Writer: Ashley Fricker
Editor: Lillian Guevara-Castro
Reviewer: Danielle Spurlin
Disclosure: When you apply through links on our site, we may earn a referral fee from our partners. For more, see our ad disclosure and review policy.
Some of the most commonly used jargon in consumer credit is that which describes products designed for consumers of certain credit types. For example, consumers with good credit scores are often called prime consumers.
Outside the prime range are the two credit extremes: people with excellent credit, or superprime consumers, and people with bad credit, called subprime consumers.
If your credit score is in the subprime range, getting new credit can be challenging and more costly. However, there are still credit opportunities out there for subprime consumers. Keep reading to discover our top picks for subprime loans available today, whether you’re after a personal loan, auto loan, or mortgage.
Getting a Personal Loan With Bad Credit
Personal loans are some of the most versatile credit products available, as they can be used to fund just about anything, unlike auto or home loans, which must be used for their named purposes.
Most personal loans are unsecured, which means they don’t require collateral, so usually, you won’t need a down payment. However, qualifying for unsecured loans can be tougher than for secured loans, especially if you have subprime credit.
Top Subprime Personal Loan Providers
The best way to improve your chances of being approved for a personal loan when you have bad credit is to focus on loans from lenders that specialize in subprime loans. While the rates will typically be higher than those for prime loans, subprime lenders tend to have much more flexible credit requirements.
While options for unsecured personal loans can be limited, you should still compare rates and fees to get the best deal. An online lending network, like our expert-rated picks below, can offer an easy way to see multiple loan quotes without the need to fill out multiple applications.
- Personal loans from $500 to $35,000
- All credit types are considered and welcome
- Simple, no credit impact form
- Helping consumers since 2001
- 4.7 out of 5 Trustpilot rating with 2,000+ reviews!
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| $500 to $35,000 | 5.99% – 35.99% | 60 Days to 72 Months | See representative example |
2. MoneyMutual
- Short-term loans up to $5,000
- 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 million customers
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| Up to $5,000 | Varies | Varies | See representative example |
- Small personal loans starting at $100
- Receive an approval decision in as little as 2 minutes
- Funds can be deposited into your account in one business day and used for any purpose
- No hidden fees
- See official site, terms, and details.
| Loan Amount | Interest Rate | Loan Term | Loan Example |
|---|---|---|---|
| $100 to $20,000 | Varies | Varies | See representative example |
+See More Subprime Personal Loan Providers
How Personal Loans Work
Personal loans can be a go-to option for many financial needs because they’re generally straightforward to obtain. However, this isn’t always the case when dealing with subprime credit. Typically, you won’t have to provide collateral or deal with other complications to qualify.
However, you will still need to fill out a loan application and go through a credit check to get most personal loans.
When you’re applying, you’ll need to provide some basic personal information, like your name, address, and date of birth, along with employment details, such as your monthly income and how long you’ve been at your current job.
If you choose to use an online lending network to find a personal loan, you’ll be presented with eligible loan offers after submitting your application. The exact number of offers you receive will vary by network (and you’re not guaranteed any loan offers).
Once you select a loan offer — either through a network or from a direct lender — you’ll be presented with the formal loan agreement. The loan agreement will lay out exactly how much you’re borrowing, the fees you’ll be charged to borrow it, and when and how much you’ll need to make payments.
The type of personal loan you choose to take out will dictate your fees and repayment terms. Personal installment loans are more affordable and have longer loan terms, while short-term personal loans can be easier to obtain but cost much more and have much shorter terms.
For personal installment loans, your interest fees will be based on the loan’s APR and the length of your loan. Installment loans usually are repaid via small monthly payments over the course of the loan term.
Short-term personal loans charge finance fees based on the size of your loan — e.g. $20 for every $100 borrowed — and typically have terms of six months or less. You’ll be required to repay your short-term loan as a single lump sum on the due date, which includes the full principal and fees.
Getting an Auto Loan with Bad Credit
Auto loans are generally the best way to finance a new or used vehicle purchase, offering the lowest rates for these purchases in most circumstances. Many auto loans are secured by the automobiles they finance, making them easier to obtain than some unsecured loans.
Keep in mind that this typically excludes motorcycles and recreational vehicles, like ATVs and RVs, as many auto lenders don’t cover these types of automobiles, particularly subprime auto lenders that cater to borrowers with poor credit.
Top Subprime Auto Loan Providers
Although it is possible to find subprime auto financing through a bank or credit union, many subprime consumers will likely have better luck getting financed through the dealer from whom they purchase their vehicle.
One simple way to connect with dealers in your area who will accommodate your credit situation is by using an online lending network, like our options below. With numerous dealer partners, these networks make it easy for you to find and compare auto loans with just a single form.
- 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 application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| 3.99% - 29.99% | 1999 | 3 minutes | 9.5/10 |
5. LendingTree
- Auto loans for purchase, refinance, and lease buyouts
- Nationwide lender network
- Get matched with up to 5 lenders that fit your financial profile
- It only takes a few minutes and is free with no obligation
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 1998 | 4 minutes | 9.5/10 |
- Free, no-obligation application
- Specializes in auto loans for bankruptcy, bad credit, first-time buyer, and subprime
- Affordable payments and no application fees
- Connects thousands of car buyers with auto financing daily
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 1994 | 3 minutes | 9.0/10 |
+See More Subprime Auto Loan Providers
How Auto Loans Work
The journey to securing an auto loan can differ depending on where you choose to borrow. Opting for a direct lender, like a bank or credit union, often means you’ll need to select your vehicle before applying for the loan.
If you decide to use an online dealer network to find a local dealer for financing, you’ll first apply through the network and select a dealer. Then you’ll meet with a dealer representative to select your vehicle from the dealer’s stock and to complete the loan process.
No matter which path you take to secure an auto loan, the fundamentals remain the same. Typically, you’ll need to provide a down payment, whether in cash or through a trade-in vehicle. Generally, the larger your down payment, the more likely you are to get approved.
The APR charged for your auto loan will depend heavily on your credit score, so subprime borrowers should be prepared for a two-digit interest rate.
Higher APRs can certainly make loans more expensive, but the interest rate isn’t the only thing affecting your monthly auto payment. The length of your auto loan term also significantly impacts the total cost of your loan and your monthly payment size.
Longer loan terms — particularly subprime loans with higher APRs — will cost you more overall, thanks to the additional interest payments. Conversely, shorter loan terms will have larger monthly payments but be less expensive overall.
Getting a Mortgage Loan with Bad Credit
Home loans are, as the name implies, used primarily to purchase residential real estate. Given that mortgages typically run into the six digits and have term lengths of 15 to 30 years, they are some of the most difficult credit products to obtain with poor credit.
If your credit score falls into the subprime range, getting a conventional mortgage is pretty unlikely. The one exception might be if you can make a very large down payment, over 20% or so.
Fortunately, conventional loans aren’t your only option for a mortgage. Various government departments offer home loan programs that can make mortgages more accessible for those with subprime credit.
Top Subprime Mortgage Providers
The most common form of home loan available to subprime borrowers is an FHA-insured loan, which is backed by the Federal Housing Administration (FHA). While the FHA requires a credit score of at least 580 to qualify for the lowest down payment amount, there are no set minimum scores to qualify overall.
But while the FHA has no minimum credit requirement, individual lenders are allowed to set their own requirements. This will likely make it necessary for subprime borrowers to shop around for a loan, perhaps through an online lending network like our options below.
- America's largest mortgage lender
- The entire process is completed online
- Options for new mortgages and refinancing existing mortgages
- Award-winning customer service and cutting-edge digital platforms
- More than 90% of clients would recommend us
- See application, terms, and details
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 1985 | 5 minutes | 9.5/10 |
-
- Buy a home or refinance your existing mortgage
- Cash-out refis and HELOCs available
- Flexible credit requirements
- Up to $8,000 in down payment assistance, see terms.
- Popular with first-time homebuyers See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| Varies | 2003 | 5 minutes | 9.5/10 |
9. Unlock
- Access up to $500,000 in home equity with NO monthly payments
- Ability to use funds for any reason
- Minimum 500 FICO required — no impact on your credit score
- No age or income restrictions
- Not available in every state; terms and conditions apply
- See application, terms, and details.
| Interest Rate | In Business Since | Application Length | Reputation Score |
|---|---|---|---|
| No Interest | 2020 | 10 minutes | 9.0/10 |
+See More Subprime Home Loan Providers
How Mortgage Loans Work
Home mortgage loans are secured loans that use the financed property as collateral against default. As such, you’ll need to have a specific property in mind before you can apply for a mortgage, though you can generally get pre-approved before finding a house.
Unlike most other types of loans, the home loan process won’t vary significantly based on the method you use to find a lender. If you go with an online lending network, you’ll be connected with a direct lender that will take you through the additional steps.
The type of mortgage you choose will greatly influence the process. Beyond conventional mortgages, each loan type comes with its own distinct set of requirements.
FHA-backed loans, for example, typically require a home inspection and appraisal before the loan can be completed. This both ensures that the property is worth the financed amount and that the home is safe for occupancy.
The amount you’re required to put forward as a down payment will also vary by loan type, with FHA loans requiring at least 3.5% down for borrowers with credit scores above 580, and at least 10% down for borrowers with lower scores.
Some government-insured loans, such as VA and USDA loans, may not require any down payment, but will have their own eligibility requirements. VA mortgage loans, for instance, don’t require a down payment, but do require you to be an active or retired military member
USDA loans don’t require a down payment, either, but are only available for properties located in an eligible rural area that will be used as the borrower’s primary residence.
Don’t Lose Hope of Finding a Loan
The world of finance is packed with jargon that might seem confusing to many. However, some terms are essential for you to understand, like knowing if you’re considered a subprime consumer.
While it’s crucial to know where your credit stands, don’t let it define your entire financial story. Even as a subprime consumer, finding a lender isn’t out of reach. Don’t let a low credit score derail your financial aspirations.
And, perhaps most importantly, know that a subprime credit score doesn’t need to last forever. There are a variety of ways to improve your credit so you can get out of the subprime realm and have an easier time finding credit in the future.
Advertiser Disclosure
BadCredit.org is a free online resource that offers valuable content and comparison services to users. To keep this resource 100% free for users, we receive advertising compensation from the financial products listed on this page. Along with key review factors, this compensation may impact how and where products appear on the page (including, for example, the order in which they appear). BadCredit.org does not include listings for all financial products.
Our Editorial Review Policy
Our site is committed to publishing independent, accurate content guided by strict editorial guidelines. Before articles and reviews are published on our site, they undergo a thorough review process performed by a team of independent editors and subject-matter experts to ensure the content’s accuracy, timeliness, and impartiality. Our editorial team is separate and independent of our site’s advertisers, and the opinions they express on our site are their own. To read more about our team members and their editorial backgrounds, please visit our site’s About page.
