If you are looking for a place to get a bad credit loan, there are several financial institutions to choose from. Online lenders, community banks and credit unions all offer credit loans with bad credit and work with borrowers across the credit spectrum.
That said, do your best to avoid certain types of bad credit loans, such as payday or car title loans. Fortunately, some credit unions and other types of lenders offer cheaper alternatives.
The best place to get a loan with poor credit
The best bad credit loans are provided by online lenders, community banks and local credit unions. When starting the research process, look into the following institutions to avoid loan fraud and predatory loans, as provided by payday lenders.
Online lender
Best: People who prefer to get a loan without visiting a brick-and-mortar store.
Several online lenders offer personal loans to applicants with low credit scores. The application process is usually quick and you need to know your approval status within minutes of application. If approved, funds may be paid immediately on the same day, but usually takes 1-3 business days.
It’s easy to be overwhelmed with the seemingly endless number of lenders. Online markets like Bankrate help you narrow your search by listing reputable lenders who offer the best bad credit loans.
Start by getting prequalified with multiple lenders and comparing rates and terms. By prequalifying, you can measure your qualifications and preview your APR without affecting your credits.
Best Personal Loans for Delinquent Credits in 2025
If you’re not good at credit, consider the top picks of Bankrate’s bad credit lenders. Before choosing a loan, prequalify and compare at least three options.
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Banks or credit unions
Best: Those who want to bank locally, those who are eligible for credit union membership, or those who want to take away payday replacement loans.
Some local community banks will consider lending to poor creditors. We may also offer competitive personal loan fees. Still, most lending decisions are based solely on your creditworthiness and income, making them difficult to get approved.
If you strike at a local bank, you may have more fortune with your local credit union – if you meet all your membership requirements. Personal loans from credit unions may be easier to qualify than community banks, but you have to be a member to borrow. Most have fairly simple membership requirements based on occupation, association, or area of residence.
Some federal credit unions offer payday replacement loans (PALs) for poor credit borrowers. PALS is a small loan with a rate cap of 28% compared to payday loans, and it could be as high as 400% on APR.
learn more: How to choose the best bad credit loan company
Pay for the Advanced App
Best: People with stable pay that need to boost their bank accounts quickly.
The Pay Advance app is designed to allow you to access your salary faster than your expected deposit date. The nature of this financial method requires a stable income stream. Regardless of your credit score, the more predictable your salary, the more likely you are to qualify for a prepayment.
The advancement in salary is not a loan and there is no interest charged. However, these apps may charge subscription fees, express funding fees, or request options tips. The fees may seem small, but don’t forget that the $500 Cash Advance’s $15 fee equals nearly 36% APR.
In addition to your potential fees, keep in mind that using the Pay Advance app will pull you from your future income. This means you will receive a lower salary on the next payday.
Defective credit loans to avoid
Some bad credit loans are predatory with unfairly high interest rates and extremely strict payment timelines. These options should only be used as a last resort.
Payday loan
Payday loans are short-term, short-term financial options, typically offering up to $500. Although it is easy to approve these products even if there is a bad credit, there are important drawbacks. You can pay a large amount of April, over 400%, and you only have a short window to pay back what you owe.
One of the challenges borrowers may face with payday loans is paying off the loan on the due date. This is usually the next payday. Unfortunately, this often leads to more fees and a constant high-profit debt cycle that can be extremely challenging. Despite its convenience, payday loans should only be considered after all other options have been exhausted.
learn more: Payday Loan vs. Installment Loan: What’s the difference?
Title Loan
Car title loans are tailored for borrowers with low credit scores and are using the car as collateral, making it relatively easy to qualify. To qualify, you must own a car entirely, meaning you don’t have a car loan.
In most cases, you will usually make equal monthly payments for up to six months, over a set period. This type of loan is dangerous as it is used to protect it. If you are late in your payment, your lender can get your car back. Also, the APR may be lower than payday loans, but it is much higher than other loans for poor credit.
High profit installment loan
A 36% APR is generally considered the boundary between affordable and affordable loans. Some installment lenders have imposed an APR of 200% or more on poor credit borrowers.
For example, Opploans has a maximum APR of 195%, but the APR from Rise can reach 299%. These loans are less risky than payday loans due to extended repayment periods, but they pay a large price.
Let’s say you need to borrow $3,000 and get approved for the loan with a 199% APR. The monthly payment is $243, with over the 18-month repayment period and paying $6,490 in interest in addition to the initial loan amount. Your $3,000 loan will ultimately cost you a whopping $9,490.
How to qualify for a bad credit loan
While traditional personal loans may be difficult to qualify, it is possible to get a personal loan with poor credit. To put yourself in a good position, consider checking the lender’s requirements and waiting if possible.
- Improve your credits. If your borrowing needs are not urgent, focus on improving your credit score. Enhance your credit profile before applying it will increase your chances of approval and ensure better interest rates.
- Applies with Cosigner or Co-Borrower. Asking a trustworthy Cosigner or co-borrower to apply can help you improve your eligibility and qualify for affordable interest rates. However, please note that if you mismanage your loan, it can negatively affect their credit and damage your relationship.
- Consider a safe loan. Protected loans are supported by collateral such as savings accounts and property, reducing risk to lenders. This makes it easier to qualify for protected loans, and this form of funding typically has a significantly lower rate.
- Shopping. To ensure the best possible rates and terminology, take your time comparing at least three different lenders as offers can vary significantly. meanwhile Personal loan lenders surveypaying close attention to interest rates, terms and fees to get the best possible deals for your financial situation.
Conclusion
A bad credit loan can help you get out of your financial binding, but in many cases it costs more than a personal loan, so take it with caution.
You can get used to the benefits and drawbacks of each option and the bad credit loan, get estimates from at least three lenders to find the most competitive loan offers. Depending on the terms of the loan, it may be better to cut costs to release funds, apply for a credit card, or find alternatives to other defective credit loans.
