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Best Loans for Bad Credit
Best Loans Of March 2022: Instant Approval Loans
The best personal loans offer low-interest rates for well-qualified borrowers, flexible loan amounts and repayment terms, and limited fees.
Many personal loans can be used to fund everyday family expenses like home improvement projects, wedding expenses, vacations, and, in some cases, even the purchase of land. Borrowers also turn to personal loans for debt consolidation because interest rates are often lower for personal loans than for credit cards—especially for applicants with good to excellent credit.
These loans are available from traditional banks, credit unions, and online lending platforms that make it easy to apply online without visiting a bank branch. What’s more, many personal loans can be funded within a few business days, so you don’t have to wait to get the money you need.
SoFi – BEST OVERALL PERSONAL LOAN
LightStream – BEST FOR LOW-INTEREST RATES
Marcus – BEST FOR TERMS UP TO 72 MONTHS
Upgrade – BEST FOR BAD CREDIT
Discover – BEST FOR A MINIMUM ANNUAL INCOME OF $25,000
Avant – BEST FOR A RANGE OF REPAYMENT TERMS
LendingClub – BEST FOR PEER-TO-PEER LENDING
Upstart – BEST FOR LOANS AS LOW AS $1,000
Payoff – BEST FOR FLEXIBLE REPAYMENT TERMS
Rocket Loans – BEST FOR EMERGENCIES
Tips for Comparing Best Personal Loans
Consider these tips when comparing personal loans:
Where possible, prequalify.
Many personal loan providers offer prospective borrowers the ability to prequalify for a loan. This means the applicant can submit details about their financing needs, income, housing situation, and other relevant information to determine what kind of loan amounts, rates, and repayment terms they are likely to qualify for. Even better, this process typically only requires a soft credit inquiry so you can shop around without hurting your credit score.
Consider the purpose of your loan.
While personal loans can be used for a pretty broad range of purposes, they are limited to things like consumer debt consolidation, home improvements, vacations, weddings, funerals, large purchases, and other personal expenses. For that reason, lenders often restrict the use of personal loans for postsecondary education expenses, business purposes, and illegal activities at a minimum. When considering a lender, confirm that your intended use of the loan is permissible under its borrower agreement.
Keep an eye out for additional fees.
Some lenders offer fee-free personal loans that don’t require borrowers to pay origination fees, late payment fees, prepayment penalties, or any other standard loan costs. However, this is more the exception than the rule, so it’s essential to ask about fees when shopping for the best loan terms. And, if a lender charges an origination fee, find out whether it’s built into the APR or taken out of the loan amount before funding, as this may impact the loan amount you need to request.
Evaluate the lender’s customer support options.
If you’ve found a lender that’s prepared to offer the money you need at acceptable terms, there’s one more thing to consider before signing the loan agreement. While customer support may not seem like a big deal in the honeymoon phase of your loan, it can make a massive difference if you encounter issues with payments or face financial hardship during your repayment period. Review the lender’s customer service resources and read reviews from past and current borrowers to ensure it’s a good fit.
We reviewed 15 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience, and the application process. We chose the ten best lenders based on the weighting assigned to each category:
Loan details: 20%
Loan cost: 35%
Eligibility and accessibility: 20%
Customer experience: 15%
Application process: 10%
We also considered several characteristics within each major category, including available loan amounts, repayment terms, APR ranges, and applicable fees. We also looked at minimum credit score requirements, whether each lender accepts co-signers or joint applications, and the geographic availability of the lender.
Finally, we evaluated each provider’s customer support tools, borrower perks, and features that simplify the borrowing process—like prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
What Is a Personal Loan?
A personal loan is a type of lump-sum financing borrowers can get from a traditional bank, credit union, or online lender, which they can use for various expenses. Typical uses include medical bills, auto repairs, home improvement projects, and debt consolidation. Personal loans typically have repayment terms between two and seven years and offer interest rates as low as 3% for high-qualified borrowers.
Best Place to Get Personal Loans
You can get personal loans from three types of institutions:
These are often technology-based non-bank companies that offer a small range of lending products, including personal loans. Online lenders typically offer low-interest rates and loans available nationally and can provide funds within 24 to 48 hours.
Many local and national banks offer personal loans and other financial products, such as checking and savings accounts. If you have an existing relationship with a bank, you may want to consider opening your loan through that bank.
These are local to your community and tend to offer applications both online and in person. Credit unions require membership, so be sure to check if you’re eligible.
The best place to get a personal loan is where you can access the most favorable terms and loan limits that fit your needs.
How to Apply for Personal Loans
While the process varies by lender, follow these general steps to apply for a personal loan:
Check your credit score.
Start by checking your credit score for free through your credit card issuer or another website that offers free scores. This will give you an understanding of your creditworthiness and your qualification chances. Aim for a score of at least 610; however, at least 720 will yield the most favorable terms.
If necessary, take steps to improve your credit score.
If your score falls below 610 or you want to boost your score to receive the best terms possible, take time to improve your score before applying, such as lowering your credit usage or paying off unpaid debts.
Determine how much you need to borrow.
Once you check your credit score, calculate how much money you want to borrow. Remember, though, you’ll receive your cash as a lump sum, and you’ll have to pay interest on the entire amount—so only borrow what you need.
Shop around for the best terms and interest rates.
Many lenders will let you prequalify before submitting your application, enabling you to see the terms you would receive with just a soft credit inquiry. Prequalifying enables you to shop around for the best rates without hurting your credit score.
Submit a formal application and await a lending decision.
After finding a lender that offers you the best terms for your situation, submit your application online or in person. This process can take a few hours to a few days depending on the lender.
How Hard Is It to Qualify for a Personal Loans?
Borrower qualifications for personal loans vary by lender. In general, an applicant will need at least a fair credit score (580 to 669) to qualify, although getting a personal loan with bad credit is possible. That said, borrowers with good to excellent scores will be eligible for the lowest interest rates, more significant loan amounts, and more flexible repayment terms.
Many lenders offer a prequalification process that lets you determine which loans and terms you qualify for based on a soft credit inquiry.
Cathy Pamela Turner has extensive expertise in banking, finance as well as accounting. A large portion of her experience was spent within commercial banks, where she worked in the roles of an underwriter credit Risk Policy Manager director of credit risk, chief credit executive, and many more. Throughout her banking career Cathy not only reviewed different kinds of commercial and personal loans, but also created and monitored policies about the origination of these loans and how they were controlled.
Vernon Tremblay, a graduate of Ohio State with a Bachelor of Arts, Founded ACFA Cashflow in 2010. Vernon has written about personal finance and has covered credit cards in-depth for over ten years. Vernon writes about how you can quickly get payday loans, loan consolidation, and emergency loans as his primary expertise. If when he's doing nothing but writing, he's spending money on comics and is the host of a comic industry podcast.