3 Best Bad-Credit Personal Loans (for $5,000 & Up)

3 Best Bad-Credit Personal Loans (for $5,000 & Up)
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Ashley Dull
By: Ashley Dull
Posted: May 3, 2018
BadCredit.org's popular "How-To" series is for those who seek to improve, rebuild or better understand their subprime credit rating.

Although being rejected for a loan outright can be tough, being accepted for a loan that is simply too small to meet your needs can, in some ways, almost be worse.

Unfortunately, there’s no real way to guarantee a loan of a certain size no matter what your credit score. Furthermore, it’s impossible to even guarantee acceptance at all for those with the worst credit scores.

That said, there are things you can do to increase your chances of being approved as well as increase the amount for which you can qualify. It all starts with finding a loan provider that won’t disqualify you based on your credit score alone.

Top Providers | Tips for Large Loans

Top Personal Installment Loan Providers for Bad Credit

There are a few ways to find lenders willing to work with poor credit, such as checking with local credit unions and community banks, but using an online lending network may be one of the easiest methods.

Online lending networks use a single application to help borrowers connect with hundreds of potential lenders from around the country.

Many of our top-rated lending networks have lending partners with flexible credit requirements that may be a good fit for your financing needs.

   
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Loan Amount Interest Rate Loan Term Loan Example
$500 to $10,000 5.99% - 35.99% 3 to 72 Months

See representative example

CashUSA.com connects users with lenders offering loans of up to $10,000 for well-qualified applicants. Applicants will need a regular monthly income of at least $1,000 — after taxes — to qualify for a loan. Loan terms are available in lengths up to 72 months.

Although BadCreditLoans.com advertises loan amounts of $500 up to $5,000, the individual lender you choose and your credit score will determine your loan amount. BadCreditLoans.com does warn that those with bad credit may be limited to loans of up to $1,000.

PersonalLoans.com caters to more than just those with poor credit, with partners offering loans of up to $35,000 for those who qualify. However, don’t expect the maximum loan amount if your credit is poor. Loan terms can be obtained in lengths of up to 72 months.

If you use an online lending network to obtain a personal loan, keep in mind that it won’t be the network itself that provides your funds. The network will provide the most appropriate offers (if any), of which you choose the offer — and lender — you’d like to accept.

Similarly, it’s the lenders that set the credit and income requirements for each loan, as well as the associated interest rates and fees.

Once you’ve chosen an offer, you’ll be taken to the individual lender’s website to complete the loan process. It’s the individual lender that will provide financing, and it’s the lender to which you will make your payments.

Tips for Obtaining a Large Loan with Bad Credit

If you’re having trouble obtaining a loan in the amount you need, there may be a few things you can do to improve the quality of your loan offers.

The first, and most obvious, is to work on improving your credit score. Paying down high-balance credit cards as much as possible can help raise your score fairly quickly if you have high utilization (though it’s probably not an option if you need the loan to consolidate debt in the first place).

Assuming you can wait before reapplying for a loan, simply spending a few months making on-time payments can also help improve your score, particularly if some of your negative marks age off of your report during that time.

Chart Showing Time Items Take to Age Off a Credit Report

When improving your credit score before applying isn’t an option, you may need to add a little extra security to your application. This may mean finding a lender that will allow you to apply for a secured personal loan using a valuable asset — usually a vehicle — as collateral.

It also may mean having a friend or family member with good credit apply with you. Some lenders may allow cosigners or joint applicants who can agree to take responsibility for the loan if you fail to do so.

While applying with a second person with better credit can sometimes provide a bigger loan, remember that you’re asking for a serious favor when you ask someone to cosign your loan. If you make late payments or default on the loan, your cosigner’s credit will also be severely damaged by your irresponsible behavior.

For cases in which direct bank financing is proving tricky, you may have better luck exploring other avenues, such as peer-to-peer lending platforms or local credit unions.

Both types of lenders tend to have higher risk tolerances than traditional banks, meaning they may have more flexible requirements to qualify and/or offer you a larger loan amount.

One alternative option may be available to you if you own your own home. You may be able to forgo a personal loan in favor of a home equity loan or line of credit.

Chart Showing Home Equity Loan vs. Line of Credit Comparison

Because these types of financing use your house as collateral, they’re typically easier to obtain with a low credit score than unsecured loans (though your credit will still be a factor).

Additionally, the amount you can borrow will depend more on how much equity you have in your home than on your credit profile, which can unlock larger loan amounts than those for which you may otherwise qualify.

Keep in mind that you should never use anything for collateral that you can’t afford to lose unless you are 100% sure you can repay your loan as agreed. That includes any vehicles used for collateral in a personal loan as well as any property used in an equity loan or line of credit. Failing to pay your loan as agreed will result in the loss of your collateral and you’ll have very little recourse if the worst comes to pass.

Funding May Be a Few Clicks Away

It can be frustrating to finally be approved for a loan, only to find it’s not enough to cover whatever it is that you need financed.

Unfortunately, when you have bad credit, being approved at all is hardly a guarantee, and being approved for a large loan can be a significant challenge.

Choosing the right lender is definitely half the battle, but even securing a $5,000 or higher loan won’t necessarily fix your financial troubles.

Make sure you also take a good, long look at your financial situation and examine how you got into credit trouble to begin with so you can work toward a better credit future.