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Guides

“How to Get a Loan with Bad Credit” (9 Personal, Home & Auto Loans)

Brittney Mayer 1/11/18

When you think about the word “risk,” what do you picture? Do you imagine a death-defying skydiver, barreling toward Earth at terminal velocity? Or maybe an icicle-bedecked thrill-seeker, perilously perched on the side of Mt. Everest?

When banks hear the word “risk,” they see something entirely different: your bad credit score. In fact, to most creditors, a bad credit score is the scariest thing they can imagine — and something to be avoided at all costs.

As with skydivers and mountain climbers, though, there are lenders who see the benefit of a little risk, and are happy to do business with you and your low credit score. Use the navigation to see our top-rated (bad-credit savvy) providers and what it will take to qualify for your loan.

Personal Loans | Home Loans | Auto Loans | Other Loans | Denial Options

Personal Loans for Bad Credit

Whether it’s for an expected event or one of life’s little surprises, a personal loan can be the best solution when you’re in a tough financial spot. Luckily, there are many personal loan lenders who will be more concerned with your paycheck than your credit score.

To calculate your risk, some lenders will use your debt-to-income ratio, taking into account your usual income and current bills; others will require a minimum weekly or monthly income. The qualifications will likely vary with the size of the loan you seek, so keep in mind what you can afford.

PersonalLoans.com is our top recommendation for obtaining a loan with bad credit.

Additionally, borrowers with bad credit should come to terms with the idea that they won’t receive stellar interest rates on any loan they take out — including personal loans. That said, shop around. There are enough lenders dealing with low-credit-score consumers who may offer you something better. Start with our top three lender networks to shop multiple lenders easily.

★★★★★
4.9 /5.0 Stars
  • Loans from $1,000 to $10,000
  • All credit types accepted
  • Loan requests can be approved in minutes
  • Get funds directly to your bank account
  • Use the loan for any purpose
  • See official site, terms, and details »
Loan Amount $1,000 to $10,000
Interest Rate 5.99% - 35.99%
Loan Example
Representative example
★★★★★
4.8 /5.0 Stars
  • Loans from $500 to $5,000
  • Helping those with bad credit since 1998
  • Compare offers from multiple lenders
  • Simple form & quick funding
  • Get your money as soon as next day
  • See official site, terms, and details »
Loan Amount $500 to $5,000
Interest Rate 5.99% - 35.99%
Loan Example
Representative example
Our Expert Review 4.8/5.0 (see review)
★★★★★
4.7 /5.0 Stars
    • Short-term loans up to $2,500
    • Online marketplace of lenders
    • Funds available in as few as 24 hours
    • Simple online form takes less than 5 minutes
    • Trusted by more than 2,000,000 customers
    • Not available in NY
    • Click here for official site, terms, and details.
Loan Amount Up to $2,500
Interest Rate Varies
Loan Example
Representative example
Our Expert Review 4.7/5.0 (see review)

+See All of Our Top Providers

Home Mortgage Loans for Bad Credit

While many subprime borrowers think they can’t buy a house while toting around their bad credit, that’s not actually the case. True, the interest rates you can attain for your home mortgage loan will be much less attractive than those of your good credit neighbor, but you still have options.

Ideally, you’ll want to place as large a down payment as possible. If you can afford a payment above 10%, you’ll reap the benefits of much lower fees and improved interest rates. If you can swing 20% down, even better. However, you don’t need to be rolling in cash to buy a home with bad credit. You can qualify for an FHA loan with a FICO credit score as low as 580 and put as little as 3.5% down on your home.

When researching your subprime home mortgage loan provider, make sure they offer the type of loan you want — not every lender offers every type of loan. You should also look into their credit history guidelines, as some providers will factor things like rental history and utility payments into their evaluation. Begin your search with our three favorite providers.

★★★★★
4.9 /5.0 Stars
  • Home purchase, refinance, home equity, and reverse mortgages
  • Lenders compete for your business
  • Receive up to 5 offers in minutes, and pick the best offer for you
  • Founded in 1996, LendingTree has facilitated 55 million+ loan requests and $250 billion+ in closed loan transactions
  • See official site, terms, and details »
Interest Rate Varies by Applicant
In Business Since 1996
Application Length 7 Minutes
★★★★★
4.7 /5.0 Stars
  • Options for: refinance only
  • Get 4 free refinance quotes in 30 seconds
  • Network of lenders compete for your loan
  • Trusted by 2 million+ home loan borrowers to date
  • Interest rates are near all-time lows
  • See official site, terms, and details »
Interest Rate Varies
In Business Since 2004
Application Length 4 minutes
★★★★★
4.7 /5.0 Stars
  • The nation's largest online lender
  • Options for home purchase, refinance, cash-out, and debt consolidation
  • Allows applicants to buy a home with a minimal down payment (as little as 3% down)
  • In some cases, down payment can be a gift from a relative or nonprofit organization
  • Get pre-approved for free – before you shop for your new home – and get more bargaining power
  • Avoid paying Private Mortgage Insurance with PMI Advantage program
  • See official site, terms, and details »
Interest Rate Varies by Applicant
In Business Since 2000
Application Length 6 Minutes

+See All of Our Top Providers

Auto Loans for Bad Credit

In many ways, an auto loan is like a small mortgage. Both loans represent a secured debt: your loan is secured by the collateral of your purchase. In the case of an auto loan, it’s your vehicle — if you default on your loan, they take your auto (and a lot of credit score points).

Because auto loans have a certain level of inherent security, plenty of lenders are willing to offer them to people with even the worst credit scores. The catch? Your income. That minimum income requirement will vary depending on the lender, the size of the loan, and, sometimes, even the make and model of the vehicle.

In general, you’ll likely need a monthly income above $1,200 to qualify for a subprime auto loan, but you should comparison shop for the best deal. You are hardly limited to your car dealership or used car trader to get your auto loan. Take a look at our expert-rated providers to start comparing.

★★★★★
4.9 /5.0 Stars
  • Network of dealer partners has closed $1 billion in bad credit auto loans
  • Specializes in bad credit, no credit, bankruptcy, and repossession
  • In business since 1999
  • Easy, 30-second pre-qualification form
  • Bad credit applicants must have $1500/month income to qualify
  • See official site, terms, and details »
Interest Rate 3.99% - 29.99%
In Business Since 1999
Application Length 3 minutes
Our Expert Review 4.9/5.0 (see review)
★★★★★
4.5 /5.0 Stars
  • Free, no-obligation application
  • Specializes in auto loans for bankruptcy, bad credit, first-time buyer, and subprime
  • Affordable payments and no application fees
  • Same-day approval available
  • Connects 1000's of car buyers a day with auto financing
  • See official site, terms, and details »
Interest Rate Varies
In Business Since 1994
Application Length 3 minutes
Our Expert Review 4.5/5.0 (see review)
★★★★
4.0 /5.0 Stars
  • Loans for new, used, and refinancing
  • Queries a national network of lenders
  • Bad credit OK
  • Get up to 4 offers in minutes
  • Receive online loan certificate or check within 24 hours
  • See official site, terms, and details »
Interest Rate Varies
In Business Since 2003
Application Length 2 minutes
Our Expert Review 4.0/5.0 (see review)

+See All of Our Top Providers

Other Loans for Bad Credit

In addition to the common personal, home, and auto loans, you may find a need for a somewhat more specialized type of loan. Both student and business loans have their own unique qualifications that may have less to do with your personal credit history than you realize.

Student Loans

When used carefully, a student loan can be a good way to invest in your education. Young adults with a college degree are more likely to get, and keep, a full-time job, and, on average, earn higher incomes.

This graph from the National Center for Education Statistics shows a strong relationship between a young adult’s education and his or her ability to get — and keep — a full-time job.

There are two main types of student loans: private and federal. Private loans come in many guises, often requiring collateral or a squeaky-clean credit report. Federal student loans, on the other hand, don’t care about your credit score — they usually only require proof of need, and will offer lower interest rates and more flexibility in payment terms.

The first step to qualifying for any federal student loan is to fill out your FAFSA (Free Application for Student Aid). As the name implies, your federal FAFSA should be free to file — be aware of look-alike services that charge a fee to file your forms.

Filling out your FAFSA will result in an aid offer, sometimes containing grants or scholarships, and usually rounded out with federal loans. Federal aid is offered on a first come, first served basis, so it could be beneficial to fill out your paperwork as soon as possible. At the very least, make sure to get in before the deadline for the academic year during which you’ll be enrolling (usually the spring before, but it varies by state).

Business Loans

Once you start a business, you enter into a realm far different from the world of personal finance to which you may be accustomed. Many of the financial options available to your business will depend largely on the type of company you form — a partnership has different tax and credit rules than an LLC, which operates differently than a corporation.

For instance, in a partnership, your business credit report could include information from your personal report, affecting the creditworthiness of your business. In an LLC or corporation, there is legal distance between your finances and that of your business. If your bad credit has affected your ability to get a business loan, try these other options for attaining capital.

To get the best results when applying for a business loan or other funding, do your research. Make sure you are current with all state and local requirements, such as attaining any necessary licensing. You should also be sure to have the more mundane trappings of a legitimate business, such as a company phone number and up-to-date business address.

If You Still Don’t Qualify

It may be that even the most adventurous lender doesn’t like the risk you represent. When you’ve repeatedly applied for a personal, home, or auto loan and keep getting rejected for your bad credit, it may be time to try a different angle.

The easiest option is to find a cosigner for your loan who is willing to guarantee to the lender that you can pay back your loan — or they will. To qualify as a cosigner, they need to have a clean credit history and may need to meet income requirements.

If you can’t get a cosigner, you will need to work on fixing your credit before you can successfully get a loan. Consulting a reputable debt management company that can negotiate with your current creditors is a good way to make your monthly payments more affordable, and get back on track to good credit. Remember that rebuilding your credit is far from an overnight process, and will require a lot of patience and dedication.

Brittney is a Contributing Editor for Digital Brands, Inc., where she uses her extensive research background to develop comprehensive guides and in-depth company profiles for BadCredit.org and CardRates.com. Brittney specializes in translating complex ideas into readable, engaging content for B2C and B2B audiences.
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