Bad credit narrows your loan options, but it doesn’t close the door. Reputable lenders cap APRs at 35.99%, and several of them actively work with borrowers who have scores as low as 580. The trick is knowing which lenders are worth applying to and which marketplaces will hand your information off to payday lenders charging 400% APR or more.
The lenders covered here were evaluated on current rates, loan amounts, credit score requirements, fees, and funding speed. We’ve also included the alternatives that sometimes make more sense than an unsecured personal loan.
5 Unsecured Loans for People with Bad Credit
Each of these options serves a different borrower profile. Some are direct lenders with published rate ranges, while others are marketplaces that match you with third-party lenders. We’ve noted which is which, along with what to watch out for in each case.
1. Upgrade
- Loan amounts: $1,000 – $50,000
- APR range: 7.99% – 35.99%
- Loan terms: 24 – 84 months
- Approval time: Decisions typically within minutes, with funding as soon as one business day
2. CashUSA
- Loan amount: $500 – $10,000
- APR range: 5.99% – 35.99%
- Loan terms: 3 – 72 months
- Approval time: Decisions typically within minutes, with funding as soon as the next business day.
3. PersonalLoans.com
- Loan amount: $250 – $35,000
- APR range: 5.99% – 35.99%
- Loan terms: 90 days – 72 months
- Approval time: Funds may be deposited as soon as the next business day
4. BadCreditLoans.com
- Loan amount: $500 – $10,000
- APR range: Varies by lender
- Loan terms: 3 – 72 months
- Approval time: Decisions typically within minutes, with funding as soon as the next business day
5. MoneyMutual
- Loan amount: $200 – $5,000
- APR range: Varies by lender, often 200% or higher
- Loan terms: Typically short-term, with repayment due on the borrower’s next payday
- Approval time: Potential approval within minutes, with funding as soon as 24 hours
How Unsecured Personal Loans Work
Unsecured personal loans don’t require collateral. Lenders evaluate your credit score, income, and debt-to-income ratio to decide whether to approve you and at what rate. Because there’s no asset backing the loan, rates tend to be higher than secured options like auto loans or home equity loans.
Most unsecured personal loans are structured as fixed-rate installment loans. You borrow a lump sum, then repay it in equal monthly payments over a set term, typically 2 to 7 years. Rates are locked in at origination, so your payment stays the same for the life of the loan.
These loans are a practical fit for several common situations:
- Debt consolidation: Rolling high-interest credit card balances into a single fixed-rate loan.
- Emergency expenses: Covering medical bills, car repairs, or urgent home repairs.
- Major purchases: Financing a large expense when a credit card’s APR would be too costly.
Unsecured loans are usually not the right fit for everyday expenses, recurring bills, or anything you could reasonably save for within a few months.
What to Compare When Shopping for a Bad Credit Loan
Not all bad credit loans are built the same. The monthly payment is only one piece of the picture, and a loan that looks affordable on the surface can cost thousands more than a competitor with slightly higher rates but better terms.
Here are the factors that actually move the needle:
- APR versus interest rate: APR includes fees and gives you the true cost of borrowing. Always compare APRs, not just interest rates.
- Origination fees: These can add 1% to 10% to your effective cost and are deducted from your loan proceeds.
- Loan term length: Shorter terms mean higher monthly payments but less total interest paid. Longer terms lower your payment but cost more overall.
- Prepayment penalties: Some lenders charge a fee if you pay the loan off early. Reputable personal loan lenders typically don’t, but always confirm.
- Autopay discounts: Many lenders reduce your rate by 0.25% to 0.50% if you enroll in automatic payments.
- Late payment fees: Check the amount and grace period before you sign.
Prequalification is the single most useful tool when comparing offers. It lets you see estimated rates and terms from multiple lenders with only a soft credit check, which doesn’t affect your credit score.
How to Get an Unsecured Loan With Bad Credit
Approval with bad credit isn’t automatic, but there’s a clear path to improving your odds. The order matters, because each step builds on the one before it.
Follow these steps to give yourself the best shot at approval and the lowest possible rate:
- Check your credit report first: Pull free reports from all three bureaus at AnnualCreditReport.com and dispute any errors dragging your score down.
- Verify your income documentation: Gather recent pay stubs, tax returns, and bank statements. Lenders care more about your ability to repay than your credit score alone.
- Prequalify with multiple lenders: Soft credit checks let you compare real rate offers from three to five lenders without damaging your score.
- Apply with the best match: Submit a formal application only after identifying the lender offering the most favorable terms.
- Read the loan agreement carefully: Look specifically for origination fees, prepayment penalties, and the total cost over the life of the loan.
- Set up autopay immediately: This secures any autopay discount and protects your credit from accidentally missed payments.
Making every payment on time is the fastest way to rebuild credit. A year of on-time payments on an installment loan can noticeably improve your score and open access to better rates on future borrowing.
Alternatives to Unsecured Personal Loans
If you don’t qualify for an unsecured loan or the rates you’re offered feel too high, several alternatives are worth considering. Some of these options are meaningfully cheaper than bad credit personal loans, and a few are specifically designed for the situations where payday loans feel like the only choice.
Credit Union Payday Alternative Loans (PALs)
Credit Union Payday Alternative Loans are the most overlooked option for bad credit borrowers. The National Credit Union Administration regulates them, and federal credit unions can offer two types.
Here’s how the two PAL products compare:
- PAL I: Loan amounts from $200 to $1,000, maximum APR of 28%, repayment terms of 1 to 6 months. Requires at least one month of credit union membership.
- PAL II: Loan amounts up to $2,000, maximum APR of 28%, repayment terms of 1 to 12 months. Available as soon as you join the credit union.
Application fees are capped at $20 for both products. Compared to a 400% APR payday loan, a PAL is dramatically cheaper and reports to the credit bureaus, which helps you build credit while you repay.
Secured Personal Loans
Secured loans require collateral, such as a vehicle title, savings account, or certificate of deposit. Offering collateral reduces the lender’s risk, which typically means lower rates and easier approval than an unsecured loan.
The downside is direct: if you default, the lender can seize the asset you pledged. Share-secured and CD-secured loans from credit unions are often the safest entry point, since they use your own savings as collateral and often come with rates under 10%.
Adding a Cosigner
A cosigner with good credit can help you qualify for a loan or secure a lower rate than you could get on your own. The co-signer is legally responsible for repayment if you default, so this option requires an honest conversation before moving forward.
Upgrade, as mentioned earlier, accepts joint applications. Several other major lenders do as well, including LightStream and LendingClub. This path is worth exploring if you have a family member or close friend with strong credit who’s willing to back you.
0% Intro APR Credit Cards
Some credit cards offer 0% introductory APRs on purchases or balance transfers for 6 to 24 months. The longest current offers, such as the Chase Slate and Wells Fargo Reflect, extend to 21 months, with a handful reaching 24 months.
For debt consolidation, a 0% balance transfer card can save you significant interest if you can pay off the balance before the intro period ends. Balance transfer fees of 3% to 5% apply, and you’ll typically need good credit (670+) to qualify, which rules this option out for many bad credit borrowers.
Borrowing From Family or Friends
A loan from someone you trust can come with flexible terms and no interest, though it carries relationship risk. Treat it like a formal agreement by writing down the loan amount, repayment schedule, and any interest. Clear expectations protect both parties and reduce the chance of hard feelings later.
Bottom Line
Getting an unsecured personal loan with bad credit is harder than with good credit, but it’s far from impossible. Upgrade offers the most predictable terms for borrowers with scores in the 580 to 669 range. Marketplaces like CashUSA, PersonalLoans.com, and BadCreditLoans.com widen your options by matching you with multiple lenders at once, though quality and rates vary by lender.
Before accepting any offer, prequalify with at least three lenders to compare real rates. If the APRs you’re offered feel too high, check whether a Credit Union Payday Alternative Loan, secured loan, or co-signed application might work better. The goal isn’t just to get approved; it’s to get a loan you can actually repay without making your financial situation worse.
On-time payments on a fair-rate installment loan are one of the fastest ways to rebuild credit. A year from now, a borrower who handled this loan responsibly will have access to options that aren’t on the table today.
Frequently Asked Questions
Before applying for any loan, it helps to have clear answers to the questions that most often come up with bad credit borrowing. These cover the situations that have the biggest impact on your approval odds, your total cost, and your credit going forward.
Can I get an unsecured personal loan while unemployed?
It’s possible but harder. Lenders want to see a stable income source, which doesn’t have to be a traditional job. Unemployment benefits, Social Security, disability payments, freelance income, and spousal income can all qualify depending on the lender. Adding a co-signer or co-applicant with employment income significantly improves your odds.
How much can I borrow with bad credit?
Loan amounts from reputable unsecured personal loan lenders range from $1,000 to $50,000. Borrowers with bad credit typically qualify for smaller amounts at higher rates, with most loans falling between $1,000 and $10,000. Marketplace lenders may offer loans as low as $250, though those often come from payday or short-term lenders with much higher APRs.
Will an unsecured personal loan improve my credit score?
It can, if you make payments on time. Installment loans add to your credit mix and build positive payment history, both of which are factored into your FICO score. A year of consistent on-time payments often produces a measurable score improvement. Missing payments does the opposite and can drop your score significantly.
What happens if I can’t repay my loan?
Missing a payment triggers late fees and a report to the credit bureaus after 30 days past due. Continued nonpayment can lead to default, collections activity, and a lawsuit for the balance owed. If you anticipate trouble, contact your lender immediately. Many offer hardship programs that pause payments or modify the loan temporarily. These options are always better than ignoring the problem.
Are payday loans the same as unsecured personal loans?
No. Payday loans are technically unsecured, but they’re structured differently. They carry APRs often exceeding 400%, require repayment within two to four weeks, and don’t typically report to credit bureaus. Traditional unsecured personal loans have longer repayment terms, lower rates capped at 35.99% with reputable lenders, and build credit when paid on time. These are different products, and they should be evaluated separately.
