An installment loan is a lump sum of cash that you repay in equal installments for a set period of time. If you have bad credit, it can be tough to qualify for this type of loan — but not impossible. Several lenders offer installment loans to borrowers with poor or no credit.
In 2024, the best installment loans for bad credit offer more lenient credit score requirements, a variety of loan amounts and relatively long repayment terms. Some also permit borrowers to apply with a co-signer or co-borrower, making it easier to qualify. However, bad credit loans typically come with higher interest rates compared to good credit loans.
Best installment loans for bad credit
- Upgrade: Best overall.
- LendingPoint: Best for quick approval decisions.
- Prosper: Best for peer-to-peer lending.
- LendingClub: Best for co-borrowers.
- Oportun: Best for small loans.
- Avant: Best for customer support.
- Upstart: Best for thin credit.
Why trust our personal loan experts
Our team of experts evaluated hundreds of personal loan products and analyzed thousands of data points to help you find the best fit for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 22 personal loan lenders reviewed.
- 308 data points analyzed.
- 6-stage fact-checking process.
Best overall
Upgrade
Blueprint Rating
Fixed APR
8.49% to 35.99%
Min. credit score
580
What you should know
With Upgrade, you can get approved for a loan ranging from $1,000 to $50,000 with a credit score as low as 580. Repayment terms range from two to seven years, and if you’re approved, you could get your funds within a day of clearing necessary verifications. Upgrade also offers joint applications, which could increase your approval chances and might get you a better rate than you’d get alone.
You might also qualify for a lower rate if you sign up for automatic payments and use a portion of your loan to consolidate existing debt. However, Upgrade doesn’t disclose how much this rate discount might be unless you have a registered account.
Keep in mind that Upgrade charges an origination fee as well as fees for late and returned payments, which could increase your overall borrowing costs.
Pros and cons
Pros
- Fast funding.
- Permits joint applicants.
- No prepayment penalty.
Cons
- Charges an origination fee.
- Charges fees for late and returned payments.
- Doesn’t disclose information about rate discounts unless you have a registered account.
More details
- Interest rates: 8.49% to 35.99%.
- Loan amounts: $1,000 to $50,000.
- Repayment terms: 2 to 7 years.
- Fees: Origination fee (1.85% to 8.99%), late fee ($10) and returned payment free ($10).
- Min. credit score: 580.
- Can apply with a co-signer: No (but can apply with a joint applicant).
Best for quick approval decisions
LendingPoint
Blueprint Rating
Fixed APR
7.99% to 35.99%
Min. credit score
590
What you should know
If you need a loan quickly, LendingPoint can be a good option — after filling out an application, you could get an approval decision in just a few seconds. And if you’re approved, LendingPoint will send your funds as soon as the next business day.
With LendingPoint, you can borrow $2,000 to $36,500 with terms from two to six years, and you could get approved with a credit score as low as 600. Keep in mind that LendingPoint doesn’t permit co-signers or joint applicants, and it has a minimum income requirement of $35,000. It also charges an origination fee, and its loans aren’t available in Nevada or West Virginia.
Pros and cons
Pros
- Quick approval decisions.
- Fast funding.
- No prepayment penalty.
Cons
- Charges an origination fee.
- Minimum income requirement of $35,000.
- Not available in all states.
More details
- Interest rates: 7.99% to 35.99%.
- Loan amounts: $2,000 to $36,500.
- Repayment terms: 2 to 6 years.
- Fees: Origination fee (0% to 8%).
- Min. credit score: 590.
- Can apply with a co-signer: No.
Best for peer-to-peer lending
Prosper
Blueprint Rating
Fixed APR
8.99% to 35.99%
Min. credit score
560
What you should know
Unlike most of the lenders on this list, Prosper is a peer-to-peer (P2P) lender. This means that instead of borrowing from a financial institution, you’ll work directly with a private investor (or group of investors) who will fund your loan. Because this cuts out the middleman, it can be easier to qualify for a P2P loan compared to a loan from a traditional lender.
With Prosper, you can borrow $2,000 to $50,000 with terms from two to five years, and you could get approved with a credit score as low as 560. Prosper also accepts joint applications, which can further increase your chances of qualifying. If you’re approved, you could get your funds as soon as the next business day.
Keep in mind that this lender charges an origination fee as well as fees for check payments, late payments and insufficient funds — all of which can increase your overall borrowing costs. Personal loans from Prosper also aren’t available in Iowa and West Virginia.
Pros and cons
Pros
- Offers P2P loans.
- Fast funding.
- Permits joint applications.
Cons
- Charges an origination fee.
- Charges fees for check payments, late payments and insufficient funds.
- Not available in all states.
More details
- Interest rates: 8.99% to 35.99%.
- Loan amounts: $2,000 to $50,000.
- Repayment terms: 2 to 5 years.
- Fees: Origination fee (1% to 5%), check payment fee ($5 or 5% of your payment, whichever is less), late fee ($15 or 5% of the unpaid amount, whichever is greater) and insufficient funds fee ($15).
- Min. credit score: 560.
- Can apply with a co-signer: No (but can apply with a joint applicant).
Best for co-borrowers
LendingClub
Blueprint Rating
Fixed APR
8.98% to 35.99%
Min. credit score
No minimum
What you should know
Many personal loan lenders don’t allow co-borrowers (also called joint applicants), but LendingClub does. While this lender has no specific minimum credit score, applying with a co-borrower could make it even easier to qualify. Even if you don’t need a joint applicant to get approved, having one could qualify you for a better rate or higher loan amount than you’d get alone. Keep in mind that unlike a co-signer who is liable for a loan if the primary borrower fails to make payments, a co-borrower is equally responsible from the start.
With LendingClub, you can borrow $1,000 to $40,000 with terms from three to five years, and you can expect to get your funds within a few days of approval — possibly within 24 hours. Note that LendingClub charges an origination fee as well as fees for late payments and insufficient funds.
Pros and cons
Pros
- Permits joint applicants.
- No specific minimum credit score.
- No prepayment penalty.
Cons
- Charges an origination fee.
- Charges fees for late payments and insufficient funds.
- Limited repayment term options.
More details
- Interest rates: 8.98% to 35.99%.
- Loan amounts: $1,000 to $40,000.
- Repayment terms: 3 to 5 years.
- Fees: Origination fee (2% to 6%), late fee (5% of outstanding payment amount or $15, whichever is greater) and insufficient funds fee ($15).
- Min. credit score: No minimum.
- Can apply with a co-signer: No (but can apply with a joint applicant).
Best for small loans
Oportun
Blueprint Rating
Fixed APR
34.95% to 35.99%
Min. credit score
No minimum
What you should know
If you only need to borrow a small amount, Oportun — the only lender on this list certified as a Community Development Financial Institution by the Department of the Treasury — could be a good choice. You can borrow as little as $300 up to $12,000 with an unsecured loan (amounts could vary depending on your state). This lender also permits co-signers in some situations.
Additionally, if you live in Arizona, California, Florida, New Jersey or Texas and own an eligible vehicle, you might be able to borrow up to $18,500 (amounts could vary depending on your state) if you secure the loan with your car title — though this means you risk losing your vehicle if you don’t keep up with your payments.
Unlike most of the lenders on this list, Oportun has no specific minimum credit score requirement — applicants only need to provide a valid ID along with proof of income and their address. This means you could qualify even if you have little to no credit. However, keep in mind that this lender’s annual percentage rates (APRs) can be higher compared to some lenders. Oportun also charges origination fees as well as fees for late and returned payments, and its loans aren’t available in Colorado, Connecticut, Maine, Maryland, Massachusetts, Nevada, New York, West Virginia or Washington, D.C.
Pros and cons
Pros
- Can borrow as little as $300.
- No specific minimum credit score.
- Fast funding.
Cons
- Charges an origination fee as well as fees for late and returned payments.
- Could lose your car if you don’t keep up with secured loan payments.
- Not available in all states.
More details
- Interest rates: 34.95% to 35.99% (depending on your state and loan type).
- Loan amounts: $300 to $18,500 (depending on your state; larger loan amounts require collateral).
- Repayment terms: 1 to 4.08 years for unsecured loans or 2 to 5.33 years for secured loans (term options will depend on your location).
- Fees: Origination fee, late fee and returned payment fee (fee amounts will depend on your location).
- Min. credit score: No minimum.
- Can apply with a co-signer: Yes (in some cases).
Best for customer support
Avant
Blueprint Rating
Fixed APR
9.95% to 35.99%
Min. credit score
580
What you should know
While many lenders have limited customer service hours, Avant’s team is available Monday through Friday from 7 a.m. to 10 p.m. Central Standard Time (CST) as well as Saturday and Sunday from 7 a.m. to 8 p.m. CST. You also have multiple options for contacting Avant, including by email, phone or mobile app or through the online dashboard. This will make it easier to get ahold of support during a time that suits your needs.
Avant’s personal loans range from $2,000 to $35,000 and come with terms from one to five years. While the average Avant borrower has a credit score between 600 and 700, you might qualify with a score as low as 580. If you’re approved, you could get your funds as soon as the next business day.
Keep in mind that this lender doesn’t permit co-signers or joint applicants and is not available in Massachusetts, Michigan, Montana, Vermont, Virginia and West Virginia. Avant also charges an origination fee as well as fees for late and dishonored payments.
Pros and cons
Pros
- Accessible customer support.
- Fast funding.
- No prepayment penalty.
Cons
- Charges an origination fee.
- Charges fees for late and dishonored payments.
- Not available in all states.
More details
- Interest rates: 9.95% to 35.99%.
- Loan amounts: $2,000 to $35,000.
- Repayment terms: 1 to 5 years.
- Fees: Origination fee (up to 4.75%), late fee ($25) and dishonored payment fee ($15).
- Min. credit score: 580.
- Can apply with a co-signer: No.
Best for thin credit
Upstart
Blueprint Rating
Fixed APR
7.8% to 35.99%
Min. credit score
300
What you should know
Upstart’s unique underwriting process uses factors such as your education and employment history in addition to credit history when making approval decisions. Because of this, Upstart not only has a very low minimum credit score requirement of only 300, but it also works with borrowers who don’t have enough of a credit history to generate a credit score — often known as having thin credit.
With Upstart, you can borrow $1,000 to $50,000 with a three- or five-year term. If you’re approved, you could get your funds as soon as the next business day.
Keep in mind that Upstart charges an origination fee along with fees for late and returned payments. It also doesn’t permit co-signers or joint applicants, and its loans aren’t available in Iowa or West Virginia.
Pros and cons
Pros
- Accessible to borrowers with little to no credit history.
- Fast funding.
- No prepayment penalty.
Cons
- Charges an origination fee.
- Limited repayment term options.
- Not available in all states.
More details
- Interest rates: 7.8% to 35.99%.
- Loan amounts: $1,000 to $50,000.
- Loan terms: 3 or 5 years.
- Discounts: None.
- Fees: Origination fee (0% to 12%), late fee (5% of past-due amount or $15, whichever is greater) and returned payment fee ($15).
- Min. credit score: 300.
- Can apply with a co-signer: No.
Compare the best installment loans for bad credit
| INTEREST RATES | LOAN AMOUNTS | REPAYMENT TERMS (YEARS) | MIN. CREDIT SCORE | CAN APPLY WITH A CO-SIGNER OR CO-BORROWER? | |
|---|---|---|---|---|---|
Upgrade | 8.49% to 35.99% | $1,000 to $50,000 | 2 to 7 | 580 | Yes |
LendingPoint | 7.99% to 35.99% | $2,000 to $36,500 | 2 to 6 | 600 | No |
Prosper | 8.99% to 35.99% | $2,000 to $50,000 | 2 to 5 | 600 | Yes |
LendingClub | 8.98% to 35.99% | $1,000 to $40,000 | 3 to 5 | No minimum | Yes |
Oportun | 34.95% to 35.99% (depending on your state and loan type) | $300 to $18,500 (larger loans require collateral) | 1 to 5.33 (longer terms require collateral) | No minimum | Yes (in some cases) |
Avant | 9.95% to 35.99% | $2,000 to $35,000 | 1 to 5 | 580 | No |
Upstart | 7.8% to 35.99% | $1,000 to $50,000 | 3 or 5 | 300 | No |
All rates include discounts as applicable where noted by the lender and are accurate as of May 8, 2024.
Methodology
Our expert writers and editors have reviewed and researched multiple lenders to help you find the best installment loan for bad credit. Out of all the lenders considered, the seven that made our list excelled in areas across the following categories (with weightings): loan details (15%), loan cost (25%), eligibility and accessibility (35%), customer service (15%) and ease of application (10%).
Within each major category, we considered several characteristics, including APR ranges, loan amounts, maximum terms, minimum credit score requirements, co-signer acceptance and funding time. We also evaluated each provider’s late fees, state availability, customer support options and customer reviews.
Why some lenders didn’t make the cut
Of the personal loan lenders that we reviewed, only a fraction made the cut. The reasons for this varied by lender, with the majority not receiving high enough scores to be included due to having stricter credit score requirements. Others also scored lower due to having limited customer service hours or poor customer reviews.
What is an installment loan?
Unlike a revolving credit line like a credit card, an installment loan is a type of loan that provides a lump sum of cash. This is then repaid in monthly installments for a set period of time, and these payments each cover a portion of the principal balance and interest that you owe.
While most installment loans come with fixed interest rates and set payments throughout the life of the loan, others — such as adjustable-rate mortgages — have variable rates that can fluctuate over time depending on market conditions. In addition to interest, lenders might also charge other fees with installment loans, such as origination fees or late fees.
How installment loans work and when to use them
Various types of installment loans can be used for almost anything. For example, you could take out a personal loan to cover a major expense, a mortgage to pay for a house, an auto loan to buy a car or a student loan to account for college costs.
Keep in mind that depending on the type of installment loan you get, you might have to provide collateral to secure the loan. For instance, while most personal loans are unsecured, a mortgage is secured by a home while a car loan is secured by a vehicle. It can be easier to qualify for a secured installment loan because there’s less risk to the lender — but you could also lose your property if you don’t make your payments.
Types of installment loans
There are many types of installment loans to help you cover different kinds of expenses. Here are some of the most common sorts of installment loans:
- Personal loans: These loans can cover almost any personal expense and typically range from a few hundred dollars up to $100,000, depending on the lender. Most personal loans don’t require collateral.
- Mortgages: These are used to pay for the purchase of a home and can come with fixed or adjustable rates. The home acts as security for the loan.
- Student loans: These can help you pay for a college education and the expenses associated with it, such as housing and textbooks. While federal student loans all come with fixed rates, private student loans can have fixed or variable rates.
- Auto loans: You can use an auto loan to pay for a new or used car, which will secure the loan as collateral.
Installment loan pros and cons
Pros
- Can cover almost any type of expense.
- Most come with fixed rates and set payments.
- Typically have lower rates compared to revolving credit lines.
Cons
- Can only borrow a single, lump sum, which can lead to overborrowing.
- Might come with fees.
- Could lose your collateral and damage your credit if you don’t keep up with your payments.
How bad credit installment loans affect your credit
Installment loans can affect your credit in a few ways. On the positive side, if you make all of your payments on time or are able to diversify your credit mix, you could see an improvement in your score over time.
On the other hand, it can also hurt your credit. When you apply for any loan, the lender will perform a hard credit check when deciding whether to approve your application. This can cause a slight but temporary drop in your credit score — but usually only about five points or less.Opening a new account can also lower your average credit age — or how long you’ve had credit accounts open. The good news is that the negative effects these have on your credit are usually temporary.
Tips for building your credit
If you have a bad credit score, consider improving it before applying for an installment loan. Here are some proven ways to build your credit:
- Pay on time. Payment history is one of the most important factors in a credit score. To strengthen your credit in the months before applying for a personal loan, focus on paying your credit cards and other bills on time.
- Ask for a credit limit increase. One credit score factor is your credit utilization, or the amount of available credit you’re using. So, if you ask your credit card issuers to increase your credit limit, it automatically lowers your utilization — as long as you don’t charge more on your cards.
- Fix any errors on your credit report. Credit-scoring companies use the information in your credit report to calculate your score, so any incorrect information could hurt your credit. You can request a copy of your reports from AnnualCreditReport.com — then from there, dispute any errors with the credit bureaus.
- Consider becoming an authorized user. You can ask a creditworthy family member or friend to add you on one of their credit cards as an authorized user. Even if you’re not actively using the card yourself, the account will appear on your credit report. For example, if the card keeps a low balance and payments are made on time, this can boost your score. But the reverse is also true: high utilization rates and missed payments can hurt your score.
Frequently asked questions (FAQs)
The credit score you’ll need for an installment loan will depend on the type of loan and the individual lender. For example, while most personal loan lenders require good credit, others accept scores as low as 560, such as Universal Credit and OneMain Financial.
Some lenders — such as Oportun and Upstart — are also willing to work with borrowers who have little to no credit history.
When considering an installment loan, it’s important to consider not only interest rates but also repayment terms, potential fees and eligibility requirements.
“Good installment loans don’t have variable interest rates,” says financial coach Jonathan Thomas. “Your rate should stay the same as long as you have the loan. You also shouldn’t see prepayment fees or application fees [fees charged to borrowers before they have been approved].”
In general, the easiest type of installment loan to get will be a short-term personal loan that doesn’t require a credit check, such as a payday loan, pawn shop loan or car title loan.
However, while these sorts of loans can be appealing, they’re also often predatory in nature, and they can come with astronomically high APRs and fees — possibly as high as 400%, depending on the type of loan. And in the case of pawn shop loans and car title loans, you could lose your property if you don’t keep up with your payments.
Because of these risks, it’s best to treat these alternatives as a last resort and to stick with a traditional personal loan instead whenever possible. Several personal loan lenders accept poor credit scores while some even work with borrowers who have no credit. Also note that legitimate lenders will charge reasonable interest rates and fees, which will be disclosed to you before you ever sign a loan agreement.
Some lenders might not have a minimum score to qualify, so you may be able to get a personal loan if your score is low or you don’t have much of a credit history at all. LendingClub and Oportun , for example, don’t have a minimum score requirement.
Just keep in mind, the lower your credit score, the higher your interest rates can be. So, even though you might be able to get an installment loan with bad credit, you’ll likely pay higher rates than you would with a good score.
