connect us with feedback from actual customers.
Not worth it
At the end of the day, Personal Loans comes across as a repackaging of a service with very negative reviews, just with a different name. The only reason we gave the newer site a slightly higher score is because of their slightly higher rating from the BBB. But, when it comes to a provider you can believe in, Personal Loans is not a trustworthy option for bad credit loans.
You might think with a name like Bad Credit Loans, this provider would be the perfect source of money for people with less-than-awesome credit. However, looking at the reputation of this service, we think the "bad" might be referring to the service you can expect!
First off, it's important to understand that Bad Credit Loans doesn't actually lend money, which isn't uncommon. There are lots of funding sources that serve as referral partners, connecting you with banks and other resources to get the money you need. But, from what we found, providing your information to Bad Credit Loans is not likely to do much more than qualify you for endless spam from not-very-reputable companies hoping to get you to do business with them.
Minimum loan requirements
However, let's say that you decide to give Bad Credit Loans a try. Do you meet their minimum eligibility requirements? They are:
Might affect your credit score
The next step is to fill out their online form. You'll have to enter information about how much you'd like to borrow, your income source (including your employer's name and phone number), bank account number and even your Social Security number (so that potential lenders can verify your identity). You'll also have to enter your mobile phone number - and in the fine print, it says that by doing so, you're consenting to receiving texts, calls and voicemails from various marketing partners. Plus, further on in the fine print, it says that by entering your SSN, you're consenting to both "soft" and "hard" pulls on your credit - and hard pulls can bring your credit score down even further!
Lack of personal contact
When we called the toll-free number for Bad Credit Loans, we got a computerized voice recording telling us about their products and services, and directing us to their website to begin the application process. We're not sure about you, but to us it's less than reassuring to call a lending referral service and only get a robot!
Failure to respond
If only that were the only cause for concern with this service. Unfortunately, that's just the beginning. Bad Credit Loans, despite being in business for over 20 years, earned the lowest possible rating from the Better Business Bureau. Contributing to this company's "F" rating was their failure to respond to most of the complaints filed against them. You can probably guess what those complaints were: failure to connect customers with real lenders, an abundance of spam, and concerns about the safety of their identifying information.
You would probably have a hard time finding a source of bad credit loans that's worse than this service. Bad Credit Loans shouldn't be entrusted with your personal details, let alone with your financial needs.
(1) Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.
(3) The full range of available rates varies by state. The average 5-year loan offered across all lenders using the Upstart platform will have an APR of 22.00% and 60 monthly payments of $25.03 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $15,018 including a $600 origination fee. APR is calculated based on 5-year rates offered in the last 1 month. There is no downpayment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
(4) If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.
Unfortunately, getting a loan when you have bad credit can be a paradox: in order to qualify for the best loans, you need a good credit history. But, to establish a good credit history, you often need to have demonstrated that you are responsible with credit - by making on-time payments, not overutilizing the credit you've been extended, and so on. On the other hand, without a loan to pay off debts and handle current financial demands, you could find yourself even deeper in the hole as calls from collection agencies start coming in and the pressure mounts.
Does this sound familiar? If so, take a deep breath and recognize that there's hope - because there are providers out there who offer loans to people with bad credit. And no, you won't have to sign away your life to qualify, though you should be aware that the terms will probably not be as favorable as those offered to people with high credit scores. That's only fair, as the lenders are taking on more risk when they give money to people with a less-than-sterling track record.
How can you tell which lender to use for your bad credit loan? That's an excellent question to ask. After all, you want to be sure that any loan you accept is going to help you get back on your feet financially, with terms you can actually meet. Here are several criteria that can help you choose the right lending partner for your situation:
TopConsumerReviews.com has reviewed and ranked the best bad credit loan providers available today. We hope this information helps you to quickly get the money you need, with terms that are fair and affordable, so that you can get back on your feet financially!
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