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Best Installment Loans For Bad CreditFEATURED PARTNER OFFER Best Overall Installment Loan for Bad CreditUpgrade Minimum credit scoreAPR rangeLoan amountsMinimum credit scoreAPR rangeLoan amountsWhy We Picked It Upgrade was launched in 2017 and provides accessible online and mobile credit and banking services in every state except Iowa, Vermont and West Virginia. Since that time, the platform has made more than $3 billion in credit available to over 10 million applicants and continues to expand its online and mobile services. Although maximum APRs are on the high end compared to other online lenders, Upgrade makes loans available to those with poor credit history. Loans amounts, which start at just $1,000, are flexible but cap out at $35,000—lower than lenders that focus on lower-risk borrowers. Three- and five-year loan terms are available. Upgrade charges an origination fee between 2.9% and 8% of the loan, and borrowers will encounter a $10 fee if their payment is more than 15 days late or if the payment does not go through; there are no discounts for autopay. That said, Upgrade borrowers are not subject to a prepayment penalty, so you can reduce the overall cost of the loan if you’re able to pay it off early. Beyond offering accessible personal loans, Upgrade streamlines the lending process with a mobile app that lets borrowers view their balance, make payments and update personal information. Upgrade’s Credit Heath tool also makes it easy to track your credit score over the life of your loan. Pros & Cons
Extra Details Eligibility: Prospective borrowers should have a minimum score of 560 to qualify for an Upgrade personal loan (the average borrower score is 697), making it an accessible option for those with fair credit. Furthermore, the lender does not require applicants to meet a minimum income requirement, although borrowers make $95,000 per year on average. Applicants should have a maximum pre-loan debt-to-income ratio of 45%, excluding their mortgage. The lender also considers each applicant’s free cash flow, which demonstrates their likely ability to make consistent on-time loan payments. Ideally, applicants should have a minimum monthly cash flow of $800. Upgrade increases loan accessibility by also allowing co-applicants. Loan uses: As with most other personal loans, loans from Upgrade must be used to pay off credit cards, consolidate other debt, make home improvements or pay for other large purchases. However, Upgrade stands out from some lenders by allowing borrowers to use personal loan funds to cover business expenses. What’s more, Upgrade will directly pay off third-party lenders, making debt consolidation more convenient than with some competing lenders. There are no specific prohibitions on the use of Upgrade loans other than those already imposed by law. Turnaround time: Once an Upgrade loan is approved, it generally takes up to four business days for a borrower to receive the funds. However, if Upgrade is directly paying off a borrower’s loans to a third-party lender, it can take up to two weeks for the funds to clear. FEATURED PARTNER OFFER Best for Fast Funding & Below-average CreditLendingPointMinimum credit scoreAPR range7.99% to 35.99% with autopay Loan amountsMinimum credit scoreAPR range7.99% to 35.99% with autopay Loan amountsWhy We Picked It LendingPoint is an online lender based in Atlanta that offers personal loans to prospective borrowers in 48 states and Washington D.C.; it does not offer loans in Nevada and West Virginia. Prospective borrowers in eligible states can apply online and benefit from quick funding. LendingPoint personal loans range from $2,000 to $36,500; Georgia loans have a minimum loan amount of $3,500. Repayment terms range from 24 to 60 months—or two to five years. There are two main disadvantages to LendingPoint: high maximum APRs and origination fees. While you can typically avoid high APRs by maintaining a high credit score, LendingPoint origination fees (0% to 6%) depend on the state you live in. Pros & Cons
Extra Details Eligibility: To qualify for a LendingPoint personal loan, you must have a minimum credit score of 600 and live in one of the 48 eligible U.S. states or Washington D.C. Loans are not available to prospective borrowers in Nevada or West Virginia. Turnaround time: Once approved, you could receive your funds as soon as the next business day. FEATURED PARTNER OFFER Best for Comparing Multiple OffersUniversal Credit
Minimum credit scoreAPR rangeLoan amountsMinimum credit scoreAPR rangeLoan amountsWhy We Picked It Universal Credit is an online lending platform that offers personal loans between $1,000 and $50,000 through its partners. Repayment terms range from 36 to 60 months—or three to five years. While Universal Credit makes finding a personal loan accessible even to those with damaged credit, it comes with a few tradeoffs. First, it charges high APRs, well above the most competitive rates seen on our list. Second, Universal Credit charges a 4.25% to 8% origination fee on all personal loans. Because this is deducted from your loan proceeds, you’ll need to factor this in when determining your loan amount to ensure you receive the necessary amount after the fact. Pros & Cons
Extra Details Eligibility: Universal Credit requires a minimum credit score of 560, making it suitable for a wide range of borrowers. Turnaround time: Once approved, Universal Credit will send your funds to your bank within one business day. However, the availability of your funds depends on how quickly your bank can process the transaction. If you’re using funds to directly pay off another creditor, it may take up to two weeks. FEATURED PARTNER OFFER Best for Quick ApprovalsUpstartMinimum credit scoreAPR rangeLoan amountsMinimum credit scoreAPR rangeLoan amountsWhy We Picked It Upstart has made a mark on the personal loan space because of its artificial intelligence- and machine learning-based approach to borrower qualification. In fact, Upstart estimates that it has been able to approve 27% more borrowers than possible under a traditional lending model. With competitive APRs, Upstart is not a top lender for borrowers who can qualify for more competitive rates. Even so, the platform’s minimum 600 credit score makes it an accessible option to those with fair credit. Upstart also offers a pretty flexible range of loan options, with amounts ranging from as low as $1,000 so you don’t have to borrow (or pay interest on) more than you really need. And, while Upstart’s loans cap out at $50,000—lower than some lenders—this is likely to be enough for many prospective borrowers. Even though Upstarts three- and five-year loan terms are more restrictive than other lenders, it’s likely to be an acceptable tradeoff for applicants who might not be approved in a more traditional lending environment. Plus, it’s available in every state except West Virginia and Iowa, so it’s as widely available as many other top lenders. Pros & Cons
Extra Details Eligibility: Upstart stands out because it uses an AI-based platform to consider a range of non-conventional variables when evaluating borrower applications. And, while the platform advertises a minimum credit score of 600, Upstart may even accept applicants who don’t have enough credit history to have a score. When evaluating prospective borrowers, Upstart considers college education, job history, residence, debt-to-income ratio, bankruptcies and delinquencies and number of credit inquiries. Borrowers also must have a full-time job or offer starting in six months, a regular part-time job or another source of regular income—with a minimum annual income of $12,000. Co-signers and co-applicants are not permitted. Loan uses: Upstart’s personal loans can be used for credit card and other debt consolidation, special events, moving and relocation, medical and dental costs and home improvements. In contrast to many other traditional and online lenders, Upstart also lets borrowers use personal loan funds to cover educational expenses (except in California, Connecticut, Illinois, Washington and the District of Columbia). Upstart borrowers cannot use personal loans to finance illegal activity or purchase weapons, firearms or illegal drugs. Turnaround time: Upstart provides next-business day funding for borrowers whose loans are accepted before 5 p.m. Eastern time Monday through Friday. Loans that are approved after 5 p.m. are typically funded the following business day, or the day after that. That said, Upstart reports that 99% of loan applicants receive their money one business day after accepting their loan terms. Loans for education-related expenses may take up to an additional three business days after loan acceptance. FEATURED PARTNER OFFER Best for a Range of Repayment OptionsAvantMinimum credit scoreAPR rangeLoan amountsMinimum credit scoreAPR rangeLoan amountsWhy We Picked It Founded in 2012 and based in Chicago, Avant is a consumer lending platform that offers secured and unsecured personal loans through a third-party bank (WebBank). Unsecured loans are available in Wasington, D.C. and every state but Hawaii, Louisiana, Nevada and South Carolina. The platform specializes in middle-income borrowers with fair to good credit and only requires a minimum score of 580 to qualify. Maximum loan amounts are low compared to other lenders, but the low minimum amount and flexible repayment terms (two to five years) make it an accessible option for borrowers. However, as with many loans for subprime borrowers, Avant personal loans come with a price. In addition to charging an administrative fee of up to 4.75% of the loan amount, Avant’s APR range (9.95% to 35.99%) is on the high end for applicants with a good to excellent credit score—and there is no autopay discount. Still, the platform earns top marks for borrowers with less than stellar credit who need quick access to funds. It’s also worth noting that Avant agreed to a $3.85 million settlement with the Federal Trade Commission (FTC) in April 2019. According to FTC documents, the lawsuit was filed in response to allegations that, among other things, Avant charged consumers late fees and interest they didn’t owe and collected payments from customers without permission or in amounts larger than authorized. We reached out to Avant to find out what they’ve done to adjust practices since the settlement but did not receive a response. Even so, Avant has a high 4.7 star rating on Trustpilot. Pros & Cons
Extra Details Eligibility: Avant aims to provide credit services to a range of customers, including those with fair credit. For that reason, Avant has a minimum credit score requirement of 580, with the average borrower score between 600 and 700. Likewise, Avant focuses on low- to middle-income borrowers and has a minimum income requirement of just $20,000, though most borrowers have an average household income of $40,000 to $100,000. To expand eligibility, Avant also will consider more than just your employment income, including alimony and child support, and may include the income of other people within your household. That said, Avant does not allow co-signers or co-applicants. Loan uses: As with many other personal loan providers, Avant loans can be used to consolidate debt and pay for things like medical expenses, auto repairs, home improvements moving or vacations and travel. Avant borrowers cannot use personal loan funds to cover business expenses, but the platform does allow current borrowers to refinance their existing Avant loans with another loan—possibly with a lower APR. Turnaround time: Avant applicants who are approved for an unsecured loan before 4:30 p.m. Central time Monday through Friday may receive their funds the next business day. However, as with other lenders, the funding timeline varies depending on the borrower’s bank. It can also take longer for borrowers who take out secured loans. FEATURED PARTNER OFFER Best for Online ExperienceLendingClubMinimum credit scoreAPR range
Loan amountsMinimum credit scoreAPR rangeLoan amountsWhy We Picked It LendingClub is a peer-to-peer—or marketplace—lender founded in 2007. As the largest online lending platform for personal loans, LendingClub has worked with over 3 million customers and funded more than $55 billion in loans. It’s also one of the most geographically widespread options, with lending capabilities in every state except Iowa and the U.S. territories. While LendingClub imposes high APRs and no autopay discount, applicants can choose to borrow as little as $1,000. So you won’t have to borrow—and pay interest on—more than you need. And, though borrowers are limited to $40,000, this is a higher cap than some other lenders. That said, LendingClub’s loan terms are limited to three or five years, which is less flexible than other lenders on our list. Borrowers also are charged an origination fee between 2% and 6% of the total loan amount, which is taken from the loan proceeds at funding. LendingClub also makes debt consolidation easier by offering a balance transfer loan. With this type of loan, LendingClub offers direct payment to third-party lenders, including over 1,700 creditors. Not only does the platform take care of payments for you, you can choose exactly how much of your new loan amount you want LendingClub to pay toward each creditor. Pros & Cons
Extra Details Eligibility: Applicants must have a minimum credit score of 600 and a minimum credit history of three years to qualify for a LendingClub loan. Furthermore, applicants should have a debt-to-income ratio of less than 40% for single applicants and 35% for joint applicants. These factors, including proof of income, help LendingClub’s platform of investors decide who they want to lend to. Co-applicants are permitted but co-signers are not an option for LendingClub borrowers. Loan uses: Loans issued through LendingClub can be used for more major expenses, including debt and credit card consolidation, home repairs, medical bills and special events. LendingClub also makes it easy to consolidate debt by offering direct payment to third party creditors. Borrowers are restricted from using funds for postsecondary education, the purchase of investments, gambling and illegal activities. Turnaround time: LendingClub borrowers typically receive their loan funds as soon as four days after loan approval. However, this timeline may vary if an application is complete or if the lender requires additional documentation or verification. MethodologyWe reviewed 29 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 best lenders based on the weighting assigned to each category:
Within each major category, we also considered several characteristics, 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 Are Installment Loans for Bad Credit?Installment loans for bad credit are secured or unsecured loans specifically designed for consumers with damaged credit scores. The loans are also suitable for prospective borrowers who do not yet have an established credit history. Because of the risk posed by less qualified borrowers, these installment loans typically come with higher interest rates, lower loan amounts and shorter repayment terms. As with all installment loans, funds are disbursed as a lump sum and interest begins accruing on the balance in the first month. Borrowers must make equal monthly payments until the loan term is over and the balance is repaid. The most common types of installment loans include personal loans, auto loans and mortgages. Some lenders specifically focus on loans for borrowers with bad credit and impose less rigorous qualifications on applicants. Likewise, lenders may look at alternative credit data like that available through specific credit companies. Other financial institutions may have lower credit score requirements, while also offering the ability to apply with a co-signer or co-borrower. Secured loans, which require collateral, may also come with less rigorous credit score requirements because they pose less risk to lenders. When to Consider an Installment Loan for Bad CreditConsider an installment loan for bad credit if you have a FICO score between 580 and 600. Likewise, if you have a limited credit profile—or no credit history at all—you may still qualify for a bad credit installment loan. To qualify for and repay a loan, you should have enough monthly cash flow to cover the necessary payments, including interest and applicable fees. Use the Forbes Advisor personal loan calculator to estimate monthly payments and determine whether an installment loan is a responsible choice. How to Choose an Installment Loan for Bad CreditConsumers with bad credit generally have fewer borrowing options than those with more competitive credit profiles. However, there are a number of lending options for bad credit, and it’s still essential to compare lenders to find the best offer available. Take these steps before choosing a lender:
How Bad Credit Installment Loans Impact Your Credit ScoreLenders typically report payments to the three main credit bureaus—Equifax, Experian and TransUnion. Because of this, making consistent, on-time payments can help you improve your credit score. In fact, payment history accounts for 35% of your FICO score. However, missing payments or defaulting on a loan can negatively impact your score. To help with this, many lenders offer an autopay option that allows you to schedule payments. Installment loans can also improve your credit score by adding variety to your credit mix, which accounts for 10% of your FICO score. Likewise, getting an installment loan can help build your credit history, which accounts for 15% of your FICO score. So, while these factors aren’t as impactful as payment history, they can help build credit over time. Summary: Best Installment Loans for Bad CreditFrequently Asked Questions (FAQs)Where can I get an installment loan with bad credit?Installment loans are available through a range of financial institutions, including traditional banks, credit unions and online lenders. However, some online and alternative lenders offer installment loans that are specifically designed for borrowers with bad credit. This makes it easier for consumers to qualify for a loan with a low credit score. Compare the best bad credit loans to find a solution that meets your needs. What credit score do you need to get an installment loan?FICO score requirements vary by lender and loan type but typically range from 550 to 720. Some lenders have lower score requirements or do not require a traditional credit check at all. While borrowers with bad credit can qualify for an installment loan, these less qualified applicants face much higher interest rates than consumers with a FICO score closer to 720. Can you get a loan with a 550 credit score?It is possible to get a loan with a 550 credit score, but most lenders impose higher score requirements. To qualify for an installment loan with a 550 credit score, focus on a lender that specializes in borrowers with poor credit. These institutions often consider a wider range of qualification factors, including alternative financial data available through Clarity Services. Next Up in Personal LoansInformation provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results. Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners. What is the easiest installment loan to get approved for?The easiest installment loans to get approved for are payday loans, personal installment loans, car title loans, and pawnshop loans.
Do you need good credit for an installment loan?While installment loans are common, not all have good terms. Good credit can make it easier for borrowers to qualify for a loan and possibly get a better interest rate. But when you have lower credit scores, you may end up with an installment loan with a higher interest rate and expensive fees.
Can I get a loan with a credit score below 600?There are lenders out there willing to offer personal loans to borrowers with a credit score of 600 or below. But with higher interest rates and fees, you may end up paying more for your debt in the long run.
Can I take a loan out with a 500 credit score?Lenders can consider giving a personal loan to a borrower with a 500 credit score. However, most lenders have preset requirements that help determine who can qualify for a loan. If you have a 500 credit score and need a personal loan, you should identify subprime lenders.
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What credit score do you need for an installment loan?
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