Best installment loans for bad credit of November 2023

Best installment loans for bad credit

Best overall

Upgrade

Blueprint Rating

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Fixed APR

8.49% to 35.99%

Min. credit score

580

What you should know

With Upgrade, you can get approved for a loan ranging from $1,000 to $50,000 with a credit score as low as 580. Repayment terms range from two to seven years, and if you’re approved, you could get your funds within a day of clearing necessary verifications. Upgrade also offers joint applications, which could increase your approval chances and might get you a better rate than you’d get alone.

You might also qualify for a lower rate if you sign up for automatic payments and use a portion of your loan to consolidate existing debt. However, Upgrade doesn’t disclose how much this rate discount might be unless you have a registered account.

Keep in mind that Upgrade charges an origination fee as well as fees for late and returned payments, which could increase your overall borrowing costs.

Pros

• Fast funding.
• Permits joint applicants.
• No prepayment penalty.

Cons

• Charges an origination fee.
• Charges fees for late and returned payments.
• Doesn’t disclose information about rate discounts unless you have a registered account.

More details

• Interest rates: 8.49% to 35.99%.
• Loan amounts: $1,000 to $50,000.
• Repayment terms: 2 to 7 years.
• Fees: Origination fee (1.85% to 8.99%), late fee ($10) and returned payment free ($10).
• Min. credit score: 580.
• Can apply with a co-signer: No (but can apply with a joint applicant).

Best for quick approval decisions

LendingPoint

Blueprint Rating

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Fixed APR

7.99% to 35.99%

Min. credit score

590

What you should know

If you need a loan quickly, LendingPoint can be a good option — after filling out an application, you could get an approval decision in just a few seconds. And if you’re approved, LendingPoint will send your funds as soon as the next business day.

With LendingPoint, you can borrow $2,000 to $36,500 with terms from two to six years, and you could get approved with a credit score as low as 600. Keep in mind that LendingPoint doesn’t permit co-signers or joint applicants, and it has a minimum income requirement of $35,000. It also charges an origination fee, and its loans aren’t available in Nevada or West Virginia.

Pros

• Quick approval decisions.
• Fast funding.
• No prepayment penalty.

Cons

• Charges an origination fee.
• Minimum income requirement of $35,000.
• Not available in all states.

More details

• Interest rates: 7.99% to 35.99%.
• Loan amounts: $2,000 to $36,500.
• Repayment terms: 2 to 6 years.
• Fees: Origination fee (0% to 8%).
• Min. credit score: 590.
• Can apply with a co-signer: No.

Best for peer-to-peer lending

Prosper

Blueprint Rating

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Fixed APR

6.99% to 35.99%

Min. credit score

600

What you should know

Unlike most of the lenders on this list, Prosper is a peer-to-peer (P2P) lender. This means that instead of borrowing from a financial institution, you’ll work directly with a private investor (or group of investors) who will fund your loan. Because this cuts out the middleman, it can be easier to qualify for a P2P loan compared to a loan from a traditional lender.

With Prosper, you can borrow $2,000 to $50,000 with terms from two to five years, and you could get approved with a credit score as low as 600. Prosper also accepts joint applications, which can further increase your chances of qualifying. If you’re approved, you could get your funds as soon as the next business day.

Keep in mind that this lender charges an origination fee as well as fees for check payments, late payments and insufficient funds — all of which can increase your overall borrowing costs. Personal loans from Prosper also aren’t available in Iowa and West Virginia.

Pros

• Offers P2P loans.
• Fast funding.
• Permits joint applications.

Cons

• Charges an origination fee.
• Charges fees for check payments, late payments and insufficient funds.
• Not available in all states.

More details

• Interest rates: 6.99% to 35.99%.
• Loan amounts: $2,000 to $50,000.
• Repayment terms: 2 to 5 years.
• Fees: Origination fee (1% to 5%), check payment fee ($5 or 5% of your payment, whichever is less), late fee ($15 or 5% of the unpaid amount, whichever is greater) and insufficient funds fee ($15).
• Min. credit score: 600.
• Can apply with a co-signer: No (but can apply with a joint applicant).

Best for co-borrowers

LendingClub

Blueprint Rating

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Fixed APR

9.57% to 35.99%

Min. credit score

No minimum

What you should know

Many personal loan lenders don’t allow co-borrowers (also called joint applicants), but LendingClub does. While this lender has no specific minimum credit score, applying with a co-borrower could make it even easier to qualify. Even if you don’t need a joint applicant to get approved, having one could qualify you for a better rate or higher loan amount than you’d get alone. Keep in mind that unlike a co-signer who is liable for a loan if the primary borrower fails to make payments, a co-borrower is equally responsible from the start.

With LendingClub, you can borrow $1,000 to $40,000 with terms from three to five years, and you can expect to get your funds within a few days of approval — possibly within 24 hours. Note that LendingClub charges an origination fee as well as fees for late payments and insufficient funds.

Pros

• Permits joint applicants.
• No specific minimum credit score.
• No prepayment penalty.

Cons

• Charges an origination fee.
• Charges fees for late payments and insufficient funds.
• Limited repayment term options.

More details

• Interest rates: 9.57% to 35.99%.
• Loan amounts: $1,000 to $40,000.
• Repayment terms: 3 to 5 years.
• Fees: Origination fee (2% to 6%), late fee (5% of outstanding payment amount or $15, whichever is greater) and insufficient funds fee ($15).
• Min. credit score: No minimum.
• Can apply with a co-signer: No (but can apply with a joint applicant).

Best for small loans

Oportun

Blueprint Rating

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Fixed APR

28.99% to 35.99%

Min. credit score

No minimum

What you should know

If you only need to borrow a small amount, Oportun — the only lender on this list certified as a Community Development Financial Institution by the Department of the Treasury — could be a good choice. You can borrow as little as $300 up to $12,000 with an unsecured loan (amounts could vary depending on your state). This lender also permits co-signers in some situations.

Additionally, if you live in Arizona, California, Florida, New Jersey or Texas and own an eligible vehicle, you might be able to borrow up to $18,500 (amounts could vary depending on your state) if you secure the loan with your car title — though this means you risk losing your vehicle if you don’t keep up with your payments.

Unlike most of the lenders on this list, Oportun has no specific minimum credit score requirement — applicants only need to provide a valid ID along with proof of income and their address. This means you could qualify even if you have little to no credit. However, keep in mind that this lender’s annual percentage rates (APRs) can be higher compared to some lenders. Oportun also charges origination fees as well as fees for late and returned payments, and its loans aren’t available in Colorado, Connecticut, Maine, Maryland, Massachusetts, Nevada, New York, West Virginia or Washington, D.C.

Pros

• Can borrow as little as $300.
• No specific minimum credit score.
• Fast funding.

Cons

• Charges an origination fee as well as fees for late and returned payments.
• Could lose your car if you don’t keep up with secured loan payments.
• Not available in all states.

More details

• Interest rates: 28.99% to 35.99% (depending on your state and loan type).
• Loan amounts: $300 to $18,500 (depending on your state; larger loan amounts require collateral).
• Repayment terms: 1 to 4.08 years for unsecured loans or 2 to 5.33 years for secured loans (term options will depend on your location).
• Fees: Origination fee, late fee and returned payment fee (fee amounts will depend on your location).
• Min. credit score: No minimum.
• Can apply with a co-signer: Yes (in some cases).

Best for thin credit

Upstart

Blueprint Rating

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Fixed APR

5.2% to 35.99%

Min. credit score

300

What you should know

Upstart’s unique underwriting process uses factors such as your education and employment history in addition to credit history when making approval decisions. Because of this, Upstart not only has a very low minimum credit score requirement of only 300, but it also works with borrowers who don’t have enough of a credit history to generate a credit score — often known as having thin credit.

With Upstart, you can borrow $1,000 to $50,000 with a three- or five-year term. If you’re approved, you could get your funds as soon as the next business day.

Keep in mind that Upstart charges an origination fee along with fees for late and returned payments. It also doesn’t permit co-signers or joint applicants, and its loans aren’t available in Iowa or West Virginia.

Pros

• Accessible to borrowers with little to no credit history.
• Fast funding.
• No prepayment penalty.

Cons

• Charges an origination fee.
• Limited repayment term options.
• Not available in all states.

More details

• Interest rates: 5.2% to 35.99%.
• Loan amounts: $1,000 to $50,000.
• Repayment terms: 3 or 5 years.
• Fees: Origination fee (0% to 10%), late fee ($15 or 5% of past-due amount, whichever is greater) and returned payment fee ($15).
• Min. credit score: 300.
• Can apply with a co-signer: No.

Best for customer support

Avant

Blueprint Rating

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Fixed APR

9.95% to 35.99%

Min. credit score

580

What you should know

While many lenders have limited customer service hours, Avant’s team is available Monday through Friday from 7 a.m. to 10 p.m. Central Standard Time (CST) as well as Saturday and Sunday from 7 a.m. to 8 p.m. CST. You also have multiple options for contacting Avant, including by email, phone or mobile app or through the online dashboard. This will make it easier to get ahold of support during a time that suits your needs.

Avant’s personal loans range from $2,000 to $35,000 and come with terms from one to five years. While the average Avant borrower has a credit score between 600 and 700, you might qualify with a score as low as 580. If you’re approved, you could get your funds as soon as the next business day.

Keep in mind that this lender doesn’t permit co-signers or joint applicants and is not available in Massachusetts, Michigan, Montana, Vermont, Virginia and West Virginia. Avant also charges an origination fee as well as fees for late and dishonored payments.

Pros

• Accessible customer support.
• Fast funding.
• No prepayment penalty.

Cons

• Charges an origination fee.
• Charges fees for late and dishonored payments.
• Not available in all states.

More details

• Interest rates: 9.95% to 35.99%.
• Loan amounts: $2,000 to $35,000.
• Repayment terms: 1 to 5 years.
• Fees: Origination fee (up to 4.75%), late fee ($25) and dishonored payment fee ($15).
• Min. credit score: 580.
• Can apply with a co-signer: No.

Compare the best installment loans for bad credit

What is an installment loan and what can it be used for?

Unlike a revolving credit line like a credit card, an installment loan is a type of loan that provides a lump sum of cash. This is then repaid in monthly installments for a set period of time, and these payments each cover a portion of the principal balance and interest that you owe.

While most installment loans come with fixed interest rates and set payments throughout the life of the loan, others — such as adjustable-rate mortgages — have variable rates that can fluctuate over time depending on market conditions. In addition to interest, lenders might also charge other fees with installment loans, such as origination fees or late fees.

Various types of installment loans can be used for almost anything. For example, you could take out a personal loan to cover a major expense, a mortgage to pay for a house, an auto loan to buy a car or a student loan to account for college costs.

Keep in mind that depending on the type of installment loan you get, you might have to provide collateral to secure the loan. For instance, while most personal loans are unsecured, a mortgage is secured by a home while a car loan is secured by a vehicle. It can be easier to qualify for a secured installment loan because there’s less risk to the lender — but you could also lose your property if you don’t make your payments.

Types of installment loans

There are many types of installment loans to help you cover different kinds of expenses. Here are some of the most common sorts of installment loans:

• Personal loans: These loans can cover almost any personal expense and typically range from a few hundred dollars up to $100,000, depending on the lender. Most personal loans don’t require collateral.
• Mortgages: These are used to pay for the purchase of a home and can come with fixed or adjustable rates. The home acts as security for the loan.
• Student loans: These can help you pay for a college education and the expenses associated with it, such as housing and textbooks. While federal student loans all come with fixed rates, private student loans can have fixed or variable rates. 
• Auto loans: You can use an auto loan to pay for a new or used car, which will secure the loan as collateral.

Installment loan pros and cons

Pros

• Can cover almost any type of expense.
• Most come with fixed rates and set payments.
• Typically have lower rates compared to revolving credit lines.

Cons

• Can only borrow a single, lump sum, which can lead to overborrowing.
• Might come with fees.
• Could lose your collateral and damage your credit if you don’t keep up with your payments.

Frequently asked questions (FAQs)

What credit score do I need for an installment loan with bad credit?

The credit score you’ll need for an installment loan will depend on the type of loan and the individual lender. For example, while most personal loan lenders require good credit, others accept scores as low as 560, such as Universal Credit and OneMain Financial.

Some lenders — such as Oportun and Upstart — are also willing to work with borrowers who have little to no credit history.

How does an installment loan affect your credit score?

When you apply for an installment loan, the lender will perform a hard credit check when deciding whether to approve your application. This can cause a slight but temporary drop in your credit score — usually about five points or less.

An installment loan might also end up helping your credit score in the long run. For example, if you make all of your payments on time or are able to diversify your credit mix, you could see an improvement in your score over time.

What should I look for in an installment loan?

When considering an installment loan, it’s important to consider not only interest rates but also repayment terms, potential fees and eligibility requirements.

“Good installment loans don’t have variable interest rates,” says financial coach Jonathan Thomas. “Your rate should stay the same as long as you have the loan. You also shouldn’t see prepayment fees or application fees [fees charged to borrowers before they have been approved].”

What is the easiest type of installment loan to get?

In general, the easiest type of installment loan to get will be a short-term personal loan that doesn’t require a credit check, such as a payday loan, pawn shop loan or car title loan.

However, while these sorts of loans can be appealing, they’re also often predatory in nature, and they can come with astronomically high APRs and fees — possibly as high as 400%, depending on the type of loan. And in the case of pawn shop loans and car title loans, you could lose your property if you don’t keep up with your payments.

Because of these risks, it’s best to treat these alternatives as a last resort and to stick with a traditional personal loan instead whenever possible. Several personal loan lenders accept poor credit scores while some even work with borrowers who have no credit. Also note that legitimate lenders will charge reasonable interest rates and fees, which will be disclosed to you before you ever sign a loan agreement.