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Best Bad Credit Loans in 2022 – Try the Top Bad Credit Score Lenders

Gone are the days when bad credit applicants couldn’t get a loan. Many lenders offer loans to people or businesses with a bad credit history or no credit history. If you have bad credit and need access to cash, you can apply for a bad credit loan.

Many banks, credit unions, and online loan companies offer loans to those with a bad credit history. With so many lenders offering bad credit loans, you may have difficulty deciding which one is the best. We contacted bad credit lenders, reviewed each lender’s requirements and loan terms, and asked customers about their experience with the lender to separate the best bad credit loan providers from the worst.

The Top Bad Credit Lenders of 2022

Here are the top bad credit lenders of 2022:

  • BadCreditLoans
  • CashUSA
  • LendYou
  • Upgrade Personal Loans
  • PickALender
  • MoneyMutual
  • Payzonno
  • Next Day Personal Loan
  • PersonalLoans

BadCreditLoans

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BadCreditLoans is an online loan marketplace that connects prospective borrowers with online lenders. The platform specializes in helping borrowers with a bad credit history or low credit score. You can use this platform to seek $10,000 or fewer loans even if your credit score is below 500.

Up until now, BadCreditLoans has helped hundreds of clients with poor credit. You can turn to this online marketplace to get emergency funds to cover unexpected expenses when you are not eligible for a traditional bank loan due to your credit history. With BadCreditLoans, you no longer have to send stacks of loan applications to banks that won’t even review them.

Applying for a loan on BadCreditLoans is simple. You have to fill out the BadCreditLoans application, which takes less than five minutes. Once you have completed the application, the platform will locate lenders that match your needs and send you their proposals via email. After selecting a lender, you have to complete a questionnaire that asks about your credit score, the purpose of the loan, and how much you want to borrow.

BadCreditLoans is designed to help borrowers with bad credit obtain small unsecured loans with a repayment period of three to 36 months. If your credit score is lower than 500, you will only be able to borrow $1,000. Only U.S. citizens who have a source of regular income can apply for a loan at BadCreditLoans.

CashUSA

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CashUSA is an online lending network that caters to borrowers with poor or no credit history. You can use the platform to obtain a loan between $500 and $10,000 with a repayment period of 90 days to 72 months. The platform does not provide direct loans, instead serves as a marketplace to connect loan applicants with third-party lenders.

You can apply for loans at CashUSA for free. After submitting your application, you will get a proposal from a lender and the loan details, such as interest rate, fees, and repayment terms. CashUSA usually does not ask for your credit score and charges high-interest rates on all loans. The platform also provides tribal loans provided by lenders on tribal land. However, these loans are not regulated by state or federal lending laws.

CashUSA asks for the intent of the loan before approving it. They provide loans for emergencies, debt consolidation, debt relief, auto purchase, auto repair, moving home improvement, medical expenses, business, tax payments, vacation, mortgage or rent, and education.

LendYou

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LendYou is one of the most popular online lending platforms that cater to short-term borrowers with a low credit score. With LendYou, you don’t have to pursue other financial routes to get traditional loans from banks. The platform connects you with lenders that offer financial support in emergencies. LendYou is a secure lending network that facilitates loan deals with potential lenders and applicants.

You can use LendYou to apply for a bad credit loan from the comfort and convenience of your home. When you apply for a loan on the site, the platform automatically locates the best lenders for you based on your application.

LendYou provides three types of loans: short-term, installment, and personal. Short-term loans have higher APR fees and apply high-interest rates on late payments. LendYou allows you to obtain a short-term loan between $100 to $1,000 and requires the pay off within 30-35 days.

LendYou also offers long-term or installment loans that range between $1,000 and $5,000. The repayment terms for these loans range from a few months to a few years. Personal loans offered by LendYou allow you to borrow as much as $15,000 with no collateral. These loans have a repayment period of up to 60 months. The platform does not charge a prepayment penalty, so you can pay off the loan early to save on interest.

Upgrade Personal Loans

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Upgrade Personal Loans is a San Francisco-based online lending platform that partners with banks and other financial institutions to offer personal loans. You can use Upgrade to borrow as much as $50,000. The platform provides secured and unsecured personal loans to borrowers with a minimum credit score of 580. If your credit score is higher, you can qualify for loans with low-interest rates and avoid Upgrade’s highest APRs.

The platform approves or denies loan applications based on the applicant’s credit history and income. While Upgrade does not have any debt-to-income (DTI) ratio requirements, the platform gives weightage to free cash flow. You must have a minimum of $1,000 in free cash flow each month and a debt-to-income (DTI) of 40% to get approved for Upgrade Personal Loans.

The platform also allows joint applications for individuals who meet minimum credit score requirements. A joint loan can help you qualify for higher amounts and more competitive APRs even with a poor credit history.

Upgrade Personal Loans are offered for debt consolidation, large purchases, credit card refinancing, and home improvements. However, you cannot obtain an education, investments, or gambling loans.

PickALender

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PickALender is an online lending platform that caters to applicants seeking personal loans. It improves your chances of successfully obtaining a loan by connecting you with an extensive network of creditors.

You can use the platform for free and obtain a loan between $100 and $35,000, which gets deposited into your bank account directly after approval. You cannot use personal loans obtained through PickALender to buy a home, pay taxes, and cover education expenses.

PickALender features many independent lenders that offer personal loans with an origination fee of 6% and an APR of 24.0980%. The platform does not specify any requirements for loan approval. Lenders have the freedom to negotiate with customers directly. Loan costs and fees vary from lender to lender. All information regarding loan specifics must be acquired from your lender.

MoneyMutual

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Money Mutual is a short-term loan provider that serves as an intermediary between lenders and borrowers. The platform features over 60 lenders that provide loans to those with bad credit.

MoneyMutual offers five types of loans: bad credit loans, cash advances, payday loans, and installment loans. You can access the website for free and apply for a loan by filling out the given forms. MoneyMutual is a great platform to obtain short-term loans from independent lenders. You can get a loan of up to $2,500. Interest rate, loan term, and APR vary from lender to lender.

MoneyMutual carries an additional layer of legitimacy as it is a member of the Online Lenders Alliance, representing the online financial services community.

Payzonno

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Payzonno is an online platform that connects you with a network of creditors that respond to your debt request. You can apply for quick personal loans from $100 to $5,000 on Payzonno. After you submit your application, the platform takes your debt request and other information to a group of trusted creditors.

Loan costs, repayment terms, and maximum loan amount differ from creditor to creditor. However, you get full disclosure on the prices and charges of all types of loans. The amount of loan a creditor is willing to provide depends on various factors, including your home state, credit history, and income.

Once the creditor has approved your loan and you agree to all loan terms, the borrowed amount will be deposited directly into your bank account. You can expect to receive the loan as soon as the next working day.

Next Day Personal Loan

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Next Day Personal Loan is an online marketplace that connects applicants seeking personal loans to different lenders. Instead of offering direct loans, the platform facilitates loan deals between lenders and borrowers. You can use the platform for free to obtain loans of $100 and $40,000. The venue only enables agreements for personal loans and student loan refinancing.

You have to fill out an application to place a loan request on the platform. After you apply, the platform connects you with up to three lenders based on your financial need. You’ll receive the proposal of each lender via email.

While interest rates vary from lender to lender, borrowers typically have to pay 14% to 20% interest on Next Day Personal Loans. Interest rates are higher for borrowers with poor credit. The platform requires borrowers to have a minimum credit score of 500. The highest APR that lenders can charge is 36%. However, the rate may increase in case of late payments. The repayment term for the loans ranges from 60 days to a year.

PersonalLoans

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PersonalLoans is one of the oldest and most reputable bad credit loans providers. The platform is not a direct lender. Instead, it serves as a middleman between borrowers and lenders to facilitate loan deals. It is an online marketplace that connects you to an extensive network of creditors that offer various types of loans.

PersonalLoans specializes in personal loans and provides loans between $500 and $35,000. If you want fewer restrictions on spending the borrowed money, you should apply for non-business loans.

The repayment terms vary from lender to lender but typically range from 90 days to 72 months. You are required to repay a set amount each week or month. Lenders can charge APR between 5.99% and 35.99%. Origination fees and other fees associated with the loan vary from lender to lender. You can use PersonalLoans to get fast cash for an emergency or a personal loan for debt consolidation, even if you have a low credit score.

The site has a straightforward signup process. Once you have signed up, the platform will keep sending you loan offers until you find a lender that best suits your needs. When you sign up, you are asked to provide basic information, such as your email, phone number, social security number, employment information, estimated credit score, and gross monthly income.

The Top Bad Credit Lenders of 2022 – Ranking Criteria

Many lending platforms claim to offer suitable loan options to those with bad credit. However, not all loans provide equal convenience. We considered the following factors to come up with the best bad credit lender of 2022:

Company Reputation & Track Record

While some companies have provided online financial services for years, some have just entered the market. We preferred companies with a track record of providing loans to borrowers with low credit scores. We considered many factors to determine the reputation and legitimacy of the lending company, including the age of the company. However, we were in no way biased against new companies.

Honesty & Transparency

The online space is saturated with lending sites that offer payday loans with unreasonably low-interest rates. Many of these shady websites are designed solely to steal customers’ personal and financial information.

Our list includes legitimate loan providers that specialize in offering bad credit loans. The history and location of all companies on our list are known. While preparing the list, we were particularly wary of companies not being upfront about their operations, place, or history. We were also wary of lenders that do disclose all hidden fees associated with the loans.

Interest Rate and Loan Cost

Lenders that offer loans to borrowers with poor credit charge high-interest rates. One of the downsides of bad credit loans is that they are expensive. However, lenders cannot exceed the legal rate of interest.

The maximum interest rate that lenders can charge varies from state to state as there is no federal regulation regarding this. While preparing the list, we considered the loan’s overall cost, including an origination fee, interest rate, APR, and additional charges. We preferred platforms that provide loans without any hidden charges. All loan providers on our list charge interest rates within the legalized limit of each state.

Ease of Use

The best lending platforms spend millions of dollars to create a user-friendly website that is easy to navigate. All lending websites on our list are highly functional and easy to use. While preparing the list, we were wary of complex sites to navigate or take time to load. All lending sites listed above have a simple application process that takes less than five minutes.

Acceptance of Low Credit Scores

Many bad credit loan providers reject the loan application of individuals with a credit score below 500. Applicants with no credit history often fail to qualify for bad credit loans. All loan providers on our list offer loans to those with a credit score of 580 or below. The lower the credit score, the higher the interest rate borrowers have to pay. Nonetheless, having a FICO score of 500 or below should not prevent applicants from getting a loan in time of need.

Funds Transfer

All good lenders transfer funds to the borrowers’ bank account within 24 to 48 hours. Some lenders may take less than 12 hours to complete the transfers. All loan providers on our list have fast loan processing times.

Customer Reviews

In addition to the factors above, we also talked to customers about their borrowing experience. We also waded through google reviews to determine which lender has a more impressive track record of facilitating loan deals for those with bad credit. All loan providers on our list are backed by thousands of positive customer reviews online.

What is ‘Bad Credit,’ and Do I have it?

Bad credit refers to a person or company’s history of failing to pay back loans reflected in a low credit score. Lenders use the credit scores to determine the borrower’s likelihood of paying off the loan on time. Your credit score is a numerical expression for your credit history, a record of how you have managed repayment of debts. A person or company with bad credit has a low credit score.

If you have had difficulty paying off a loan or loans on time in the past, you will find it difficult to borrow money from reputable lenders at competitive interest rates. Financial institutions consider risky borrowers when negative factors emerge in your credit history. The negative factors contributing to poor credit include charge-offs, defaulting on loans, late payments, and recent bankruptcies.

If your credit report features several delinquencies, you’ll have trouble getting secured (backed by collateral) and unsecured (without collateral) loans. Your previous lateness suggests that you may not make timely payments in the future, reducing your chances of getting a loan with standard requirements.

Most lenders use FICO scores to evaluate credit risk and the creditworthiness of borrowers. FICO scores represent data in five areas: payment history, length of credit history, new credit accounts, current levels of indebtedness, and types of credit used.

How do Credit Scores work?

A credit score numerically represents five core areas of a credit report. While all of these factors can contribute to bad credit or a low credit score, each aspect has a different weightage in the credit score. Here’s an overview of how FICO credit scores work:

Payment History (35%)

A history of late payments or delinquencies contributes to a lower credit score. Similarly, a history of timely payments positively impacts your credit score and increases your creditworthiness as a borrower. Individuals and businesses with a record of paying bills before the due date or on time have a clean payment history and higher credit scores.

Amounts Owed (30%)

A debt ratio of 0.6 or higher contributes to a low credit score. Carrying a high amount of debt damages your credit score as you are less likely to pay off the debt if you already owe a lot of money. While the amount of outstanding debt may not directly impact your credit score, your ability to pay it off does. Regardless of your debt-to-income ratio, you can still be denied a loan on high outstanding debt.

Length of Credit History (15%)

If you have responsibly repaid debts for many years, you’ll have a higher credit score. A more extended credit history contributes to a higher credit score. Conversely, a shorter credit history lowers your credit score and makes you a relatively risky borrower. People or companies whose individual credit accounts have been open for a more extended period have higher credit scores.

Credit Mix (10%)

Credit mix refers to the types of credit accounts you hold, such as credit cards, student loans, automobile loans, and mortgages. While your credit mix typically determines 10% of your credit score, it may significantly impact your credit score if you have a sparse credit history. Similarly, a lack of diversity in a credit mix can contribute to a lower credit score, such as having only one type of credit account.

New Credit (10%)

Opening several new credit accounts in a short period lowers your average account age, which reduces your credit score. A more concise credit history has a more significant impact on your credit score if your credit reports do not feature a lot of other credit information. If you open a different type of new credit account, your credit score may increase as it will diversify your credit mix. Nonetheless, opening a new credit account can still lower your credit score regardless of how long you have been managing credit.

A credit score is one of the best measures of your financial health. Your credit score reflects your creditworthiness and credit standing. Lenders use your credit score to determine the likelihood of you paying off the loan quickly. However, a low credit score is not the only indicator of poor credit. A few indicators of bad credit include rejection of loan application, unforeseen cuts to your credit limits, and an increase in interest rates of existing accounts.

Most financial institutions use the FICO credit score model to depict a company or person’s credit history. However, other credit-scoring systems also exist. The best way to evaluate your credit standing is to order your credit score from myFICO.com. A FICO credit score provides a detailed view of your credit.

You are in a safe zone if you have a FICO credit score between 669 and 740. However, if your FICO credit score is below 590, you are statistically a risky borrower. A FICO score of 800 and above is considered excellent. The FICO score range is broken down into five ratings:

  • Poor: Below 580
  • Fair: 580-669
  • Good: 670-739
  • Very Good: 740-799
  • Exceptional: 800 and above

How Does a Bad Credit Loan Work?

While people or companies with low credit scores are considered risky borrowers, loan options are available. You can apply for a bad credit loan if you do not have a good credit history. Applying for a bad credit loan is simple: all you have to do is submit your personal information and credit report to a credit union of your choice. You’ll get notified if the lender approves your loan application. Once the moneylender accepts your application, the borrowed amount will be deposited in your account within 24 to 48 hours. However, some financial institutions take more than two days to transfer the funds.

The Pros & Cons of Bad Credit Loans

The main advantage of a bad credit loan is that you can borrow money if you have a low credit score. Bad credit loans allow you to borrow money without a guarantor or collateral. Here are some of the advantages of bad credit loans:

No Hidden Charges

Lenders offering bad credit loans do not charge any additional or hidden fees, such as document fees, discharging flat fees, processing fees, and penalty charges.

Quick Approval

Bad credit loans are generally approved within three days or less. Once your loan application has been approved, you can get funds within 24 hours.

Borrowers Can Pay Off the Loan on in Installments

Lenders offering bad credit loans allow you to pay off the borrowed amount in installments. You don’t have to pay off the entire loan at once. Instead, you repay the loan over time with a predetermined number of scheduled payments. The number of payments depends on the repayment period or the time frame you have to pay back the loan. The installments are higher if you pay off the loan over several years. The interest rate on loans also goes higher as the repayment period increases.

Repair Your Credit History Over Time

You can slowly build a good credit history by applying for a bad credit loan. A bad credit loan is a great way to ensure that you will pay off the loan on time, positively impacting your credit history, thereby raising your credit score.

Bad credit loans also have their fair share of disadvantages. Here are some of the drawbacks associated with bad credit loans.

High-Interest Rates

Lenders apply high-interest rates on bad credit loans to mitigate the associated risk. The lower your credit score, the higher the interest rate. Loans with high-interest rates are challenging to pay off.

Fixed Repayment Terms

In the case of credit cards, the card issuer specifies the minimum payment you have to make each month. On the other hand, bad credit loans require you to repay a set amount each month. You agree to this amount with your lender before entering the contract. Fixed repayment terms can lead to missed payments which negatively impact your credit history and lower your credit score.

Fees and Penalties

While bad credit loans typically do not have any hidden fees, lenders charge an origination fee to process your loan application. Some lenders also charge a prepayment penalty if you pay off the loan early. They also charge a late fee if you miss a payment. You may also have to pay a fee for making payments by check.

License Problems and Scams

Most bad credit lenders are not licensed in every state across the country. You must ensure that the lender you choose is licensed in your state before applying for the loan.

Can Increase Debt

People or businesses with bad credit already have outstanding debt when applying for a bad credit loan. If you take a bad credit loan to pay off an old loan, you can increase your overall debt. You should only pursue a bad credit loan if you are confident that you can maintain your loan repayments.

Types of Bad Credit Loans

It’s indeed a challenge to find a low-cost loan with bad credit. Here are some types of bad credit loans:

Credit Unions

While the lending policies of credit unions are different from commercial banks, they have similar application processes. If you have poor credit, you can apply for a loan at a credit union. However, you must become a member of the credit union to apply for a loan. All loans offered by credit unions have an interest rate of 18% regardless of the borrower’s credit score.

Friends and Family

If you have a bad credit history, you can borrow from your friends and family in time of need. Though this may be dangerous from a relationship point of view, it can help you avoid the anxiety that comes with a cruel qualifying process. However, you must treat the loan as a significant business transaction to prevent problems in the relationship.

Online Personal Loans

Online lending platforms offer bad credit loans for debt consolidation, home repairs, and many other expenses. These loans are the quickest to obtain as they get approved within minutes, and funds get transferred within a day. Most online loan providers do not charge an application fee or prepayment penalty.

Frequently Asked Questions About Bad Credit Loans

We receive many questions about bad credit, low credit scores, and bad credit loans. Here are some of the most frequently asked questions about bad credit loans:

Q: Can I get a loan with a FICO score of 580?

A: Yes, you can get a bad credit loan with a 580 FICO score. You can also apply for a secured or unsecured personal loan with a co-signer.

Q: What is the most accessible loan with a low credit score?

A: Payday loans, personal loans, and pawnshop loans are the most accessible loans with a low credit score. All of these loans are short-term cash solutions for people with bad credit. You can apply for any of these loans if you need fast cash.

Q: Can I get a loan without any credit history?

A: Yes, you can get a loan even if you have little to no credit history. Although it may be hard for you to find a lender, you can get a no-credit-history loan with a high-interest rate.

Q: Can I get a personal loan with bad credit?

A: Yes, you can get a personal loan with bad credit or a low credit score. There are many affordable loan options available for borrowers with bad credit.

Q: What is an emergency loan?

A: An emergency loan is a loan designed for short-term financial emergencies. Emergency loans usually have high-interest rates and fees. There are several types of emergency loans, such as a payday loan, personal loan, loan from family or friends, and a lower-cost payday alternative loan from a credit union.

Q: Can I get an emergency loan with bad credit?

A: While borrowing options are limited for people with bad credit, you can get an emergency loan with a low credit score. However, emergency loans for people or businesses with bad credit are expensive. As bad credit statistically makes you a risky borrower, the lender will charge a high-interest rate on loan. Additionally, bad credit borrowers cannot borrow as much money as those with a higher credit score.

Q: Where can I get an emergency loan with bad credit?

A: You can get an emergency loan with bad credit from online lenders, credit unions, traditional banks, relatives and friends, payday lenders, and credit card companies. However, some of these borrowing options may not be right for you. For example, credit card cash advances are costly and may even increase your credit utilization rate, hurting your credit score.

Q: Can I get a $20,000 loan with bad credit?

A: Borrowers usually need a credit score above 669 to get a $20,000 loan. However, some lenders offer this much to borrowers with bad credit.

Q: Why do lenders offer bad credit loans?

A: Lenders offer bad credit loans because these loans have high-interest rates. Some bad credit loans also come with additional charges.

Q: Will a bad credit loan impact my credit score?

A: Yes, a bad credit loan can slightly lower your credit score, just like a mortgage or credit card application. This is because the lender runs a hard inquiry on your credit. Whenever a lender runs a search on your credit, your credit score gets a slight dip.

Q: How to apply for a bad credit loan?

A: Applying for a bad credit loan is very easy. You have to fill out a loan application with the lender, provide the necessary documents, and choose an option from the loan offers available. You must review all loan offers, their terms, and compare rates.

Q: Are self-employed individuals eligible for bad credit loans?

A: Yes, many lenders offer loans for self-employed individuals with bad credit. Solo traders, freelancers, and other self-employed individuals can take bad credit loans to consolidate their debts, cover outstanding bills, and improve their cash flow.

Q: How long does a bad credit loan take to get approved?

A: You can get approved for $1,000 to $50,000 within 3 to 7 days with 36 to 60 months repayment terms. Once your loan has been approved, you will receive the funds early as the next business day. Some lenders take up to 3 days to transfer the funds.

Q: Am I eligible for a bad credit loan if I do not have a job?

A: Yes, you are eligible for a bad credit loan even if you do not have a job. While some lenders require proof of income verifications, you can use self-employment income, retirement benefits, or disability payments as a source of income.

Q: Can I pay off a bad credit loan early?

A: Yes, you can pay off a bad credit loan early to save on interest and decrease your monthly debt load. However, some lenders charge a prepayment penalty if you pay off your debt before time which will undo the money you save on interest. Additionally, paying off a loan prematurely can impact your credit history and hurt your credit score.

Q: What’s the total cost of a bad credit loan?

A: The total cost of a bad credit loan depends on several factors, including the borrowed amount of money, repayment terms, and annual percentage rate (APR). APR is the annual rate of interest that you must pay on loan. It is based on the borrowed amount, loan fees, monthly interest rate, and the length of the repayment period. Bad credit loans generally have higher APRs, between 3.22% and 35.99%. Some lenders also charge origination fees and other costs.

Q: Are bad credit loans safe?

A: Yes, bad credit loans are safe if obtained from a reputable lender. You can get a bad credit loan from any lender on our list. Before applying for a loan, you must check the lender’s BBB rating, payment requirements, and Google reviews for their services.

Q: How long do I get to pay off a bad credit loan?

A: Like other types of loans, bad credit loans also require you to repay a specified amount of money in monthly installments over a fixed period, i.e., repayment period. The repayment period for a bad credit loan can be anywhere between two and five years.

Q: What payment methods are used to pay back bad credit loans?

A: Most lenders use automatic payments (ACH) to withdraw money from your bank account every month. However, you can also make a payment online on the due date.

Q: Is there a penalty for prematurely paying off a bad credit loan?

A: Yes, many lenders charge a penalty for paying off a loan early. Some lenders allow you to pay off a loan early, some charge a prepayment penalty.

Q: Are bad credit loans backed by collateral?

A: No, bad credit loans are not backed by collateral or security.

ALSO READ: 7 Best Credit Repair Companies and Services to Use in 2022

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