5 Best Unsecured Personal Loans for Bad Credit of 2024


We all face financial setbacks at some point in our lives. Whether it’s an unexpected medical bill, an unforeseen car repair, or a sudden layoff, life can throw a wrench in our plans, leaving us in need of extra cash.

For those struggling with bad credit, these situations can be even more stressful since obtaining unsecured personal loans can be a challenge. Low credit scores may lead to higher interest rates or even disqualification from some loans, potentially worsening your credit score if you default on existing payments.

In this guide, we’ll explore the best unsecured personal loans for bad credit, along with tips for improving your credit score and strategies for budgeting and paying off debt.

Key takeaways:

  • Financial setbacks can be especially challenging for those with bad credit.
  • Some online lenders offer unsecured personal loans specifically for borrowers with poor credit.
  • It’s crucial to work on improving your credit score to secure better loan terms in the future.

5 Unsecured Loans for People with Bad Credit

Thankfully, some online lenders recognize that life doesn’t always go according to plan. They’ve designed accessible unsecured loans that don’t automatically disqualify borrowers due to a blemished credit history.

While these loans come with interest, the rates vary based on your credit score. It’s essential to use unsecured loans only for financial emergencies, and to shop around for the best terms for your specific needs and credit standing.

1. CashUSA

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  • Loan Amount: $500 – $10,000+
  • APR: 5.99% – 5.99%
  • Term: 3 – 72 months

CashUSA is an online loan marketplace that connects borrowers with a wide range of lenders, making it possible for individuals with bad credit to secure an unsecured loan.

Their extensive network of providers offers various personal loan options, catering to a broad spectrum of financial needs.

Features and Benefits

  • Simple application: CashUSA features a user-friendly application process that enables you to request a loan without any hassle. The platform will then match you with potential lenders based on your financial profile and loan requirements.
  • Wide range of loan amounts: CashUSA’s network of lenders offers loans ranging from $500 to $10,000 or more, allowing borrowers to find an option that suits their specific financial needs, whether it’s covering unexpected expenses or consolidating debt.
  • Quick approval and funding: Once matched with a lender and your personal loan request is approved, you can expect the funds to be deposited into your bank account within one business day. This speedy process can be particularly helpful for borrowers who need to address urgent financial needs.
  • Flexible terms and rates: Loan terms and interest rates vary depending on the lender and your credit standing, allowing borrowers to find an option that best fits their financial situation and repayment capabilities.
  • All credit types eligible: CashUSA caters to borrowers with various credit profiles, including those with poor credit scores, giving more people the opportunity to access much-needed funds.

Read our full review of CashUSA

2. MoneyMutual

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  • Loan Amount: Up to $2,500
  • APR: Variable
  • Term: Variable

MoneyMutual is an online lending platform that offers fast, short-term loans to borrowers with bad credit. Recognizing the financial challenges many Americans face, MoneyMutual has become a trusted source of emergency funds for over two million customers.

Features and Benefits

  • Quick application: MoneyMutual’s online application is simple, free, and takes only a few minutes to complete. This streamlined process ensures that borrowers can access the funds they need without delay.
  • Fast funding: Once your personal loan is approved, you can receive your funds via direct deposit, sometimes within 24 hours. This expedited funding process is crucial for borrowers who need immediate financial assistance.
  • Short-term loan option: MoneyMutual offers loans of up to $2,500, designed to help borrowers address short-term financial needs or emergencies. This loan amount may be sufficient for covering unexpected expenses, such as car repairs or medical bills.
  • Accessible to those with bad credit: MoneyMutual caters to borrowers with lower credit scores, offering a valuable resource for individuals who may struggle to secure loans through a bank or credit union.
  • Wide network of lenders: MoneyMutual works with a large network of lenders, increasing your chances of finding a loan offer that matches your financial needs and credit profile.

Read our full review of MoneyMutual

3. PersonalLoans.com

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  • Loan Amount: $500 – $35,000
  • APR: 5.99% – 35.99%
  • Term: 3 – 72 months

PersonalLoans.com is an online lending platform that matches borrowers with lenders offering funds from $500 to $35,000, regardless of credit score.

With repayment terms of up to 72 months, these unsecured loans for bad credit are an excellent option for debt consolidation or addressing various financial needs.

Features and Benefits

  • Easy loan application: PersonalLoans.com features a straightforward online application process that allows you to explore your loan options without affecting your credit score. Once you’ve been matched with a lender, you can complete the personal loan process on the lender’s website.
  • Wide range of loan amounts: Borrowers can access loans ranging from $500 to $35,000, making PersonalLoans.com a versatile option for a variety of financial needs, such as covering unexpected expenses, debt consolidation, or funding home improvement projects.
  • Flexible terms: With repayment terms ranging from 3 to 72 months, PersonalLoans.com allows borrowers to choose a repayment plan that aligns with their budget and financial goals. This flexibility can make it easier to manage debt and improve your overall financial health.
  • No minimum credit score requirement: PersonalLoans.com does not impose a minimum credit score requirement, making their services accessible to a wide range of borrowers, including those with less-than-perfect credit.
  • Debt consolidation option: For individuals looking to consolidate debt, PersonalLoans.com offers an opportunity to pay off outstanding balances at a lower interest rate, potentially saving money and simplifying the repayment process.

Read our full review of PersonalLoans.com

4. BadCreditLoans.com

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  • Loan Amount: $500 – $10,000
  • APR: 5.99% – 35.99%
  • Term: 3 – 36 months

Bad Credit Loans is an online lending platform that specializes in connecting borrowers with lenders who are willing to provide loans to individuals with poor credit.

With loan amounts ranging from $500 to $10,000 and interest rates starting as low as 5.99%, Bad Credit Loans is an ideal starting point for those seeking unsecured loans, especially since submitting an application is free and easy.

Features and Benefits

  • Specializes in loans for bad credit: Bad Credit Loans focuses on helping borrowers with bad credit access the funds they need, making it a valuable resource for individuals who might struggle to secure a personal loan through traditional means.
  • Wide range of loan amounts: Borrowers can request loans ranging from $500 to $10,000, providing options for various financial needs, whether it’s covering an unexpected expense or consolidating debt.
  • Competitive interest rates: Rates start as low as 5.99%, making them a competitive option for borrowers with poor credit.
  • Simple, free application process: The loan application process is straightforward and free, allowing borrowers to explore their loan options without any financial commitment or impact on their credit score.
  • Flexible loan terms: Loan terms range from 3 to 36 months, giving borrowers the flexibility to choose a repayment plan that works best for them.

Read our full review of Bad Credit Loans

5. CashAdvance

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  • Loan Amount: $100 – $1,000
  • APR: 200% – 2000%
  • Term: Variable

CashAdvance is an online lending platform that offers small, short-term loans to borrowers regardless of their credit score. With loan amounts of up to $1,000 and relatively high loan rates, CashAdvance is a suitable option for those in need of quick cash and can repay the personal loan promptly.

Features and Benefits

  • Fast application: CashAdvance provides a quick and straightforward application process, making it easy for borrowers to request a personal loan without any hassle.
  • Small loans: CashAdvance offers loans of up to $1,000, making it an ideal option for borrowers who need a small amount of cash to cover an unexpected expense or bridge a temporary financial gap.
  • Quick access to funds: Once your loan is approved, the funds can be delivered directly to your bank account, ensuring that you can access the money as quickly as possible.
  • Available to borrowers with poor credit: CashAdvance is an option for individuals with less-than-perfect credit scores, providing an alternative to traditional financial institutions that may have more stringent lending requirements.

Read our full review of CashAdvance

What is an unsecured loan?

An unsecured loan is a type of credit extended to borrowers without the requirement of collateral. Unlike secured loans, which require an asset (such as a house or car) as security, unsecured loans rely solely on the borrower’s creditworthiness and ability to repay the personal loan. This makes unsecured loans riskier for lenders, as there is no guarantee that they can recover their funds if the borrower defaults on the loan.

How do unsecured loans work?

When a borrower applies for an unsecured personal loan, the lender will assess their credit history, income, employment status, and other financial factors to determine their creditworthiness. Based on this information, the lender will decide whether to approve the personal loan and, if approved, the terms of the loan, including the interest rate, loan amount, and repayment schedule.

Unsecured loans are typically repaid through fixed monthly payments, which include both principal and interest. The interest rate on an unsecured loan is often higher than that of a secured loan, reflecting the increased risk for the lender.

Types of Unsecured Loans

There are several types of unsecured loans available to borrowers. They differ in terms of loan amounts, interest rates, and repayment terms. Here’s a more in-depth look into each type:

Personal Loans

Personal loans are one of the most common types of unsecured loans. They are versatile and can be used for various purposes, such as debt consolidation, home improvements, or covering unexpected expenses. Personal loan lenders typically offer fixed interest rates and repayment terms.

Many of them do not require collateral but do consider the borrower’s credit score, credit history, and debt to income ratio. Borrowers with good, fair, or even poor credit scores may qualify for a personal loan, although the rates and terms will vary based on these factors.

Credit Cards

Credit cards represent a revolving form of unsecured credit. They allow borrowers to make purchases and pay them off over time. If you carry a balance from month to month, interest is charged on any outstanding balance that is not paid in full by the due date.

Unlike personal loans or auto loans, which are installment loans with a fixed number of monthly payments, credit cards allow you to borrow money repeatedly as long as you stay within your credit limit.

Student Loans

Many student loans, especially those issued by the federal government, are unsecured loans designed to help cover the cost of education. These loans often have a lower interest rate and flexible repayment options. Although they are technically unsecured loans, since no collateral is required, defaulting on a student loan can have severe consequences, such as wage garnishment.

Peer-to-Peer Loans

Peer-to-peer (P2P) loans are facilitated through online platforms that connect borrowers directly with individual investors or multiple lenders. P2P loans can be used for various purposes and may offer competitive rates, even for those with bad credit scores. These loans usually have a quicker approval process than traditional personal loans, often with funds transferred to a verifiable bank account within a few business days.

Payday Loans

Payday loans are a type of short-term unsecured loan where borrowers agree to repay the loan with their next paycheck. While they provide a quick way to get cash for those with low credit scores or bad credit, they often come with exorbitant fees and high-interest rates. It’s important to carefully consider the terms and costs of a payday loan before accepting it.

Bad Credit Loans

Bad credit loans are geared towards borrowers with poor credit histories. While these loans often have a higher interest rate than traditional personal loans, they can be an option for individuals with a lower credit score who need to borrow money. Some lenders specialize in bad credit personal loans, providing more flexible lending criteria than traditional banks or credit unions.

Pros and Cons of Unsecured Loans

Unsecured loans, such as personal loans or credit card loans, offer numerous advantages and disadvantages. For those with bad credit scores or who want to borrow money without risking their assets, unsecured loans can be beneficial. However, these loans also come with their own set of challenges. Here’s a closer look:


No Collateral Required

Borrowers aren’t required to put up any assets as security for an unsecured loan, distinguishing them from secured loans. This aspect makes unsecured loans more accessible for those who may not have valuable assets to use as collateral, including bad credit borrowers.


Unsecured loans can serve a wide range of purposes, offering flexibility to borrowers. Whether you want to consolidate credit card debt, finance a major purchase, or cover unexpected expenses, unsecured personal loans provide the flexibility you need. For example, you can utilize a personal loan for debt consolidation to combine existing debts into a single loan with a potentially lower interest rate.

Fast Approval Process

Unsecured loans typically have a faster approval process than secured loans, as there’s no need to evaluate collateral. Many online lenders offer a quick turnaround, with loan funds being disbursed within a business day after loan approval.


Higher Interest Rates

Due to the increased risk to lenders (since they lack the security of collateral), unsecured loans, particularly bad credit loans, typically have higher rates compared to secured loans. The interest rates may be particularly high for payday loans or cash advances.

Stricter Eligibility Requirements

Lenders often require borrowers to have a fair to good credit score and stable income to qualify for an unsecured loan. When applying for a personal loan with bad credit, you may find it more challenging to get approved for an unsecured loan, especially from traditional banks. A bad credit score could also lead to a higher annual percentage rate (APR) on the loan.

Lower Borrowing Limits

Unsecured loans generally have lower loan amounts compared to secured loans, as lenders aren’t protected by collateral. This limit might be a disadvantage for those needing to borrow larger sums. However, this isn’t an absolute rule, as loan amounts vary widely depending on factors like the borrower’s income, credit history, and the lender’s policies.

Step-by-Step Process for Securing a Loan

Securing an unsecured loan, especially when considering options like bad credit loans, requires a methodical approach. Below are the essential steps to follow:

1. Check Your Credit

Before applying, it’s crucial to understand your credit score and credit history. Both play a significant role in the loan approval process. Online lenders, credit unions, and traditional banks use these metrics to gauge your creditworthiness.

Reviewing your credit report also gives you a chance to spot and correct any errors that might be affecting your score.

2. Research Lenders and Loan Options

Different lenders range of loan options catering to diverse financial needs. Whether you’re exploring online personal loans, loans from credit unions, or loans from traditional banks, it’s essential to compare bad credit personal loan rates, loan amounts, and repayment terms. Look for unsecured loans that suit your needs, and always compare multiple lenders to get the best deal.

3. Gather Necessary Documentation

Prepare essential documents like pay stubs, bank statements, and tax returns to prove your financial stability and monthly income. These documents are vital as many lenders assess your debt to income ratio when evaluating your loan application.

4. Submit Your Application

Once you’ve chosen a personal loan lender that meets your needs, complete the loan application. Some lenders, especially online lenders, offer pre-approval, allowing you to gauge potential loan term using a soft credit check, which doesn’t harm your credit score. Make sure the loan application is thorough, with all required documentation, to avoid delays.

5. Review and Accept Loan Terms

Upon loan approval, go through the loan agreement meticulously. Check the interest rate, origination fee, monthly payment, and any prepayment penalties. Assess whether the loan terms fit your budget and how much you can afford to pay each month. Only then should you proceed to accept the offer.

6. Consider Alternatives If Needed

If you struggle to qualify for a traditional unsecured personal loan due to a low credit score or poor credit history, consider alternatives. Credit unions sometimes offer more lenient terms to members, and there are specific bad credit loan companies dedicated to helping those with imperfect credit histories.

Evaluating Loan Options: Factors to Consider

When comparing unsecured personal loans for bad credit, it’s essential to keep several factors in mind:

  • Interest rates: The interest rate is the cost of borrowing money, expressed as a percentage of the loan amount. It’s essential to search for the lowest rates available based on your credit score.
  • Loan term: The loan term refers to the duration of the loan, or the time you have to repay the borrowed amount. Shorter loan terms typically result in lower total interest costs but higher monthly payments. Conversely, longer loan periods mean lower payments but higher total interest costs.
  • Fees: Some lenders charge additional fees, such as origination fees, prepayment penalties, or late payment fees. Be sure to factor in these costs when evaluating loan options.
  • Repayment flexibility: Consider whether the lender offers flexible repayment options, such as the ability to make extra payments or change your payment due date.
  • Customer service: The quality of a lender’s customer service can impact your borrowing experience. Look for lenders with a reputation for responsive, helpful customer support.

Requirements for an Unsecured Personal Loan

When applying for an unsecured loan, lenders will typically require the following:

  • Credit score: A good credit score is essential for obtaining an unsecured loan, as it demonstrates your creditworthiness and ability to repay the loan. Lenders may have varying credit score requirements, but a higher credit score will generally result in more favorable rates and terms.
  • Stable income: Lenders want to ensure that you have a reliable income source to make your loan payments. You may need to provide proof of employment, pay stubs, or tax returns to verify your income.
  • Debt-to-income ratio: Your debt-to-income (DTI) ratio compares your monthly debt payments to your gross monthly income. Lenders use this ratio to assess your ability to manage additional debt. A lower DTI ratio is preferable, with many lenders requiring a DTI ratio below 43% to qualify for an unsecured loan.
  • Financial history: Lenders will review your financial history, including your credit report and any past delinquencies or bankruptcies, to determine your overall financial stability and creditworthiness.
  • Personal information: You will need to provide personal information such as your name, address, Social Security number, and date of birth when applying for an unsecured loan.

Alternatives to Consider

If you are unable to qualify for an unsecured loan or are seeking other options, consider the following alternatives:

  • Secured loans: Secured loans require collateral, such as a house, car, or savings account, which can result in lower interest rates and more favorable loan terms. Examples of secured loans include home equity loans, auto loans, and secured personal loans.
  • Family and friends: Borrowing from family or friends can be a more accessible and flexible option for obtaining a loan, especially if you have a poor credit history. However, it is crucial to establish clear terms and repayment expectations to avoid damaging personal relationships.
  • Co-signer: If you have difficulty qualifying for an unsecured loan on your own, consider asking someone with a strong credit history to co-sign your loan. This person will be legally responsible for repaying the personal loan if you default, which can help you secure a better interest rate.
  • Home equity line of credit (HELOC): A HELOC is a revolving line of credit that uses your home as collateral. This option can provide lower rates and tax-deductible interest, but it puts your home at risk if you cannot make your monthly payment.
  • Personal line of credit: A personal line of credit is a flexible, revolving credit option that allows you to borrow funds up to a predetermined limit. You can draw from this line of credit as needed and only pay interest on the amount you use. Personal lines of credit can be secured or unsecured, and rates may vary depending on your creditworthiness and the lender.
  • 0% intro APR credit cards: Some credit cards offer a 0% introductory annual percentage rate (APR) on purchases or balance transfers for a limited period, typically ranging from 6 to 21 months. These cards can be a cost-effective way to finance purchases or consolidate high-interest debt, provided you pay off the balance before the promotional period ends. Keep in mind that after the introductory period, the APR will revert to the card’s standard rate, which could be much higher.

Improving Your Credit for Better Future Loans

While these lenders offer valuable services to borrowers with less-than-perfect credit scores, it’s crucial to work on improving your credit score over time to secure better loan rates in the future. With dedication and persistence, you can rebuild your credit score and achieve financial freedom.

Tips for Boosting Your Credit Score

  • Check your credit reports: Obtain free credit reports from the three major credit bureaus (Equifax, Experian, and TransUnion) through AnnualCreditReport.com. Review your reports for errors and dispute any inaccuracies you find.
  • Pay your bills on time: Your payment history accounts for 35% of your credit score. Paying your bills on time and in full is essential to improving your score.
  • Reduce your credit utilization: Your credit utilization ratio is the percentage of your available credit that you’re using. Aim to keep your utilization below 30% to avoid negatively impacting your credit score.
  • Diversify your credit mix: Having a mix of different types of credit, such as credit cards, installment loans, and mortgages, can help improve your credit score.
  • Avoid applying for multiple loans or credit cards: Each time you apply for credit, a hard inquiry is made on your credit report, which can temporarily lower your score. Limit your applications to avoid multiple hard inquiries.

Strategies for Budgeting and Paying Off Debt

To improve your financial health and credit score, it’s essential to develop effective budgeting and debt repayment strategies.

Budgeting Tips

  • Track your income and expenses using a budgeting app or spreadsheet.
  • Categorize your spending to identify areas where you can cut back.
  • Set realistic financial goals and prioritize your spending accordingly.
  • Allocate a portion of your income to an emergency fund for unexpected expenses.
  • Periodically review and adjust your budget as needed to stay on track.

Debt Repayment Strategies

Avalanche method: This approach involves paying off the debt with the highest interest rate first, while making minimum payments on other debts. By focusing on high-interest debt, you can save money on interest over time.

Snowball method: The snowball method involves paying off the debt with the smallest balance first while making minimum payments on other debts. This strategy provides a psychological boost from achieving small victories and can help maintain motivation to tackle larger debts.

Regardless of the method you choose, the key to success is consistency and determination. With the right mindset and strategy, you can achieve a debt-free lifestyle and improve your credit score. Utilizing personal loans wisely can be the first step toward taking control of your finances and moving in the right direction.

Frequently Asked Questions

What types of loans are available to people with low credit scores?

Loans available for individuals with bad credit include:

  • Secured personal loans: These loans for individuals with bad credit are backed by collateral, which can result in lower interest rates and more favorable terms.
  • Unsecured personal loans for bad credit: Some lenders specialize in offering unsecured loans to people with bad credit, although these loans usually come with a higher interest rate.
  • Peer-to-peer loans: P2P lending platforms can connect borrowers to individual investors who may be more willing to lend to those with lower credit scores.
  • Credit-builder loans: These loans are specifically designed to help borrowers improve their credit scores by making on-time payments.
  • Payday loans: These short-term, high-interest loans are generally easier to qualify for, but should be used cautiously due to their high costs.

Can I get a personal loan with no credit check?

Some lenders provide no-credit-check loans, but they typically come with high interest rates and fees. It’s essential to carefully review the terms and conditions of any no-credit-check loan and consider other options before committing to this type of bad credit loan.

How long does it take to get approved for a loan?

Approval times for unsecured loans vary depending on the lender and your individual circumstances. Some online lenders can offer pre-approval within minutes and fund the loan within one business day, while traditional banks and credit unions may take several days to process and approve an application.

Can I prequalify for a loan without affecting my credit score?

Many lenders offer prequalification, which allows you to see potential rates and terms without affecting your credit score. Prequalification typically involves a soft credit inquiry, which does not impact your credit score.

What happens if I default on a loan?

If you default on an unsecured loan, the lender may report your missed payments to the credit bureaus, resulting in a negative impact on your credit score. Additionally, the lender may pursue legal action, including garnishing your wages or levying your bank accounts, to collect the outstanding debt.

Can I use a personal loan to consolidate debt?

Yes, unsecured personal loans can be used for debt consolidation. By using an unsecured loan to pay off high-interest debts, such as credit card balances, you can potentially save on interest payments and simplify your monthly payments by combining multiple debts into a single loan.

Can I pay off an unsecured loan early?

Many lenders allow borrowers to pay off their unsecured loans early without penalty. However, some lenders may charge prepayment penalties for paying off an unsecured personal loan ahead of schedule. It’s essential to review your loan agreement or consult your lender to determine whether prepayment penalties apply to your specific loan.

Jamie Cattanach
Meet the author

Jamie Cattanach is a freelance writer whose work has been featured at Fodor's, Yahoo, SELF, The Motley Fool, Roads & Kingdoms, and other outlets.