If you're dealing with a low credit score, securing a personal loan can be challenging. However, with the right lender, it’s possible to get a loan even with bad credit. In this guide, we’ll explore the best personal loan lenders for people with bad credit in the USA in 2025, providing insights into the best options, loan terms, and what you need to know before applying.
Whether you’re looking to consolidate debt, cover emergency expenses, or finance a large purchase, this guide will help you find the perfect lender.
What is Considered a "Bad Credit" Score?
Bad credit generally refers to a credit score below 580. In the U.S., credit scores are calculated based on various factors, including payment history, credit utilization, and length of credit history. Scores between 300 and 579 are considered poor and can make it harder to qualify for traditional loans.
Impact of Bad Credit on Loan Approval
When you apply for a personal loan with a low credit score, lenders may consider you a higher-risk borrower. This means you may face higher interest rates, fewer loan options, or even outright rejection. However, bad credit doesn't necessarily mean you can’t get a loan. Some lenders specialize in providing loans to individuals with low credit scores, although the terms might not be as favorable as those offered to borrowers with good credit.
Top Personal Loan Lenders for Bad Credit in the USA (2025)
Here’s a look at some of the best personal loan lenders for bad credit in the USA for 2025:
1. Upstart
Best for: Fast approvals and non-traditional credit assessments
Upstart stands out for using non-traditional factors, such as your education, employment history, and other personal attributes, alongside your credit score when determining loan eligibility. This can be a significant advantage for those with bad credit or limited credit history.
- Loan Amounts: $1,000 to $50,000
- APR Range: 5.4% to 35.99%
- Repayment Terms: 3 to 5 years
- Pros: Fast approval and funding, use of alternative credit factors.
- Cons: Higher APRs for those with poor credit.
2. OneMain Financial
Best for: Secured and unsecured personal loans
OneMain Financial offers both secured and unsecured loans, giving you more options depending on your credit situation. If you have a valuable asset like a car or home, you may qualify for a lower interest rate with a secured loan. This lender is ideal for borrowers who need flexibility and personalized service.
- Loan Amounts: $1,500 to $20,000
- APR Range: 18% to 35.99%
- Repayment Terms: 2 to 5 years
- Pros: Secured loan options for better rates, brick-and-mortar locations for in-person service.
- Cons: Higher rates for unsecured loans.
3. Avant
Best for: Borrowers looking for quick access to funds
Avant is known for its fast loan approval process, making it an excellent choice for those who need quick access to funds. They offer loans to borrowers with fair to bad credit, and the application process is straightforward and fast.
- Loan Amounts: $2,000 to $35,000
- APR Range: 9.95% to 35.99%
- Repayment Terms: 2 to 5 years
- Pros: Quick funding, easy online application.
- Cons: Higher APRs for individuals with bad credit.
4. LendingClub
Best for: Peer-to-peer lending with flexible credit criteria
LendingClub operates as a peer-to-peer lending platform, connecting borrowers with individual investors. The platform’s flexible eligibility requirements make it a viable option for those with less-than-perfect credit. They offer both personal loans and debt consolidation loans, which can be especially useful for those trying to improve their financial situation.
- Loan Amounts: $1,000 to $40,000
- APR Range: 6.34% to 35.89%
- Repayment Terms: 3 to 5 years
- Pros: Peer-to-peer model with potentially lower rates, flexible terms.
- Cons: Origination fees can be high (up to 6%).
5. Prosper
Best for: Personal loans with lower starting APRs
Another peer-to-peer lender, Prosper connects borrowers with investors in a way that offers relatively low starting APRs, even for those with bad credit. They provide a simple and transparent loan process, which is ideal for individuals looking to consolidate debt or pay for large expenses.
- Loan Amounts: $2,000 to $40,000
- APR Range: 7.95% to 35.99%
- Repayment Terms: 3 or 5 years
- Pros: Competitive rates, quick application process.
- Cons: Origination fees, longer approval times.
6. NetCredit
Best for: Bad credit borrowers who need quick access to funds
NetCredit offers both personal loans and lines of credit to individuals with bad credit. While their APRs can be quite high, they provide an option for people with extremely poor credit scores who may not qualify for traditional loans. NetCredit is known for its quick application and approval process.
- Loan Amounts: $1,000 to $10,000
- APR Range: 34% to 155% (varies by state and credit profile)
- Repayment Terms: 6 to 60 months
- Pros: Fast application process, flexible terms.
- Cons: Very high APRs, particularly for those with very bad credit.
How to Improve Your Chances of Getting Approved for a Personal Loan with Bad Credit
Here are a few tips that could increase your chances of getting approved for a personal loan:
1. Check and Improve Your Credit Score
If possible, take steps to improve your credit score before applying. Pay off outstanding debt, make timely payments, and reduce your credit utilization.
2. Consider a Co-Signer
A co-signer with better credit can improve your chances of approval and may even help you secure a lower interest rate.
3. Provide Proof of Stable Income
Lenders want to know that you can repay the loan. Providing proof of steady income, such as pay stubs or tax returns, can boost your credibility.
4. Limit Other Debts
Try to pay off any existing debts before applying for a personal loan. Lenders will assess your debt-to-income ratio, so lowering your existing obligations can improve your chances.
5. Use Collateral
If you're having trouble qualifying for an unsecured loan, consider a secured loan where you offer collateral, such as your car or home, to back the loan.
Factors to Consider When Choosing a Personal Loan Lender with Bad Credit
When looking for a personal loan, especially with bad credit, it’s crucial to consider the following factors:
1. Interest Rates
Interest rates for individuals with bad credit are typically higher than those for individuals with excellent credit. It's important to compare rates from various lenders to ensure you're getting the best deal possible.
2. Loan Terms
Consider the length of the loan and the repayment schedule. Longer-term loans may have lower monthly payments but could cost more in interest over time. Shorter-term loans may have higher monthly payments but can save you money in interest.
3. Approval Process
Different lenders have different approval processes. Some may require a credit check, while others may offer loans without one. Lenders may also consider other factors, like your income and employment status, to determine whether you qualify.
4. Lender Reputation and Customer Reviews
Reputation is important when choosing a lender. Look for lenders with positive customer reviews, transparent terms, and fair policies. Online reviews can offer insights into the overall customer experience.
5. Eligibility Criteria
Check the lender’s eligibility criteria before applying. Some lenders may have more flexible requirements, while others may require a minimum credit score, income level, or employment status.
Alternatives to Personal Loans for Bad Credit
If you’re unable to secure a personal loan, consider these alternatives:
1. Secured Loans
Secured loans require collateral and may be easier to qualify for with bad credit.
2. Credit Union Loans
Credit unions often have lower interest rates and may be more willing to lend to people with bad credit compared to traditional banks.
3. Borrowing from Friends or Family
If possible, borrowing from family or friends may offer lower interest rates, but it can strain personal relationships if not handled carefully.
4. Payday Loans
Payday loans should be avoided at all costs, as they come with extremely high-interest rates and short repayment terms.
How to Compare Lenders and Choose the Right One
When comparing lenders, consider the following factors:
- APR and Fees: Compare the total cost of the loan, including interest and fees.
- Loan Amounts and Repayment Terms: Choose a lender that offers the loan size you need and a repayment plan that fits your budget.
- Customer Service: Look for lenders with excellent customer support and transparent terms.
- Online vs. Traditional Lenders: Online lenders may offer more flexibility and faster approval, while traditional banks may offer more stability.
Finding the best personal loan lender for bad credit in the USA in 2025 can be challenging, but it’s not impossible. By considering factors such as interest rates, loan terms, and lender reputation, you can find the best loan option to fit your needs. Whether you choose an online lender like Upstart or a more traditional option like OneMain Financial, make sure to research thoroughly and understand the terms before committing.
Remember to improve your credit score if possible, and explore alternatives such as credit unions or secured loans if you’re unable to qualify. The right loan can provide financial relief, but choosing the right lender is key to ensuring you’re not saddled with high fees or terms that are too difficult to manage.