What Is the Easiest Loan to Get with Bad Credit?

If your credit score is in the range of 300 to 579, you have bad credit. In finance, your credit score is always one of the most significant signals lenders use to assess your creditworthiness. In most cases, it’s hard for those with poor credit to access loans, and they also face much higher APR rates as compared to those with good or excellent credit. Still, the great news is that some lenders provide reasonable loan options for individuals with low credit scores; find out in this writing now!

What Are Bad Credit Loans?

To define, loans with bad credit (or bad credit loans) are personal loans you can get even if you have a low credit score or a poor credit history. Lenders usually check your score and overall creditworthiness every time you apply for a loan, and they may reject your application due to having bad credit.

According to FICO, a score below 580 is considered a bad or poor credit score. Although obtaining a loan with a credit score under 580 can be challenging, there are still lenders open to providing funding to individuals with scores ranging from 580 to 600 and even less than that.

Loans for bad credit are usually more expensive than other personal loans, but they are still better than payday loans and other predatory forms of lending, which charge very high fees and can trap you in debt.

What Is the Easiest Loan to Get with Bad Credit?

Don’t worry if your credit score is not good; there are different great, easy loans for bad credit that you can opt for. Below are several options that you can take into consideration:

Upgrade

Upgrade requires a minimum credit score of 580. The lender allows its borrowers to apply for loans ranging from $1,000 to $50,000 with an annual percentage rate (APR) of 8.49% to 35.99%. It has 02- to 07-year terms available, which is quite flexible for most borrowers.

With Upgrade, applicants can get their loans in 1 business day after their applications get approved. Additionally, you may be eligible for a reduced rate when signing up for autopay and repaying some of your existing debts directly.

However, Upgrade charges an origination fee (ranging from 1.85% to 9.99% of your loan amount), late fees, and fees for failed payment attempts. Note that the option for joint loans is available for this lender.

Upstart

If your credit score is just as low as 300, or if you even don’t have a credit score, then Upstart personal loans might be the ideal option for you. Upstart works with applicants with a minimum credit score of 300 and above. It may also accept loan applications from individuals without a sufficient credit history to have a score. This lender also considers other factors, like the applicants’ education & employment history.

However, Upstart loans only offer two repayment options: 36 and 60 months, and they come with higher origination fees (maybe up to 12%) compared to those of other lenders. In addition, Upstart also charges late fees and returned payment fees.

This online lender allows you to borrow as little as $1,000 and as much as $50,000, with the APR ranging between 6.4% and 35.99%. Upgrade offers no discounts and also doesn’t allow for applications with co-signers.

LendingClub

With a credit score requirement of at least 600, LendingClub, a common peer-to-peer lending marketplace, is also a good option for those with a less-than-ideal credit score. Though this online lender demands fair credit, you, with poor credit, could still qualify for a loan with the presence of a creditworthy co-borrower. LendingClub allows the option of joint loans. In addition, LendingClub is also a great option for debt consolidation, as it’ll repay the third-party lenders on your behalf.

However, it’s worth noting that LendingClub charges APRs of between 9.57% and 35.99%, without auto discounts—pretty high compared to other lenders. Applicants can borrow as much as $40,000 and as little as $1,000 for the loan terms of 2 to 5 years.

As with the other lenders in this list, LendingClub charges origination fees of up to 8% and late payment fees. Also, the process of obtaining funding may be longer in comparison to some other lenders.

Others

Along with these 03 lenders, there are still many other options for easy loans to get with bad credit. More suggestions for you to take into consideration include Avant, OnemainFinancial, LendingPoint, and more. Of course, each lender has different eligibility requirements for accepting a loan. Comparing various lenders and their terms is vital for figuring out the best lender for your financial needs and situations.

Where To Get a Loan with Bad Credit or Poor Credit History?

There are various lenders where you can find bad credit loans, including:

• Banks: If you already have a relationship with a bank, it's worth checking if they will provide you with a loan based on your current credit score. Typically, banks have stricter eligibility criteria, considering income, credit, and other aspects, compared to online lenders.
• Credit Unions: If there's a credit union nearby or if you're already a member of a credit union, it’s a good idea to take a look at the personal loans they offer. Many credit unions have special programs for individuals with poor credit.
• Online lenders: They seem to have much more flexible and easier eligibility requirements. But please note that taking loans from online lenders comes with higher APRs and fees, especially for borrowers with poor credit.

Tips to Get a Loan with Bad Credit

Getting a loan with poor credit is indeed challenging yet still possible. Here are some extra works that can help you enhance your chance of getting approved:

• Check your credit score:

Before beginning your search for your best lender, it's essential to know what your credit score is through your credit card provider. You can also do that through credit-providing websites. That will provide insight into what you may or may not qualify for. Additionally, you need to review your credit score for any inaccuracies, such as debts that do not belong to you. Besides, if necessary, you can take steps to improve your credit score before applying for a loan, such as paying off existing debts and cutting your credit usage.

• Evaluate your budget:

You should only take a loan that you feel confident will pay off on time. So, don’t skip the step of evaluating your budget and determining how much loan you are able to afford. Remember, taking out a large loan amount may lead to real difficulties in meeting repayment obligations in the future and the possibility of further damaging your credit score.

• Pre-qualify with different lenders:

Some lenders have a pre-qualification process that allows applicants to see if they qualify and what terms they would receive without a hard credit check. That helps you compare and choose the most suitable lenders for your needs and situations.

• Use a co-borrower or co-signer, if necessary:

If you want to improve the chances of receiving better loan terms, consider including a co-borrower or co-signer. A co-signer is the person who agrees to take responsibility for repaying the loan in case you are unable to do so, which lowers the risk for the lender. Note that co-signers do not have access to the loan funds & payment details.

On the other hand, co-borrowers can access the loan funds and payment details, and they share responsibility for the loan repayment. Be aware that failing to repay the loan according to the agreed terms will negatively affect your and your co-borrower's or co-signer's credit.

• Consider adding collateral:

If you are looking for ways to improve your chances of bad credit loan approval, you may want to think about adding collateral. However, it’s crucial to know that the lender can take your collateral in case you default on the loan. Though this makes the loans more accessible to those with bad credit, it also makes the secured personal loan really risky. So, be cautious and thoroughly evaluate your budget and affordability if you intend to add collateral.

Bad Credit Loan Scams: Warning Signs to Identify

You should know this: Bad-credit borrowers have limited options, making them more vulnerable to scammers. So, it’s always vital to safeguard yourself from those guys. Here are some common warning signs of a scam that you should know:

• Lenders can’t show their licenses.
• Absence of reviews on the internet or reviews that appear faked or staged.
• Grammar mistakes or copied logos in names or correspondence.
• Promotions for “no credit check!”, "no credit check required!", "bad credit is OK!" or something like that.
• Require applicants to pay fees before they get the loan.
• You get a phone call from someone you don't know, and they want to give you a loan.
• …

Final thoughts

Getting a loan with bad credit scores is tough, but not impossible. Options do exist for those with low credit scores seeking the easiest loans to obtain. Many lenders provide loans with flexible requirements, and you do not need a perfect score to quickly get them. However, be aware that these loans often come with high APRs and some types of fees. Before applying for a loan, always take time to check your credit score, review your finances, evaluate your budget, compare lenders, assess the lender’s reliability, and prequalify for a loan. By following these small pieces of advice, you may significantly enhance your chances of receiving a loan with bad credit.

Red more: Top 07 Factors to Consider Before Picking a Personal Loan