The 4 Best Personal Loans for Bad Credit in 2019

Lending Club is a well-established online lender that makes a large volume of loans. It does not publicly share any minimum credit score requirement, but interest rates for the least creditworthy borrowers can be quite high—as much as 35.89% APR. Plus, you may need to pay an origination fee of 1% to 6% of your loan amount. With three- and five-year repayment options, you can keep monthly payments relatively low.

What We Like

• Relatively long history of lending online

• Two reasonable repayment periods keep it simple and should result in a payment that works

• Fixed interest rate prevents surprises

• Borrow as little as $1,000

What We Don’t Like

• Origination fees that reduce your loan proceeds can leave you with less than you need

• Interest rates above 30% make borrowing expensive 

Tip: Unlike credit cards, personal loans with fixed rates typically have the same payment every month, which helps you manage your budget.

OneMain Financial offers a variety of loans, including unsecured personal loans, to borrowers with bad credit. There is no minimum credit score required to apply. Interest rates here are also as high as 35.99%, but at least there is no origination fee. Depending on your state, you can borrow between $1,500 and $20,000. 

What We Like

• Several repayment terms to choose from

• Fixed interest rate prevents payment shocks if rates rise

• Same-day funding in some cases

What We Don’t Like

• In-person visit may be required for verification before funding your loan

• Interest rates above 30% make borrowing expensive 

Avant is an online lender that promises quick funding for personal loans. An Avant representative says that there is no minimum credit score requirement and everybody is welcome to apply. However, those with credit scores above 600 are more likely to get approved and may qualify for lower interest rates. Avant may charge an origination fee of 4.75%, and the highest APR is currently 35.99%.

What We Like

• Fixed-rate loans for predictable repayment

• Customer service seven days a week by phone, email, and chat

• Repayment terms of two to five years

• Loans as small as $2,000

What We Don’t Like

• Not available in all states

• At the highest rates, it may be best to avoid borrowing

In a world of online banking and peer-to-peer (P2P) lending, brick-and-mortar institutions may seem irrelevant. But they’re still helpful, particularly if you have bad credit. The best offers you see advertised online are only available to borrowers with excellent credit. But your local bank or credit union might be eager to serve the community and work with borrowers who have less-than-perfect credit. 

Credit unions, as not-for-profit institutions, might be an especially good bet—but don’t rule out small banks. Credit unions are unique, though, because they may offer Payday Alternative Loans (PALs) in addition to personal loans. Depending on your credit rating, those small, short-term loans might be better than anything else available.

Why Go Local?

If you have your checking account with a local institution and you receive regular pay into that account, you might have a better chance of getting approved because lenders can view your transaction history. Plus, while speaking with a loan officer, you might learn about options you weren’t aware of.

What We Like

• In-person discussions can help you learn how to improve your application

• Loan officer review might result in approval where an automated system would deny you

• Can provide guidance on avoiding predatory lenders

What We Don’t Like

• Takes time to visit in person

• Application process might be more cumbersome than you’d experience with online lenders