Bad credit lenders help borrowers with poor credit. Companies like WorldFinance, BadCreditLoans, CashUSA, and Avant differ in that some offer personal loans while others offer alternative loans. For example, personal loan APRs are capped at 35.99%, while alternative loans have APRs of 36% or more.

To obtain the cheapest rate, we recommend submitting multiple applications to gauge lenders’ interest. Applying won’t impact your credit score, and an offer doesn’t require a commitment. However, different products have different terms, so read the offers carefully before deciding.

Lender:	Amount:	APR:	Min. Credit Score:	Best For:	Apply:
MoneyMutual	$100 – $5,000	5.99% – 35.99%	0	Bad or no credit	Apply Now SSL No Credit Effect
ZippyLoan	$100 – $15,000	5.99% – 35.99%	0	Bad or no credit	Apply Now SSL No Credit Effect
Upstart	$1,000 – $75,000	6.6% – 35.99%	300	Low credit scores, high DTI ratios	Apply Now SSL No Credit Effect
BadCreditLoans	$500 – $10,000	5.99% – 35.99%	Not Listed	Comparing bad credit loans	Apply Now SSL No Credit Effect
CashUSA	$500 – $10,000	5.99% – 35.99%	Not Listed	Comparing bad credit loans	Apply Now SSL No Credit Effect
PersonalLoans	$1,000 – $35,000	5.99% – 35.99%	580	Short and long-term personal loans	Apply Now SSL No Credit Effect
LendingPoint	$2,000 – $36,500	9.99% – 35.99%	580	$25,000 annual incomes	Apply Now SSL No Credit Effect
WorldFinance	$450 – $10,000	27.5% – 81.29%	Not Listed	Bad credit	Apply Now SSL No Credit Effect
Avant	$2,000 – $35,000	9.95% – 35.99%	580	$20,000 annual incomes	Apply Now SSL No Credit Effect
NextDayPersonalLoan	$100 – $40,000	Not Listed	Not Listed	Comparing bad credit loans	Apply Now SSL No Credit Effect
OppLoans	$500 – $4,000	59% – 160%	0	Bad or no credit	Apply Now SSL No Credit Effect
NetCredit	$500 – $20,000	19.9% – 150%	Not Listed	Flexible terms and APRs	Apply Now SSL No Credit Effect
PersonifyFinancial	$500 – $15,000	19% – 199.99%	Not Listed	Small and large bad credit loans	Apply Now SSL No Credit Effect
Lendly	$1,000 – $2,000	175% – 225%	Not Listed	Repaying with direct deposit	Apply Now SSL No Credit Effect
UniversalCredit	$1,000 – $50,000	8.93% – 35.93%	560	Low credit scores, high DTI ratios	Apply Now SSL No Credit Effect

Companies like WorldFinance, BadCreditLoans, CashUSA, and Avant help bad credit borrowers obtain affordable loans. Unfortunately, payday loans have an average APR of 400% and often trap people in a cycle of debt. Conversely, the companies below offer either personal or alternative loans, and they can help you if you have very bad credit.

Personal loans are affordable products designed for borrowers with good, fair, and bad credit. In contrast, Alternative loans are reserved for borrowers with very bad credit and have higher interest charges. Here is how we categorize the different products:

• Alternative loans’ APRs exceed bad credit personal loans but are lower than payday loans. For example, personal lenders typically let you borrow $1,000 to $100,000, with APRs of 5.99% to 35.99%, while payday lenders typically let you borrow $100 to $1,000, with an average APR of 400%. Alternative lenders meet you in the middle since they typically let you borrow $1,000 or less to in between $5,000 and $10,000, depending on the lender, with APRs of 36% to 400%. For context, 100% is often the most common.

But these are rough estimates, and lenders’ terms can vary. Also, while personal loans often max at $100,000, loan networks like Even Financial offer financing of up to $250,000, and other lenders may extend credit of less than $1,000. However, we hope that contrasting the loan amounts, APRs, and terms makes it easier to visualize how these different business models work. The key takeaway is that alternative loans are cheaper and more flexible than payday loans. Therefore, they are much better options when you don’t qualify for a personal loan.

For more options, our marketplace is home to dozens of bad credit lenders that offer affordable financing. Enter your desired criteria below and click on the “Shop Around” button to see a list of suitable products.

What Products Do We Review In This Guide?

This guide aims to educate borrowers about bad credit personal and alternative loans. We reviewed both products because applicants with poor or borderline credit scores may not qualify for bad credit personal loans, and alternative loans are the next best option. Moreover, since the latter is often much cheaper than payday loans, learning about these lenders saves you money during financial emergencies.

Also, we never have and never will recommend payday loans. And we encourage you to avoid these products at all costs. We also reviewed several alternative lenders that offer lower rates than payday lenders.

ZippyLoan

ZippyLoan is a reputable comparison site with an extensive network of lenders. Loans range from $100 to $15,000, with typical terms of six months to five years. Like PersonalLoans and SuperMoney, ZippyLoan lets you customize your search criteria so that you end up viewing the products with the highest chance of approval. The application process takes approximately five minutes, and ZipplyLoan’s financing example references APRs of 12% to 35.99%. However, like many comparison sites, terms and conditions vary depending on the lender and your credit score.

ZippyLoan is like other personal lenders because its APRs max at 35.99%. However, some lenders on its network offer alternative loans, and their APRs may exceed 100%. Therefore, it’s essential to read the offers carefully to understand which product you’re getting. Also, applying won’t impact your credit score, and requesting an offer doesn’t require a commitment. However, ZippyLoan does not serve customers in West Virginia, Oregon, New York, or the District of Columbia.

Pros:

• ZippyLoan helps you obtain bad credit financing of $100 to $15,000.
• Lenders’ APRs typically range from 12% to 35.99%.
• The minimum credit score to qualify is 0.
• Due to its extensive network of lenders, you may receive multiple offers.
• Lenders’ small loan options are often cheaper than payday loans.
• Borrowers of all credit scores are welcome to apply.
• Applying won’t hurt your credit score.

Cons:

• Fees vary by lender.
• Alternative loans have APRs over 35.99%.
• ZippyLoan does not offer financing in West Virginia, Oregon, New York, or the District of Columbia.

The impact of COVID-19:

Although ZippyLoan doesn’t have any specific programs related to the coronavirus pandemic, you can apply for a hardship exemption. To do so, contact a representative at 1-844-379-8621 or email support@zippyloan.com.

BadCreditLoans

BadCreditLoans is another top-notch comparison site that serves borrowers with bad credit. Loans range from $500 to $10,000, with APRs of 5.99% to 35.99%, and terms of 90 days to six years. Applicants in all states should be able to apply, and requesting an offer doesn’t require a commitment and won’t impact your credit score. Like ZippyLoan, BadCreditLoans’ search function helps you obtain personalized recommendations from lenders on the network. Therefore, you can shop around, browse multiple offers, and take your time before deciding.

However, BadCreditLoans’ small-dollar products are also like ZippyLoan’s. As a result, some loans may have APRs that exceed 35.99%. For your reference, we only recommend these products to borrowers with very bad credit because they’re cheaper than payday loans. However, you should submit multiple personal loan applications before settling for an alternative loan.

Pros:

• BadCreditLoans helps you obtain bad credit financing of $500 to $10,000.
• Lenders’ APRs typically range from 5.99% to 35.99%.
• Like ZippyLoan, BadCreditLoans’ extensive network of lenders may help you obtain multiple offers.
• BadCreditLoans should accept applications in all states.
• Borrowers of all credit scores are welcome to apply.
• Applying won’t hurt your credit score.

Cons:

• Like ZippyLoan, fees vary by lender.
• Alternative loans have APRs over 35.99%.

The impact of COVID-19:

Since BadCreditLoans is a comparison site, it can’t amend loan agreements. As a result, you should contact your lender directly to determine if forbearance or hardship programs are available. In addition, you can also call BadCreditLoans at 1-800-245-5626 or email support@badcreditloans.com for helpful advice.

CashUSA

CashUSA is like BadCreditLoans because financing ranges from $500 to $10,000, with APRs of 5.99% to 35.99%, and terms of 90 days to six years. Moreover, the comparison site also has a vast network of lenders that compete for your business. However, like other networks on our list, fees vary by lender, and you see the terms and conditions when you receive an offer. However, like ZippyLoan and BadCreditLoans, you can inquire without worry because applying won’t impact your credit score. In addition, it only takes a few minutes to finalize your request, and CashUSA’s services should be available in all states. As a result, sites like ZippyLoan, BadCreditLoans, and CashUSA let you view multiple offers, and you can choose the one that best fits your needs.

Pros:

• CashUSA helps you obtain bad credit financing of $500 to $10,000.
• Like BadCreditLoans, lenders’ APRs typically range from 5.99% to 35.99%.
• CashUSA’s extensive network of lenders may help you obtain multiple offers.
• Borrowers of all credit scores are welcome to apply.
• Applying won’t hurt your credit score.

Cons:

• Like ZippyLoan and BadCreditLoans, fees vary by lender.
• Alternative loans have APRs over 35.99%.

The impact of COVID-19:

Since CashUSA is a comparison site, it can’t amend loan agreements. As a result, you should contact your lender directly to determine if forbearance or hardship programs are available. In addition, you can also call CashUSA at 1-866-973-6587 for guidance.

Upstart

Terms: 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. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000).

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.

The full range of available rates varies by state. A representative example of payment terms for a Personal Loan is as follows: a borrower receives a loan of $10,000 for a term of 60 months, with an interest rate of 18.44% and a 8.64% origination fee of $864, for an APR of 22.88%. In this example, the borrower will receive $9,136 and will make 60 monthly payments of $257. 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.

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.

While most loans through Upstart are unsecured, certain lenders may place a lien on other accounts you hold with the same institution. It is important to review your promissory note for these details before accepting your loan.

When you check your rate, we check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, we do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information may be reported to the credit bureaus.

The APR calculation compares the two models based on the average APR offered to borrowers up to the same approval rate. The hypothetical credit-score only model used in Upstart’s analysis was developed in connection with the CFPB No Action Letter access-to-credit testing program and was built from a traditional credit score only model trained on Upstart platform data. APR for the scorecard was averaged for each given traditional credit score grouping.

While automated recurring payments are easy to set up, payments by check or one time electronic payments can also be used to repay a loan. Borrowers have the flexibility to choose the repayment method that works best for them.

This information is based on actual borrowers as of 4/1/2023 who identified “credit card refinancing” as their primary use of funds and paid off at least 51% of their outstanding credit card debt within 3 months of taking out the loan. Out of these actual borrowers, some could have experienced an increase or decrease in their credit score. This information reflects the overall average change in credit score points experienced by this group of borrowers as identified above.

The majority of borrowers on the Upstart marketplace are able to receive an instant decision upon submitting a completed application, without providing additional supporting documents, however final approval is conditioned upon passing the hard credit inquiry. Loan processing may be subject to longer wait times if additional documentation is required for review.

Unlike the other companies on our list, Upstart is neither a direct lender nor a comparison site. Uniquely positioned right in the middle, Upstart is a peer-to-peer (P2P) lender connecting borrowers with investors. The latter provides the capital for loans, and Upstart acts as the middle man, underwriting and servicing the loans. You can borrow anywhere from $1,000 to $75,000, with APRs of 6.6% to 35.99% and terms of three to five years. Upstart notes that five-year loans have an average APR of 23.98%. However, the main benefit is that Upstart has a minimum credit score requirement of 300. And since alternative credit metrics like your education and job history can make up for a poor credit score, Upstart should be on your radar if you have bad or very bad credit.

For context, borrowers in Georgia ($3,100), Hawaii ($2,100), Massachusetts ($7,000), New Mexico ($5,100), and Ohio ($6,000) have higher loan minimums. However, applicants in all states should be able to apply, and requesting an offer doesn’t require a commitment and won’t impact your credit score.

Pros:

• Upstart provides bad credit financing of $1,000 to $75,000.
• APRs typically range from 6.6% to 35.99%.
• Upstart’s algorithm approves more borrowers than traditional lenders.
• Borrowers of all credit scores are welcome to apply.
• Applying won’t hurt your credit score.

Cons:

• Upstart levies a 0% to 12% loan origination fee.
• A late payment fee of 5% of the amount due, or $15, whichever is greater, will apply after a 15-day grace period.
• Upstart may levy a $15 insufficient funds fee.
• Upstart may levy a $10 fee for paper documents.
• Minimum loan amounts are higher in some states.

The impact of COVID-19:

If you need to pause your loan payments because of the pandemic or due to other financial difficulties, you can submit an online request through Upstart’s website. In addition, you can also call the lender at 1-855-451-6753.

PersonalLoans

PersonalLoans is one of the best comparison sites in the marketplace. You can borrow anywhere from $1,000 to $35,000, with APRs of 5.99% to 35.99% and terms of 90 days to six years. As a result, PersonalLoans’ APRs and terms are like BadCreditLoans and CashUSA, so you can’t go wrong with either choice. But, conversely, BadCreditLoans and CashUSA cap their loans at $10,000, so you may prefer PersonalLoans due to the higher loan amount; it all comes down to your personal preference.

However, unlike the three companies reviewed above, you need a credit score of at least 580 to qualify, and PersonalLoans stipulates that you must have recurring income. For context, this can be full-time, part-time, or self-employment income, disability, or Social Security benefits. Also, almost all lenders in the marketplace require some recurring funds to show that you can repay the loan. Finally, PersonalLoans’ services should be available in all states; so if you like ZippyLoan but live in West Virginia, Oregon, New York, or the District of Columbia, PersonalLoans is a solid fallback option.

Pros:

• PersonalLoans helps you obtain bad credit financing of $1,000 to $35,000.
• Like BadCreditLoans and CashUSA, lenders’ APRs typically range from 5.99% to 35.99%.
• PersonalLoans’ extensive network of lenders may help you obtain multiple offers.
• Borrowers of all credit scores are welcome to apply.
• Applying won’t hurt your credit score.

Cons:

• Lenders on PersonalLoans’ network charge an origination fee of 1% to 5%.
• Some lenders charge late payment fees.

The impact of COVID-19:

Since PersonalLoans is a comparison site, it doesn’t issue loans directly. Moreover, the lenders on PersonalLoans platform determine their deferral and forbearance policies independently. As a result, you need to contact your lender directly to determine the available options.

LendingPoint

Unlike the comparison sites listed above, LendingPoint is a direct lender that offers bad credit financing. The difference is that comparison sites help match you with lenders, while LendingPoint issues loans itself. You can borrow anywhere from $2,000 to $36,500, with APRs of 9.99% to 35.99% and terms of two to five years. Like PersonalLoans, the minimum credit score to qualify is 580, but you also need to have an annual income of at least $25,000. LendingPoint is like ZippyLoan, BadCreditLoans, and the other companies on our list because its personal loan APRs max at 35.99%. However, while alternative lenders are part of their networks, LendingPoint only offers personal loans. Therefore, if you have very bad credit and can’t meet the minimum credit score threshold, you should look elsewhere. Also, LendingPoint’s loans are not available in Nevada or West Virginia.

Pros:

• LendingPoint provides bad credit financing of $2,000 to $36,500.
• APRs typically range from 9.99% to 35.99%.
• Applying won’t hurt your credit score.

Cons:

• LendingPoint’s loan origination fee is 0% to 6%.
• LendingPoint’s late payment fee can reach upwards of $30.
• LendingPoint’s insufficient funds fee is $20.
• LendingPoint’s loans are not available in Nevada or West Virginia.

The impact of COVID-19:

LendingPoint doesn’t reference any specific hardship policies. However, you can call the lender at 1-888-969-0959 or email customerservice@lendingpoint.com to learn more about your options.

WorldFinance

Like LendingPoint, WorldFinance is a direct lender and not a comparison site. However, the two differ materially because WorldFinance’s APRs are not directly listed. Moreover,, since the example on its website uses rates of 27.50% to 81.29%, we classify the company as an alternative lender and not a personal lender. You can borrow anywhere from $450 to $10,000 with terms of six months to four years. And like BadCreditLoans and CashUSA, WorldFinance doesn’t list a minimum credit score requirement, and the company notes that “you don’t need perfect credit to get a loan.” Therefore, if you need small-dollar financing and want to avoid payday loans, WorldFinance is an excellent option. However, loans are only available in 16 states, so WorldFinance doesn’t offer nationwide coverage.

Pros:

• WorldFinance provides bad credit financing of $450 to $10,000.
• APRs typically range from 27.50% to 81.29%.
• WorldFinance’s APRs are lower than comparable alternative lenders.
• Small loan options are often cheaper than payday loans.
• Applying won’t hurt your credit score.

Cons:

• WorldFinance’s loan origination fee is $25 to $100
• WorldFinance’s late payment fee is 5% of the amount due, or $5 to $30.
• WorldFinance’s insufficient funds fee is $10 to $50
• WorldFinance only accepts applications in 16 states.

The impact of COVID-19:

While WorldFinance doesn’t list any pandemic policies, assistance is always available. Thus, if you want to learn more about potential relief programs, you can call WorldFinance at 1-888-378-3886 or email customercommunication@worldacceptance.com.

Avant

Like PersonalLoans and LendingPoint, Avant has a minimum credit score requirement of 580. However, Avant is like LendingPoint because it’s a direct lender and not a comparison site. Therefore, your loan proceeds come directly from the company and not a third-party lender. Avant’s loans range from $2,000 to $36,500, with APRs of 9.95% to 35.99% and terms of two to five years. Moreover, you can apply without hurting your credit score, and you don’t have to complete the loan process if you’re uncomfortable with the terms. To qualify, you must have an annual income of at least $20,000, and like LendingPoint, financing is not available in Nevada or West Virginia. In addition, borrowers in Colorado, New York, Iowa, Hawaii, and Vermont, have to look elsewhere.

Pros:

• Avant provides bad credit financing of $2,000 to $36,500.
• APRs typically range from 9.95% to 35.99%.
• Applying won’t hurt your credit score.

Cons:

• Avant’s loan origination fee can reach upwards of 4.75%.
• Avant’s late payment fee can run upwards of $25 after a 10-day grace period.
• Avant’s insufficient funds fee is $15.
• Avant’s products are not available in all states.

The impact of COVID-19:

Avant offered relief programs to help support struggling borrowers throughout the pandemic. Moreover, if you find yourself unable to make your scheduled loan payments, you can call the lender at 1-800-712-5407. In addition, you can also email support@avant.com.

NextDayPersonalLoan

Like WorldFinance, NextDayPersonalLoan can help you obtain an alternative loan. However, the company connects you with third-party lenders and is not a direct lender. Its vast network can help you get $100 to $40,000, but like ZippyLoan and some of the other comparison sites on our list, APRs, terms, and fees vary by lender. Therefore, you need to apply before viewing the terms and conditions. However, applicants in all states should be able to inquire, and requesting a quote won’t impact your credit score.

In addition, NextDayPersonalLoan processes applications in two minutes or less and qualified borrowers receive funding in as little as one business day. But you can’t apply for cash advances in Connecticut, New Hampshire, Washington, or Vermont. However, state restrictions are typical with alternative lenders, and companies like ZippyLoan and WorldFinance also restrict access in certain states. For additional help, our guide on the best loan apps reviews 17 companies that provide the cheapest cash advances. As a result, they can help you obtain short-term funding and avoid payday loans.

Pros:

• NextDayPersonalLoan helps you obtain bad credit financing of $100 to $40,000.
• NextDayPersonalLoan’s extensive network of lenders may help you obtain multiple offers.
• Lenders’ small loan options are often cheaper than payday loans.
• Borrowers of all credit scores are welcome to apply.
• Applying won’t hurt your credit score.

Cons:

• Like ZippyLoan and BadCreditLoans, fees vary by lender.
• Alternative loans have APRs over 35.99%.

The impact of COVID-19:

Since NextDayPersonalLoan is a comparison site, it can’t amend loan agreements. As a result, you should contact your lender directly to determine if forbearance or hardship programs are available. In addition, you can also call NextDayPersonalLoan at 1-866-829-4551 for helpful advice.

OppLoans

OppLoans is like WorldFinance because it directly issues alternative loans. As mentioned, LendingPoint is also a direct lender. However, the big difference is that it only provides personal loans. With OppLoans, you can apply for $500 to $4,000, with APRs of 59% to 160% and terms of nine to 18 months. There is no minimum credit score requirement, and OppLoans finances borrowers in all states except West Virginia, New York, and the District of Columbia. In addition, OppLoans conducts a soft credit check, and applying won’t impact your credit score.

OppLoans’ disclosures state that its products are “an expensive form of credit.” However, the company is transparent with its APRs and fees, and all of the relevant information is easily accessible on its website. Furthermore, since payday loans have an average APR of 400%, alternative lenders like OppLoans and WorldFinance are still better choices for short-term financing. Finally, OppLoans also reports your repayment history to Equifax, Experian, and TransUnion. Therefore, on-time repayment can boost your credit score and increase your chances of obtaining cheaper loans.

Pros:

• OppLoans provides bad credit financing of $500 to $4,000.
• APRs typically range from 59% to 160%.
• The minimum credit score to qualify is 0.
• Small loan options are often cheaper than payday loans.
• Applying won’t hurt your credit score.

Cons:

• You incur an origination fee of 0% to 3%.
• You incur a late payment fee of $15 for every 15 days your loan is past due in some states.
• You incur an insufficient funds fee of $15 in some states.
• You incur an administration fee of $75 in some states.
• Borrowers in West Virginia, New York, and the District of Columbia can’t apply.

The impact of COVID-19:

Standing by its customers throughout the pandemic, OppLoans offered relief programs to borrowers struggling to make their payments. If you find yourself in a similar situation, you can call OppLoans at 1-800-990-9130 or email the company at payments@opploans.com.

NetCredit

It would be best if you thought of NetCredit like WorldFinance and OppLoans. The company is a direct lender that specializes in alternative loans. You can borrow anywhere from $500 to $20,000, with APRs of 19.90% to 150%, and terms of six months to five years. Moreover, its high-end APR of 150% is like OppLoans’ 160%, so you can’t go wrong with either choice. However, there is a big difference at the low-end. Since OppLoans’ APRs start at 59% and NetCredit’s start at 19.90%, the latter is cheaper. However, borrowers with the highest credit scores often obtain the lowest rates. So if you have very bad credit, you may receive similar offers from both lenders.

But loans are only available in 36 states, and late payment fees range from $15 to $25 depending on your state of residence (after a 10 to 15-day grace period). Likewise, loan origination fees vary by state and can cost you up to 5%.

Pros:

• NetCredit provides bad credit financing of $500 to $20,000.
• APRs typically range from 19.90% to 150%.
• The average borrower incurs an APR of 83%.
• Small loan options are often cheaper than payday loans.
• Applying won’t hurt your credit score.

Cons:

• You incur a loan origination fee of up to 5%.
• Depending on your state, you incur a late payment fee of $15 to $25 after a 10 to 15-day grace period.
• Borrowers in some states can’t apply.

The impact of COVID-19:

NetCredit’s loan deferral program helped struggling borrowers navigate the uncertainties of the pandemic. If you want to learn more about how NetCredit can help you, its customer support team is accessible at 1-877-392-2014 or at support@netcredit.com.

PersonifyFinancial

Like WorldFinance, NetCredit, and OppLoans, PersonifyFinancial is another alternative lender that issues loans directly. You can borrow anywhere from $500 to $15,000, with APRs of 19% to 199.99%, and terms of one to four years. However, unlike its direct counterparts, PersonifyFinancial’s minimum term is longer than other alternative lenders. For example, the minimum loan term is one year, while WorldFinance and NetCredit’s are six months, and OppLoans is nine months. Therefore, PersonifyFinancial may be the right alternative lender for you if you have a longer time horizon.

Like NetCredit, PersonifyFinancial’s low-end APR is less than 20%. However, its high-end APR exceeds WorldFinance, NetCredit, and OppLoans. As a result, some repayment terms may be more attractive to some borrowers and less attractive to others; it comes down to your personal preference.

Finally, PersonifyFinancial’s loan origination fee is often 5% of the amount borrowed, and late payment fees typically apply. In addition, you can only inquire in 26 states.

Pros:

• PersonifyFinancial provides bad credit financing of $500 to $15,000.
• APRs typically range from 19% to 199.99%.
• Small loan options are often cheaper than payday loans.
• Applying won’t hurt your credit score.

Cons:

• You incur a typical loan origination fee of 5%.
• Late payment fees often apply.
• Borrowers in some states can’t apply.

The impact of COVID-19:

While PersonifyFinancial has a COVID-19 Customer Resource Center with helpful tips on easing borrowers’ financial burden, it doesn’t list any specific company policies. However, if you want to speak with a representative, you can call PersonifyFinancial at 1-888-578-9546 or complete the company’s contact form.

Lendly

Lendly is another direct alternative lender like WorldFinance, NetCredit, OppLoans, and PersonifyFinancial. Loans range from $1,000 to $2,000, with typical APRs of 175% to 225% and standard terms of one to two years. In addition, you can repay the funds on your own or through direct deposit. The latter results in the lowest rate of 175%, though the direct option is unavailable in California, Kansas, or Minnesota. Therefore, borrowers in these states incur an APR of 225%.

But Lendly loans are still cheaper than payday loans, and like PersonifyFinancial, the standard minimum loan term is one year. Furthermore, while Lendly shouldn’t be your first choice due to its high APRs, the product is suitable if you have no other option. In addition, Lendly’s disclosures state that “There are no fees other than interest on a Lendly loan.” As a result, you shouldn’t have to worry about origination, late payment, insufficient funds, or administrative fees. However, it’s prudent to read the terms and conditions carefully to ensure that you and the lender are on the same page. Also, Lendly only extends financing to borrowers in 26 states.

Pros:

• Lendly provides bad credit financing of $1,000 to $2,000.
• APRs typically range from 175% to 225%.
• “There are no fees other than interest on a Lendly loan.”
• Lendly loans are often cheaper than payday loans.
• Applying won’t hurt your credit score.

Cons:

• You can’t obtain the lowest APR if you live in California, Kansas, or Minnesota.
• Borrowers in some states can’t apply.

The impact of COVID-19:

Like many bad credit lenders on our list, the pandemic didn’t affect Lendly’s policies. However, if you need assistance or want to learn more about potential loan forbearance options, you can call Lendly at 1-844-453-6359 or email theteam@getlendly.com.

UniversalCredit

UniversalCredit is like LendingPoint because it’s a direct lender that only issues personal loans. However, the main difference is that UniversalCredit has lower approval standards. For example, UniversalCredit’s minimum credit score is 560, while LendingPoint’s is 580. More importantly, UniversalCredit’s average borrower has a credit score of 638 and an annual income of $60,000, while LendingPoint’s metrics are 673 and $80,000, respectively. Therefore, UniversalCredit helps borrowers near the low-end of the credit spectrum.

You can borrow anywhere from $1,000 to $50,000, with APRs of 8.93% to 35.93% and terms of three to five years. Your DTI ratio can’t exceed 75%, and you must have a valid email address and bank account. UniversalCredit’s loan origination fee is 4.25% to 8%, but you don’t have to worry about prepayment penalties.

However, UniversalCredit is an affiliate of Upgrade, and the latter doesn’t issue loans in Washington, D.C., Iowa, and West Virginia. Therefore, UniversalCredit may have similar policies in those regions.

Pros:

• UniversalCredit provides bad credit financing of $1,000 to $50,000.
• APRs typically range from 8.93% to 35.93%.
• UniversalCredit often approves more bad credit borrowers than Upgrade.
• Applying won’t hurt your credit score.

Cons:

• UniversalCredit’s loan origination fee is 4.25% to 8%.
• Borrowers in some states may not be able to apply.

The impact of COVID-19:

UniversalCredit doesn’t list any pandemic-related programs. However, since Upgrade provided loan assistance during the outbreak, UniversalCredit should have similar policies. To learn more, you can call UniversalCredit at 1-877-418-9765 or email support@universal-credit.com.

Do Lenders Approve Borrowers With Bad Credit?

Yes. Lenders are much more flexible than in years past. With Fintech companies gaining market share, their algorithms emphasize alternative credit metrics. Therefore, companies like Upstart care more about your spending habits, income, savings, education, and rent history than your credit score. In addition, competition has increased materially. With new lenders entering the marketplace, they win clients by expanding their lending horizons. And this means finding creditworthy borrowers that used to settle for payday loans. As a result, if this sounds like you, there are plenty of opportunities available if you do your research.

Bad credit personal loans:

These products have APRs that often range from 15% to 35.99%. Moreover, while personal loans typically range from $1,000 to $100,000, borrowers with bad credit usually won’t qualify for the highest amounts. However, flexible terms of one to five years are often available, making it easier for budget planning.

Alternative payday loans:

These products have APRs that often range from 36% to 100%, but some companies can charge 100% to 300% and still market the loans as more affordable than payday loans. However, we recommend that you only use the latter if it’s an emergency and you have no other option. In addition, loan amounts typically range from $1,000 or less to between $5,000 and $10,000.

What Other Types of Bad Credit Loans Are Available?

As mentioned, the lending market has evolved significantly, which means more approvals and lower APRs than in years past. As a result, you can obtain an affordable bad credit loan. However, knowing where to look is just as important as knowing where not to look. And this means avoiding payday loans and auto title loans.

Payday loans:

With an average APR of 400%, payday loans are predatory products that trap borrowers in a cycle of debt. In addition, the financing charges are excessive, and late payment fees can quickly result in the cost of the loan exceeding the principal. Therefore, we never have and never will recommend payday loans, and we encourage you to avoid these products even if it’s an emergency.

Auto title loans:

Similar to payday loans, auto title loans are highly predatory. Their APRs average 300% and you have to post your car as collateral. Moreover, if you can’t repay the proceeds and default, the lender will seize your vehicle. Auto title loans are structured so that the loan amount is much less than the value of your car. Therefore, the money you gain by not paying back the loan is often much less than the money you lose during your vehicle repossession. As a result, we recommend avoiding auto title loans, as there are plenty of unsecured financing options available for borrowers with bad credit.

Where to turn:

We hope that our guide helps you find affordable bad credit financing. Please view our study on the best personal loans for bad credit for more options. There, you’ll find plenty of lenders that are willing to help.

Is It Smart to Take Out a Bad Credit Loan?

Under most circumstances, we recommend that you avoid bad credit loans and focus on improving your credit score. The products are expensive, and even APRs of 15% to 35.99% will result in high finance charges. Therefore, unless it’s an emergency, you should only borrow a small amount and focus your energy on making on-time repayments. That way, you’ll repair your credit score and qualify for cheaper loan rates in the future.

How Do I Obtain The Cheapest Bad Credit Loan?

Before accepting any offer, we always recommend you conduct a thorough search. At first, you should only apply for personal loans. If that fails, then move on to other products. Here’s how to obtain the cheapest loan:

• Apply for an unsecured bad credit personal loan: Apply to as many lenders as possible. They all perform a ‘soft’ credit pull so that it won’t affect your credit score. We recommend starting with at least 5 to 10 lenders to see who comes up with the best offer. Denied application: it’s not the end of the world! Speak with the lender directly and ask why. Ask if there is anything you can do or if lowering the amount can change the result.
• Apply for a secured personal loan: While it’s risky to put up collateral, the practice will increase your chances of approval and allow you to lower your APR. But, only do so if you know you can repay the funds. Otherwise, you risk losing your property.
• Apply for a cosigner loan:A cosigner is a great way to obtain better loan terms and decrease your APR if you don’t have the collateral for a secured personal loan.
• Apply for an alternative loan: If you can’t find a cosigner, an alternative loan is your next best option. Alternative loans are more expensive than personal loans but cheaper than payday loans. APRs range from 35.99% to 400%, but many lenders cap their APRs from 100% to 200%.

What Should I Do If This Doesn’t Work?

If you’ve gone through the list above and still can’t get approved, it’s time to work on your credit score. Alternative lenders are extremely accommodating, so you need to reevaluate your financial situation if they deny your application.

• Get your bills in order: Since your payment history determines 35% of your FICO score, staying up-to-date on all your transactions will move your credit score in a positive direction. Look, we understand. If it were that easy, you wouldn’t be looking for a bad credit loan! Small steps can make a big difference, and you need to start somewhere!
• Keep credit card charges to less than 30% of your limit: Since credit usage accounts for 30% of your FICO score, keeping your balance in check will uplift your credit score. For tips on how to appear more creditworthy to lenders, check out our detailed guide.
• Take advantage of Experian Boost and Ultra FICO: The credit scoring models, which took effect in 2019, use your utility, phone, and TV bill payments, as well as your checking, saving, and money market account behavior, to increase your credit score. Enrollment is voluntary, but Experian found that 75% of people with credit scores less than 680 improved it after signing up for Experian Boost. With Ultra Fico, by maintaining an average savings balance of $400 and with no negative balances for at least three months, you receive an initial boost in your credit score by up to 20 points.

See our guide on credit-report changes for a detailed breakdown of what both offer.

Loan Options For Borrowers With Borderline Credit Scores

If you find yourself above or below the bad credit scoring range, other products are available. For example, alternative loans are more expensive than bad credit personal loans but cheaper than payday loans. However, they are unsecured and are the next-best option for borrowers with very bad credit.

Our guide on payday loan alternatives lists several reputable lenders, and we also reviewed 25 alternative payday lenders that help borrowers with very bad or no credit. However, we only recommend these products for emergencies, so they shouldn’t be your first choice. Instead, you should browse our marketplace and submit several bad credit personal loan applications before settling for an alternative payday loan.

Conversely, a fair credit personal loan may be more appropriate if you have a credit score of 600 to 690. Companies like Upstart, Avant, HappyMoney, LendingTree, and Upgrade help you find low-cost personal loans with flexible terms. Typical APRs range from 10% to 15%, and our study explains what to expect if you have fair credit.

Why Should I Avoid Payday Loans?

Payday loans are incredibly predatory. They have APRs that average 400%, and lenders use manipulative tactics to keep you stuck in a vicious debt cycle. You may come across advertisements like: “$300 payday loan for only $30!”

But, what payday lenders don’t tell you is how quickly interest charges can get out of hand. Remember, the loan is only for two weeks. And say you lose work hours and can’t repay the loan, you’ll incur rollover charges and late payment fees. Suddenly, your $300 payday loan has a $30 rollover charge, plus another $30 interest for the two-week extension. So you pay $90 in interest and fees for a 4-week loan.

Moreover, payday lenders are highly aggressive when collecting their funds. They’ll continuously debit your bank account to recoup whatever money they can. As a result, the practice can lead to significant bank overdraft fees and hurt your finances. The Consumer Financial Protection Bureau (CFPB) found that 20,000 bank account holders who made payments to online payday lenders incurred an average of $97 in overdraft and non-sufficient funds fees. The figure is nearly three times more than the $34 incurred by the average American.

Why Did We Select These Lenders?

We analyzed more than 100 lenders to determine which companies have the best products and the lowest APRs. Loan companies often have different definitions of bad credit, and their minimum credit scores vary. Moreover, some have minimum income requirements, while others’ terms and conditions differ by state. Overall, the products above cover the entire bad credit lending market and should meet the needs of most borrowers.

Conclusion

If you have bad credit, you can still obtain an affordable loan with an APR of 15% to 35.99%. New technology has loosened lenders’ underwriting standards, as alternative credit metrics carry more weight in the decision process. As a result, it increases your chances of approval, and the days of relying on payday lenders are long gone. The key is to submit several applications. Because loan requests don’t impact your credit score, you have nothing to lose by gauging lenders’ interest. Therefore, a little effort can save you a lot of money. Moreover, repaying the funds on time is a prudent pathway to rebuilding your credit and obtaining cheaper rates.