Loan Reviews

Where to Find Legit Personal Loan Companies for Bad Credit Online?

EPF Last Update: October 25, 2020

Legit loans are these that meet state laws and regulations and are licensed by the authorities. However, there are loans that are technically legit in some states, but they are very expensive and we don’t recommend them because of their bad reputation. These are payday loans and auto title loans. Getting a legit personal loan with bad credit is possible these days because the lending market is more flexible. For those who can’t get a personal loan because of their low credit, there are still better options than payday loans.

Below we will show you the best legit loans for bad credit. But before that, please watch our video on how people with bad credit can legit personal loans.



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Upgrade Disclaimer: Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. The lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. The actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade’s lending partners. Information on Upgrade’s lending partners can be found at https://www.upgrade.com/lending-partners/.

Lending is a multi-billion-dollar business. Like in every such business, it is obvious that there will be some scams. Here we will teach you how to avoid scam loans.

Loans can’t be categorized just as legit or scam. There is also a huge grey area between them. There we can find loans that are technically legit but they are not a good deal. Some people even call them a scam. These are loans with a bad reputation. We will also talk about them.

How to Find Legit Loan Companies and Avoid Scams?

  • Payday loans are illegal in many states

ElitePersonalFinance created a table where we extracted all payday loan regulation by states. You can see that there are states where payday loans are absolutely illegal. In other states, they are legal but not regulated by the law. And in some states, they are legit and regulated by the law. State laws regulate:

  • The highest amount allowed, which is $500 in most cases.
  • The APR.
  • The loan terms.

There are still many lenders that are illegal in their states but operate with no problems.

  • Upfront fees

Every lender that requires you to pay upfront fees to qualify for a loan is a fraud. There are many free-application loan companies allowing you to compare offers with no upfront fees. Asking for an upfront fee is not legal.

  • Hidden fees

When you accept an offer, make sure that the loan company has listed all of the fees. They have to be carefully explained and included in the contract. Legitimate lenders are required to write all fees in the contract and even to explain them to you if you ask them for some clarifications. When you accept the offer, be sure that you understand these fees:

  • APR
  • Origination fee
  • Prepayment fee
  • Late fee
  • Insufficient funds fee
  • Refinancing options
  • Rollovers
  • Auto title loans are illegal in many states

Like with payday loans, many states put legal restrictions on auto title loans.

  • Personal information

Ask your company how your personal information will be stored. Many payday lenders reserve their rights to sell your personal information. You have to avoid these lenders completely. You should provide your personal information only after you have approved the offer and only if the contract clearly states that it can’t be sold to other companies.

  • Avoid lenders that won’t check your credit score

Typically, payday lenders won’t check your credit score and your financial situation, but there is a great reason behind that. They know very well that you have a bad credit score and your financial situation is not so good. These lenders don’t care if you can pay the money on time but only want to trap you in a debt cycle.

  • Avoid unsecured and unsafe sites

Every legitimate loan company should have an SSL certificate on your application form where you reveal your personal details in case you apply online.

  • Avoid sites that look like a scam and relatively new sites

If a site looks like a scam, then it probably is. We highly recommend you to work with reliable and well-known companies. On our site, we list only reputable and well-known loan companies. There are also other big personal finance blogs like ours that list and rank legit loan companies. You can also check what they have to say. You can find them by typing “best personal loan for bad credit” or similar phrases.

  • Avoid lenders that aren’t licensed or registered in your state
  • Avoid lenders that require you to provide them with a prepaid credit card number
  • All legitimate loan companies are free to register and there is no obligation to accept their offers
  • Don’t register with companies that will do a hard inquiry on your credit file

A hard inquiry reduces points on your credit score. Legit companies will do a hard pull, but this will happen only after you accept the offer.

  • Register only with BBB accredited companies
  • Check carefully their contact details

Their physical address has to be on their website.

  • Read reviews

You can type a company’s name and words like ‘review, scam, legit’ after it. If a company is legitimate, you should find a lot of positive reviews. But don’t stop there. Some people who review loan companies get paid to write incorrect (positive) information about them. Stick to reviews from safe and big personal finance sites. These sites spend a lot of time and money to research to provide you with correct information. Also, read people’s comments under the company’s name. But of course, in the end, you have to read the terms of the company where you apply.

If you stick with these rules, you should find a lot of legit loans!

Consequences of Applying for Not Legit Loans

We really don’t want to see people doing this, but still many people end up registering with fraud lenders or those that are legit but non recommended. Below we will list some consequences of doing this.

  • You reveal your personal information to lenders who reserve their rights to sell it to third parties.
  • You register with an unsafe, unsecured website with your personal details and your information can get intercepted by hackers.
  • You receive a contract with many hidden fees.
  • You can’t pay the money on time and the lender requires you to roll it over and thus puts you in a debt cycle.
  • You pay much higher interest fees than with a personal loan.
  • You are told that based on your financial situation you can’t get better loan terms from other legit companies.
  • You are made to sign a contract in an office where you don’t have enough time to read it carefully.

There can be more consequences, but we reserve our rights not to provide legal advice on our site since we are not legal experts. We are financial experts. For more legal consequences, you can turn to a lawyer.

Is There a Difference Between Legit Personal Loans and Legit Bad Credit Loans?

Technically, a company is not legit if it doesn’t respect the law. All other companies should be considered legit. So, based on the law, there is no difference between these two.

But in practice, there is a difference!

And the difference comes from the fact that people who are looking for personal loans and people who are looking for bad credit loans are targeted by different lenders.

If you have a great credit score, you typically go with personal loans or even banks, credit unions, credit cards, and so on. These are legit options with a good reputation.

People with a bad credit score are targeted by unscrupulous lenders. They are manipulated into believing that they have no other options. And people who don’t have a lot of knowledge of the lending market and want money very fast end up falling to these scams. These loans, although legit, have a bad reputation and bad terms too.

In this article, we discuss the only legitimacy. But we only wanted to let you know that you still have many chances to get better terms for a personal loan even with a bad credit score.

Unsafe but Legit Loans with Bad Reputation!

Like we mentioned earlier, there are legit companies, there are scams, but there is also one big grey area. There you can find many companies that are technically legit, but they are not the best deal and they have a very bad reputation. And many people even call them a scam. Here are some of them.

  • Payday loans

If a payday lender is licensed in your state and meets the law regulations that we have mentioned earlier, this is a legitimate business. However, payday loans have a very bad reputation because of their high APR and the likelihood of getting into a debt cycle. Again, we can’t say that they are illegal, but they are a bad deal. We highly recommend that you avoid them. Nowadays, there are many other options available even for people with bad credit.

  • Auto title loans

Again, they are illegal in many states. But if a lender meets the law regulations and if they are licensed, we can’t say that they are entirely illegal. However, we can say that they are not a great deal, because, like with payday loans, you receive an offer with a high APR and in addition, you put your car at risk. These days, there are many ways to avoid them.

  • Installment payday loans

These offers look like payday loans which are slightly improved because the lender provides you with a repayment plan. But you still pay a very high APR, so again, they are not a good deal, although they can be technically legitimate.

  • Alternative payday loans

These are much better than payday loans. They offer more money, a lower APR, and much more flexibility. We recommend them only to people with really bad credit. People who really have no other option can actually benefit from these. Experts say different things about them. Some say they are still predatory but commendable. Other will say they are highly improved payday loans. Although we place them in our grey area, they can be really helpful to many people.

Why My Credit Score is Low?

There can be lots of reasons for your credit score to go down and sometimes it’s just a matter of you not knowing about some of the things that can negatively affect your score. Here are a few things that can cause your credit score to drop:

  • Applying for too many credit cards

Whether you are accepted or not, applying for too many loans or lines of credit can cause points to come off your credit score.

  • A history of late payments

Maybe you have been doing everything you are supposed to now, but you had some delinquent accounts or lots of late payments from years ago holding you back.

  • A huge mistake from the past

If you declared bankruptcy within the last 10 years, it’s going to haunt you and there’s nothing you can do about it.

  • Too much credit card debt

Until you can properly manage your debt, including your credit card debt, your credit score is going to suffer.

  • Not having enough credit diversity

It’s important to have a variety of credit sources, including both installment and revolving debt; loans, credit cards, mortgages, and etc.

  • Not being old enough

Even if your credit is perfect, if you are young you have not been demonstrating you can handle debt for a long enough period of time and this could hold you back.

  • Having errors on your credit report

When is the last time you checked your credit report for errors? Cleaning them up can take time, but you will notice an increase in your credit score by doing so.

How to Get The Best Offer Available?

The most important tip to get the best rates is to apply to many online loan companies. But to be more precise, apply for 100 and even more legit loan companies. Apply for many companies that target people like you. Based on your financial situation, credit score, debt to income ratio, and so on, we have different recommendations for you. Before we move on with quick reviews of the big names in lending, review some of our lists.

How to get personal loans with bad credit fast and easy?

How to get a personal loan if you have a really bad credit score?

Personal loans for fair credit score.

Best bad credit loans 2020.

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