Best Personal Loans for Bad Credit for May 2022

Upgrade

• APR: 5.94% to 35.97%
• Loan amount: $1,000 to $50,000
• Loan terms: 24 to 84 months
• Time to receive funds: 1 business day
• Prequalification: Yes
• Origination fee: 2.9% to 8%. 
• Co-signer/joint applicant option: Joint applicant
• Prepayment penalty: No
• Minimum credit score: Not disclosed

Upgrade is a 100% online neolender (an online only lender) that can be used for credit card refinancing, debt consolidation, home improvement and major purchases. Upgrade might not have the lowest APR relative to other neolenders, but it does make loans available to those with poor credit history. Upgrade also offers a 0.5% discount for users who opt for autopay. 

Keep in mind that the majority of lower rates will go to users who want smaller loans under $25,000. Upgrade also charges late fees, and its origination fees are on the higher end (ranging up to 8%).

Upstart

• APR: 5.35% to 35.99%
• Loan amount: $1,000 to $50,000
• Loan terms: 36 and 60 month loans
• Time to receive funds: 1 business day
• Prequalification: Yes
• Origination fee: 0% to 8%
• Co-signer/joint applicant option: No
• Prepayment penalty: No
• Minimum credit score: No minimum requirement

Upstart is an artificial intelligence lending platform built on the premise of improving consumers’ access to credit. It is one of the only lenders to make loans available to those with limited credit history, with no minimum credit score requirement. Instead, Upstart considers alternative factors such as a job history and requires proof of a regular source of income. 

Upstart charges late fees and relatively high origination fees, in addition to a $10 fee for every requested paper copy of your loan agreement. Upstart does not offer loans to West Virginia or Iowa residents. 

Happy Money

• APR: 5.99% to 24.99%
• Loan amount: $5,000 to $40,000
• Loan terms: 24 to 60 months
• Time to receive funds: 2 to 5 days
• Prequalification: Yes
• Origination fee: 0% to 5%
• Co-signer/joint applicant option: No
• Prepayment penalty: No
• Minimum credit score: 550

Happy Money’s Payoff Loan is specifically for credit card debt. With a minimum credit score requirement of 550, it’s a great option for those with lower credit. Happy Money will also consider your debt-to-income ratio, age of credit history, lines of credit opened and credit utilization while deciding your rates. Happy Money does not offer loans in Massachusetts or Nevada.

LendingClub

• APR: 7.04% to 35.89%
• Loan amount: $1,000 to $40,000
• Loan terms: 36 or 60 month terms
• Time to receive funds: 2 days
• Prequalification: Yes
• Origination fee: 3% to 6%.
• Co-signer/joint applicant option: Joint applicant
• Prepayment penalty: No
• Minimum credit score: 600

LendingClub is a digital lender that offers credit card consolidation loans, balance transfer loans, debt consolidation loans and home improvement loans. It has a minimum credit score requirement of 600, making its loans accessible to those with below average credit. LendingClub does charge late fees. 

LendingClub is a great option for those who want to apply with a joint applicant: If you don’t have long-standing credit history, or if your credit score is too low for you to apply, you can ask someone with good or excellent credit history to act as a co-borrower. As a co-borrower, they would hold equal ownership of the loan and equal responsibility for paying back the loan. 

LendingPoint

• APR: 9.99% to 35.99%
• Loan amount: $2,000 to $36,500
• Loan terms: 24 to 60 months
• Time to receive funds: 1 business day
• Prequalification: Yes
• Origination fee: 0% to 6%
• Co-signer/joint applicant option: No
• Prepayment penalty: No
• Minimum credit score: Not disclosed

LendingPoint is open to borrowers with fair credit. It also requires a minimum annual income of $25,000. It’s a great option for borrowers who need funds fast but don’t want to apply for a payday loan. LendingPoint may charge late fees.

A personal loan consists of funds usable for any purpose except educational expenses or investments. They’re mostly to consolidate debt, finance home improvements or pay for family-related expenses or emergencies.

There are two types of personal loans: An unsecured loan allows you to borrow money and pay it back at regular intervals at a fixed interest rate. A secured personal loan requires you use an asset as collateral in order to access funding. Unsecured loans are viewed as riskier, and so will likely have a higher interest rate. Personal loans are generally unsecured. 

An origination fee is a one-time, loan processing fee. It is a percentage of your total loan: A loan of $10,000 with a 5% origination fee will require you to take out $10,500. 

The factors that determine your origination fee amount and APR are the same that determine your eligibility for a personal loan: Your credit score, credit history, income, loan amount, loan terms and status as a single applicant or co-applicant will likely have an impact. As always, applicants with higher credit scores and established credit histories will qualify for the lowest rates. Shorter loan terms and larger loan amounts also usually have lower rates. 

There are a few different credit scoring models. FICO scores dictate that a ‘very poor’ score is in between 300 and 579 and a ‘fair’ score is between 580 to 669, while VantageScore dictates that a ‘very poor’ score is between 300 and 499, a ‘poor’ score is between 500 and 600 and a ‘fair’ score is between 601 and 660. 

Though numbers vary between companies, many lenders set their minimum credit score qualification between 600 and 640. 

Prequalification is offered by many lenders to allow potential applicants to view their payment plan, interest rates and monthly payment prior to actually submitting an application for the loan. Prequalification requires a soft credit pull, through which lenders view a limited portion of your credit history. Notably, a soft credit pull will not have any impact upon your credit score.