How to Get Every Type of Loan With Bad Credit

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Borrowing money when you have bad credit can be a stressful experience. For starters, your chances of getting denied are high. And if you do get approved, many bad-credit loans come with high interest rates.

Neither risk is entirely avoidable. But if you know where to look, you can find loans for people with bad credit that aren’t predatory. With these loans, you can improve your chances of getting approved and maybe even score a reasonable interest rate. Here’s how to find them.

Loans for people with bad credit: Here are your options

Depending on the type of loan you’re looking for, different options are available. Find out which option works for you for the following loan types.

Student loans

If you’re in school, your best bet is to apply for federal student loans. The Department of Education doesn’t run a credit check when you apply, so you’ll qualify for the low interest rates the government offers.

If you don’t qualify for federal student loans or you’ve maxed out your federal loan options, your next option is private student loans.

Private student lenders do have credit score requirements, however. So, you’ll need to find a co-signer who has good or excellent credit to help you get approved.

Mortgage loans

Getting a conventional mortgage loan can be hard if your credit isn’t great. Although the minimum credit score in most cases is 620, lenders aren’t required to approve your application if your score makes the cut.

To help provide mortgage loans for people with bad credit, three government agencies offer programs to insure mortgage loans. This insurance limits the risk for lenders, which can result in looser credit requirements.

Keep in mind, however, that each agency might have eligibility requirements and extra closing costs.

Here’s a breakdown:

Government Agency Minimum Credit Score Extra Closing Costs Basic Eligibility Requirements
Veterans Affairs (VA) None Funding fee of 1.25 percent to 3.3 percent of the loan amount You must be one of the following: an active-duty service member, a veteran, an eligible spouse of a veteran, or a U.S. citizen who served in the armed forces of a government allied with the U.S. during World War II.
Federal Housing Administration (FHA) 500 Upfront Mortgage Insurance Premium (UFMIP) of 1.75 percent of the base loan amount You must put down 10 percent to get approved with a credit score of 500 to 579 or 3.5 percent to get approved with a credit score of 580 or higher.
U.S. Department of Agriculture (USDA) 580 None There are different requirements depending on which program you choose. See the USDA website for more details.

For some agencies, more requirements apply. For example, the VA has some requirements regarding how long you’ve been in service. There are also some exceptions if you’ve suffered a service-connected disability. See the VA eligibility page for more information.

Keep in mind that mortgage lenders are interested in other aspects of your financial situation as well. For example, they want to know you have a stable job. They also want to make sure your debt load won’t be too heavy if you add a mortgage.

In fact, mortgage lenders typically use two ratios to make sure your debt isn’t too much of a burden:

  • Front-end ratio: Your total monthly housing costs shouldn’t exceed 28 percent of your gross monthly income.
  • Back-end ratio: Your total monthly debt payments, including the proposed mortgage, shouldn’t exceed 36 percent of your gross monthly income.

Auto loans

Auto loans are typically secured, meaning the vehicle is used as collateral in case you default, so you usually can get one with bad credit.

Some auto lenders specialize in auto loans for people with bad credit. Here are a few examples:

Additionally, well-known lenders such as Capital One and U.S. Bank allow you to get preapproved for a loan with a soft credit check, which can give you an idea of whether you’d get approved without officially applying.

To improve your chances of getting approved with a low interest rate, considering getting a co-signer with a good credit history.

Personal loans

The nice thing about personal loans is there are few exceptions for how you can use the funds. But good personal loans for people with bad credit are tough to find.

If you want an unsecured personal loan, here are a few options to consider:

Lender Minimum Credit Score Interest Rates (as of November 2017)
OneMain Financial None Not listed
Avant 580 9.95% – 35.99%
Lending Club 600 6.16% – 35.89%

Note that both Avant and Lending Club allow you to pre-qualify for a loan before you officially apply. This process allows you to see what kinds of terms you’d qualify for with a soft credit check, which won’t hurt your credit score. Then, you can apply to get the final offer.

If you’re having a hard time getting approved for an unsecured personal loan, some lenders offer bad-credit loans that are secured with collateral such as a car title, certificate of deposit (CD), or savings account.

Here are the top options for secured personal loans:

Lender Minimum Credit Score Interest Rates (as of November 2017)
Finova Financial No credit check 30.00% APR maximum
OneMain Financial None Not listed
Wells Fargo None Find your rate

Getting a co-signer with a solid credit history can significantly improve your chances of getting approved with a lower interest rate.

Short-term loans

If you need cash fast but don’t need enough to qualify for a personal loan, you might think your only options are payday loans and auto title loans.

But these loans are often predatory in nature, charging sky-high interest rates and requiring that you repay them within weeks.

If you’re a member of a credit union, you might be able to get a payday alternative loan. These bad-credit loans don’t charge more than 28.00% APR. You typically need to be a member of the credit union for at least one month before applying, though, so it’s not a good option if you don’t meet that eligibility requirement.

Also, not all credit unions offer payday alternative loans, so call first.

Credit-builder loans

If you don’t necessarily need the money but want to work on improving your credit, a credit-builder loan can help you.

Self Lender is a popular company that offers credit-builder loans. Here’s how it works:

  • The lender sets aside the loan amount in a CD account instead of giving it to you. That account serves as collateral for the loan.
  • You make payments on the loan for 12 months with a 10.57% APR while the loan earns a lower rate of interest in the CD account.
  • When you finish paying off the loan, you receive the balance of the CD, including the interest it earned during the term of the loan.

Self Lender doesn’t do a hard credit pull and doesn’t have any minimum credit score or history requirements.

Credit cards

If you want a great rewards credit card with a big sign-up bonus, you might be setting yourself up for disappointment. These credit cards typically are targeted to people with good or excellent credit.

That doesn’t mean you’re completely out of luck, but it does mean you might have to put some money down as a deposit on a secured credit card.

The Discover it Secured credit card is the best option for people with bad credit. Here are its main features:

  • There’s no annual fee.
  • Your deposit can be as low as $200. Your credit limit will be equal to your deposit.
  • You’ll earn 2 percent cash back at restaurants and gas stations up to $1,000 spent between the two each quarter. Plus, you’ll get 1 percent cash back on everything else.
  • Starting eight months after you open the account, Discover will review your account each month to determine if it can convert your card to an unsecured card.
  • You’ll have free access to your FICO credit score so you can track your improvements.

The card charges a 23.99% APR, but you can avoid it by paying off your balance in full each month. You’ll also build credit while you make payments, meaning you can realistically improve your credit score without paying a dime in interest.

How to improve your credit to get past bad-credit loans

If you need to borrow money now, some bad-credit loans can get you the cash you need without costing you an arm and a leg. But there are steps you can take to improve your credit and qualify for better loans in the future.

Check your credit reports

You can access your credit report from each of the three national credit bureaus — Experian, Equifax, and TransUnion — once a year at AnnualCreditReport.com.

As you review your credit reports, you’ll get an idea of what’s causing your low credit score so you can address the issues.

For example, if you notice an error or fraudulent account, you can contact the listed lender and credit bureau to dispute the item. If you have late payments on a loan, you can pay it up and continue making payments on time.

Know what goes into your credit score

Although there’s no way to know exactly how your credit score is calculated, some general factors go into your score. Each one is weighted differently, and this chart for the FICO credit score shows how important each one is:

As you can see, your payment history and how much you owe are vastly more important than the other factors, so focus on those as you’re working to build your credit.

Avoid borrowing unless it’s necessary

As long as your credit is less than stellar, you’ll continue to pay relatively high interest rates on bad-credit loans. So, until your credit has improved and you qualify for better rates, avoid taking out loans or carrying a credit card balance.

As you establish a better credit history and borrowing becomes less expensive, borrowing won’t hurt you as much as it once did.

There’s hope for people with bad credit

Although having bad credit can make it harder to obtain a loan, it’s not impossible.

As you research options and compare offers, you’ll find loans for people with bad credit do exist. You just have to make sure you’re getting the best deal for your situation.

Then, you can begin the long but rewarding journey of building your credit and improving your financial situation for the future.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderAPR RangeLoan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal Loans: Fixed rates from 6.990% APR to 14.865% APR (with AutoPay). Variable rates from 6.255% APR to 12.555% APR (with AutoPay). SoFi rate ranges are current as of September 1, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.255% APR assumes current index rate derived from the 1-month LIBOR of 2.08% plus 4.425% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

    To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.See Consumer Licenses.
  2. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  3. SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.
  4. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

3 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 4.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 4.99% APR loan, a borrower will need excellent credit on a loan of $15,000 with a term of 24 months, and qualify for at least two of the following discounts: (1) add a co-borrower who has sufficient income; (2) use at least fifty percent of the loan proceeds to directly pay off existing debt; or (3) show proof of having at least forty-thousand dollars in retirement savings – contact FreedomPlus for further details.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

5 Important Disclosures for LendingPoint.

LendingPoint Disclosures

  • Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon LendingPoint’s final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. LendingPoint makes loan offers from $2,000 to $25,000, at rates ranging from a low of 15.49% APR to a high of 34.49% APR, with terms from 24 to 48 months. The loan offer(s) shown reflect a 28 day payment cycle which is being offered as a courtesy as many of our customers are paid on a biweekly schedule and thus this may better align the loan payment dates with your actual income receipt schedule.

6 Important Disclosures for LendingClub.

LendingClub Disclosures

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.


7 Important Disclosures for Earnest.

Earnest Disclosures

  1. Earnest does not lend in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

8 Important Disclosures for Avant.

Avant Disclosures

* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.

** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33


* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

7.73% – 29.99%$1,000 - $50,000Visit Upstart
6.26% – 14.87%1$5,000 - $100,000Visit SoFi
6.99% – 35.97%*$1,000 - $50,000Visit Upgrade
5.99% – 24.99%2$5,000 - $35,000Visit Payoff
4.99% – 29.99%3$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%4$5,000 - $50,000Visit Citizens
15.49% – 34.49%5$2,000 - $25,000Visit LendingPoint
6.16% – 35.89%6$1,000 - $40,000Visit LendingClub
6.99% – 18.24%7$5,000 - $75,000Visit Earnest
9.95% – 35.99%8$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.