The best personal loans if you have bad credit but still need access to cash

Getting a personal loan when you have bad credit or no credit history can be tough. Like most financial products, borrowers have to submit an application listing their income information and agree to a credit check before getting approved for a loan. Lenders prefer to work with customers who have a proven track record of paying their bills on time and earning enough money to stay on top of their debt while honoring all terms and agreements.

A good credit score starts at 670 on the FICO scale (661 for VantageScore). Anything over 740 is considered very good, and above a 800 FICO® score (or 781 VantageScore) is considered excellent.

If your credit score is less than 670, you may feel like your score is a roadblock to getting access to good financial products. However, there are a few lenders that work with such candidates, helping them to borrow money for emergency expenses including medical bills and auto repairs, refinancing high-interest debt or even consolidating debt payments.

But proceed with caution: Lenders may charge higher interest rates or tack on origination fees, early payoff penalties and late fees to borrowers they consider to be "riskier." Therefore, if you have less-than-perfect credit, it's important to do your homework before signing on the dotted line to make sure you're comfortable with the terms of the loan.

CNBC Select rounded up the top personal loans for bad credit, looking at fees, interest rates and flexible repayment options for different credit scores. We tried to prioritize loans with no origination or sign-up fees, but since this list is for borrowers with lower credit scores, many of the loans you see below come with added costs. (Read more about our methodology below.)

• Best for people without a credit history: Upstart
• Best for flexible terms: OneMain Financial
• Best for quick funding: Avant
• Best for fast approval: LendingPoint

Who's this for? Upstart is one of the few companies that look at factors beyond your credit score when determining eligibility. It also offers fairly low interest rates.

It considers factors like education, employment, credit history and work experience. Generally, you'll need a credit score of about 300 to qualify for a loan, but you can qualify even if you have an insufficient credit history. If you want to find out your APR before you apply, Upstart will perform a soft credit check. Once you apply for the loan, the company will perform a hard credit inquiry which will temporarily ding your credit score.

You can choose a three-year or five-year loan and borrow anywhere from $1,000 to $50,000. Plus, Upstart has fast service  — you'll get your money the next business day if you accept the loan before 5 p.m. EST Monday through Friday. 

The interest rate and fees, however, can add up. The APR may range from 4.60% to 35.99%. If you're more than 10 days late on a payment, you'll owe 5% of the unpaid amount or $15, whichever is greater. You'll also have to pay between zero and 10% upfront on the origination fee, depending on the terms of the loan. The good thing about Upstart is that if you choose to pay off your loan early, you won't be hit with a penalty fee.

Who's this for? OneMain Financial Personal Loans is a good option for people who want different options when it comes to the length of the repayment period. OneMain doesn't determine the terms of your loan just based on your credit score and there is no minimum credit score. The company looks at credit history, income, expenses, and if applicable, collateral. You can also see if you prequalify for a loan without undergoing a hard inquiry. 

OneMain offers loans ranging from $1,500 to $20,000 (this can vary by state), and you can choose between a variety of different term lengths such as 24, 36, 48, or 60 months. There are also no early payoff penalty fees.

The major drawbacks are the high APRs, origination fees and late fees. The APR starts at 18% and can be as high as 35.99%. Origination fees can either be a flat fee ranging from $25 to $500 or a percentage of the loan you've taken out, ranging from 1% to 10%. Meanwhile, late fees can either be a flat $5 to $30 per late payment or 1.5% to 15% of the late amount of your last monthly payment.

While most personal loans are unsecured, OneMain offers people the option of using collateral to receive better loan terms. Collateral may be trucks, RVs, boats and campers.

Who's this for? Avant Personal Loans can be a good option for those who need money in a pinch. If you're approved by 4:30 p.m. CT Monday through Friday, you'll receive your funds the next day. You can also check if you prequalify without harming your credit score.

If your credit score isn't great, you can still get approved as Avant looks at both your credit score and income. However, most of their customers have a credit score of 600 to 700, according to Avant.

You can take out loans between $2,000 and $35,000, and loan terms range from 24 to 60 months.

The origination fees aren't substantial, ranging from 0% to 4.75%. The APR ranges from 9.95% to 35.99% which isn't the lowest interest rate you'll receive, but there are personal loans with higher minimum APRs. Just note there is a late fee of $25 if you don't make your payment within ten days after the due date.

Who's this for? LendingPoint is a good option if you want a loan with a decent APR and origination fee. Much like other personal loans, LendingPoint offers prequalification so you can check the terms of your potential loan without harming your credit score. LendingPoint will also inform you of the approval decision within seconds of applying. Generally, it will take one business day to receive the funds.

There is a minimum annual income requirement of $35,000, and these loans are not available to residents of Nevada or West Virginia. When determining eligibility for a loan, LendingPoint considers credit score, loan term, credit usage, loan amount and other factors.

Loan amounts range from $2,000 to $36,500, and the length of the loan term can be anywhere from 24 to 72 months. While LendingPoint doesn't have the lowest APRs, interest rates start at a relatively low rate of 7.99% to a high 35.99%. The origination fees range from 0% to 7% of your total loan amount.

• What is considered a "bad" credit score
• Can I pre-qualify without hurting my credit score?
• Do personal loans build credit?
• What's the difference between secured vs. unsecured loans?
• Tips to qualify for a bad credit loan
• Alternatives to high-interest loans

Here is how lenders classify "fair" and "poor" credit scores:

FICO Score

• Very poor: 300 to 579
• Fair: 580 to 669
• Good: 670 to 739
• Very good: 740 to 799
• Excellent: 800 to 850

VantageScore

• Very poor: 300 to 499
• Poor: 500 to 600
• Fair: 601 to 660
• Good: 661 to 780
• Excellent: 781 to 850

Scores lower than 670, and certainly scores lower than 600, will most likely disqualify you for the most affordable personal loans. But if you're in a pinch, it's not all-out impossible to get a loan with a credit score in the high 500s or low 600s.

Yes, it is possible to pre-qualify for a personal loan without hurting your credit score. Do some research before you apply. Read reviews and learn what to consider before agreeing to take on a loan. When you're ready to apply, follow these steps to make sure you don't ding your score too much.

1. Shop around for the best rate. Avoid hard inquiries by knowing your credit score before you submit a formal application so you know what you might qualify for. Many lenders will allow you to submit a prequalification form. Or consider using a lending platform (such as Upstart or LendingTree) to view multiple offers at once.
2. Decide on the best offer. Choose the loan with the best monthly payment and interest rate for your budget. Be sure to look at how much the loan will cost you over the full length of the term and decide if the cost is worth it.
3. Submit a formal application. Have your social security number on hand, as well as supporting documents such as bank statements and paystubs.
4. Wait for final approval. This could take just a few minutes, an hour or up to 10 days. To facilitate a speedier approval, apply during normal business hours and submit the required documents right away.
5. Get your funds. Once your loan is approved, you'll be asked to input your bank account information so the funds are deposited into your account. You may also be able to request a paper check from your lender, or in the case of a consolidation loan, you may be able to have funds sent right to your creditors.

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Personal loans are a form of installment credit, which affect both your credit report and your credit score. Having both installment and revolving credit in your profile will strengthen your credit mix.

Having a diverse credit mix is helpful — but it's not everything. Some say that adding a new installment loan, like a car loan or a mortgage, can boost your score, but there's no sense in taking on debt (plus interest) unless you actually need it.

While a new installment loan might boost your score by strengthening your credit mix, a personal loan will only improve your credit over time if you can afford to make on-time payments. Late and missed payments show up as negative marks on your credit report.

While taking on an installment loan won't boost your score a whole lot, using a personal loan to pay off credit card debt could increase in your credit score. Paying off a card will have a big impact on your credit utilization rate, which is a major factor in determining your credit score.

Once your cards are paid off, aim to keep your spending under 10% of your available credit. If you don't take on more credit card debt and pay your personal loan on time each month, you'll see a noticeable improvement in your credit score.

A secured loan is a loan backed by collateral. The most common types of secured loans are mortgages and car loans, where the collateral is your home or car. But really, collateral can be any kind of financial asset you own. And if you don't pay back your loan, the bank can seize your collateral as payment. A repossession stays on your credit report for up to seven years.

An unsecured loan requires no collateral, though you're still charged interest and sometimes fees. Student loans, personal loans and credit cards are all examples of unsecured loans.

Since there's no collateral, financial institutions give out unsecured loans based in large part on your credit score, income and history of repaying past debts. For this reason, unsecured loans may have higher interest rates (but not always) than a secured loan.

Qualifying for a loan if you have bad credit may be tricky but you can take steps to improve your chances of approval, including:

• Checking your credit: While you might already know your credit requires some work, knowing your score can help you weed out personal loan lenders whose credit requirements you aren't likely to meet. Plus, checking your credit report for errors and disputing them might have a positive effect on your scores.
• Pre-qualifying: Pre-qualification can help you determine whether you're likely to be approved for a loan. Additionally, you'll see your estimated loan terms, which will allow you to shop around for the best rates.
• Using a co-signer or co-borrower: If a family member or trusted friend has a good credit score, you can ask them to be a co-signer or co-borrower on your loan. Co-signers have no access to loan funds or payment information but agree to repay the loan if the borrower fails to make payments. Co-borrowers, on the other hand, can access the funds and payment information and are also responsible for the loan and any missed or late payments. Note that if you don't repay the loan as agreed, your co-borrower's or co-signer's credit will be negatively impacted along with yours.
• Adding collateral: You can secure your personal loan by adding collateral. For example, you might be able to pledge your car or money in your savings account as collateral. If you fail to repay the loan, the lender has the right to take your collateral. This makes a secured personal loan risky but also more accessible to borrowers with low credit scores.
• Including additional income: Many lenders allow you to add non-employment income on your loan application, such as Social Security payments, alimony or child support. A higher income can improve your approval chances.

Bad credit might stop you from qualifying for credit products like 0% APR credit cards or low-interest personal loans. If you want to avoid paying high interest rates, you can look into the following alternatives:

• Peer-to-peer (P2P) loans: P2P loans are offered by individual investors rather than financial institutions. These lenders might be more willing to work with borrowers with lower credit scores and offer lower interest rates.
• Life insurance policy loan: If you have life insurance, you can borrow from its cash value using your policy as collateral. Typically, this type of loan doesn't require a credit check and might offer more favorable terms than a personal loan.
• 401(k) loan: You may be able to borrow money from your workplace retirement account. You'll have to repay it with interest, but the interest will go back into your 401(k) account along with balance payments. This type of loan also usually doesn't have a minimum credit requirement. Note, however, that a 401(k) loan should be one of the last resort options as the money you borrow from your retirement account loses the potential to keep growing over time, decreasing your future retirement savings.

If you have less-than-perfect credit, obtaining a personal loan may be challenging. While you can find lenders with lenient credit requirements, you're likely to face higher interest rates and fees. For that reason, take the time to explore your options and pre-qualify with several lenders to secure the most advantageous offer.

To determine which personal loans are the best for consumers with bad credit, CNBC Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions. When possible, we chose loans with no origination or sign-up fees, but we also included options for borrowers with lower credit scores on this list. Some of those options have origination fees.

When narrowing down and ranking the best personal loans, we focused on the following features:

• Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan's term, which means your monthly payment won't vary, making your budget easier to plan.
• Flexible minimum and maximum loan amounts/terms: Each lender provides more than one financing option that you can customize based on your monthly budget and how long you need to repay your loan.
• No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
• Streamlined application process: We considered whether lenders offered same-day approval decisions and a fast online application process. 
• Customer support: Every loan on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
• Fund disbursement: The loans on our list deliver funds promptly through either an electronic wire transfer to your checking account or in the form of a paper check. Some lenders (which we noted) offer the ability to pay your creditors directly.
• Autopay discounts: We noted the lenders that reward you for enrolling in autopay by lowering your APR by 0.25% to 0.5%.
• Creditor payment limits and loan sizes: The above lenders provide loans in an array of sizes, from $1,000 to $100,000. Each lender advertises its respective payment limits and loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be for such an amount.

The rates and fee structures advertised for personal loans are subject to fluctuate in accordance with the Fed rate. However, once you accept your loan agreement, a fixed-rate APR will guarantee your interest rate and monthly payment will remain consistent throughout the entire term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To take out a loan, many lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

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