Best Personal Loans For Bad Credit | Your Complete Guide in 2021

If you really need to take out a loan, there are a ton of available options available that don’t consider your credit score.

Best Personal Loans For Bad Credit

Part of proper financial management is getting loans for huge important purchases such as getting a car or buying a house.

However, getting a loan is completely dependent on your current credit score, and in fact, the rate and terms that you can get are completely dependent on how good your score is.

But there are many whose credit score is actually not that good and could have less than 600 points.

Many financial institutions will be reluctant to loan out to people with bad credit scores because there is an assumption that they would be terrible in paying back their loans.

However, there are institutions willing to lend money even if you have a lower credit score.

If you read on, we’ll explore what are the best personal loans for bad credit and how that might actually help you get the loan that you need for that expensive purchase or venture.

Credit Scores and Personal Loans

As mentioned earlier, a credit score can influence the kind of loans you can get from banks and financial institutions.

A credit score is a numerical representation of your capability to pay back credit which is generated by the three credit reporting bureaus – Equifax, TransUnion, and Equifax.

The score is a scale between 300 to 850 and indicates to lenders how risky it is to lend to you and the likelihood the financial institution will get their money back.

It is for this reason that many institutions are hesitant to lend money if your score is 600 or below.

In many cases, it is advisable to raise your credit score first before getting a personal loan.

However, if you really need to take a loan now, then don’t despair.

There are still some financial institutions that are going to take the risk.

But this also usually means you get higher interest rates and not-so-good terms on your loans.

Let’s take a look at some of the best personal loans for bad credit scores and see which one you can sign up for.

Great Loan Options

If you have a bad credit score but still need to take out a personal loan for your needs, then rejoice as there are several options open to you.

These options are just some of the best personal loans for bad credit and will ensure that you will have access to the cash you may need.

These options include:

  • Loan aggregators
  • Personal loan lenders
  • Peer-to-peer lenders

These options provide bad credit loans to anyone in need but with terms that are generally worse than your average bank and loan providers.

You have to take into account though that banks and credit unions are unlikely to provide you a loan with a bad credit score that these options will normally allow.

Loan Aggregators

Best Personal Loans For Bad Credit

Loan aggregators are an excellent source of financing especially when you don’t have a good credit score.

They aren’t direct lenders like banks but are a large number of lenders participating in a platform.

Since they offer loans at all credit levels, you may be able to get credit even if your score is pretty low.

So this is how it works, you enter your loan request and then lenders who match your credit profile will give you offers.

Of these loan aggregators, the most popular one is Fiona.

Fiona allows you to complete a single loan request first, then you gain access to other offers which you can then select which offer is the best for you.

Personal Loan Lenders

Another option for the best personal loans for bad credit is personal loan lenders.

They are designed specifically to provide personal loans of any kind and amount and are usually available to any credit score.

The following loan lenders are the ones we consider the best.

  • OppLoans is an excellent lender without a minimum credit score requirement. This means regardless of your credit score, you can actually try their offers. They take a variety of other factors to make their assessment including bank data and information alternate credit bureaus. The great thing with OppLoans is that if you do good in paying back your loans, they report it to the three main credit bureaus which could easily increase your score. 
  • Upstart on the other hand is designed for students and newly graduated people who are looking to build a good credit history. The loans available can be anywhere between $1,000 and $50,00 and can be used for a wide variety of expenses. It uses artificial intelligence or AI in order to approve loan requests. This gives it an approval rate of 27% higher than other loan companies. 
  • Then there’s Monevo which can show you up to 30 companies at the time giving you loan options. Lenders can offer between $500 to $100,000 and interest rates starting at 1.99% APR. Monevo does check credit scores but will often allow you to borrow money even if you have a low score of 450 which is amazing for any lender. 

Peer-to-Peer (P2P) Lenders

Best Personal Loans For Bad Credit

Peer-to-peer lenders may just be the best source of financing available when you have bad credit.

They do have high-interest rates with as high as 36% on some but you get a fixed rate and limited terms without a need for collateral.

On top of that, loans from these lenders can be taken out for any purpose and may be used for the purpose of debt consolidation, starting a business or even buying a car. 

Two of the most popular P2P lenders include LendingTree and Prosper.

LendingTree is an amazing site that lets you compare and shop for rates at nearly every loan type.

It’s a one-stop-shop for all your loan needs from mortgages to student loans.

You can get multiple quotes in one place so you can really see the best rates possible.

Prosper, on the other hand, focuses on personal loans.

An application takes just a few minutes and can easily get approval for a loan of up to $40,000.

The lender offers a number of term lengths to choose from so you can even pick one that fits your budget.

Best Personal Loans For Bad Credit

Final Thoughts

Bad credit scores generally mean loss of access to the best possible loans available with low-interest rates and great terms.

But it’s not all a loss for people who have poor credit scores.

If you really need to take out a loan, there are a ton of available options available that don’t consider your credit score.

Instead, they focus on other factors and can easily get you approved and started right away.

It’s just a matter of choosing which of the best personal loans for bad credit is the one for you. 

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Author: John Benares

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