- By Sheraz
- November 25, 2025
Content articles
Many lenders weigh a borrower’s creditworthiness heavily when considering applications. For borrowers with bad scores, this can translate to higher interest rates and fees.
A borrower can bolster their application by shopping around for the best personal loans for fair credit with bad credit. Lenders like Upstart consider multiple data points and may offer borrowers a better approval chance without a hard credit pull.
Many lenders focus on your credit score and creditworthiness when making a loan decision. For borrowers with poor credit, it may be difficult to qualify for a personal loan. Fortunately, there are lenders that cater to bad-credit borrowers by offering loans with higher maximum amounts, lower interest rates and easier terms and conditions.
Online lenders often consider factors like your income and employment status to qualify you for a personal loan personal loans for bad credit guaranteed approval , which can make it easier for borrowers with poor credit to get approved. Additionally, some credit unions and other community-based financial institutions offer personal loans to members who may not meet strict qualification requirements of banks and other major lenders.
Ultimately, choosing the best personal loan for bad credit comes down to how you use it and whether you can afford the monthly payments. If you don’t have enough income to cover your expenses, it’s important to weigh your options and seek financial counseling if necessary.
To find the best personal loan for bad credit, you should compare rates, terms and loan amounts offered by each lender. In order to make a direct comparison, you should prequalify with each provider using their respective websites. This process typically requires a soft credit inquiry, which won’t hurt your credit. Some lenders allow you to do this for free, while others charge a small fee.
Taking out a personal loan with fair credit can help you pay off an emergency expense or consolidate high-interest debt, but it’s important to fully evaluate the benefits and disadvantages of the loan. You’ll need to consider the lender’s minimum credit score, preferred debt-to-income ratio and APY (Annual Percentage Yield) rates as well as the origination, prepayment and late payment fees.
You’ll want to compare the best personal loans for fair credit with bad credit from a variety of lenders, including online and community banks. Some lenders focus more on factors beyond your credit and income, such as your education and job history, which can make it easier to qualify for a loan even with a less-than-perfect score. Online lenders often offer competitive rates for borrowers with bad credit.
You can get a better idea of your creditworthiness by reviewing your Experian FICO(r) Score and Experian credit report, which you can check for free. It may also be helpful to find a lender that offers a prequalification process, which typically only uses a soft credit inquiry, so it won’t lower your score. You can use a prequalification tool to submit basic information like your income, desired loan amount and housing status to receive personalized offers from multiple lenders. Compare your options and choose the lender with the most favourable terms.
If your credit score is below a lender’s minimum threshold, it can be difficult to get approved for a personal loan. The good news is that there are lenders that specialize in offering personal loans for borrowers with bad credit. Whether your credit is bad due to financial missteps, a lack of time to build credit or other reasons, there are lenders that can offer you the money you need with competitive terms and a reasonable interest rate.
A personal secured loan is a great option for borrowers with bad credit because it requires you to pledge an asset, such as a savings account or a home equity line of credit, as collateral. This reduces the risk for the lender, which allows them to offer lower rates and higher borrowing limits. This type of loan is typically available from online lenders, credit unions and banks. Try to compare offers from several different lenders to ensure you are getting the best terms.
Another option for borrowers with bad credit is to borrow from their retirement savings through a 401(k) loan. While this is not ideal, it may be necessary if you have no other options. You can also consider taking out a student loan to cover education expenses, which doesn’t require a credit check and can come with flexible repayment terms.
If your credit score is too low to qualify for a personal loan alone, you could try applying with a cosigner. This type of loan allows you to add someone with a stronger credit history to your application, which reduces the lender’s risk and increases your chances of approval. A cosigner can also help you get a better annual percentage rate (APR) or increase your maximum loan amount.
A cosigned loan is typically unsecured, which means it doesn’t require collateral like a car or savings account that the lender can repossess in case of default. This makes it less likely to hurt your credit score, although your overall borrowing history has a greater impact on your credit scores than a single new loan.
You can find personal loans for bad credit with a cosigner by searching online for lenders that accept applicants with poor or fair credit. Compare the various options, including their rates, fees and terms. Look for lenders that offer a secure website and padlock icon, which indicates that their site is protected from unauthorized access.
It’s also a good idea to check with your local banks and credit unions to see what types of personal loans they offer. They may have options for people with fair or bad credit, or they might know of private lenders that do.
