What Banks Offer Bad Credit Loans?
Can I get a loan from a bank if I’m with bad credit? Unfortunately, the answer is no.
But don’t worry, there are plenty of other options.
Online lenders offer personal loans to people with bad credit. And in today’s market, you can obtain a bad credit personal loan of up to $100,000 with an APR anywhere from 5.99% to 35.99%. Watch our video, which shows how people can get a personal loan for bad credit. Then check the best personal loans on our marketplace.
Now, let’s discuss bank loans.
They’re issued by large financial institutions and come with low APRs. However, to qualify, you need a minimum annual income and a high credit score. With good to excellent credit, bank loans are a great option. But with bad to fair credit, you likely won’t qualify.
| Bank: | Amount: | APR: | Min. Credit Score: | Min. Income: |
| Wells Fargo | $3,000 – $100,000 | 5.49% – 22.99% | 660 | N/A |
| Citibank | $2,000 – $50,000 | 7.99% – 17.99% | N/A | $10,500 |
| U.S. Bank | $3,000 – $25,000 | 7.49% – 17.99% | N/A | N/A |
| Marcus | Up to $40,000 | 6.99% – 19.99% | 680 | N/A |
| TD Bank | $2,000 – $50,000 | 6.99% – 18.99% | 660 | No income verification |
Best Bank Personal Loan Alternatives for Bad Credit
| Loan Company: | Min. Credit Score: | APR: | Amount: | Approval: | Terms: | Type: |
|---|---|---|---|---|---|---|
| BadCreditLoans | 0 | 5.99% – 35.99% | $500 – $10,000 | < 1 Day | 3 – 36 months | Personal Loans for Really Bad Credit |
| OppLoans | 0 | Vary By State | $500 – $4,000 | < 1 Day | 9 – 18 months | Alternative Payday Loans for Really Bad Credit |
| CashUSA | 0 | 5.99% – 35.99% | $1,000 – $10,000 | < 1 Day | 2 – 5 years | Secured Personal Loans for Bad Credit |
| LendingTree | 500 | 3.99% – 35.99% | $1,000 – $50,000 | < 1 Day | 1 – 5 years | Personal Loans for Bad Credit |
| LendingPoint | 585 | 9.99% – 35.99% | $2,000 – $25,000 | 1 – 3 Days | 3 – 5 years | Personal Loan for Bad Credit |
| PersonalLoans | 580 | 5.99% – 35.99% | $1,000 – $35,000 | < 1 Day | 90 days – 72 months | Personal Loans for Bad Credit |
As you can see, there are plenty of reliable lenders out there.
If your credit score is 500 or more, start with LendingTree, PersonalLoans, and LendingPoint. They offer competitive APRs and usually provide funding in 1 business day. If your credit score is less than 500, try BadCreditLoans. Your APR won’t exceed 35.99%, and all loans are unsecured.
If you’re comfortable using collateral, CashUSA is the lender for you. And by securing your loan, it’s possible to receive an APR as low as 10%.
Now let’s discuss OppLoans and LendUp. These are alternative lenders – which means their APRs exceed 35.99%. However, compared to predatory payday loans with average APRs of 400%, their products are much more affordable.
For a detailed breakdown of everything, these companies have to offer, see our advanced guide.
Loans Available to People with Bad Credit
To figure out which loan is right for you, you need to understand how each works:
- Unsecured Personal Loans. The term ‘unsecured’ means you don’t have to put up any collateral. They’re installment loans, with amounts usually ranging from $500 to $100,000. APRs are capped at 35.99%, and LendingTree, PersonalLoans, LendingPoint, and BadCreditLoans are some of the best providers out there.
- Secured Personal Loans. The term ‘secured’ means you have to put up collateral. It’s riskier from a borrower’s perspective because the lender will seize your asset if you fail to repay the proceeds. However, because it’s less risky from a lender’s perspective, you usually receive a lower APR. For secured loans, CashUSA is our top choice.
- Cosigner Loans. ‘Cosigning’ means someone else is vouching for your creditworthiness. The person also becomes liable for the debt if you fail to pay. But, because a co-signer makes the loan less risky for the lender, you usually receive a lower APR.
- Alternative Payday Loans. Alternative payday loans are used by borrowers who don’t qualify for personal loans but want to avoid the high APRs of predatory payday loans. You can borrow anywhere from $100 to $5,000, and APRs tend to range from 35.99% to 200%. OppLoans is our top choice, with LendUp a close second.
- Credit Union Loans. Federal credit unions cap their APRs at 18%, but you need to be a member to qualify. However, most credit unions are not-for-profit enterprises and look to help those in their communities. Because of that, their qualification criteria analyze more than just your credit score.
Why Don’t Banks Offer Personal Loans to People with Bad Credit?
It’s all about risk. Banks manage a complex portfolio of assets, requiring them to limit their exposure to risky borrowers:
- Banks have higher credit score requirements. Because banks face regulatory scrutiny, they often cap their subprime loan exposure. Because of this, they usually only offer personal loans to borrowers with ‘good’ credit scores (670 to 739).
- Banks want to market credit cards. Because banks would rather promote credit cards, offering personal loans to borrowers with bad credit can cause overlap.
- Banks usually have income minimums. To ensure you can repay the loan, banks usually want to see your most recent tax filing. If you can’t meet the minimum income requirement, you’re probably too risky.
- Banks often ask for collateral. While many online lenders offer unsecured loans, banks usually require collateral to overcome a bad credit score. This way, the bank is covered in case you default.
What If I Have Fair Credit?
It usually isn’t enough.
Online lenders and alternative lenders thrive because they fill the void left by traditional banks. Because banks deny so many borrowers, online lenders step in to provide financing when banks say no.
However, U.S. Bank offers a payday loan alternative called the Simple Loan. You can borrow upwards of $1,000, and the bank charges a $12 fee (with automatic payments from your U.S. Bank checking account) or a $15 fee (with manual payments) for every $100 borrowed. You repay the proceeds in 3 monthly payments, and a $400 loan with a $48 finance charge has an APR of 70.65%.
Can I Get a Credit Card from a Bank if I Have Bad Credit?
While your options are usually limited, there are credit cards designed for borrowers with bad credit. However, these are usually secured cards that have low limits and require a security deposit. And when you add fees on top of that, your credit limit becomes very small.
Have a look at this formula:
Actual Credit Limit = Credit Limit – Security Deposit – Annual Fee – Minimum Monthly Payment * N
For example, if you apply for a secured credit card with a credit limit of $500, a security deposit of $250, an annual fee of $50, and an APR of 18%, your minimum monthly payment works out to $20. For the first month, your actual credit limit is only $180:
$180 = $500 – $250 – $50 – $20 * 1
Despite all that, a secured credit card is a great tool to rebuild your credit. By making the minimum monthly payment, it boosts your credit score. And once banks and other lenders see your creditworthiness is improving, they’ll start offering products with higher limits, lower APRs, and better rewards. For example, say the minimum credit score for the card you want is 670, but you have a credit score of 500. If you use a secured card to build your credit score up to 620, your bank may reward your hard work by allowing you to upgrade to a more attractive card.
Best Credit Cards for Borrowers with Bad Credit
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