Best Bad Credit Loans: Top Direct Low Credit Lenders to Use (March 2023 Update)
Roughly 50% of Americans have a below-average credit score.
Fortunately, you can still borrow money with bad credit or no credit. In fact, you have more bad credit loan company options than ever.
However, the bad credit lending world is filled with shady companies, overpriced lenders, and scams.
That’s why we did the hard work for you. We tested the world’s most popular bad credit loan websites. We contacted money services businesses, worked with security experts, and identified the best bad credit loan companies of 2023.
After hundreds of hours and research and deliberation among our editorial team, here’s how we ranked the best bad credit loan companies of 2023:
MoneyMutual is one of the best-known names in the bad credit loan community. The company will deposit up to $5,000 in your account in as little as 24 hours – even if you have a bad credit score. If you need a lot of money quickly and have bad credit, then MoneyMutual may be your best option.
MoneyMutual is also ideal for smaller amounts. Borrowers can borrow anywhere from $100 to $5,000 with bad credit. Whether you’re looking for a small cash advance until payday or needing a larger infusion of cash, MoneyMutual may have you covered.
Another perk of MoneyMutual is its longevity: it’s one of the longest running financial services businesses on this list. The Las Vegas-based company has attracted 2,000,000+ happy customers and an average rating of 5 stars out of 5 over the years. MoneyMutual is also a member of the Online Lenders Alliance (OLA) and CFEF, giving it extra legitimacy over competing bad credit lenders on our list.
Borrowable Amount: $100 to $5,000
BadCreditLoans.com gets lenders competing for your business. The website has one of the easiest application processes in the short term lending community. Plus, you can get a loan between $500 to $10,000, making BadCreditLoans.com one of the better options on our list for people who need to borrow all different amounts.
BadCreditLoans.com is 100% free. The company does not charge anything to search through lenders using the online application. Once you see a lender you like, you can complete an application with that lender. Each lender charges a fee for their services, but it’s easy to see all fees and charges upfront.
Available 24/7, BadCreditLoans.com is ideal for people needing to secure a short term loan for any reason. The website is well-established, transparent, and popular. And, because they work with dozens of lenders, BadCreditLoans.com accepts people with all levels of credit – from average credit to bad credit to no credit.
Borrowable Amount: $500 to $10,000
PersonalLoans.com simplifies personal loans while having some of the largest borrowable amounts in the industry. With PersonalLoans.com, you can request loans of $1,000 to $35,000, giving you a large infusion of cash when you need it most.
PersonalLoans.com, like other networks on our list, is 100% free to use with no hidden fees. The website gets lenders competing for your business. You enter your information, view available offers, and complete individual applications to get funding fast. Each lender charges their own fees and interest. However, all charges are transparently disclosed upfront.
There are multiple perks to using PersonalLoans.com over other bad credit lending websites. The website is simple and straightforward to use. They’ve invested in security and bank-grade data encryption technology. Plus, you can borrow up to $35,000 at a reasonable APR, depending on your credit score. For all of these reasons and more, PersonalLoans.com is the #3 best bad credit lender available today.
Borrowable Amount: $1,000 to $35,000
CashUSA.com provides personal loans to people with average credit, bad credit, and no credit. Whatever your credit score may be, you could borrow up to $10,000 with CashUSA.com with competitive payment terms.
Just complete the secure online form at CashUSA.com, review the offer presented, then accept. CashUSA.com makes it easy to see the total cost of your loan (with APRs between 5.99% and 35.99%), customize your loan repayment period (from 90 days to 72 months), and receive funds as soon as possible.
Like other lenders, CashUSA.com has straightforward borrowing requirements. You must be a US citizen or permanent resident over 18 who has had a job for at least 90 days. You must also have a checking account, work and phone numbers to contact, and an email address. As long as you meet these requirements, you could receive a sizable loan with CashUSA.com.
Borrowable Amount: $100 to $10,000
Funds Joy Loans
Funds Joy Loan aims to speed up and simplify the borrowing process. You can complete the Funds Joy Loans online form in under 10 minutes, then receive up to $5,000 shortly thereafter. The advanced, automated Funds Joy Loans system includes a simple, clear-cut form available on your computer, tablet, or mobile phone.
Like other lending networks on our list, Funds Joy Loans helps you find the best offer by getting lenders competing for your business. You submit a request, check the offers, then receive your money.
Each Funds Joy Loans offer comes with a transparent APR, customizable terms, and other perks. All fees are transparently disclosed upfront, making it easy for you to pick the lender that works for your unique needs.
Borrowable Amount: $100 to $5,000
Upgrade Personal Loans
Upgrade, found online at Upgrade.com, is a financial services business offering personal loans, no-fee checking accounts, and affordable credit lines.
One of the perks of Upgrade is that you can borrow up to $50,000 with the company, giving Upgrade the largest borrowable amount on our list. It’s unlikely people with bad credit qualify for a $50,000 loan, although they can still access surprisingly high amounts through Upgrade.com.
Upgrade designs its personal loans as a simple way to build your future. You can enjoy perks like low fixed rates, affordable monthly payments, and zero prepayment fees.
Another perk of Upgrade is that it offers many complementary financial services. You can refinance credit cards, consolidate date, and simplify your checking account, for example, among other perks.
Borrowable Amount: $100 to $50,000
How We Ranked
Our experts contacted lenders, applied for dozens of loans, and combed through thousands of user reviews to compile the rankings above. Here are some of the factors we used in our rankings:
Borrowable Amount: You may be surprised how much money you can borrow with bad credit. The best bad credit lenders let you borrow anywhere from $5,000 to $50,000 even with a bad credit score. The higher your credit, the more you can borrow. However, we considered the overall borrowable amount with each company in our rankings.
Time Until Deposit: We tested each bad credit loan company to determine the time between the initial application and the final deposit. Some companies consistently deposit funds into your bank within hours of application, for example, while others take 5 to 7 business days. If you need money fast, then you need the best bad credit lender.
User Interface and Ease of Application: Some bad credit loan companies have long, complicated, and cumbersome application processes. Others have a poor user interface or a website that looks like it hasn’t been updated since 2005. We considered user interface (UI) and overall ease of application in our rankings.
Acceptance of Bad Credit & No Credit Lenders: The bad credit loan companies listed above all accept borrowers with bad credit or no credit. Some lenders also accepted borrowers with good credit. However, we only included lenders who accepted borrowers with bad credit or no credit on our list.
Transparent Lending Terms & Fees: Bad credit loan companies must disclose percentage rates and other fees upfront. They are also must not exceed a certain maximum annual percentage rate (APR). The best bad credit loan companies disclose all fees and charges upfront, abide by financial regulations, and are honest about the cost of borrowing.
Competitive Cost of Borrowing: Some companies charge a fortune to borrow even a small amount of money because they know people with bad credit are desperate. Other companies charge a competitive rate. We considered the cost and overall value of the bad credit lending company in our ratings.
Company Reputation & Quality: There are plenty of scams in the bad credit lending community. Shady companies try to take advantage of people with bad credit. We considered company reputation and overall transparency in our rankings. Some companies have been successfully lending money to borrowers for 20+ years. Others rebrand every two years to avoid being labeled as scams. The best bad credit loan companies have a proven reputation over a long number of years.
Customer Reviews: We personally used each of our recommended bad credit loan companies above. However, we also acknowledge that different people have different experiences with lenders, which is why we considered customer reviews in our rankings. MoneyMutual, the #1 bad credit loan company on our list, has 2,000,000+ reviews and a 5-star average rating, for example. Other companies have similarly impressive reviews.
Security, Certification, & Regulation: Some bad credit loan websites are registered in exotic countries to avoid regulations. Others abide by strict financial regulations. The best bad credit lenders, for example, are members of the OLA and CFEF. Good bad credit lending websites are also secured by bank-grade encryption and other security systems to protect borrowers’ data.
Length of Repayment Options: Do you need a bad credit loan until your next payday? Or would you prefer to pay back your loan over multiple months or years? The best bad credit lending companies give you several options, making it easy to choose the repayment option that works best for you.
Quality of Affiliated Lenders: Some of the bad credit loan companies get lenders competing for your business. They share your information with a network of lenders to help you find the best rates and largest borrowing amount. Because we can’t judge these services on their financial strength or lending quality, we judged them based on the quality of lenders they work with. Some websites have strict quality control, for example, while others sell your information to anyone to make a quick buck.
How Bad Credit Loans Work
If you have bad credit and need money, then you’re not alone.
4 in 10 Americans would not be able to pay $400 in emergency expenses according to the US Federal Reserve’s Economic Well-Being of US Households report.
Meanwhile, roughly half of all Americans have a below-average credit score.
Fortunately, bad credit loans can help. Bad credit loan companies provide a service – lending money – in exchange for a fee – interest. You borrow money today, then pay it back in the future with interest – just like you would with a car loan, mortgage, or line of credit.
Here are the basic steps behind a standard bad credit loan application online:
Visit a bad credit loan website and complete an application
Enter your name, contact information, the amount you wish to borrow, and your desired borrowing period (like 2 weeks to 2 years)
Enter your bank account information for a direct deposit
Wait for the lender to accept your application, then receive your money in 24 to 48 hours
That’s it! When the borrowing process goes smoothly, you can easily get a loan of $100 to $5,000 within hours of applying.
Some lenders require you to make minimum monthly payments over the next 2 to 3 years to repay the loan. Others simply require a single lump sum at the end of your borrowing period.
Some bad credit loan websites require you to input a Social Security Number to verify your credit score. Others, however, do not. However, this is considered a soft inquiry, which means it doesn’t impact your credit score. Once you complete a formal application with a lender, however, they may need to contact a credit bureau to verify your credit score, and this may be considered a hard inquiry. A few hard inquiries is unlikely to impact your credit score, but dozens of hard inquiries in a short period could lower your credit score.
Many lenders only require the last 4 digits of your SSN to verify your identity.
Regardless of your credit score, however, you can find a lender that works for you. Lenders may offer higher interest rates and lower borrowing amounts to borrowers with bad credit, but all lenders listed above work with people with bad credit.
Bad Credit Loan Requirements
To qualify for a bad credit loan, you typically need to meet the following requirements:
- Be at least 18 years old
- Be a US citizen or permanent resident
- Be employed for at least 90 days and meet certain minimum income requirements
- Have a checking account in your name
- Provide work and home phone numbers and a valid email address
Different lenders have different income requirements. Some lenders let you qualify with minimum wage or less, for example, while others cater to people with high income and poor credit.
Whatever your financial situation may be, you should be able to find a bad credit loan if you meet the requirements above.
How Much Do Bad Credit Loans Cost?
Bad credit loans vary widely in pricing depending on the amount you borrow, your credit score, and the repayment terms you choose.
Some bad credit loans come with interest rates as low as 5.99%, for example.
If you borrow $1,000 today, then you would pay just $59.90 to borrow that money for an entire year. If you borrow $1,000 for one month, then you would pay $5 in interest. If you borrow it for two weeks (like most payday loans), then you could pay just $2.50 in interest. That means you would only need to repay $1,002.50 or $1,005.
Or, if you borrow $1,500 over a 2 year term with an APR of 7.9%, then you would make payments of $67.77 per month over 24 months, giving you a total payable amount of $1,626.54. Your total cost of borrowing would be $126.54.
If you have bad credit or no credit, then you could pay higher interest rates. By completing an application with multiple bad credit lenders, you can find the best bad credit loan company that works for your unique needs.
Be aware most lenders charge extra fees for non-payment of loan. If you are unable to make regular loan payments, or if you fail to repay the lump sum at the conclusion of your loan, then you could face additional penalties.
Do Bad Credit Loans Affect My Credit Score?
Most bad credit loan websites perform a soft inquiry, which means your application will not impact your credit score. You can enter your personal information into a bad credit loan website to verify your identity without worrying about the impact on credit score.
If you complete an application with a lender, then that lender may contact one of the three major credit bureaus (TransUnion, Experian, and Equifax) to verify your credit score. This is considered a hard inquiry, and it may impact your credit score.
However, a single hard inquiry is unlikely to significantly impact your credit score, and even multiple hard inquiries should have limited impact. If you request dozens of hard inquiries in a short period, however, then it could lower your credit score.
That’s why financial experts recommend using bad credit loan websites to compare offers upfront before picking a single one or two lenders you like. You can perform as many soft inquiries as you like, then perform a single hard inquiry to get the money you need.
Some lenders also report payments to the credit bureaus. If you make regular payments on your bad credit loan, for example, then this could improve your credit score – just like regular credit card or mortgage payments could boost your credit score.
Are Bad Credit Loan Websites Safe?
The bad credit loan websites listed above are safe to use. We’ve personally tested each service, contacted the companies behind the websites, and verified their authenticity and reliability.
However, not all bad credit loan websites are safe. Some attract customers with claims of easy money and no credit check, for example. Others dazzle you with low upfront fees, only to surprise you with hidden charges.
That’s why it’s important to look for bad credit loan website reviews before you complete an application:
- Reputable bad credit loan websites are generally safe to use
- Most lenders use bank-grade encryption to protect your data
- Because most lending websites perform a soft inquiry, your initial application should not impact your credit score
- The best bad credit loan websites have connected borrowers with thousands of loans, and some have 20+ years of reliable industry experience
- Bad credit lenders must abide by strict financial regulations, including limitations on fees, APRs, and more
Overall, bad credit loan websites provide a service in exchange for a fee. They must meet strict requirements and abide by certain regulations to provide that service.
Secured Loans Versus Unsecured Loans
If you have bad credit, then you can get a secured loan or unsecured loan. Depending on your credit score, desired borrowing amount, income, and available collateral, one option may be the right choice for you.
Here are the differences between secured loans and unsecured loans:
A secured loan is “secured” by collateral.
You could give someone a valuable item – like a car or collectible coin – in exchange for receiving money. If you don’t repay the lender, then the lender gets to keep the collateral.
A mortgage is considered a secured loan because your house is securing the mortgage: if you don’t make payments, then your bank repossesses your home.
Secured loans are a good option or people with bad credit. You may not have a good credit score, but you have a valuable item to secure the loan. As long as you have the collateral, you can obtain a loan up to the value of that collateral.
Most bad credit loan companies provide unsecured loans. You are not providing any collateral to obtain a loan through a bad credit lending website, for example. Instead, your loan is secured by your credit score and personal ability to repay debt.
To account for higher risk, lenders charge higher interest rates on unsecured loans. This makes unsecured loans more expensive than secured loans. Instead of paying interest rates of 5.99%, for example, you could pay interest rates of 25% to 35%.
However, if you have bad credit and zero collateral, then a bad credit loan may be your only option.
How to Avoid Bad Credit Loan Scams
There are plenty of scams in the bad credit lending community. Here are some of the best tips for avoiding 99% of scams:
Check Google reviews. Even the best lenders have negative reviews from people who didn’t understand the borrowing terms, but the best companies consistently rise to the top of Google reviews and other review aggregators.
Check the lender’s rating with the Better Business Bureau (BBB). Some companies have bad BBB ratings, while others have s long history of doing business fairly.
Check payment requirements and lending terms. Lenders must transparently disclose all lending terms upfront. If a company is offering you “free” money with no mentions of APRs or fees, then it could be a scam.
If a lender claims to provide a bad credit loan with no credit check, be wary. All online lenders require your Social Security Number (or at least the last 4 digits of your SSN) to verify your ability to repay the loan. Unless you’re working with a specific payday lender specializing in no credit check loans, you should be wary of companies that claim to ignore your credit history.
The lender has a name similar to a well-known bank, credit card company, or other financial organization. Some bad credit loan companies use familiar names and terms to convince you they’re a legitimate organization. If the lender has a name similar to a well-known bank or financial company, then be wary.
Avoid lenders that do business over the phone with no written documentation. Some reputable bad credit lenders do business over the phone. However, you should be wary of companies that exclusively do business over the phone with limited paperwork or documentation required. In fact, United States law restricts the ability of businesses to provide loans or credit cards over the phone. Get information in writing.
Verify the lender is registered in your state. To provide loans to people in your state, the lender must be registered in your state. Check your state’s department of financial regulation database or equivalent organization to verify the lender’s authenticity.
Avoid wiring money or paying fees upfront. Disreputable bad credit loan companies may ask you to wire money to approve the loan. Typically, these are scams. Don’t send a company money upfront. There are plenty of bad credit lenders offering upfront money with no hidden charges.
What is a Bad Credit Score? What’s a Good Credit Score?
Most lenders consider 580 and below to be a bad credit score. 670 and above, meanwhile, is considered a good credit score. Everything in between is considered a fair credit score.
Here’s how most lenders rank credit scores:
- Exceptional Credit: 800+
- Very Good Credit: 740 to 799
- Good Credit: 670 to 739
- Fair Credit: 580 to 669
- Poor Credit: 580 or below
Top 7 Types of Bad Credit Loans
If you have bad credit, then there are plenty of lending options available to you. Sure, having bad credit may make it harder to get a cheap mortgage or auto loan; however, there are plenty of other ways to get the money you need.
Here are the top 7 types of bad credit loans available to you today, even if you have a bad credit score:
Online Bad Credit Loans: Online bad credit loans make it easy to get the money you need as quickly as possible. They work similar to payday loans or cash advances: you provide proof of income, and the website provides you with a loan based on your income and your perceived ability to repay.
Bank Agreement or Line of Credit: If you have been a customer with your bank for a long time, then you may be able to access a line of credit or setup a bank agreement with your bank. Many banks provide short-term loans and other lines of credit to customers in need.
Home Equity Loan or Home Equity Line of Credit: You can use the equity in your home to get money today. Home equity loans let you use your home equity as collateral for a secured loan. Home equity lines of credit, meanwhile, work similar to a credit card, allowing you to borrow money against the equity in your home and pay it back as needed.
Peer to Peer Loans: If you borrow money from a friend and agree to pay it back, then that’s a peer to peer (P2P) loan. You can find P2P lending websites where lenders may or may not check credit score.
Secured Personal Loan: Do you have a valuable item to use as collateral? You could use it to secure a personal loan. Lenders take possession of your valuable item in exchange for cash. Once you repay your loan, you repossess your item.
Student Loan: Even if you have bad credit, you could qualify for federal, state, or private student loans. Student loans require you to be attending a school part-time or full-time, but many people qualify even with bad credit.
Car Title Loan: Do you own your car outright? You could get a secured loan using the title of your car as collateral. Lenders provide you with cash today. If you don’t repay that cash, then the lender assumes title of your vehicle.
Overall, people with bad credit have plenty of options for bad credit loans.
FAQs About Bad Credit Loans
Our experts get plenty of questions about bad credit loans and how they work. Here are some of the answers to our most frequently asked questions.
Q: How much can I borrow with bad credit?
A: You can borrow anywhere from $100 to $50,000 with bad credit. Some lenders care more about your income than your credit score. If you have a high income, then you could borrow up to $50,000. Even if you have a low income, you can still borrow a significant amount with a bad credit score.
Q: Can bad credit loans improve my credit score?
A: Bad credit loans can improve your credit score. If you make regular payments on your bad credit loan, and the lender reports your payments to credit bureaus, then your bad credit loan could significantly raise your credit score.
Q: How do I raise my credit score?
A: You can raise your credit score by paying off account balances, avoiding late payments, opening new credit accounts to raise your available credit, and lowering your credit utilization ratio.
Q: How do bad credit loans work?
A: Bad credit loans work in a similar way to ordinary short-term loans or payday loans. You complete an application online, enter your personal information and bank account deposit data, verify your income, and receive your funds. Then, you repay the loan in monthly payments or as a lump sum.
Q: What is considered a bad credit score?
A: People with a credit score under 580 are considered to have bad credit by most lenders.
Q: What’s a good credit score?
A: People with FICO credit score ranges of 580 to 669 are considered to have fair credit, while people with scores of 670 to 739 are considered to have good credit. People with scores of 740 to 799 are considered to have very good credit, while people with scores of 800 or higher are considered to have exceptional credit.
Q: How do I know if I have bad credit?
A: If you have previously defaulted on a loan, have a history of missing credit card payments, or have had other financial issues in the past, then you may have a bad credit score.
Q: How do I check my credit score?
A: You can check your credit score for free at AnnualCreditReport.com. AnnualCreditReport.com is a free, legitimate website run by the three major credit bureaus in the United States (TransUnion, Experian, and Equifax). You are entitled to receive one free credit report per year from each of the three bureaus. Alternatively, there are plenty of free credit check websites and services available online.
Q: How is my credit score determined?
A: Credit bureaus use multiple factors to determine your credit score, including payment history (35%), credit utilization (30%), length of credit history (15%), types or diversity of credit (10%), and new credit or credit inquiries (10%).
Q: How do I get a loan with bad credit?
A: You can get a loan with bad credit through bad credit lending websites and other sources. Even if you have bad credit, there are plenty of lenders available to you.
Q: What do I need to apply for a bad credit loan online?
A: Most bad credit lenders require you to be a US citizen or permanent resident over 18 years of age with a valid checking account and a steady job for the last 90 days. Generally, as long as you are an adult with a Social Security Number and a source of income, you can find a bad credit lender willing to work with you.
Q: How fast will I get my money?
A: Most bad credit lenders direct deposit funds into your bank account within 24 to 48 hours of approving your application. Some deposit money even sooner.
Q: How do I repay my bad credit loan?
A: Most lenders require you to repay your bad credit loan with monthly payments. Some, however, allow you to repay your loan as a single lump sum at the end of your repayment period.
Q: What happens if I can’t repay my bad credit loan?
A: Most lenders have penalties for failing to repay your bad credit loan. Check your loan documentation to verify any penalties or additional charges.
Q: Are bad credit loans legit?
A: Yes, bad credit loans are legitimate, and bad credit lenders are legitimate businesspeople. Bad credit loans have existed in some form for thousands of years. Today, bad credit loans are a formal, regulated industry, and bad credit lenders must be registered in your state.
Q: What’s the best bad credit loan company?
A: The best bad credit loan companies, according to our research and rankings, include MoneyMutual, BadCreditLoans.com, and PersonalLoans.com.
Q: How do no credit check loans work?
A: Some companies provide loans without a credit check. Typically, these loans consider your income instead of your credit score, and they’re ideal for people with bad credit or no credit. However, they also tend to have much higher interest rates and fees than a typical loan.
Q: What is an origination fee with bad credit loans?
A: Some lenders charge an “origination fee” on your loan ranging from 1% to 10%. They deduct this fee from your borrowed amount. Instead of receiving $5,000 on your bad credit loan, for example, you could receive $4,950 because of the 1% origination fee.
Bad credit lenders have existed for thousands of years. Today, it’s easier than ever to get a bad credit loan.
Thanks to bad credit loan comparison websites, you can easily compare offers, check borrowable amounts, and pick the right loan for your unique needs.
Whether you need to borrow $100 or $50,000, you can find a bad credit lender willing to work with you.
Check out any of the top-ranked bad credit lenders above to get the ideal bad credit loan for your unique needs.
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