Best Installment Loans for Bad Credit in May 2024

Even with no or bad credit, you might qualify for an installment loan from these lenders

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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Written by Carol Pope | Edited by Amanda Push | Updated April 26, 2024
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
LenderUser ratingsBest for…APR rangeLoan termsLoan amountsCredit score requiredOrigination fee
Upstart logo
(16,463)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

No or thin credit7.80% - 35.99%36 and 60 months$1,000 - $50,0003000.00% - 12.00%
(3,639)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Joint loans8.99% - 35.99%24 to 60 months$2,000 - $50,0005601.00% - 7.99%
(129)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Building or improving credit11.69% - 35.99% (with discounts)36 or 60 months$1,000 - $50,0005605.25% - 9.99%
(2,209)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Interest rate discounts8.49% - 35.99% (with discounts)24 to 84 months$1,000 - $50,0005801.85% - 9.99%
OneMain Financial logo
(8,061)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Quick loans18.00% - 35.99%24 to 60 months$1,500 - $20,000Not specified1.00% - 10.00% or $25 to $100
Read more about how we chose the best bad credit installment loans.

Bad credit installment loan lenders at a glance

Upstart logo

Upstart: Best for no or thin credit

APR range7.80% - 35.99%
Loan terms36 and 60 months
Loan amounts$1,000 - $50,000
Minimum credit score300
Origination fee0.00% - 12.00%
ProsCons
 Don’t always need credit to qualify
 Accepts credit scores as low as 300
 15-day grace period for late payments
 May pay a hefty upfront fee (origination fee)
 Only two term lengths to choose from
 No joint loans

Prosper: Best for joint loans

APR range8.99% - 35.99%
Loan terms24 to 60 months
Loan amounts$2,000 - $50,000
Minimum credit score560
Origination fee1.00% - 7.99%
ProsCons
 Can change payment due date once a year
 Free monthly FICO scores
 Has a mobile app with high ratings
 Every loan has an origination fee
 If investors don’t fund your loan, your listing will expire
 Customer service department is not open on weekends

Universal Credit: Best for building or improving credit

APR range11.69% - 35.99% (with discounts)
Loan terms36 or 60 months
Loan amounts$1,000 - $50,000
Minimum credit score560
Origination fee5.25% - 9.99%
ProsCons
 Comes with free credit monitoring
 Can compare multiple loan offers at one time
 Accepts fair to poor credit
 Mandatory origination fee
 Other lenders have shorter or longer terms
 No live chat for customer service

Upgrade: Best for interest rate discounts

APR range8.49% - 35.99% (with discounts)
Loan terms24 to 84 months
Loan amounts$1,000 - $50,000
Minimum credit score580
Origination fee1.85% - 9.99%
ProsCons
 Can put up collateral to increase approval odds
 Might get funds within one business day
 Rate discount for automatic payments
 Must use your loan for debt consolidation to get the lowest interest rate
 Will pay an origination fee
 Technically need fair credit if going by FICO scores

OneMain Financial logo

OneMain Financial: Best for quick loans

APR range18.00% - 35.99%
Loan terms24 to 60 months
Loan amounts$1,500 - $20,000
Minimum credit scoreNot specified
Origination fee1.00% - 10.00% or $25 to $100
ProsCons
 Could get money the same day you apply
 Physical offices located across the country
 Accepts collateral
 High rates
 Mandatory origination fee
 History of regulatory action

How do installment loans for bad credit work?

An installment loan for bad credit is a personal loan available to borrowers with less-than-perfect borrowing histories.

Many lenders only approve borrowers with good credit or better. For reference, a good FICO score starts at 670. However, lenders for bad credit loans cater to those with lower scores (generally 300 to 669).

Personal loans come as a lump sum of cash. Then, you pay back what you borrowed (plus interest and fees) in equal monthly installments. You can use a personal loan for nearly anything, including home improvements, car repairs, credit card refinancing and more.

You should know that even if a lender approves you for a bad credit installment loan, your loan could be pricey. The lower your score, the higher your interest rate, and in some cases, the more fees you’ll pay.

 Avoiding predatory installment loans

You’ll need to be selective to avoid predatory lending if you have bad credit. As tempting as they may be, pass on payday loans, title loans and pawn shop loans. These have sky-high APRs that can trap you in a cycle of debt.

While it’s not hard to find installment loans online for bad credit, you may run into shady lenders. Most online lenders are reputable, but some aren’t. Generally, an APR above 36% is predatory. Pay attention to rates and don’t be afraid to shop around.

How to compare bad credit installment loans

APR: Your annual percentage rate, or APR, is the total cost of your loan including interest and fees. The higher the APR, the more expensive the loan. When comparing loans, look at the lender’s maximum APR. Minimum APRs go to people with excellent credit, so those won’t apply here.

Fees: Installment loans for bad credit are more likely to carry an origination fee. This is a fee that the lender deducts from your loan proceeds before sending it to you.

Not as common, but some lenders charge prepayment penalties. Your loan will probably come with high rates, so you may want to pay it off early to pay less overall interest. This might not be worth it if your lender charges a fee for doing so.

Loan terms: Your loan term is the length of time you have to pay off your loan. Some lenders may offer to extend your loan term because it typically means a lower monthly payment. But beware — the longer it takes for you to pay your loan, the more overall interest you’ll probably pay.

Loan amounts: Because personal loans come as a lump sum, make sure your loan provides the amount of money you need. Unlike a credit card, you can’t borrow from the same personal loan more than once. Instead, you’ll have to take out another loan.

Funding timeline: Lenders have two funding timelines. One measures how quickly it can review and approve (or deny) your application. The other measures how quickly it can send you your loan after it approves you.

Lender reputation: Researching a lender’s reputation is vital. This is especially true when you need an installment loan for bad credit. Unfortunately, there are plenty of bad actors waiting to take advantage of those in a tough spot.

The Consumer Financial Protection Bureau (CFPB) maintains a database of borrower complaints. Use this as well as LendingTree’s lender reviews before accepting an offer.

How to apply for a bad credit installment loan

Applying for a bad credit installment loan is much like applying for any other type of loan.

 Check your credit and review your budget

Before you borrow, make sure that you can handle another monthly bill. A loan can get you out of a bind, but you’ll end up worse off than when you started if you fall behind on your payments.

Use our personal loan calculator to see how much your loan payments could cost each month.

If you can afford a loan, the next thing you should do is check your credit. This can help you figure out what lenders you might qualify for (and whether their rates are competitive).

Get your credit score for free with LendingTree Spring. We’ll also show you exactly what factors are currently impacting your score.

 Prequalify and compare offers

Next, prequalify for a loan with several lenders. Prequalification lets you check how likely a lender is to approve you. The process only requires a soft credit hit, so it has no impact on your credit.

Use LendingTree’s personal loan marketplace to get a handful of loan offers at once. You can prequalify for up to five lenders in just a few minutes.

Once you have your offers, compare the metrics we discussed above to find the loan that works best for you.

 Apply and accept your loan

Applying for a loan is straightforward. You’ll provide your name and birthday, as well as some financial information. This includes your annual income, and you may need to provide bank statements or other similar documents.

If the lender approves you, you’ll sign a contract called a promissory note (you can usually do this online). Then, the lender will send your loan funds by paper check or direct deposit. If you’re getting a debt consolidation loan, it might offer to send your loan directly to your creditors.

About 30 to 45 days after you get your loan, you’ll start to pay it back in equal monthly installments.

How to improve your approval odds

Some lenders specialize in installment loans for bad credit. Nevertheless, approval is never guaranteed. If you’re struggling to get a loan, the strategies below could boost your personal loan approval odds.

  • Add a co-borrower: In essence, a co-borrower or cosigner is someone you add to your loan to vouch for you. Both you and your co-borrower have equal responsibility (and rights) to the loan. Ideally, the person you add should have better credit than you. That said, your co-borrower’s credit score will be negatively impacted if your payments are late. Stick to your agreement to avoid a ruined relationship.
  • Consider a secured loan: A secured loan is one that requires collateral. In the case of installment loans, collateral is usually your car. Secured loans are risky. If you don’t pay back your loan, the lender can repossess your collateral. On the upside, secured loans are easier to get, since the lender knows it can recoup some of its losses if you stop paying.
  • Review your credit report: Order a free credit report and check for any fishy entries. It might take some effort, but disputing credit report errors could improve your credit score if you can get an error removed.

Alternatives to bad credit installment loans

Installment loans for bad credit aren’t right for everyone. If you don’t qualify — or if a loan won’t meet your needs — you could have other options.

Paycheck advance app

When used responsibly, paycheck advance apps can help bridge the gap between paydays. Instead of charging interest, most of these apps charge fees. Sometimes, these fees are optional. It’s easy to get in a cycle of borrowing, though. Try not to use these apps often.

401(k) loan

You might be able to borrow from your retirement savings if you’re facing a serious financial hardship. Your credit score doesn’t come into play on a 401(k) loan.

At the same time, if you change or lose your job, you may have to pay back your loan in full in a short period of time. Otherwise, you’ll be on the hook for taxes and a 10% penalty (unless you’re 59 ½ or older).

Credit card for bad credit

If you need money on an ongoing basis, a credit card for bad credit might make sense. However, many of these types of cards require a deposit. If you can afford the deposit (and make your payments on time), you might qualify for a traditional credit card in the future.

How we chose the best installment loans for bad credit

We reviewed more than 31 lenders to determine the overall best five bad credit installment loans. To make our list, lenders must offer personal loans that are accessible to borrowers with bad (or fair) credit. Lenders must also have competitive APRs. From there, we prioritize lenders based on the following factors:

  • Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
  • Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

Frequently asked questions

There are a few ways to get a loan when no one will approve you. A history of on-time payments and paying off existing debt can help you get approved. Admittedly, these aren’t overnight fixes.
 
You could also look into no-credit-check loans. With these, the lender relies on the information it finds during a soft credit pull. But know that the easier a loan is to get, the higher its rates. APRs on no-credit-check loans can hit the triple digits.

A hardship loan is a type of loan that you take out in times of financial hardship. These could help with everyday expenses like utilities or for unexpected emergencies, such as car repairs.

Yes. Rates on an installment loan from a reputable lender should be less than 36%. The average APR on payday loans is around 400%.
 
What’s more, you typically only have two weeks (or one pay cycle) to pay off your payday loan. Terms on an installment loan usually range between 12 and 60 months (sometimes longer).

If you have no other choice and are confident that you can pay back what you borrow, you might be a good candidate for a bad credit installment loan. Just compare offers so you don’t get stuck with a higher rate than necessary. Bad credit installment loans can be expensive.