You may have heard the term “bad credit” before, but what does it mean? First, let’s clarify by saying that the term is not supposed to be mean or offend you. Instead, bad credit simply refers to a credit score in the 550 to 629 range. If your credit score sits in that range, you are likely seen as a risky borrower according to lenders’ standards. And while it won’t be impossible to get a loan with bad credit, it will be harder, and lenders will probably charge you a higher interest rate to absorb that risk.
The Benefits Of Bad Credit Personal Loans
If you lack the savings or income to pay bills or cover an emergency, a personal loan may be your best bet for several reasons. First, depending on the lender, it can give you the funds you need within a day. Second, as mentioned, you can get a personal loan even with bad credit. Third, with some personal loans reaching $50,000, they can sufficiently cover large expenses. Fourth, personal loans can give you several years to repay the money so you can enjoy manageable monthly payments. Lastly, as you repay a personal loan on time, you can build your credit to qualify for loans and credit cards with lower interest rates in the future.
What To Look For When Shopping For A Bad Credit Personal Loan
You want to shop around with different lenders to get the best rate on your personal loan, especially since you’ll probably pay more interest due to your lower credit score. To find the best personal loan to fit your needs, compare the following:
- Interest rates – Some lenders cap their interest rates at 36 percent. While still high, look for such a lender, as loans can get even more expensive for bad credit borrowers.
Funding time – You may get same-day funding via some online lenders. - Credit reporting – You want to build your credit score as you repay the personal loan. Make sure the lender offers credit reporting to the major credit bureaus.
- Application process – Ideally, you should find a lender that offers prequalification so you can see what loan you can get without a hard credit pull. This makes it easier to compare rates. As for the application process, some lenders can give you a decision within minutes after entering some data online.
Where To Find A Bad Credit Loan Up To $50,000
Personal loans typically range from $1,000 to $50,000. What can get you a larger loan near the max? If your credit score is low, evidence of consistent income could get you there.
Otherwise, you may need to add collateral (like your car) to make the loan a secured one, or you’ll need a co-signer or co-borrower.
Here are lenders that offer personal loans for bad credit borrowers. Shop around extensively before formally applying for a loan:
- LendingClub
- OneMain Financial
- Seed
- Universal Credit
- Upgrade
- Upstart
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