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5 Best Online Loans for Bad Credit

Find the best online loans for bad credit from lenders that design installment loans that cater to people with past credit problems.

There's no doubt options for online loans for bad credit are somewhat limited ⏤ but you don't have to rely on payday lenders when you have bad credit.

Several online lenders offer installment loans for bad credit. However, you have to expect online loans for bad credit will cost you a lot more in interest.

We reviewed several companies offering online bad credit loans and decided the following options have a quick and easy application process to help you get the funds you need.

5 Best Online Loans For Bad Credit

All lenders on this list will perform a soft credit inquiry to determine eligibility so your credit score will not take a hit to find out if you're qualified.

1. BadCreditLoans

BadCreditLoans offers personal loans that range from $500 to $10,000 with repayment terms from up to 36 months. BadCreditLoans makes it easier for people with bad to find a loan because you complete one application and one credit check to potentially get connected with lenders who may be willing to approve your application.

BadCreditLoans details:

  • Quick application for multiple lenders.
  • Loan terms up to 36 months.
  • Have a credit score of at least 500.
  • Prequalify with a soft pull that won’t harm credit.
  • Have a regular income, either from full-time employment, self-employment, or disability or Social Security benefits.
  • Have a checking account in your name.

2. CashUSA

CashUSA is a lending network that connects borrowers with multiple lenders that make pre-qualify with a soft credit pull. If you’re prequalified, you will be asked to complete a loan application and have your funds deposited into a linked bank account within one business day.

CashUSA details:

  • Loans from $500 to $10,000.
  • Receive a loan decision in minutes.
  • Get funds directly to your bank account.
  • Loan terms range from 3 to 72 Months.
  • Estimated APR: 5.99% – 35.99%.
  • Minimum credit score: 500.

3. Universal Credit

Universal Credit offers personal loans specifically for those with bad credit or fair credit. These loans range from $1,000 to $50,000 and have fixed interest rates. Repayment terms are between three to five years, and if you're approved, you could receive your funds within one business day after completing any necessary verifications. Don't let bad credit hold you back from getting the financial assistance you need.

Universal Credit details:

  • Suggested minimum credit score is 560
  • Loan amounts range from $1,000 – $50,000.
  • Repay monthly, over 3, 5, or 7 years.
  • Estimated APR: 11.69% to 35.93%.
  • Loan origination fee of 5.25% to 9.99% of the loan amount which is deducted directly from your loan funds.
  • Universal Credit reports loan payments to all three major credit bureaus.
  • No prepayment fee.
  • Offers a 0.5 percentage point rate discount for setting up autopay.
  • Universal Credit borrowers have free access to their credit score, credit monitoring and a credit score simulator tool.

4. OppLoans

OppLoans is a lending company that specializes in providing installment loans for bad credit. Unlike traditional lenders, OppLoans does not perform a hard credit check during the application process, making it easier for borrowers to get approved but this a very expensive loan. The funding process is quick, with funds typically being disbursed within 1 to 2 business days. While their loans have longer terms than payday loans, OppLoans' rates are like payday loans, ranging from 59% to 160%. Proceed with caution if you decide to accept a loan offer but keep in mind, you can pay this loan off early to save money on interest.

OppLoans details:

  • If approved, you may receive money in your account as soon as the same business day.
  • 350 minimum score required
  • Loan amounts range from $500 to $4,000.
  • Repay monthly, over 9 – 18 months.
  • Estimated APR: 59% – 160%.
  • No prepayment penalties – Repay your loan early and save money in interest with no hidden fees
  • OppLoans reports customer payment history to the three major credit bureaus.
  • Monthly minimum income of $1,500.

5. LendingPoint

LendingPoint loans start at $2,000 up to $36,500, with funding available as soon as the next business day. Loan amounts are lower than some competitors but no collateral is required. LendingPoint reports payments to two of the three major credit bureaus, which can help improve your credit score over time.

LendingPoint details:

  • Suggested minimum credit score is 600
  • Loan amounts range from $2,500 – $36,500.
  • Repay monthly, over 2 to 5 years.
  • Estimated APR: 7.99% to 35.99%.
  • Loan origination fee of 0% to 7.00% of the loan amount which is deducted directly from your loan funds.
  • No prepayment fee.

What are online installment loans with bad credit

An installment loan is a type of loan that provides borrowers with a fixed amount of money, which is paid back over a set period of time through a series of regular payments or installments. The payments typically include both principal and interest, and are scheduled to occur at regular intervals, such as monthly or bi-weekly.

Installment loans can be secured or unsecured, depending on the lender and the borrower's creditworthiness:

  • Secured installment loans require collateral, such as a car or house, to be pledged as security against the loan.
  • Unsecured installment loans, on the other hand, do not require collateral, but may have higher interest rates to compensate for the increased risk to the lender

What's the difference in an installment loan vs. a payday loan

Installment loans are often used for major purchases or expenses that are too large to be covered by a single payment, and can provide borrowers with a predictable repayment schedule that makes it easier to budget and manage their finances.

The main difference between an installment loan and a payday loan is the way they are repaid.

Installment Loans:

  • An installment loan is repaid over time, typically in equal payments or installments.
  • Installment loans usually have longer repayment periods, ranging from a few months to several years, and often involve larger amounts of money.
  • Installment loans are generally used for larger purchases or expenses, such as a car, home repairs, or medical bills.

Payday Loans:

  • Payday loans are designed to be repaid in full on the borrower's next payday and are usually a small-dollar amount, like $300.
  • The repayment period for a payday loan is typically very short, often just a few weeks, and the loan is usually repaid in a single lump sum payment on the borrower's next pay date, which includes both principal and interest.
  • The interest rate and fees for payday loans tends to be much than installment loans.
  • Borrowers with bad credit often qualify for payday loans because they have less stringent credit requirements than installment loans.
  • Payday loans can also lead to a cycle of debt for borrowers who cannot afford to repay the loan in full on their next payday.

What's considered a bad credit score?

Here is how FICO® breaks down credit scores:

  • Bad credit: 579 and below
  • Fair credit: 580-669
  • Good credit: 670-739
  • Very good credit: 740-799
  • Exceptional credit: 800 and above

Facts to consider when getting online loans for bad credit

1. Online loans for bad credit are unsecured

With unsecured loans for bad credit you won't be required to place an asset as collateral, so the lender can't automatically take a piece of your property as payment if you default. 

But unsecured loans for bad credit allow lenders to take other collection actions even if they can't automatically take your house, car, or other assets. These collection actions include reporting late payments to credit bureaus, hiring a collection agency, or filing a lawsuit against you. Be sure to make all payments on time, and if you run into any trouble making a payment, reach out to your lender immediately.

2. Online loans for bad credit will have fixed repayment periods

Unlike payday loans which are typically the only option for bad credit loans, you'll have a set period of time to repay your online loan for bad credit. Loan periods are usually stated in months: 12, 24, 36, 48, and some times even 60 months. However, keep in mind that while longer repayment periods will lower your monthly loan payment, you'll end up paying more in interest than if you had a shorter repayment period. That's because interest is added on per payment.

3. Common fees with online loans for bad credit

Most bad credit loans will charge late fees if your payments fall behind. Another fee to consider with online loans for bad credit is origination fees. Origination fees can run from about 1 to 6 percent of the amount you're borrowing and is usually taken from the loan proceeds when the loan is disbursed. Late payments have a huge negative impact on credit scores, so avoid at all costs.

People often experience an immediate boost in credit scores once bad credit loans are positively reported to the credit bureaus.

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