6 Best Personal Loans for Bad Credit That Aren’t Payday Loans


If you’re living paycheck to paycheck, financial emergencies can feel stressful and overwhelming. For example, when a household appliance breaks or your car needs major repairs, these things have to be dealt with. But these unexpected emergencies can add up to quite a bit of money you don’t have.

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If you have bad credit due to the financial mistakes you made in the past, you’re in a tough spot. Lenders aren’t fond of consumers with low credit scores, so you may have difficulty getting approved for a loan. Unfortunately, this causes many people to apply for bad credit loans from predatory payday lenders and ultimately worsens their financial situation.

What are the best personal loans for bad credit?

If you need money to get you through a financial emergency, personal loans are a much better option than payday loans. Here are the six best bad credit personal loans.


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BadCreditLoans.com is an online service that connects consumers with short-term loans. Of course, you’re not going to find a personal loan with the best rates, but it’s a good option for borrowers that can’t get approved elsewhere.

You can take out a personal loan up to $10,000 with APRs ranging from 5.99% to 35.99%. The loan terms range from three to 36 months. Applying is free, and you’re not obligated to take out any loan they offer you, so it could be worth it to try it out.


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PersonalLoans.com is an online marketplace connecting consumers with participating lenders. You can apply for a personal loan up to $35,000 with an APR range between 5.99% and 35.99%.

You’ll need to have a credit score of 580 or higher to qualify. However, since it’s a lending marketplace, there are no guarantees about the kind of lender you’ll get matched with.


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LendingClub offers installment loans between $1,000 and $40,000 with an APR range between 6.95% and 35.89%. LendingClub operates as an online marketplace and is one of the most popular peer-to-peer lenders in the industry.

You’ll need a minimum credit score of 600 to apply, but most of the borrowers approved through LendingClub have a score of at least 700. So if your credit history is really bad, this will not be the best choice for you.


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Avant offers fixed-rate personal loans in amounts ranging from $2,000 to $35,000, with APRs ranging from 9.95% to 35.99%. They do charge an origination fee of 4.75%, but there are no prepayment fees.

There are no minimum requirements to apply, though most approved borrowers have a credit score of at least 600. If you’re approved for a personal loan from Avant, you could receive the funds as soon as the next business day.


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With OppLoans, you can receive a personal loan from $500 to $4,000 even if your credit score is below 600. The APR range is 99%-199%, with repayment terms up to 36 months.

Obviously, the high interest rates don’t make this lender the best option, but it is an alternative to taking out a payday loan. And they do have an A+ rating from the Better Business Bureau, so this is a trustworthy lender.

OppLoans won’t do a hard pull on your credit, so you can apply without worrying it will damage your credit further. However, you will need to live in one of the states where OppLoans operates to apply.

OneMain Financial

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OneMain Financial offers personal loan options from $1,500 to $20,000 with APRs ranging from 16.05% to 35.99%. The loan amount you’re approved for will be subject to state minimum and maximum size restrictions. OneMain does charge a loan origination fee; the amount varies by state.

Unlike most personal loan lenders, OneMain Financial doesn’t have a minimum credit score required for approval. And if you’re approved for a loan, you could receive the funds on the same business day.

What is the difference between a payday loan and an installment loan?

An installment loan is a broad term used to describe several types of loans. Mortgages, auto loans, and personal loans would all be examples of installment loans. You borrow a certain amount of money and pay your lender back in agreed-upon monthly payments. These loans are usually done through a bank, credit union, or online lender.

In comparison, a payday loan is a short-term cash advance usually taken out through a loan agency, though these can also be done online. You’ll usually borrow a smaller amount of money at a high interest rate. You’ll pay this money back from your next paycheck.

Pros and Cons of Payday Loans

Payday loans are easy to obtain, and you can receive the money quickly. This can be tempting if you find yourself in a financial emergency. And these agencies are all over the place, so they are convenient to access.

But payday loans are always the more expensive option because of the exorbitantly high interest rates. And it’s easy to fall into a cyclical pattern of debt because you’re always borrowing from a future paycheck.

The CFPB found that 80% of payday loans are either rolled into another loan or immediately followed by another loan within two weeks. Some payday loan borrowers take out as many as eight to 10 loans a year.

Pros and Cons of Installment Loans

Installment loans are much more predictable than payday loans. They come with a fixed interest rate, and your payments will always be due at the same time each month. And since the loan amount is higher, the repayment terms are much longer.

However, installment loans can come with high interest rates as well, especially if you have a low credit score. And you can end up paying a lot of money in fees if you regularly miss payments.

Can I get an installment loan with poor credit?

Individuals with poor credit find themselves at a disadvantage when they need to borrow money. Lenders weigh your credit history heavily because a low credit score indicates that you’re a riskier investment.

This is a catch-22 scenario many borrowers have found themselves in. But if you find yourself in this situation, know that it is possible to borrow money without resorting to payday loans.

Some reputable lenders are willing to give installment loans to consumers with bad credit. So you can expect to pay more money in interest, and your loan terms will not be as favorable. But it will be nowhere near the 400% interest you could end up paying with a payday loan.


These six lenders are a better option than payday loans, but they still aren’t going to give you the most favorable interest rate. Improving your credit score is the best way to find to qualify for a personal loan with lower interest rates.

Improving your credit score will take time, but there are small steps you can take to get started. Keep track of your bills to ensure you’re making your monthly payments on time. Begin focusing on paying down debt and only apply for new credit as needed.

Jamie Johnson
Meet the author

Jamie Johnson is a freelance writer who has been featured in publications like InvestorPlace and GOBankingRates. She writes about various personal finance topics including student loans, credit cards, investing, building credit, and more.