Having a low credit score can make borrowing more difficult, especially when you need money for an unexpected expense, medical bill, car repair, or debt consolidation. Traditional banks may offer fewer options to borrowers with damaged credit histories, and some lenders that accept lower scores charge significantly higher interest rates.However, a low credit score does not automatically mean that every loan application will be rejected.
Some lenders consider additional factors, including income, employment, existing debt, and banking history. The important question is whether you can find a loan with affordable payments and terms that fit your budget.
The best personal loans for bad credit in 2026 are not necessarily the loans with the fastest approval or the fewest eligibility requirements. A suitable loan should have transparent costs, manageable repayment terms, and a lender you can verify independently.
This guide explains how bad-credit personal loans work, what to compare, which lenders to investigate, and what alternatives may be worth considering before you borrow.
What Is a Personal Loan for Bad Credit?
A personal loan for bad credit is a loan marketed to, or available to, borrowers whose credit histories may make conventional financing harder to obtain.
Credit scores are one factor lenders may use to assess an application. Different lenders have different approval criteria, and there is no universal credit-score cutoff that applies to every personal loan.
Depending on the lender, a personal loan may be unsecured or secured.
Unsecured personal loans generally do not require the borrower to pledge a specific asset as collateral. Approval may depend heavily on credit history, income, existing obligations, and other underwriting factors.
Secured personal loans require collateral, such as money held in a qualifying account or another acceptable asset. Collateral may help some applicants qualify, but the borrower risks losing the pledged asset if the loan is not repaid according to the agreement.
Most installment personal loans provide a lump sum that is repaid through scheduled payments over an agreed period. Interest and fees depend on the lender, borrower, loan amount, and contract terms.
Best Personal Loan Lenders to Compare in 2026
No lender is best for every borrower. The companies below are examples to investigate when comparing bad-credit personal loans. Eligibility, rates, fees, and product availability can change, and the options available to you may differ by state.
1. Upstart: Worth Investigating With a Limited Credit History
Upstart uses additional information beyond traditional credit-score criteria in its lending process. Depending on its current underwriting rules, this may make it worth investigating for borrowers who have limited credit histories or do not fit conventional lending profiles.
A broader assessment does not mean that everyone with bad credit will qualify. Income, outstanding obligations, employment-related information, and other factors may still affect the decision and offered terms.
Before accepting an offer, review the APR, origination fee, repayment term, and net amount you will receive after any deductions.
Potential fit: Borrowers whose credit histories are limited or less conventional.
What to check: Actual eligibility, total repayment cost, and whether an origination fee applies.
2. OneMain Financial: An Option for Some Lower-Credit Borrowers
OneMain Financial offers personal installment loans and evaluates applicants using its lending criteria. It may be worth comparing for borrowers who have difficulty qualifying through lenders that require stronger credit profiles.
Depending on the loan and state, the company may offer secured or unsecured options. Secured borrowing introduces additional risk because collateral may be at stake if the borrower defaults.
Do not focus only on the loan amount or how quickly funds might arrive. Review the interest rate, fees, payment schedule, collateral requirements, and consequences of missed payments.
Potential fit: Borrowers who want to compare installment-loan options and can meet the provider’s requirements.
What to check: Total borrowing cost, state-specific terms, and whether collateral is required.
3. Avant: An Option to Compare for Personal Installment Loans
Avant offers personal financial products to eligible borrowers, with availability and underwriting requirements depending on the product and location.
Borrowers with imperfect credit may investigate its current personal-loan terms alongside other offers. However, approval criteria, minimum credit expectations, and pricing can change, so do not rely on an old advertised threshold.
Compare the APR and origination fee carefully. A fee deducted from the loan proceeds can mean you receive less money than the amount shown in the contract while still owing the scheduled loan balance.
Potential fit: Applicants looking for an installment loan and a straightforward comparison of costs.
What to check: Current state availability, origination charges, and the total amount repayable.
4. Upgrade: Consider Comparing Its Available Loan Options
Upgrade offers personal loans and other credit products to eligible applicants. Its underwriting requirements and available features depend on the product, the borrower’s financial circumstances, and location.
Some borrowers may find prequalification useful for reviewing potential offers before completing a full application. Whether the process uses a soft inquiry and what happens during a subsequent application should be confirmed with the provider.
Compare the proposed monthly payment against your budget, and calculate the full cost over the entire term. A longer repayment period can reduce the monthly payment while increasing total interest paid.
Potential fit: Borrowers comparing installment loans, including options that may accommodate different credit profiles.
What to check: The final APR, origination fee, repayment term, and conditions for any rate discount.
How to Choose Among These Lenders
Treat these companies as a starting point rather than a guaranteed shortlist. A lender that works for one borrower may decline another applicant or offer a rate that is too expensive.
Independent comparison resources can help identify current products, but always verify details with the lender itself. For example, LendingTree’s bad-credit loan comparison discusses providers including Upstart, OneMain Financial, Avant, and Upgrade. Its reported offers reflect its own data and should not be interpreted as a promise of approval or pricing for every applicant.
What Interest Rate Can You Expect With Bad Credit?
Borrowers with lower credit scores may be offered higher interest rates because lenders generally view their applications as presenting greater repayment risk. However, your credit score alone does not determine the final rate.
Lenders may also consider:
- Monthly income and employment stability
- Existing debt payments
- Credit history and recent delinquencies
- Loan amount and repayment term
- Whether the loan is secured
- State-specific rules and lender policies
There is no single APR that applies to all bad-credit loans. An advertised starting rate may be available only to applicants with stronger financial profiles.
When comparing offers, focus on the annual percentage rate (APR) rather than the interest rate alone. APR can include certain borrowing fees, helping you compare products with different fee structures. The exact disclosures and calculation rules depend on the loan and applicable law. The Consumer Financial Protection Bureau explains why APR is useful when comparing borrowing costs.
Also ask for the total amount you will repay. A low monthly payment may look attractive but can hide a long term and a high overall cost.
How Much Can You Borrow With Bad Credit?
The amount available depends on the lender, the applicant’s financial position, state regulations, and the purpose of the loan.
Some providers advertise loans starting at relatively small amounts, while others offer larger personal loans. The maximum advertised amount is not necessarily available to someone with bad credit, and you should not assume that you will qualify for a particular figure.
Before choosing an amount, estimate the actual expense you need to cover. Borrowing more than necessary increases the balance on which interest may be charged.
For example, if you need $2,000 to repair a vehicle so you can get to work, compare the cost of borrowing that amount with the cost of alternative transportation, a payment plan, or other realistic options. The best decision depends on your circumstances, not just the amount a lender is willing to offer.
How to Qualify for a Personal Loan With Bad Credit
You cannot guarantee approval, but preparing your application can help you understand your financial position and avoid preventable mistakes.
1. Check Your Credit Reports
Review your credit reports for inaccurate balances, accounts you do not recognize, or outdated information.
In the United States, consumers can obtain credit reports through AnnualCreditReport.com. If you find an error, follow the relevant credit bureau’s dispute process.
Correcting inaccurate information does not guarantee a higher score or loan approval, but accurate reports are important when lenders evaluate your application.
2. Calculate Your Existing Debt Obligations
List your current monthly payments, including credit cards, auto loans, student loans, and other debts.
Estimate how much money remains after essential living expenses and existing obligations. A new payment should fit within that amount without forcing you to rely on additional borrowing.
If your budget is already stretched, taking out another loan may make the situation worse even if a lender approves it.
3. Compare Prequalification Options
Some lenders allow borrowers to check potential eligibility or estimated terms before submitting a full application. A prequalification process may use a soft credit inquiry, which generally does not affect your credit score.
However, policies vary. Confirm whether the lender uses a soft or hard inquiry at each stage. A full application may involve a hard inquiry, and prequalification does not guarantee final approval or the terms you will receive.
4. Prepare Accurate Application Information
Depending on the lender, you may need to provide identification, income information, employment details, housing costs, bank-account information, and details about existing debts.
Provide accurate information and use a lender’s verified website or official application process. Never falsify income, employment, or financial documents to improve your chances of approval.
5. Consider a Smaller Loan
If you qualify for a smaller amount at more manageable terms, it may be more appropriate than taking the maximum offered.
Borrow only what you need and can repay. A smaller balance can reduce total interest costs, although the exact savings depend on the APR, term, and fees.
6. Compare Multiple Offers
Where possible, compare several offers using the same borrowing amount and repayment term.
Record each lender’s APR, fees, monthly payment, total repayment amount, and any collateral or guarantee requirements. Avoid submitting numerous full applications without first checking eligibility and inquiry policies.
What Fees Should You Watch For?
The interest rate is only one part of the cost of a personal loan. Read the agreement for all charges that may apply.
Origination fee: Some lenders charge a fee for processing the loan. It may be deducted from the funds you receive or handled in another way specified in the agreement.
Late payment fee: Missing a scheduled payment may trigger a charge and potentially affect your credit history.
Returned payment fee: A payment that fails because of insufficient funds or another issue may result in an additional fee.
Prepayment terms: Some loans permit early repayment without a penalty, while others may have conditions you should understand before signing.
Optional products: Review whether any insurance or additional service is optional, how much it costs, and whether it is appropriate for your circumstances.
Ask the lender for a written breakdown of the amount borrowed, money disbursed, fees, payment schedule, and total cost. Do not sign until you understand these figures.
Are Personal Loans for Bad Credit Safe?
A personal loan from a legitimate lender can be useful in some situations, but a high-cost loan can create financial problems when the payment is unaffordable.
Before applying, verify the company’s identity, check its official website, and determine whether it is authorized to offer loans in your state where required.
Be cautious if a lender:
- Guarantees approval without evaluating your circumstances.
- Demands an unexplained upfront payment to release loan funds.
- Pressures you to sign immediately.
- Refuses to disclose the APR, fees, or total repayment amount.
- Requests passwords or one-time verification codes.
- Uses misleading government-affiliation claims.
- Encourages you to borrow more than you need.
Some legitimate providers charge disclosed fees, so the existence of a fee alone does not prove fraud. The warning sign is a demand for money under unclear or deceptive conditions, particularly when the provider cannot be independently verified.
The CFPB also advises borrowers considering online payday loans to investigate the lender, understand the costs, and protect their personal financial information. These warnings are especially relevant when comparing unfamiliar online borrowing services.
Alternatives to Personal Loans for Bad Credit
If loan offers are too expensive, consider whether another option could meet the same need.
Credit Union Loans
Some credit unions offer personal loans and may consider factors beyond a single credit score. Membership eligibility varies, and not every credit union accepts every applicant.
Ask about APRs, fees, repayment terms, and whether the institution offers financial counseling or small-dollar loan programs.
Payment Plans With Service Providers
For medical bills, utilities, or certain repair expenses, ask the provider whether it offers a payment plan or financial assistance.
A payment arrangement may avoid taking on a separate high-cost loan, although the terms and availability vary.
Nonprofit Credit Counseling
If you are struggling with multiple debts, a reputable nonprofit credit counselor may help you review your budget and evaluate options. Ask about fees, services, and whether a proposed debt management plan is suitable for your situation.
Employer or Community Assistance
Depending on your circumstances, an employer may offer a payroll advance or emergency assistance program. Local nonprofits and public assistance programs may also provide support for certain eligible expenses.
Verify the conditions carefully and understand whether any advance must be repaid through future wages.
Building Credit Before Applying
If the expense is not urgent, improving your credit profile before borrowing may expand your options.
Review reports for errors, pay existing accounts on time, reduce revolving balances where possible, and avoid taking on unnecessary new debt. Credit improvement takes time and is not guaranteed to produce a particular score or loan offer.
Personal Loan vs. Payday Loan: What’s the Difference?
A personal installment loan typically provides a lump sum repaid through scheduled installments over an agreed term. A payday loan is generally a short-term borrowing product associated with a borrower’s upcoming wages or bank-account payment.
Payday loans can have extremely high costs relative to the amount borrowed and may be difficult to repay without taking on further debt. The CFPB warns that online payday loans can carry substantial fees and that some websites are lead generators rather than direct lenders.
Do not compare products by looking only at the cash received or the next payment due. Compare the APR, fees, repayment period, and consequences of being unable to repay on time.
If you are considering a short-term loan because you cannot cover essential expenses, investigate payment plans and local assistance before accepting expensive borrowing.
Frequently Asked Questions
Can I get a personal loan with a 500 credit score?
Some lenders may consider applicants with very low credit scores, while others may decline the application or offer expensive terms. Your income, debts, credit history, and the lender’s criteria also matter. There is no guarantee that a borrower with a 500 score will qualify.
Which personal loan is easiest to get with bad credit?
There is no universally easiest lender. Approval standards vary, and a loan that is easier to obtain may have higher fees or interest rates. Compare the full cost and avoid choosing a product solely because it advertises fast approval.
Can I get a bad-credit personal loan without a cosigner?
Some lenders offer individual applications without a cosigner, but approval depends on their criteria. A cosigner or joint applicant may be available with certain products, although that person can take on significant repayment responsibility. Read the agreement before involving another person.
Do bad-credit personal loans improve your credit score?
They may help establish a positive payment history if the lender reports the account to relevant credit bureaus and you make payments as agreed. However, the effect depends on the reporting practices and your overall credit profile. Late payments or default can harm your credit.
Should I use a personal loan to consolidate credit card debt?
Debt consolidation may be worth considering if the new loan has a lower overall cost and a manageable payment. Compare APRs, origination fees, repayment periods, and total interest. Avoid building up new credit card balances after consolidation, as doing so can increase your overall debt.
Are no-credit-check personal loans a good idea?
A claim of no credit check does not automatically make a loan affordable or safe. The lender may use other information to evaluate you, and the product may have high costs. Verify the provider and review all terms before sharing sensitive information or accepting funds.
How can I compare loan offers without hurting my credit score?
Look for lenders that clearly state whether they offer prequalification with a soft credit inquiry. Confirm the inquiry policy before proceeding. A later full application may require a hard inquiry, and prequalification is not a guarantee of approval.
Final Thoughts
The best personal loans for bad credit in 2026 are those that meet a real financial need without creating an unaffordable repayment obligation. Upstart, OneMain Financial, Avant, and Upgrade are examples of providers borrowers may investigate, but their current eligibility rules and terms must be checked directly.
Before borrowing, review your credit reports, calculate your budget, compare APRs and fees, and determine the total amount you will repay. If the available offers are too expensive, investigate credit unions, payment arrangements, nonprofit counseling, and other alternatives.
A loan should help solve a financial problem—not make it more difficult to manage.
Financial disclaimer: This article is for educational purposes only and is not financial, legal, or tax advice. Lender availability, eligibility requirements, interest rates, fees, and loan terms can change. Confirm current details with the lender and relevant authorities before making a financial decision.