Personal loans for poor credit

Borrowers with poor credit typically see advertised APRs from 24.99% to 35.99%. The exact rate depends on income, existing debt, and other factors.

If the rates you see are high, consider whether you can wait and improve your credit, or whether a co-signer could help you qualify for a lower APR.

Below 630 choices are genuinely limited and the rates on offer can be high. Some lenders specialize in this band and price accordingly; others will not lend at all.

This is the band where collateral can matter most. Some lenders offer secured loans backed by a vehicle where an unsecured application would be declined, but that means the vehicle is on the line if you fall behind. These options may not be available through the lenders currently listed here.

We would rather say this plainly than imply otherwise: if the borrowing is not urgent, a few months of on-time payments and reduced balances will usually save you more than any comparison can.

None of these are instant, but each one moves the APR a lender will quote someone with poor credit.

• Avoid payday and title loans, whose effective rates are far above anything shown here
• Weigh a secured offer carefully; a lower rate is not worth losing the car you drive to work
• Ask a credit union whether it offers a small-dollar or credit-builder loan
• Clear any accounts in collections where you can, and get the resolution recorded
• Set every bill to autopay so no further late marks are added

Most personal loans from our lending partners are unsecured and fixed rate. With no collateral involved, the lender prices the loan almost entirely on how likely it believes you are to repay. That judgment is built from your credit history, your income relative to your existing debt, how long you have been employed, and the amount and term you ask for.

Personal loans can also be secured by collateral, such as a motor vehicle. Pledging collateral can support a larger amount or a lower rate, but it puts the vehicle at risk if the loan is not repaid. Secured options vary by lender and may not be available through the lenders currently listed here.

The number that matters is the APR, not the interest rate. APR folds in the interest rate plus any origination fee, so it is the only figure that lets you line two offers up fairly. A loan quoted at a lower interest rate can easily cost more once a 6% origination fee is deducted from the money you actually receive.

• Credit history and score band: the single biggest driver of the rate you are offered
• Debt-to-income ratio: monthly debt payments measured against gross monthly income
• Loan amount and term: longer terms usually carry higher rates
• Income stability: length of employment and whether income is verifiable
• Whether the loan is secured: collateral can lower the rate a lender is willing to offer
• State of residence: not every lender lends in every state