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With more and more Americans living paycheck to paycheck, direct lenders for bad credit personal loans have never been sought after as much as they have now. Fortunately, bad credit borrowers can forgo predatory payday, auto title, and pawnshop loans and opt for reputable bad credit personal loan offers from online marketplaces like LifeLoans. Switching to loans offered at these online marketplaces allows borrowers to enjoy lower APRs (up to 35.99%), flexible repayment terms, and no origination, prepayment, or renewal fees.
All of our recommended partner lender marketplaces offer anywhere from $100 to $50,000 with sub 35.99% APRs, worlds apart from the 300% and 400% APRs bad credit borrowers may be accustomed to. In addition, outside of traditional bad credit personal and installment loans, the best lenders for bad credit personal loans also offer flexible repayment terms and no origination or prepayment penalties.
Keep reading to learn more about the best direct lenders for bad credit personal loans, including interesting statistics on debt in America, different types of bad credit funding sources, and ways to boost your credit score.
Best Direct Lenders for Bad Credit
LifeLoans – 4.9/5.0 – Best Overall
MarketLoans – 4.8/5.0 – Best for Poor and Fair Credit
100Lenders – 4.8/5.0 – Best for Personal Loans with Low Credit
247Installment– 4.7/5.0 – Best for Same Day Funding
VivaLoan – 4.6/5.0 – Best Website
Rating: 4.9/5.0
Amount: $100 — $40,000
APR: 5.99% to 35.99%
Min. Credit Score: 0
Approval: 5 minutes
Do you have a credit score from 300 to 580 and looking for quick emergency cash to cover short-term expenses like unpaid medical bills? LifeLoans is up to the task. An extensive network of participating direct lenders offers loans starting at $100 up to $40,000 with respectable 5.99% to 35.99% APRs.
Unlike traditional auto title and payday loans, direct lenders like LifeLoans’ repayment terms are much more favorable, going up to five years. Plus, there are no origination and prepayment fees. Only late and insufficient funds fees apply.
One of our favorite things about LifeLoans is its transparency. All qualification criteria are clearly stated, such as its minimum $1,000 monthly income and four weeks of employment history requirement. Disclaimers also outline APRs with a loan example to understand what you can expect to pay.
How to Apply: To apply for a LifeLoans loan, gather all supporting documentation before completing an online application through the LifeLoans portal. Then, it only takes 2 minutes to be matched with a list of lenders with loan documentation to follow.
Eligibility:
● 18 years of age or older
● U.S. citizen or permanent resident
● At least $1,000 in monthly income
● Employment for a minimum of four weeks
● Valid checking account
● Completed LifeLoans online application
Highlights:
● Loans up to $40,000
● APRs up to 35.99%
● Easy qualification criteria
● No minimum required credit score
Fees:
● Origination, prepayment, and late/insufficient funds fees vary by lender
Pros:
● Personal loans up to $40,000
● Same day approval
● 5.99% to 35.99% APRs
● Extensive network of legit direct lenders
● Excellent for bad credit borrowers
Cons:
● Not a direct lender
● Mostly unsecured, not secured loans
● Not accredited by the Better Business Bureau
● Lower maximum loan amount than some competitors
● Active military personnel cannot enroll
● Not available to Connecticut, New Hampshire, Washington, and Vermont residents
Terms: LifeLoans offers alternative payday advance loans from $100 to $40,000 with Annual Percentage Rates (APRs) of 5.99% – 35.99%. It is not a direct lender but an online marketplace connecting borrowers with a network of lenders, each with their origination, prepayment, and late/insufficient funds fees terms, all deducted from the loan proceeds. Based on the above APRs, a representative loan would be for $3,800 with a 25% APR (no origination fee). On a one-year repayment term, you would pay a total of $4,334.02 ($534.02 in total interest paid). Several factors affect the APRs you are offered, including your credit score and debt-to-income ratio.
Rating: 4.8/5.0
Amount: $100 — $40,000
APR: Up to 35.99%
Min. Credit Score: 0
Approval: 5 minutes
Suppose you are on the hook for an unpaid utility bill or an unexpected bridesmaid assignment at your best friend’s wedding. In that case, MarketLoans is an excellent place to start looking for a direct lender for bad credit.
Unlike traditional payday loans, payday alternative loans from online marketplaces like MarketLoans simply work better. For perspective, a 21% APR, $23,000 loan on a one-year repayment term will result in total payment of $25,699.40 with interest of $2,699.40. These terms offer exceptional value for bad credit installment loans and personal loans.
Loans on MarketLoans start from as little as $100 and go up to $40,000. Expect sub-35.99% APRs and repayment terms of up to seven years, with origination, prepayment, and late fees depending on the lender. With hundreds of legit participating lenders, it’s easy to compare shop for the best rates and terms.
How to Apply: To apply for a MarketLoans, visit marketloans.com and complete a simple two-minute form. By completing the form, you consent to MarketLoans Terms of Service, Privacy Policy, and advertiser disclosures. Remember that MarketLoans is not a direct lender, but an online aggregator of lending partners advertising their own loan products and services competing for your business.
Eligibility:
● 18 years of age or older
● U.S. citizen or permanent resident
● Minimum monthly income of $1,000
● Valid phone number and checking account
● Favorable debt-to-income ratio
● Completed MarketLoans online application
Highlights:
● Loans up to $40,000
● Legit direct lenders
● Annual percentage rates up to 35.99%
● Excellent for bad credit borrowers
● 256-bit encryption technology for safe online applications
Fees:
● Origination, prepayment, and late/insufficient funds fees vary by lender
Pros:
● Loans up to $40,000
● APRs up to 35.99%
● No minimum credit score required
● Excellent source of no-credit-check loans
● Funds to your account in as little as the next business day
Cons:
● Not a direct lender
● A limited number of cash advance loans
● Mostly unsecured personal loan offers
Terms: MarketLoans offers alternative payday advance loans with no credit check from $100 to $40,000 with many lenders offering Annual Percentage Rates (APRs) up to 35.99%. It is not a direct lender but an online marketplace connecting borrowers with a network of lenders, each with their own origination, prepayment, and late/insufficient funds fees terms, all deducted from the loan proceeds. Based on the aforementioned APRs, a representative loan would be for $25,000 with a 219% APR (no origination fee). On a two-year repayment term, you would pay $30,245.17 ($5,245.17 in total interest paid). Several factors affect the APRs you are offered, including your credit score and debt-to-income ratio.
Rating: 4.8/5.0
Amount: $100 — $40,000
APR: Up to 35.99%
Min. Credit Score: 0
Approval: 5 minutes
Like LifeLoans and MarketLoans, Kansas-based 100Lenders is ready to offer bad credit borrowers loans from $100 to $40,000 with APRs up to 35.99%. In addition, all participating lenders on the platform are legit, offering APRs well below that of the 400%+ APRs offered by traditional payday loans.
Another feature we appreciate about 100Lenders is its same-day approval and funding to your checking or savings account as early as the next business day from its partner direct lenders.
One of the best things about 100Lenders is that it performs soft inquiries. Many direct lenders also require no minimum credit score for bad credit personal loans. However, remember that not all lenders report on-time payments to credit bureaus.
How to Apply: To apply for a 100Lenders loan, you must meet our qualification criteria before submitting an online application through the 100Lenders portal. All loan requests can be completed in 2 minutes with same-day approval.
Eligibility:
● 18 years of age or older
● U.S. citizen or permanent resident
● Completed 100Lenders online application
Highlights:
● APRs up to 35.99%
● Loans up to $40,000
● Same day approval
● Legit direct lenders
Fees:
● Origination, prepayment, and late/insufficient funds fees vary by lender
Pros:
● Loans from $100 to $40,000
● Soft inquiry
● Same-day approval
● No minimum required credit score
● Clearly-stated Terms of Service and Privacy Policy
Cons:
● Repayment terms vary by lender
● Information may be shared with other aggregators
● Not available in CT, NH, WA, VT
● Active military personnel not accepted
● Requires minimum monthly income of $1,000
Terms: 100Lenders offers alternative payday advance loans with no credit check from $100 to $40,000 with Annual Percentage Rates (APRs) varying by lender. Many lenders offer APRs up to 35.99%. It is not a direct lender but an online marketplace connecting borrowers with a network of lenders, each with their origination, prepayment, and late/insufficient funds fees terms, all deducted from the loan proceeds. Based on the aforementioned APRs, a representative loan would be for $20,000 with a 34% APR (no origination fee). On a one-year repayment term, you would pay $23,871.65 ($3,871.65 in total interest paid). Several factors affect the APRs you are offered, including your credit score and debt-to-income ratio.
Rating: 4.7/5.0
Amount: Up to $40,000
APR: Up to 35.99%
Min. Credit Score: 0
Approval: 5 minutes
247Installment is an online Marketplace offering excellent annual percentage rates (sub 35.99%) on loans up to $40,000 for bad credit borrowers. As a source of quick cash, this beats traditional payday loans and their outrageous 400% APRs.
Its online interface is very simple. Submit all loan details (requested loan amount and contact/financial information) and get connected with a network of legit lenders in less than two minutes. Upon acceptance, you’ll be prompted to sign a loan agreement before receiving funds in your account as little as the next business day.
All in all, 247Installment is one of the more well-rounded online marketplaces for unsecured and secured loans with no minimum credit score required.
How to Apply: It is almost effortless to take out a loan through 247Installment. First, gather all your supporting documentation before completing an online form through the portal, providing your desired loan amount and all contact/banking information before being matched with lenders.
Eligibility:
● 18 years of age or older
● U.S. citizen or permanent resident
● Extensive network of direct lenders
● Completed 247Installment online application
Highlights:
● Sub-35.99% APRs
● Loans from $100 to $35,000
● Quick 2-minute online application
● Excellent source of fast helping bad credit borrowers
Fees:
● Origination, prepayment, and late/insufficient funds fees vary by lender
Pros:
● Loans from $100 to $35,000
● Excellent for bad credit borrowers
● No origination fees or prepayment penalties
● No prepayment penalties
● Simple, two-minute application form
Cons:
●
● Not a direct lender
● Some annual percentage rates above 35.99% APR
● Maximum loan amount of $35,000 lower than other online marketplaces
● No guarantee you will be offered loan amount requested
● No forbearance or hardship support line
Terms: 247Installment offers alternative payday advance loans with no credit check from $100 to $35,000 with many lenders offering Annual Percentage Rates (APRs) up to 35.99%. It is not a direct lender but an online marketplace connecting borrowers with a network of lenders, each with their own origination, prepayment, and late/insufficient funds fees terms, all deducted from the loan proceeds. Based on the aforementioned APRs, a representative loan would be for $30,000 with a 31% APR (no origination fee). On a three-year repayment term, you would pay $46,441.24 ($16,441.24 in total interest paid). Several factors affect the APRs you are offered, including your credit score and debt-to-income ratio.
Rating: 4.6/5.0
Amount: $100 — $15,000
APR: Up to 35.99%
Min. Credit Score: 0
Approval: 5 minutes
Bad credit borrowers looking for quick cash to cover past due auto repair, medical bills, or any of life’s curveballs can benefit from loan proceeds from VivaLoan.
Like LifeLoans, MarketLoans, 247Installment, and 100 Lenders, 247Installment offers access to an extensive network of bad credit direct lenders providing $100 to $15,000 with APRs up to 35.99%. Worried about data safety? VivaLoans adhere to rigorous federal fraud prevention technology, such as 256-bit SSL encryption and Online Lenders Alliance (OLA) certification, ensuring the highest safety standards against fraud.
If you are okay with a lower maximum loan amount ($15,000) than competing online marketplaces, VivaLoan is an excellent bet.
How to Apply: To apply for a VivaLoan loan, you must complete an online application through the ViuvaLoans portal. Expect to answer questions such as desired loan amount, the purpose of the loan, income information, and contact/deposit information.
Eligibility:
● 300 – 850 FICO score
● 18 years of age or older
● U.S. citizen or permanent resident
● Minimum $1,000 monthly income required
● Must be employed for a minimum of four weeks
● Completed VivaLoans online application
Highlights:
● Loans from $100 to $15,000
● Large network of direct lenders
● No minimum credit score required
● Excellent source of payday alternative loans
● Extensive network of bad credit direct lenders
Fees:
● Origination, prepayment, and late/insufficient funds fees vary by lender
Pros:
● Loans from $100 to $15,000
● APRs below 35.99%
● All credit types accepted
● No prepayment penalties
● Next business day direct deposits
● OLA-compliant with 256-bit SSL encryption
Cons:
● Not a direct lender
● Low max loan amount of $15,000
● Late and insufficient funds fees apply
● Not all lenders report on-time payments to credit bureaus
● Not available to New York, West Virginia, and District of Columbia residents
Terms: VivaLoan offers alternative payday advance loans from $100 to $40,000 with Annual Percentage Rates (APRs) of 5.99% – 35.99%. It is not a direct lender, but an online marketplace connecting borrowers with a network of lenders, each with their own origination, prepayment, and late/insufficient funds fees terms, all deducted from the loan proceeds. Based on the aforementioned APRs, a representative loan would be for $14,500 with a 32% APR (no origination fee). On a 1-year repayment term, you would pay a total of $17,134.40 ($2,634.40 in total interest paid). Several factors affect the APRs you are offered, including your credit score and debt-to-income ratio.
How to Apply for Personal Loans Bad Credit
Here are the steps to apply for a bad credit personal loan.
Review Your Credit Score. Before applying for any bad credit personal loan, it is essential to check your credit score. Even a 50-point credit score increase could shave ten or more percentage points off your loan. The easiest way to do this is by visiting annualcreditreport.com and pulling free credit reports from each of the three credit reporting agencies: Equifax, Experian, and TransUnion.
If you discover any errors, finally dispute it with the credit reporting agency. Disputes usually take up to 45 business days.
Check Your Loan Affordability. Checking for loan affordability should be addressed. We highly recommend using a personal loan calculator to estimate your future monthly loan payments. The best personal loan calculators allow users to enter a desired loan amount, repayment term, and interest rate with calculation for estimated monthly payments based on total principal and interest charges.
Be sure to pay attention to calculating your preferred interest rate and simulate all payback periods (in months or years). By performing a detailed evaluation of your loan request and finances, expect to better manage your monthly budget.
We highly recommend that your total loan obligation does not surpass a healthy 40% debt-to-income ratio. If you go over that ratio, you may need help with your monthly budgeting to cover other expenses, such as mortgage and student loan payments.
How Do Bad Credit Online Marketplaces Work?
Online marketplaces like ZippyLoan and VivaLoans all work similarly.
For starters, each lending network has a quick, 2-minute application process that allows you to view a list of no-obligation loan offers from multiple lending companies. Many require no minimum credit score with only a soft inquiry to learn your credit history. Soft inquiries do not affect your credit score.
When submitting a loan application, expect to provide direct lenders your desired loan amount, name, annual income, cash flow, and other information before being matched with a list of qualified, legit lenders offering up to 35.99% APRs. Documentation that may be requested includes voided checks, proof of income, and a government-issued photo ID, such as a passport or driver’s license.
Once your application is submitted, expect several introductory offers with final approval to follow.
Once your application is approved, expect loan proceeds to appear in your checking account in as little as the next business day. From there, feel free to spend it on anything you wish, including unpaid medical and utility bills.
What Can Bad Credit Loans Be Used For?
Bad credit loans from direct lenders can be used to cover all types of expenses, including but not limited to the following:
● Unpaid medical bills
● Unexpected auto repair bills
● Debt consolidation
● Cost of living increases
● Impromptu weddings
● Miscellaneous large purchases
What Can Bad Credit Loans Not Be Used For?
Bad credit loans from direct lenders cannot be applied to products and services primarily paid with other loans. For example, college tuition relies on government back student loans and scholarship opportunities.
For a second example, financing a new Tesla Model X uses auto loans (not to be mistaken with auto title loans), not personal payday alternative loans. Not to mention, your vehicle is used as collateral for your auto loan.
Advantages and Disadvantages of Lending Networks Over Direct Lenders
Lending networks (online marketplaces) like 100Lenders, VivaLoan, and 247Installment have numerous advantages and disadvantages over direct lenders.
Advantages
Wide Variety. With more than 100 participating lenders at online marketplaces, expect a more manageable time comparison shopping for the loan you want. APRs, repayment terms, and fee structures all vary by lender.
Loans offered include bad credit personal loans, fair credit installment loans, and auto loans.
Vital Lifeline. Loans from direct lenders for bad credit offer a vital lifeline in paying for emergency expenses, such as pass-through medical bills or unexpected auto repair invoices. They can also be used towards step consolidation and large purchases like cruise tickets and Disney World tickets.
Seamless Application Process. Online forms take as little as two minutes to complete. Then, provide your desired loan amount, monthly income, employment information and answer other qualifying questions before being presented with lenders and loans that match your profile.
Road to Credit Score Recovery. One of the best things about an online lending network with direct lenders is that most lenders report on-time payments to the three major credit bureaus — Equifax, Experian, and TransUnion. With payment history accounting for 35% of your overall FICO score, every on-time payment matters.
Top Notch Security Features. 256-bit encryption and Online Lenders Alliance (OLA) seal all our representatives of companies that adhere to the most rigorous security standards, keeping your information secure in compliance with federal law.
The OLA is a trade organization that sets industry standards and best practices on how borrowers are treated. This responsibility includes advising on federal and state policy.
Disadvantages
Not Direct Lenders. Online marketplaces do not make any credit decisions or charge for any loan product. Instead, its revenue stream comes from commission fees paid by direct lenders.
Data Sharing. All information submitted through online marketplaces may be forwarded to aggregators who may pitch their loan products. However, it is easy to opt out of this text and email communications with a quick “no send” message.
State Exclusions. Online marketplaces with direct lenders are not available in all states. For example, NextDayPersonalLoan is unavailable to Connecticut, New Hampshire, Washington, and Vermont residents and ZippyLoan is not available to New York, West Virginia, Oregon or District of Columbia residents.
Can I Get A Personal Loan/Installment Loan with Bad Credit?
Although there are many no-credit-check personal loans and installment loans for bad credit borrowers, expect to meet other qualifying criteria such as minimum monthly income, employment status, and positive cash flow.
What Are Your Thoughts On Cash Advance Apps Like Earnin and Brigit?
We recommend cash advance apps like Earnin and Brigit to cover those pesky paycheck gaps. Download the app, connect your bank account, submit proof of income, and be eligible to receive up to $100 per day or $750 per pay period at 0% interest.
Expect to keep the 0% interest until proceeds are repaid on your next payday. We love the ease of use, lightning-quick processing times, and same-day approval that all cash advance apps offer for bad credit borrowers.
Are Auto Title Loans a Good Idea for Bad Credit Borrowers?
We highly recommend avoiding auto title loans from any direct lenders.
Auto title loans use your vehicle as collateral for quick cash up to a percentage of the vehicle’s value. According to the National Pawn Brokers Association, the average pawn shop loan is $150.
Most run no credit checks, with only income verification and proof of vehicle ownership required. From there, auto title lenders determine the loan amount based on your vehicle’s value. Remember that origination, application, and late fees comprise a large percentage of the overall loan cost.
In states where auto title loans are legal, expect 300% APR caps with extra fees. In addition, the chances of losing your collateral are high. According to the Consumer Financial Protection Bureau (CFPB), one in five auto title loan Borrowers have their vehicle seized after defaulting on loans.
Avoid the predatory 300% APRs auto title loans are known for and go with an alternative payday loan/bad credit personal loan from reputable lending networks like ZippyLoans and VivaLoans.
What About Payday Loans?
Payday loans are arguably the most predatory of all loan types. These short-term loans of up to $500 charge excessive fees (as high as $20 for every $100 borrowed) and create a vicious debt cycle that relies on borrowers extending due dates and paying renewal fees, with a substantial possibility total interest charges will exceed your principal after several months.
Additionally, payday lenders only sometimes report on-time payments to credit bureaus.
In the end, payday loans’ only benefits are no credit checks, same-day approval, and funding to your checking account as soon as the next business day.
What Are the Types of Loans for Bad Credit?
Fortunately, many funding opportunities are available for bad credit borrowers from direct lenders.
Here are all of the different types of loans bad credit borrowers can take advantage of:
Payday Alternative Loans (PALs). Offered by National Credit Union Administration (NCUA) credit union members, payday alternative or an excellent alternative to traditional payday loans, offering up to $2,000 with capped 28% APRs. Repayment terms usually go from one to 12 months without any rollovers. Application fees of up to $25 (per loan) may apply.
As for PAL eligibility requirements, it’s pretty loose, but not as loose as bad credit loans offered by ZippyLoans and others. You must be a member with proof of income (e.g., pay stub or bank statement) with no PALs taken out in the last six months and a minimum deposit of $5 to a checking or savings account. Keep in mind that not all credit unions offer payday alternative loans.
Our preferred credit unions for payday alternative loans include Alliant Credit Union, Pentagon Federal Credit Union, and Navy Federal Credit Union.
Cash Advance Apps. Cash advance apps like Earnin, Brigit, and Dave offer small loans with low fixed fees and 0% interest up to $100 a day or $750 per pay period. Each of them has different reimbursement methods. For example, Earnin only charges an optional, voluntary tip of up to $14, whereas Brigit asks for a monthly $9.99 minimum fee.
These services do not perform credit checks, but a bank account collecting direct deposits from employers is required. All loans are paid in full upon your next paycheck.
How Do I File A Complaint For a Direct Lender for Bad Credit?
If you suspect that the direct lenders for bad credit you have taken out a loan with is not legit, there are several actions you can take.
For starters, we recommend submitting a complaint to the Consumer Financial Protection Bureau (CFPB). This US government agency helps consumers interact with financial institutions like banks, credit unions, and online lenders.
Regarding complaints, the CFPB has a solid track record of getting company responses, usually within 2 weeks. In addition, complaints can be filed for virtually every type of loan product and service, including debt settlement/credit repair services, payday loans, personal loans, and installment loans for bad credit.
For more information on the Consumer Financial Protection Bureau’s complaint submission process, visit CFPB – Submit a Complaint.
How Can I Get A Bad Credit Loan?
To get a bad credit loan from direct lenders, we recommend following all of the steps below in sequential order.
Check Your Credit Score. Visit annualcreditreport.com and pull your credit report from each of the three major reporting credit bureaus. Then, check every report with a fine-toothed comb, checking for accuracy errors. Common credit reporting mistakes include incorrect addresses, open accounts marked as closed (and vice versa), and incorrect balances.
If you discover an error on your credit report, file a dispute with the credit bureau.
Equifax – www.equifax.com/personal/credit-report-services/credit-dispute/
Experian – www.experian.com/disputes/main.html
TransUnion – https://dispute.transunion.com
For more information on disputing errors on your credit report, visit the Consumer Financial Protection Bureau’s helpful guide here.
Evaluate Lender Qualification Criteria. With many bad credit lenders requiring no minimum credit score, assess your qualification strength. Learn your direct lender’s lending criteria, including required monthly income and employment status. Almost all online marketplaces require a minimum monthly income of $800 and that you are currently employed for the past four weeks.
Pre-Qualification. Pre-qualification allows bad credit lenders to determine your personal and installment loan eligibility. Expect a soft inquiry, which does not affect your credit score.
Compare a Minimum of Five Loan Offers. By comparing quotes from several direct lenders for bad credit, you will be better equipped to find the most favorable terms for your financial situation. Carefully look into APRs, fee structure, repayment terms, and various benefits such as consumer education and financial hardship/forbearance options.
What Are The Benefits of Debt Consolidation Using a Direct Lender for Bad Credit?
Debt consolidation is one of the most innovative ways of managing your finances. It allows you to consolidate multiple high-interest debts into a single lower-interest monthly payment. Other benefits to debt consolidation include saving money, faster payoff, a boosted credit score, and cutting down on the number of monthly bills.
Remember, you do not need good credit to consolidate debt. However, you should expect a higher percentage of bad credit debt consolidation loans to be collateral-backed secured loans.
What Is The Best Personal Loan Calculator?
There are hundreds of personal loan calculators on the internet. We appreciate anyone that is easy to use and allows you to enter a loan amount, interest rate, and loan term to calculate your estimated monthly payment, total interest paid, and the total loan cost. It should also clearly distinguish between interest and principal paid.
Our personal favorite personal Loan calculator belongs to Bankrate. Credit reporting bureau Experian also offers a similar version.
We highly recommend using personal loan calculators to understand how each loan works with interest rates and repayment terms. In addition, it allows you to better understand your estimated monthly budget in the future.
What Types of Fees Can I Expect From Direct Lenders for Bad Credit?
Bad credit personal loans from direct lenders are known for three types of fees: origination, prepayment, and late payment.
Origination fees usually equate to 1% to 8% of the loan, a processing fee deducted from the loan proceeds. For example, a 2% origination fee on a $10,000 loan equals $200, so your loan proceeds will come to $9,800.
Prepayment penalties from direct lenders are assessed for paying off your loan ahead of schedule. However, through our recommended online marketplaces, most participating lenders do not charge this fee.
Lastly, late payment fees are exactly what it implies, a penalty for not paying your latest balance (minimum payment) by the due date.
Except for Upstart, we strongly encourage bad credit borrowers to look for loans with no origination and prepayment penalties, as these are unnecessary processing and administrative fees in a competitive lending environment.
How Did We Choose These Lenders?
Our review of bad credit lending Networks has more than eight evaluation criteria under consideration, starting with APRs, fee structure, repayment options, funding time, and transparency, with clearly stated disclaimers on the website.
Our preferred best direct lender marketplaces for bad credit offer loans from $100 up to $40,000 with a maximum of 35.99% APRs, representing the top threshold for bad credit rates. Preferably, repayment terms go from two to seven years, an excellent alternative over the two to four-week repayment terms offered by payday, auto title, and pawn shop lenders.
Another key selection criterion is eligibility requirements. We prefer loose qualification criteria such as being 18 years or older with US citizenship/permanent residency and income verification (minimum monthly income of $800), allowing quick, fair, and affordable access to fast cash.
Another area we focused heavily on is website disclaimers. All disclaimers should have active loan examples, describe all data protection policies (including how your information is shared), and provide word on which states are not eligible to submit a loan request. Kudos to any lending network that belongs to the Online Lenders Alliance (OLA), an organization that advocates for fraud prevention with loan products.
Lastly, remember processing speed. We prioritized lending networks with simplified application forms taking at most five minutes to complete. Expect same-day approval and next-day funding with most lenders. In addition, speed helps address emergency expenses like unpaid utility and mortgage bills quickly.
Frequently Asked Questions
What are bad credit loans?
Bad credit loans are funding opportunities available to borrowers with credit scores in the $300 to 579 range, available at banks, credit unions, and online marketplaces like NextDayPersonalLoan and 100Lenders. Many offer excellent terms compared to traditional payday loans, such as sub-35.99% APRs, repayment terms of up to seven years, and no origination or prepayment penalties.
Which loan company is best for bad credit?
There is no best loan company for bad credit. Each online marketplace or direct lender offers its own advantages and disadvantages with potential niche specialties. For example, LendingPoint iss best known for favorable term flexibility, contributing 7.99% to 35.99% APR loans up to $36,500.
In turn, Upstart works best for those with limited credit histories (300 minimum required credit score), offering a higher maximum loan amount of $50,000, higher than most online marketplaces provide.
Can I get a personal loan with guaranteed approval?
Unfortunately, reputable personal lenders offer no guaranteed approvals. Even with lenders requiring no minimum credit score, expect to meet other qualification criteria, such as age (18 years of age or older) with a minimum monthly income of $800 and/or be currently employed.
What are some different types of bad credit personal loans from direct lenders?
Outside of bad credit personal and installment loans, borrowers can take advantage of unsecured/secured loans, credit cards, cash advances, and paycheck advance services like Earnin, Brigit, and Dave.
Remember that online marketplaces like 100Lenders are primarily a source of unsecured loans and that cash advance apps operate more as paycheck advance services, not actual lending.
Where can I get bad credit for personal loans?
Bad credit personal loans can be obtained from three key sources — online lenders, direct lenders, and local lenders.
Online lenders are split into marketplaces (e.g., ZippyLoans) and non-marketplace lenders like Upstart. Direct lenders comprise banks, credit unions, and online platforms like Chase Bank, Pentagon Federal Credit Union, and Wells Fargo. Local lenders typically extend payday, auto title, and pawn shop loans (highly not recommended).
Conclusion
All in all, bad credit borrowers have plenty of options when it comes to the best direct lenders for bad credit. For example, an employed person with a 550 credit score, $1,000 monthly income, and a modest 40% debt-to-income ratio can expect competitive APRs up to 35.99% on payday alternative loans, bad credit unsecured personal loans, and other payday loan alternatives.
With more and more Americans living paycheck to paycheck, direct lenders for bad credit personal loans have never been sought after as much as they have now. Fortunately, bad credit borrowers can forgo predatory payday, auto title, and pawnshop loans and opt for reputable bad credit personal loan offers from online marketplaces like LifeLoans. Switching to loans offered at these online marketplaces allows borrowers to enjoy lower APRs (up to 35.99%), flexible repayment terms, and no origination, prepayment, or renewal fees.
All of our recommended partner lender marketplaces offer anywhere from $100 to $50,000 with sub 35.99% APRs, worlds apart from the 300% and 400% APRs bad credit borrowers may be accustomed to. In addition, outside of traditional bad credit personal and installment loans, the best lenders for bad credit personal loans also offer flexible repayment terms and no origination or prepayment penalties.
Keep reading to learn more about the best direct lenders for bad credit personal loans, including interesting statistics on debt in America, different types of bad credit funding sources, and ways to boost your credit score.
Best Direct Lenders for Bad Credit
LifeLoans – 4.9/5.0 – Best Overall
MarketLoans – 4.8/5.0 – Best for Poor and Fair Credit
100Lenders – 4.8/5.0 – Best for Personal Loans with Low Credit
247Installment– 4.7/5.0 – Best for Same Day Funding
VivaLoan – 4.6/5.0 – Best Website
Rating: 4.9/5.0
Amount: $100 — $40,000
APR: 5.99% to 35.99%
Min. Credit Score: 0
Approval: 5 minutes
Do you have a credit score from 300 to 580 and looking for quick emergency cash to cover short-term expenses like unpaid medical bills? LifeLoans is up to the task. An extensive network of participating direct lenders offers loans starting at $100 up to $40,000 with respectable 5.99% to 35.99% APRs.
Unlike traditional auto title and payday loans, direct lenders like LifeLoans’ repayment terms are much more favorable, going up to five years. Plus, there are no origination and prepayment fees. Only late and insufficient funds fees apply.
One of our favorite things about LifeLoans is its transparency. All qualification criteria are clearly stated, such as its minimum $1,000 monthly income and four weeks of employment history requirement. Disclaimers also outline APRs with a loan example to understand what you can expect to pay.
How to Apply: To apply for a LifeLoans loan, gather all supporting documentation before completing an online application through the LifeLoans portal. Then, it only takes 2 minutes to be matched with a list of lenders with loan documentation to follow.
Eligibility:
● 18 years of age or older
● U.S. citizen or permanent resident
● At least $1,000 in monthly income
● Employment for a minimum of four weeks
● Valid checking account
● Completed LifeLoans online application
Highlights:
● Loans up to $40,000
● APRs up to 35.99%
● Easy qualification criteria
● No minimum required credit score
Fees:
● Origination, prepayment, and late/insufficient funds fees vary by lender
Pros:
● Personal loans up to $40,000
● Same day approval
● 5.99% to 35.99% APRs
● Extensive network of legit direct lenders
● Excellent for bad credit borrowers
Cons:
● Not a direct lender
● Mostly unsecured, not secured loans
● Not accredited by the Better Business Bureau
● Lower maximum loan amount than some competitors
● Active military personnel cannot enroll
● Not available to Connecticut, New Hampshire, Washington, and Vermont residents
Terms: LifeLoans offers alternative payday advance loans from $100 to $40,000 with Annual Percentage Rates (APRs) of 5.99% – 35.99%. It is not a direct lender but an online marketplace connecting borrowers with a network of lenders, each with their origination, prepayment, and late/insufficient funds fees terms, all deducted from the loan proceeds. Based on the above APRs, a representative loan would be for $3,800 with a 25% APR (no origination fee). On a one-year repayment term, you would pay a total of $4,334.02 ($534.02 in total interest paid). Several factors affect the APRs you are offered, including your credit score and debt-to-income ratio.
Rating: 4.8/5.0
Amount: $100 — $40,000
APR: Up to 35.99%
Min. Credit Score: 0
Approval: 5 minutes
Suppose you are on the hook for an unpaid utility bill or an unexpected bridesmaid assignment at your best friend’s wedding. In that case, MarketLoans is an excellent place to start looking for a direct lender for bad credit.
Unlike traditional payday loans, payday alternative loans from online marketplaces like MarketLoans simply work better. For perspective, a 21% APR, $23,000 loan on a one-year repayment term will result in total payment of $25,699.40 with interest of $2,699.40. These terms offer exceptional value for bad credit installment loans and personal loans.
Loans on MarketLoans start from as little as $100 and go up to $40,000. Expect sub-35.99% APRs and repayment terms of up to seven years, with origination, prepayment, and late fees depending on the lender. With hundreds of legit participating lenders, it’s easy to compare shop for the best rates and terms.
How to Apply: To apply for a MarketLoans, visit marketloans.com and complete a simple two-minute form. By completing the form, you consent to MarketLoans Terms of Service, Privacy Policy, and advertiser disclosures. Remember that MarketLoans is not a direct lender, but an online aggregator of lending partners advertising their own loan products and services competing for your business.
Eligibility:
● 18 years of age or older
● U.S. citizen or permanent resident
● Minimum monthly income of $1,000
● Valid phone number and checking account
● Favorable debt-to-income ratio
● Completed MarketLoans online application
Highlights:
● Loans up to $40,000
● Legit direct lenders
● Annual percentage rates up to 35.99%
● Excellent for bad credit borrowers
● 256-bit encryption technology for safe online applications
Fees:
● Origination, prepayment, and late/insufficient funds fees vary by lender
Pros:
● Loans up to $40,000
● APRs up to 35.99%
● No minimum credit score required
● Excellent source of no-credit-check loans
● Funds to your account in as little as the next business day
Cons:
● Not a direct lender
● A limited number of cash advance loans
● Mostly unsecured personal loan offers
Terms: MarketLoans offers alternative payday advance loans with no credit check from $100 to $40,000 with many lenders offering Annual Percentage Rates (APRs) up to 35.99%. It is not a direct lender but an online marketplace connecting borrowers with a network of lenders, each with their own origination, prepayment, and late/insufficient funds fees terms, all deducted from the loan proceeds. Based on the aforementioned APRs, a representative loan would be for $25,000 with a 219% APR (no origination fee). On a two-year repayment term, you would pay $30,245.17 ($5,245.17 in total interest paid). Several factors affect the APRs you are offered, including your credit score and debt-to-income ratio.
Rating: 4.8/5.0
Amount: $100 — $40,000
APR: Up to 35.99%
Min. Credit Score: 0
Approval: 5 minutes
Like LifeLoans and MarketLoans, Kansas-based 100Lenders is ready to offer bad credit borrowers loans from $100 to $40,000 with APRs up to 35.99%. In addition, all participating lenders on the platform are legit, offering APRs well below that of the 400%+ APRs offered by traditional payday loans.
Another feature we appreciate about 100Lenders is its same-day approval and funding to your checking or savings account as early as the next business day from its partner direct lenders.
One of the best things about 100Lenders is that it performs soft inquiries. Many direct lenders also require no minimum credit score for bad credit personal loans. However, remember that not all lenders report on-time payments to credit bureaus.
How to Apply: To apply for a 100Lenders loan, you must meet our qualification criteria before submitting an online application through the 100Lenders portal. All loan requests can be completed in 2 minutes with same-day approval.
Eligibility:
● 18 years of age or older
● U.S. citizen or permanent resident
● Completed 100Lenders online application
Highlights:
● APRs up to 35.99%
● Loans up to $40,000
● Same day approval
● Legit direct lenders
Fees:
● Origination, prepayment, and late/insufficient funds fees vary by lender
Pros:
● Loans from $100 to $40,000
● Soft inquiry
● Same-day approval
● No minimum required credit score
● Clearly-stated Terms of Service and Privacy Policy
Cons:
● Repayment terms vary by lender
● Information may be shared with other aggregators
● Not available in CT, NH, WA, VT
● Active military personnel not accepted
● Requires minimum monthly income of $1,000
Terms: 100Lenders offers alternative payday advance loans with no credit check from $100 to $40,000 with Annual Percentage Rates (APRs) varying by lender. Many lenders offer APRs up to 35.99%. It is not a direct lender but an online marketplace connecting borrowers with a network of lenders, each with their origination, prepayment, and late/insufficient funds fees terms, all deducted from the loan proceeds. Based on the aforementioned APRs, a representative loan would be for $20,000 with a 34% APR (no origination fee). On a one-year repayment term, you would pay $23,871.65 ($3,871.65 in total interest paid). Several factors affect the APRs you are offered, including your credit score and debt-to-income ratio.
Rating: 4.7/5.0
Amount: Up to $40,000
APR: Up to 35.99%
Min. Credit Score: 0
Approval: 5 minutes
247Installment is an online Marketplace offering excellent annual percentage rates (sub 35.99%) on loans up to $40,000 for bad credit borrowers. As a source of quick cash, this beats traditional payday loans and their outrageous 400% APRs.
Its online interface is very simple. Submit all loan details (requested loan amount and contact/financial information) and get connected with a network of legit lenders in less than two minutes. Upon acceptance, you’ll be prompted to sign a loan agreement before receiving funds in your account as little as the next business day.
All in all, 247Installment is one of the more well-rounded online marketplaces for unsecured and secured loans with no minimum credit score required.
How to Apply: It is almost effortless to take out a loan through 247Installment. First, gather all your supporting documentation before completing an online form through the portal, providing your desired loan amount and all contact/banking information before being matched with lenders.
Eligibility:
● 18 years of age or older
● U.S. citizen or permanent resident
● Extensive network of direct lenders
● Completed 247Installment online application
Highlights:
● Sub-35.99% APRs
● Loans from $100 to $35,000
● Quick 2-minute online application
● Excellent source of fast helping bad credit borrowers
Fees:
● Origination, prepayment, and late/insufficient funds fees vary by lender
Pros:
● Loans from $100 to $35,000
● Excellent for bad credit borrowers
● No origination fees or prepayment penalties
● No prepayment penalties
● Simple, two-minute application form
Cons:
●
● Not a direct lender
● Some annual percentage rates above 35.99% APR
● Maximum loan amount of $35,000 lower than other online marketplaces
● No guarantee you will be offered loan amount requested
● No forbearance or hardship support line
Terms: 247Installment offers alternative payday advance loans with no credit check from $100 to $35,000 with many lenders offering Annual Percentage Rates (APRs) up to 35.99%. It is not a direct lender but an online marketplace connecting borrowers with a network of lenders, each with their own origination, prepayment, and late/insufficient funds fees terms, all deducted from the loan proceeds. Based on the aforementioned APRs, a representative loan would be for $30,000 with a 31% APR (no origination fee). On a three-year repayment term, you would pay $46,441.24 ($16,441.24 in total interest paid). Several factors affect the APRs you are offered, including your credit score and debt-to-income ratio.
Rating: 4.6/5.0
Amount: $100 — $15,000
APR: Up to 35.99%
Min. Credit Score: 0
Approval: 5 minutes
Bad credit borrowers looking for quick cash to cover past due auto repair, medical bills, or any of life’s curveballs can benefit from loan proceeds from VivaLoan.
Like LifeLoans, MarketLoans, 247Installment, and 100 Lenders, 247Installment offers access to an extensive network of bad credit direct lenders providing $100 to $15,000 with APRs up to 35.99%. Worried about data safety? VivaLoans adhere to rigorous federal fraud prevention technology, such as 256-bit SSL encryption and Online Lenders Alliance (OLA) certification, ensuring the highest safety standards against fraud.
If you are okay with a lower maximum loan amount ($15,000) than competing online marketplaces, VivaLoan is an excellent bet.
How to Apply: To apply for a VivaLoan loan, you must complete an online application through the ViuvaLoans portal. Expect to answer questions such as desired loan amount, the purpose of the loan, income information, and contact/deposit information.
Eligibility:
● 300 – 850 FICO score
● 18 years of age or older
● U.S. citizen or permanent resident
● Minimum $1,000 monthly income required
● Must be employed for a minimum of four weeks
● Completed VivaLoans online application
Highlights:
● Loans from $100 to $15,000
● Large network of direct lenders
● No minimum credit score required
● Excellent source of payday alternative loans
● Extensive network of bad credit direct lenders
Fees:
● Origination, prepayment, and late/insufficient funds fees vary by lender
Pros:
● Loans from $100 to $15,000
● APRs below 35.99%
● All credit types accepted
● No prepayment penalties
● Next business day direct deposits
● OLA-compliant with 256-bit SSL encryption
Cons:
● Not a direct lender
● Low max loan amount of $15,000
● Late and insufficient funds fees apply
● Not all lenders report on-time payments to credit bureaus
● Not available to New York, West Virginia, and District of Columbia residents
Terms: VivaLoan offers alternative payday advance loans from $100 to $40,000 with Annual Percentage Rates (APRs) of 5.99% – 35.99%. It is not a direct lender, but an online marketplace connecting borrowers with a network of lenders, each with their own origination, prepayment, and late/insufficient funds fees terms, all deducted from the loan proceeds. Based on the aforementioned APRs, a representative loan would be for $14,500 with a 32% APR (no origination fee). On a 1-year repayment term, you would pay a total of $17,134.40 ($2,634.40 in total interest paid). Several factors affect the APRs you are offered, including your credit score and debt-to-income ratio.
How to Apply for Personal Loans Bad Credit
Here are the steps to apply for a bad credit personal loan.
Review Your Credit Score. Before applying for any bad credit personal loan, it is essential to check your credit score. Even a 50-point credit score increase could shave ten or more percentage points off your loan. The easiest way to do this is by visiting annualcreditreport.com and pulling free credit reports from each of the three credit reporting agencies: Equifax, Experian, and TransUnion.
If you discover any errors, finally dispute it with the credit reporting agency. Disputes usually take up to 45 business days.
Check Your Loan Affordability. Checking for loan affordability should be addressed. We highly recommend using a personal loan calculator to estimate your future monthly loan payments. The best personal loan calculators allow users to enter a desired loan amount, repayment term, and interest rate with calculation for estimated monthly payments based on total principal and interest charges.
Be sure to pay attention to calculating your preferred interest rate and simulate all payback periods (in months or years). By performing a detailed evaluation of your loan request and finances, expect to better manage your monthly budget.
We highly recommend that your total loan obligation does not surpass a healthy 40% debt-to-income ratio. If you go over that ratio, you may need help with your monthly budgeting to cover other expenses, such as mortgage and student loan payments.
How Do Bad Credit Online Marketplaces Work?
Online marketplaces like ZippyLoan and VivaLoans all work similarly.
For starters, each lending network has a quick, 2-minute application process that allows you to view a list of no-obligation loan offers from multiple lending companies. Many require no minimum credit score with only a soft inquiry to learn your credit history. Soft inquiries do not affect your credit score.
When submitting a loan application, expect to provide direct lenders your desired loan amount, name, annual income, cash flow, and other information before being matched with a list of qualified, legit lenders offering up to 35.99% APRs. Documentation that may be requested includes voided checks, proof of income, and a government-issued photo ID, such as a passport or driver’s license.
Once your application is submitted, expect several introductory offers with final approval to follow.
Once your application is approved, expect loan proceeds to appear in your checking account in as little as the next business day. From there, feel free to spend it on anything you wish, including unpaid medical and utility bills.
What Can Bad Credit Loans Be Used For?
Bad credit loans from direct lenders can be used to cover all types of expenses, including but not limited to the following:
● Unpaid medical bills
● Unexpected auto repair bills
● Debt consolidation
● Cost of living increases
● Impromptu weddings
● Miscellaneous large purchases
What Can Bad Credit Loans Not Be Used For?
Bad credit loans from direct lenders cannot be applied to products and services primarily paid with other loans. For example, college tuition relies on government back student loans and scholarship opportunities.
For a second example, financing a new Tesla Model X uses auto loans (not to be mistaken with auto title loans), not personal payday alternative loans. Not to mention, your vehicle is used as collateral for your auto loan.
Advantages and Disadvantages of Lending Networks Over Direct Lenders
Lending networks (online marketplaces) like 100Lenders, VivaLoan, and 247Installment have numerous advantages and disadvantages over direct lenders.
Advantages
Wide Variety. With more than 100 participating lenders at online marketplaces, expect a more manageable time comparison shopping for the loan you want. APRs, repayment terms, and fee structures all vary by lender.
Loans offered include bad credit personal loans, fair credit installment loans, and auto loans.
Vital Lifeline. Loans from direct lenders for bad credit offer a vital lifeline in paying for emergency expenses, such as pass-through medical bills or unexpected auto repair invoices. They can also be used towards step consolidation and large purchases like cruise tickets and Disney World tickets.
Seamless Application Process. Online forms take as little as two minutes to complete. Then, provide your desired loan amount, monthly income, employment information and answer other qualifying questions before being presented with lenders and loans that match your profile.
Road to Credit Score Recovery. One of the best things about an online lending network with direct lenders is that most lenders report on-time payments to the three major credit bureaus — Equifax, Experian, and TransUnion. With payment history accounting for 35% of your overall FICO score, every on-time payment matters.
Top Notch Security Features. 256-bit encryption and Online Lenders Alliance (OLA) seal all our representatives of companies that adhere to the most rigorous security standards, keeping your information secure in compliance with federal law.
The OLA is a trade organization that sets industry standards and best practices on how borrowers are treated. This responsibility includes advising on federal and state policy.
Disadvantages
Not Direct Lenders. Online marketplaces do not make any credit decisions or charge for any loan product. Instead, its revenue stream comes from commission fees paid by direct lenders.
Data Sharing. All information submitted through online marketplaces may be forwarded to aggregators who may pitch their loan products. However, it is easy to opt out of this text and email communications with a quick “no send” message.
State Exclusions. Online marketplaces with direct lenders are not available in all states. For example, NextDayPersonalLoan is unavailable to Connecticut, New Hampshire, Washington, and Vermont residents and ZippyLoan is not available to New York, West Virginia, Oregon or District of Columbia residents.
Can I Get A Personal Loan/Installment Loan with Bad Credit?
Although there are many no-credit-check personal loans and installment loans for bad credit borrowers, expect to meet other qualifying criteria such as minimum monthly income, employment status, and positive cash flow.
What Are Your Thoughts On Cash Advance Apps Like Earnin and Brigit?
We recommend cash advance apps like Earnin and Brigit to cover those pesky paycheck gaps. Download the app, connect your bank account, submit proof of income, and be eligible to receive up to $100 per day or $750 per pay period at 0% interest.
Expect to keep the 0% interest until proceeds are repaid on your next payday. We love the ease of use, lightning-quick processing times, and same-day approval that all cash advance apps offer for bad credit borrowers.
Are Auto Title Loans a Good Idea for Bad Credit Borrowers?
We highly recommend avoiding auto title loans from any direct lenders.
Auto title loans use your vehicle as collateral for quick cash up to a percentage of the vehicle’s value. According to the National Pawn Brokers Association, the average pawn shop loan is $150.
Most run no credit checks, with only income verification and proof of vehicle ownership required. From there, auto title lenders determine the loan amount based on your vehicle’s value. Remember that origination, application, and late fees comprise a large percentage of the overall loan cost.
In states where auto title loans are legal, expect 300% APR caps with extra fees. In addition, the chances of losing your collateral are high. According to the Consumer Financial Protection Bureau (CFPB), one in five auto title loan Borrowers have their vehicle seized after defaulting on loans.
Avoid the predatory 300% APRs auto title loans are known for and go with an alternative payday loan/bad credit personal loan from reputable lending networks like ZippyLoans and VivaLoans.
What About Payday Loans?
Payday loans are arguably the most predatory of all loan types. These short-term loans of up to $500 charge excessive fees (as high as $20 for every $100 borrowed) and create a vicious debt cycle that relies on borrowers extending due dates and paying renewal fees, with a substantial possibility total interest charges will exceed your principal after several months.
Additionally, payday lenders only sometimes report on-time payments to credit bureaus.
In the end, payday loans’ only benefits are no credit checks, same-day approval, and funding to your checking account as soon as the next business day.
What Are the Types of Loans for Bad Credit?
Fortunately, many funding opportunities are available for bad credit borrowers from direct lenders.
Here are all of the different types of loans bad credit borrowers can take advantage of:
Payday Alternative Loans (PALs). Offered by National Credit Union Administration (NCUA) credit union members, payday alternative or an excellent alternative to traditional payday loans, offering up to $2,000 with capped 28% APRs. Repayment terms usually go from one to 12 months without any rollovers. Application fees of up to $25 (per loan) may apply.
As for PAL eligibility requirements, it’s pretty loose, but not as loose as bad credit loans offered by ZippyLoans and others. You must be a member with proof of income (e.g., pay stub or bank statement) with no PALs taken out in the last six months and a minimum deposit of $5 to a checking or savings account. Keep in mind that not all credit unions offer payday alternative loans.
Our preferred credit unions for payday alternative loans include Alliant Credit Union, Pentagon Federal Credit Union, and Navy Federal Credit Union.
Cash Advance Apps. Cash advance apps like Earnin, Brigit, and Dave offer small loans with low fixed fees and 0% interest up to $100 a day or $750 per pay period. Each of them has different reimbursement methods. For example, Earnin only charges an optional, voluntary tip of up to $14, whereas Brigit asks for a monthly $9.99 minimum fee.
These services do not perform credit checks, but a bank account collecting direct deposits from employers is required. All loans are paid in full upon your next paycheck.
How Do I File A Complaint For a Direct Lender for Bad Credit?
If you suspect that the direct lenders for bad credit you have taken out a loan with is not legit, there are several actions you can take.
For starters, we recommend submitting a complaint to the Consumer Financial Protection Bureau (CFPB). This US government agency helps consumers interact with financial institutions like banks, credit unions, and online lenders.
Regarding complaints, the CFPB has a solid track record of getting company responses, usually within 2 weeks. In addition, complaints can be filed for virtually every type of loan product and service, including debt settlement/credit repair services, payday loans, personal loans, and installment loans for bad credit.
For more information on the Consumer Financial Protection Bureau’s complaint submission process, visit CFPB – Submit a Complaint.
How Can I Get A Bad Credit Loan?
To get a bad credit loan from direct lenders, we recommend following all of the steps below in sequential order.
Check Your Credit Score. Visit annualcreditreport.com and pull your credit report from each of the three major reporting credit bureaus. Then, check every report with a fine-toothed comb, checking for accuracy errors. Common credit reporting mistakes include incorrect addresses, open accounts marked as closed (and vice versa), and incorrect balances.
If you discover an error on your credit report, file a dispute with the credit bureau.
Equifax – www.equifax.com/personal/credit-report-services/credit-dispute/
Experian – www.experian.com/disputes/main.html
TransUnion – https://dispute.transunion.com
For more information on disputing errors on your credit report, visit the Consumer Financial Protection Bureau’s helpful guide here.
Evaluate Lender Qualification Criteria. With many bad credit lenders requiring no minimum credit score, assess your qualification strength. Learn your direct lender’s lending criteria, including required monthly income and employment status. Almost all online marketplaces require a minimum monthly income of $800 and that you are currently employed for the past four weeks.
Pre-Qualification. Pre-qualification allows bad credit lenders to determine your personal and installment loan eligibility. Expect a soft inquiry, which does not affect your credit score.
Compare a Minimum of Five Loan Offers. By comparing quotes from several direct lenders for bad credit, you will be better equipped to find the most favorable terms for your financial situation. Carefully look into APRs, fee structure, repayment terms, and various benefits such as consumer education and financial hardship/forbearance options.
What Are The Benefits of Debt Consolidation Using a Direct Lender for Bad Credit?
Debt consolidation is one of the most innovative ways of managing your finances. It allows you to consolidate multiple high-interest debts into a single lower-interest monthly payment. Other benefits to debt consolidation include saving money, faster payoff, a boosted credit score, and cutting down on the number of monthly bills.
Remember, you do not need good credit to consolidate debt. However, you should expect a higher percentage of bad credit debt consolidation loans to be collateral-backed secured loans.
What Is The Best Personal Loan Calculator?
There are hundreds of personal loan calculators on the internet. We appreciate anyone that is easy to use and allows you to enter a loan amount, interest rate, and loan term to calculate your estimated monthly payment, total interest paid, and the total loan cost. It should also clearly distinguish between interest and principal paid.
Our personal favorite personal Loan calculator belongs to Bankrate. Credit reporting bureau Experian also offers a similar version.
We highly recommend using personal loan calculators to understand how each loan works with interest rates and repayment terms. In addition, it allows you to better understand your estimated monthly budget in the future.
What Types of Fees Can I Expect From Direct Lenders for Bad Credit?
Bad credit personal loans from direct lenders are known for three types of fees: origination, prepayment, and late payment.
Origination fees usually equate to 1% to 8% of the loan, a processing fee deducted from the loan proceeds. For example, a 2% origination fee on a $10,000 loan equals $200, so your loan proceeds will come to $9,800.
Prepayment penalties from direct lenders are assessed for paying off your loan ahead of schedule. However, through our recommended online marketplaces, most participating lenders do not charge this fee.
Lastly, late payment fees are exactly what it implies, a penalty for not paying your latest balance (minimum payment) by the due date.
Except for Upstart, we strongly encourage bad credit borrowers to look for loans with no origination and prepayment penalties, as these are unnecessary processing and administrative fees in a competitive lending environment.
How Did We Choose These Lenders?
Our review of bad credit lending Networks has more than eight evaluation criteria under consideration, starting with APRs, fee structure, repayment options, funding time, and transparency, with clearly stated disclaimers on the website.
Our preferred best direct lender marketplaces for bad credit offer loans from $100 up to $40,000 with a maximum of 35.99% APRs, representing the top threshold for bad credit rates. Preferably, repayment terms go from two to seven years, an excellent alternative over the two to four-week repayment terms offered by payday, auto title, and pawn shop lenders.
Another key selection criterion is eligibility requirements. We prefer loose qualification criteria such as being 18 years or older with US citizenship/permanent residency and income verification (minimum monthly income of $800), allowing quick, fair, and affordable access to fast cash.
Another area we focused heavily on is website disclaimers. All disclaimers should have active loan examples, describe all data protection policies (including how your information is shared), and provide word on which states are not eligible to submit a loan request. Kudos to any lending network that belongs to the Online Lenders Alliance (OLA), an organization that advocates for fraud prevention with loan products.
Lastly, remember processing speed. We prioritized lending networks with simplified application forms taking at most five minutes to complete. Expect same-day approval and next-day funding with most lenders. In addition, speed helps address emergency expenses like unpaid utility and mortgage bills quickly.
Frequently Asked Questions
What are bad credit loans?
Bad credit loans are funding opportunities available to borrowers with credit scores in the $300 to 579 range, available at banks, credit unions, and online marketplaces like NextDayPersonalLoan and 100Lenders. Many offer excellent terms compared to traditional payday loans, such as sub-35.99% APRs, repayment terms of up to seven years, and no origination or prepayment penalties.
Which loan company is best for bad credit?
There is no best loan company for bad credit. Each online marketplace or direct lender offers its own advantages and disadvantages with potential niche specialties. For example, LendingPoint iss best known for favorable term flexibility, contributing 7.99% to 35.99% APR loans up to $36,500.
In turn, Upstart works best for those with limited credit histories (300 minimum required credit score), offering a higher maximum loan amount of $50,000, higher than most online marketplaces provide.
Can I get a personal loan with guaranteed approval?
Unfortunately, reputable personal lenders offer no guaranteed approvals. Even with lenders requiring no minimum credit score, expect to meet other qualification criteria, such as age (18 years of age or older) with a minimum monthly income of $800 and/or be currently employed.
What are some different types of bad credit personal loans from direct lenders?
Outside of bad credit personal and installment loans, borrowers can take advantage of unsecured/secured loans, credit cards, cash advances, and paycheck advance services like Earnin, Brigit, and Dave.
Remember that online marketplaces like 100Lenders are primarily a source of unsecured loans and that cash advance apps operate more as paycheck advance services, not actual lending.
Where can I get bad credit for personal loans?
Bad credit personal loans can be obtained from three key sources — online lenders, direct lenders, and local lenders.
Online lenders are split into marketplaces (e.g., ZippyLoans) and non-marketplace lenders like Upstart. Direct lenders comprise banks, credit unions, and online platforms like Chase Bank, Pentagon Federal Credit Union, and Wells Fargo. Local lenders typically extend payday, auto title, and pawn shop loans (highly not recommended).
Conclusion
All in all, bad credit borrowers have plenty of options when it comes to the best direct lenders for bad credit. For example, an employed person with a 550 credit score, $1,000 monthly income, and a modest 40% debt-to-income ratio can expect competitive APRs up to 35.99% on payday alternative loans, bad credit unsecured personal loans, and other payday loan alternatives.
