Having bad credit might be incredibly frustrating, but it isn’t the end of the world, despite what many people think. When you have bad credit, getting lenders to trust you with their money can be more difficult. However, more and more peer-to-peer lenders are popping up around the country. And many of them specialize in personal loans for people with bad credit scores. 

So if you want to consolidate debt, pay off a medical bill, or need cash for an emergency, keep reading to find out how you can get a personal loan with bad credit. 

What Are Personal Loans?

A personal loan delivers a one-time cash loan payment from a lender to a borrower. Like a regular loan, the lender then pays this money back over time plus a percentage of interest, depending on the loan’s terms. 

Personal loans could be used to make large purchases, pay back medical debt, consolidate other debt, cover emergency expenses, or cover other major personal expenses. Personal loans can be paid back quickly over a few months, or they could take multiple years to be repaid.

How Do I Know If My Credit Is Bad?

The idea of “bad credit” is subjective and depends on the credit events that got you to your current score. There are general ranges considered “bad” and “good” credit, although some lenders will determine your credit based on individual factors. According to Experian, here’s how most lenders break down credit scores:

  • Very poor credit is between 300-579
  • Fair credit is between 580-669
  • Good credit is between 670-739
  • Very good credit is between 740-799
  • Exceptional credit is anything over 800

Are There Benefits to Getting A Personal Loan With Bad Credit?

There are many benefits to getting a personal loan when you have bad credit. First, personal loans are unsecured, meaning you won’t need to put down any collateral to qualify. Additionally, since these loans are personal, there aren’t any restrictions on what you can use the funds for. 

Approval time for personal loans is usually much quicker than other loans, meaning you can be approved in two or three days. Often, you can have funds deposited into your account the following business day. Personal loans can also come from multiple lenders, and the payouts are often higher than other types of loans. 

Can I Improve My Credit Score With A Personal Loan?

Paying off a personal loan in a consistent, timely fashion could certainly boost your credit score in a matter of a few months. This is especially true if you use a personal loan to consolidate and pay off other debt, primarily credit card debt. 

As soon as your overall credit usage comes down, your credit score will begin to reflect that. That said, your score may initially dip since you are taking out a new loan. However, your credit score will eventually improve once you start paying off the existing loans. 

Will My Fees Be Much Higher With Bad Credit?

Personal loan lenders will advertise small interest rates to get people to sign with them, some even promising rates in the single digits. However, these rates are specifically for those with great credit, so you should not expect these same rates if you have a poor credit score. 

With poor credit, you can expect to pay around 20 percent and even up to 30 percent in interest rates for these same loans. Additionally, you will likely have a higher origination or administrative fee deducted from your loan payout. This fee typically hovers between six and eight percent.

Will My Application Process Be Difficult With Bad Credit?

Since a lot of lending and banking is now done online, most of your applications for personal loans will be conducted entirely from the lender’s website. First, you’ll complete a general application that includes your personal information (your name, birthday, social security number, and where you live). You will also be asked about your credit score. 

The lender will also ask you the purpose of the loan and what you will use it for. You should provide an accurate credit estimate based on a recent credit report or a free credit score checking tool. The loan offer could be denied or even downgraded if, when the lender does a hard inquiry on your credit score, it is lower than you initially reported. 

You will then need to then approve the official loan offer. And after that, the final approval and review from the lender should be completed in a few business days. From there, you could have funds in your account the very next business day!

Best Personal Loan Options

Next, we’ll discuss some of the best lenders to get a personal loan with bad credit. While these lenders aren’t guaranteed to offer you a loan, they frequently have some of the best rates for those with poor credit. And they typically don’t charge ridiculous fees. So if you are considering a personal loan, check out this list of lenders. 


Monevo is not just one lender but rather an online marketplace of potential lenders that allows customers to pick and choose the best possible rates for their personal loans. The website has over 30 different banks and lenders available to choose from. 

While the site offers loan contracts for those in virtually any situation, they do have specific programs available for those with a credit score as low as 450. Most people in poor or bad credit situations fall within this range! Loans are available in amounts anywhere from $500 to $100,000. 


OppLoans is a lender designed explicitly for those with poor credit. And not only do they have loan options for those with a low credit score, but they also help you improve your credit. 

When you take out a loan with OppLoans, they report all of your payments to the major credit bureaus, helping you build credit and improve your credit score with each timely payment. They don’t have any credit score minimum to take out a loan, but loans will be smaller, and interest rates will be significantly higher when you have poor credit. 


BadCreditLoans is precisely what it sounds like–they provide loans specifically to those with a low credit score. They don’t only offer personal loans, however. You can get student loans, business loans, credit cards, and more from BadCreditLoans. 

The interest rates for personal loans can range anywhere from six to 36 percent, and loan terms can vary between three months and 72 months. BadCreditLoans is also a loan marketplace rather than an actual lender, so you can weigh different options on the site. 


LendingPoint is another personal loan option, primarily for those with fair credit. Fair credit could just be a few points up from poor on your credit score, so be on the lookout for any credit improvements if you want to use LendingPoint. More than seven million people used LendingPoint in 2020 to secure loans, so it is undoubtedly a trustworthy source if you have a fair credit score. 

Closing Thoughts

Taking out a personal loan can be a great idea if you need some emergency cash. But you’ll want to be careful if you already have a bad credit score. Don’t borrow more than you can realistically pay back. And be sure to make all your payments on time. If you are smart about it, your personal loan could be an effective way to improve your credit score over time.