What Is A Bad Credit Personal Loan? Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Getting a Loan With Bad Credit Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Westend61/Getty Images October 26, 2022 Aylea Wilkins is an editor specializing in personal and home equity loans. She has previously worked for Bankrate editing content about auto, home and life insurance. She has been editing professionally for nearly a decade in a variety of fields with a primary focus on helping people make financial and purchasing decisions with confidence by providing clear and unbiased information. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. A is a type of personal loan that caters to borrowers with lower credit scores. They can be used for a variety of purposes, such as covering financial emergencies, consolidating debt or paying for medical bills. Bad credit personal loans work the same way as other personal loans — they generally come with a fixed interest rate and are payable in fixed monthly installments. But here’s the key difference: they often come with higher interest rates and fees. Where can you get a bad credit loan
You can get a from many places, such as: Credit unions. Since credit unions are member-owned institutions, they may be willing to offer you a loan even if you have less-than-stellar credit. Online lenders. Many online lenders offer bad credit loans. For example, offers loans to consumers with credit scores as low as 580. Traditional banks. You may also get one from a bank, though they tend to have more stringent credit requirements. And if you have a relationship with the bank, you may be offered an interest rate discount. Who may want to consider a bad credit loan
A bad credit loan may be worth considering if you need fast cash and can’t get approved for a traditional loan. You could pay several hundred or thousands of dollars more in interest. Still, the rate is usually far less than payday lenders charge, and some lenders offer same or next-day funding. A secured loan is a good fit for borrowers who are confident that they can make the loan payments on time. These are ideal for people who have something to use for collateral and could benefit from the lower rates. An unsecured loan could be ideal if you’d prefer not to put an asset up for collateral and don’t mind paying a higher cost to borrow the funds you need. How much does a personal loan cost when you have bad credit
It depends on the lender and your credit rating. You can expect an APR of up to 36 percent when you . A lower credit score means you’ll typically get a higher interest rate as the risk of you defaulting on the loan is higher. But if you opt for a secured loan, the lender could give you a slight break on the interest as they’ll assume a little less risk. How do you avoid predatory bad credit loans
Not all bad credit loans are the same. When evaluating your options, consider these factors to gauge if the loan you’re considering is a safe and viable choice: Is the lender reputable? The lender should be registered to do business in your state and have a physical address and secured website. Does the lender charge prepayment penalties? You may want to steer clear of bad credit loans with prepayment penalties. Otherwise, you’ll be assessed a fee if you get back on track sooner than later and pay the loan off early. Is the interest rate excessive? Bad credit loans come with steep interest rates. The rate quote for your preferred lender should be comparable to what other lenders offer. If not, it may be a scam. What are the repayment terms? Steer clear of bad credit loans with extended payment periods. The lender may stretch the loan out to make your monthly payment more affordable, but you’ll also pay a fortune in interest as they’ll have more time to collect from you. Also, look for lenders who guarantee approval before you apply or require an upfront payment to secure a loan. Both are signs of a scam, and these lenders should be avoided at all costs. What are alternatives to a bad credit loan
If you can’t get approved for a bad credit loan or would prefer to explore other options, here are some alternatives to consider: Credit cards: Some credit card companies feature products for consumers with past credit challenges. Only consider options that do not charge steep annual fees or monthly maintenance fees if possible. Payday loans: These loans should only be used as a last resort as they often come with three-digit interest rates. Plus, they’re typically due within two weeks and can strain your finances if you cannot pay. You may incur additional interest and fees from having to roll the loan over. Family or friends: You can also ask a relative or close confidant to loan you the money. Put an agreement in writing to avoid any confusion, and only commit to a repayment schedule that you can comfortably afford and that works for your budget. As you get back on track financially, consider improving your credit health and building an emergency fund. That way, you won’t have to resort to a bad credit loan if you experience financial hardship in the future. Bottom line
If you need money fast to tackle various expenses, taking out a bad credit personal loan is one potential solution. But before you do this, consider whether you can afford the higher borrowing costs and explore cheaper alternatives. For example, a friend or family member may be willing to loan you money at a much lower interest rate. Also, be mindful of potential scams — steer clear of lenders who guarantee approval or charge excessively high rates compared to other lenders. SHARE: Aylea Wilkins is an editor specializing in personal and home equity loans. She has previously worked for Bankrate editing content about auto, home and life insurance. She has been editing professionally for nearly a decade in a variety of fields with a primary focus on helping people make financial and purchasing decisions with confidence by providing clear and unbiased information.