Personal Loan For Bad Credit

In today’s financial landscape, the need for personal loans is often paramount, offering individuals the flexibility to address various financial obligations and pursue their aspirations.

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However, for those with a less-than-ideal credit history, accessing such financial assistance can prove challenging.

This is where personal loans for bad credit emerge as a vital lifeline, providing individuals facing credit hurdles with the opportunity to obtain the financial support they require.

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Despite past setbacks or financial difficulties, these specialized loan products offer a pathway to access funds for urgent needs, unexpected expenses, or to consolidate debts, empowering individuals to navigate their financial challenges with greater ease and confidence.

In this guide, we’ll explore the dynamics of personal loans for bad credit, shedding light on their features, benefits, and considerations, to help you make informed decisions on your financial journey.

Upgrade

Loan amount: $1,000 to $50,000

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Interest rates (APR): 8.49% to 35.99% (depending on creditworthiness) – Upgrade offers fixed interest rates, so your rate locks in at the time of approval

Repayment terms: 24 to 84 months

Origination fee: 1.85% to 9.99% of the loan amount (deducted from the loan proceeds)

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Credit score requirement: Minimum of 600 (Upgrade may consider borrowers with lower scores but rates might be higher)

Funding time: As soon as same-day funding is possible, but typically within 4 business days

Other features:

  • Prequalification with a soft credit check
  • Option for automatic payments and autopay discounts
  • Secured loans available (which can offer lower rates)

Things to consider:

  • Upgrade’s maximum APR is on the higher side compared to some lenders.
  • The origination fee can increase the overall cost of your loan.

Before applying for an Upgrade loan, it’s wise to:

  • Shop around and compare rates with other lenders.
  • Use the prequalification tool to see your estimated rates without impacting your credit score.
  • Factor in the origination fee when considering the total loan cost.

Upstart

Upstart personal loans function a little differently than traditional lenders, so here’s a breakdown of their key details:

Loan amount: $1,000 to $50,000

Interest rates (APR): 7.8% – 35.99% (based on credit, income, and other factors) – Upstart uses AI to assess your application and determine your specific rate

Repayment terms: 3 or 5 years (36 or 60 months)

Origination fee: 0.00% – 12.00% (varies depending on your loan) – This fee is deducted from your loan amount upon approval

Credit score requirement: Upstart considers more than just your credit score. They look at education, employment, and other factors. This can be beneficial for borrowers with limited credit history.

Funding time: Upstart boasts fast funding, potentially within 1 business day after approval and signing the loan agreement

Other features:

  • Prequalification with a soft credit check, so it won’t hurt your credit score.
  • Fixed interest rates – your rate locks in at the time of approval.
  • Repayment options are limited to recurring monthly or bi-monthly payments.

Things to consider:

  • Upstart’s potential origination fees can be higher than some lenders.
  • They only offer two repayment term options (3 or 5 years).
  • While they consider more than credit score, their APRs can still be on the higher side for borrowers with lower creditworthiness.

Before applying for an Upstart loan, it’s wise to:

  • Use their prequalification tool to see your estimated rates and terms without impacting your credit score.
  • Compare rates and terms with other lenders to find the best option for you.
  • Factor in the potential origination fee when considering the total loan cost.

Universal Credit

It’s important to clarify that Universal Credit itself isn’t a lender and doesn’t directly offer loans. Universal Credit is a benefit program in the UK for people on a low income or out of work.

However, Universal Credit claimants can get an advance payment on their benefits. This isn’t technically a loan, but it acts similarly. Here’s a breakdown of Universal Credit advances:

  • Amount: Varies depending on your circumstances, but typically limited to a month’s worth of benefit payment.
  • Repayment: Deducted automatically from your future Universal Credit payments over a specific period (usually 12 months, but can be extended in exceptional circumstances).
  • Interest: There is no interest charged on a Universal Credit advance.
  • Credit score impact:¬†Does not affect your credit score.

Other options for borrowers on Universal Credit:

If you’re on Universal Credit and need a loan, you may want to consider these alternatives:

  • Credit unions: These often offer better rates and terms to people with lower credit scores.
  • Building societies: Similar to credit unions, they may be more flexible with lending criteria.
  • Community Development Finance Institutions (CDFIs): These non-profit organizations provide financial services to underserved communities, potentially including personal loans.

Remember, it’s important to compare rates and terms from different lenders before making a decision. Be sure you can afford the repayments before taking out any loan.

Avant

Avant offers personal loans that could be a good fit for borrowers with fair credit scores. Here’s a breakdown of their key details:

  • Loan amount: $2,000 to $35,000
  • Interest rates (APR): 9.95% to 35.99% (depending on your creditworthiness) – Avant offers fixed interest rates
  • Repayment terms: 12 to 60 months
  • Origination fee: Up to 4.75% of the loan amount (deducted from the loan proceeds)
  • Credit score requirement: Minimum of 580 (though borrowers with higher scores will qualify for better rates)
  • Funding time: As soon as the next business day after approval

Other features:

  • Prequalification with a soft credit check, so it won’t hurt your credit score.
  • Convenient online application process.
  • Manage your loan and make payments easily through their mobile app.

Things to consider:

  • Avant’s APR range can be high, especially for borrowers with lower credit scores.
  • The origination fee adds to the overall cost of your loan.

Before applying for an Avant loan, it’s wise to:

  • Prequalify to see your estimated rates and terms without impacting your credit score.
  • Compare rates and terms with other lenders to find the best option for you.
  • Factor in the origination fee when considering the total loan cost.

Best Egg

Loan amount: $2,000 to $50,000 (loan limits can vary by state and with special offer codes)

Interest rates (APR): 8.99% to 35.99% (depending on your creditworthiness) – Best Egg offers fixed interest rates

Repayment terms: 36 to 60 months

Origination fee: 0% to 8.99% of the loan amount (deducted from the loan proceeds)

Credit score requirement: Varies depending on loan type:

  • Unsecured loans: Minimum credit score in the mid-600s
  • Secured loans (with collateral): May be possible with a lower credit score

Funding time: As soon as one business day after approval

Other features:

  • Prequalification with a soft credit check
  • Option for automatic payments and autopay discounts
  • Secured loans available (which can offer lower rates and higher loan amounts for borrowers with lower credit scores)

Things to consider:

  • Best Egg’s APR range can be high, especially for borrowers with lower credit scores.
  • The origination fee can increase the overall cost of your loan. For unsecured loans, the fee can be as high as 8.99%, which can be a significant chunk of the loan amount, especially for smaller loans.

Before applying for a Best Egg loan, it’s wise to:

  • Prequalify to see your estimated rates and terms without impacting your credit score.
  • Compare rates and terms with other lenders to find the option with the lowest overall cost for you.
  • Factor in the origination fee when considering the total loan cost.
  • Consider a secured loan if you have collateral available and a lower credit score, as it might offer a lower interest rate and a higher loan amount.
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