Isn’t the thought of getting rejected for a loan because of bad credit, absence of credit history, or a combination of both exhausting? Bad credit is simply a low credit score, reflecting a high risk to lenders. Specific qualification metrics are used to classify individuals accordingly, but fortunately, it isn’t the end of the world. Many bad credit lenders are willing to provide support. However, individuals need to proceed with caution, as the list of conditions may be extensive. What might these entail? Our editorial team decided to do the heavy lifting and arrived at what we believe are top services that bring bad credit lenders and borrowers for 2022.
Ultimately, this guide intends to reveal our top picks and elaborate on the process that led us to them. Moreover, individuals must acknowledge the possible pros and cons of choosing a bad credit lender while being fully equipped with the fundamental nature of these loans. Without any further delay, here are our top picks:
The Top 9 Bad Credit Lenders in 2022
After narrowing down the hundreds of services out there, we were most comfortable with the following handful:
- Bad Credit Loans
- CashUSA
- LendYou
- MoneyMutual
- Next Day Personal Loan
- Payzonno
- PersonalLoans
- PickALender
- Upgrade Personal Loans
Bad Credit Loans
- Website: Bad Credit Loans
- Loan Amount (Annual % Rate): Up to $10,000 (5.99% to 35.99%)
Bad Credit Loans aim to offer a free service through which a lender and borrower can meet. The former will then present their loan offer without any obligation to accept it. Besides bad credit, this service also offers credit cards, lines of credit, business loans, student loans, auto loans, home loans, and mortgage loans.
Individuals are likely to be drawn to the educational articles covering topics like when to take a loan out, how to spend responsibly, budget future income to repay loans, etc. This is something we encourage everyone to browse through before proceeding. As for what the process entails, the preliminary step is an application. A lender might respond with a loan offer based on the information provided (i.e., age, proof of citizenship, income status, SSB, checking accounts under the correct name, etc.). Things must be respected and abided by their terms.
When one decides to accept an offer, the agreement is depicted via e-signature, and the funds are anticipated to be deposited to one’s chequing account within one business day. Nonetheless, the availability timeframe will depend on the lender’s deposit process. In addition to being 100% free, Bad Credit Loans is liked for its simple application process, privacy and security, and massive network.
CashUSA
- Website: CashUSA
- Loan Amount (Annual % Rate): $500 to $10,000 (5.99% to 35.99%)
CashUSA utilizes its extensive network of lenders and other third-party networks to review applications and connect the right lender to borrowers. A 100% free service with no shortage of business advertising options for cash loans, going with CashUSA naturally implies diversity in offers. This service’s application process is swift since individuals are only asked the basic requirements.
In our minds, CashUSA and Bad Credit Loans’ business model is identical, yet the differences lie primarily in the resources presented and the types of loans. We felt that the way information was shown on the CashUSA website was slightly more straightforward, which might be meaningful to some over others. Likewise, the team at Bad Credit Loans focuses on different types of loans, which is more likely to capture a bigger target market.
LendYou
- Website: LendYou
- Loan Amount (Annual % Rate): $1,000 to $2,500 (4.99% to 450%)
LendYou wants to support borrowers in whatever way they possibly can. Whether it means auto repairs, medical bills, or recouping short-term funds, this team ensures cash advance and personal loans are made available as quickly as possible. Unlike the previously listed platforms, LendYou’s range is narrower, but they are flexible from their looks. The first step is to complete an online application. Then, one of their lender partners will make an offer, and once accepted, the funds can be accessed within 24 hours.
MoneyMutual
- Website: MoneyMutual
- Loan Amount (Annual % Rate): $100 to $5,000 (Not available)
MoneyMutual is a free resource on our list to provide potential borrowers the chance to link with potential lenders. Like every other team, this team does not get involved in the negotiation processes. Yet, they believe that creating such a platform can help 4 in 10 Americans who need emergency assistance (i.e., unexpected bills, medical bills, groceries, gas and other essentials, car repairs, and special occasions). We feel individuals should use MoneyMutual to their full advantage as their resources are informative and provide a clear perspective on what people will be signing up for. The process is three-fold; application, lender review and offer, and finally, accessing the funds.
Next Day Personal Loan
- Website: Next Day Personal Loan
- Loan Amount (Annual % Rate): $100 to $40,000 (Not available)
Next Day Personal Loan aims to join lenders and borrowers together. Once the application has been reviewed and an offer prepared, their role comprises redirecting borrowers to their lenders. Discussions on the loan terms, amount, APR, and repayment schedules are privately discussed among the parties involved. It would have been nice to have a feel for what the range for the annual percentage rates might look like, but it may not matter because each lender is different. The services in this guide are comparable, with differences resting in the specifics of the basic requirements. We mean that the definition of employment, for instance, might vary from one lender to the next. Likewise, some lenders might expect a decent credit history, while others disregard it altogether.
Payzonno
- Website: Payzonno
- Loan Amount (Annual % Rate): $100 to $5,000 (Not available)
Next up, we have Payzonno, a free service where the borrowers completed application is the only requirement. The range on the loan amount is narrower than some of the other services, but the idea is the same: connect with a lender, sort out the specifics of the loan and come up with a reasonable repayment schedule. Once everything has been agreed upon, it is as simple as sealing the deal and waiting a business day for the funds to be reflected in one’s respective account. The income requirement in Payzonno’s ask is a bit higher, i.e., $1,000 per month after tax, along with proof that the borrower has been employed at the present job for at least three months.
PersonalLoans
- Website: PersonalLoans
- Loan Amount (Annual % Rate): $1,000 to $35,000 (5.99% to 35.99%)
PersonalLoans qualified for this guide not only because they are free and associate borrowers and lenders but also because they are thorough in their explanations and transparent about their processes. For instance, individuals will find an example of what the APR might look like on loans that are 2, 3, 4, or even six years down the line on different loan amounts, the number of payments to be made, what a monthly payment might look like and many more.
It’s these extra steps that help to differentiate a company that merely wants to establish a relationship between lenders and borrowers and one that genuinely wants to make a positive difference in one’s financial hiccups. Their FAQ section covers the basics, and when in doubt, a deeper conversation can be held with the team, or individuals can scavenge through their resources. Additionally, this platform is more flexible in the types of loans offered. They aren’t restricting consumers to bad credit or personal loans, but even funds for special occasions.
Whether everyone will have access to everything is determined solely based on one’s application, but in general, they don’t only focus on a homogeneous financial background. There’s something on here for everyone: the feeling we got as we browsed through their website.
PickALender
- Website: PickALender
- Loan Amount (Annual % Rate): $100 to $40,000 (Not available)
Whether individuals need debt or credit card consolidation or others related to travel, home improvement, and auto, PickALender is allegedly here to build appropriate connections. As repetitive as this may be, this service’s application process is quick. This team takes pride in their nationwide marketplace of lenders and lending partners, fast delivery, data security, and willingness to consider all credits; low, high, and anything in between. Remember that they must be within PickALender’s coverage area for people to access a lender. This is something to discuss with customer service before proceeding.
Upgrade
- Website: Upgrade
- Loan Amount (Annual % Rate): Up to $50,000 (8.99% to 29.99%)
Lastly, we have Upgrade Personal Loans, which is by far the only platform that avows up to $50,000 in loans. Their APR range is also more reasonable, making it an affordable option for individuals. One can apply and possibly discuss with a possible lender within a few steps. Usually, the lender comes up with a proposal offer, and the borrower reviews and assesses the documentation before proceeding. Another facet that drew us to this platform is its clean presentation and hassle-free nature, ultimately facilitating borrowing processes.
The Process of Elimination: How We Finalized Our Top Contenders
From all the guides we’ve created thus far, this one felt straightforward. Usually, we start by developing a ranking system where at least one listed factor must hold for it to carry some degree of value. The more boxes checked off, the better, but since we are dealing with financial and confidential information, the top contenders had to satisfy everything listed below:
Transparency
Transparency is a must-have because it reflects the company’s procedures, details on their goods and services, third-party involvement, and what individuals can expect throughout it all. In this case, each company should have disclosed their contact information, the privacy policy, whether submitted applications will be used for other purposes or accessed by third parties, and background on the lenders.
Data Security
Data security is also a given because the listed services pertain to customer assets and identity. Since everything is handled online, companies must prove that essential measures have been established to support data security and protection against the risk of identity theft. This is especially important considering that the application process delves into personal information that can cause damage if stolen. One measure that might comfort individuals is 256-bit encryption, deemed the most secure method after 128- and 192-bit encryptions. 256-bit encryption remains the most employed to date.
Loan Amount
Our editorial team was equally interested in the loan amount range when reviewing lender and borrower platforms. While any amount might be helpful for those seeking bad credit loans, each situation is unique. If a significantly large amount is needed, the chance to discuss the possibility should be granted. Thus, anywhere between $100 and up to $50,000 was sought.
Application Process & Approval Rate
The purpose of seeking solutions online is to speed up processes. If the application process is lengthy, people might feel discouraged. Upon reviewing the questions asked, we were relieved with our picks because they’ve simplified the application and asked direct and close-ended questions that can be completed in under 5 minutes. The same goes for approval; borrowers will hear from a probable lender within 24 to 48 hours of applying. This is ideal because it gives the borrower a chance to figure out the next steps.
Access to Deposit
Regarding deposits, we were interested in services that assured access to funds within 24 hours, and this appears to be the case with all nine contenders. There may be slight delays depending on the amount, the lender, and the financial institution where individuals hold their bank account, but these are unlikely.
Flexible Terms & Upfront Disclosure
Although bad credit loans can be perceived as a luxury, it might be easier for said individuals to have flexible terms. We were particularly interested in the annual percentage rates and loan requests. The former will vary individually, but understanding what the minimum and maximum rates might entail can permit one to assess affordability. Likewise, we are pleased to report that our top picks prioritize “no obligation loan requests.” In other words, when a lender makes an offer, individuals can review it and still turn it down if they feel it doesn’t suit their needs.
Educational Resources
In all nine cases, individuals can read into the additional resources to fully understand what the company is about and what borrowers expect. Some of our picks go into more details than others, so we encourage everyone to navigate definitions, processes, and established policies. Having foundational knowledge before walking into a discussion will expedite the decision-making process.
The Steps to Getting a Bad Credit Loan
As with any loan, there is a process to consider. While there might be marginal differences, most companies look for very similar things. On that note, individuals need to understand that the lender-borrower relationship is a 2-way street. Therefore, as much as it is essential to study the lender’s details, one’s details will need examining as well. Nevertheless, here is a brief on the general idea behind getting a bad credit loan:
Step 1: Review Your Credit Score
A credit score is a three-digit number that represents one’s likelihood to pay bills in a timely fashion [1]. Typically ranging between 300 and 850, this score is calculated by factoring in credit reports, including payment history, existing debt, and credit history. Most of all, it is used to determine how risky a borrower might be to a lender. The higher the score, the more willing the lender will be lax in credit terms and applicable rates. In the case of bad credit loans, the scores are typically below fair, so borrowers need to prepare for higher rates. For people who are curious to see where they lie on the scale, here’s an idea presented by Equifax:
- 300 to 579: Poor
- 580 to 669: Fair
- 670 to 739: Good
- 740 to 799: Very Good
- 800 to 850: Excellent
Step 2: Read into Bad Credit Lenders
As mentioned earlier, a bad credit lender is a lender who is willing to provide a loan to borrowers with sub-par credit scores (below fair). Traditional lenders usually see such borrowers as high-risk, preventing them from making an offer, but individuals need not fear their credit score with a bad credit lender. Actionable steps to improve said scores can be taken while still accessing funds.
There are certain facets that lenders like to review [2]. The first one is the credit score, to see what one can afford as a loan. By requesting a credit report from one of the credit bureaus, bad credit lenders will get a sense of how finances are being handled and whether any importance has been placed on improving the credit score over a certain period. Next, we have an employment history. In place of the credit score, bad credit lenders put more weight on current employment (i.e., full-time, part-time, permanent, contract, self-employed, etc.).
The monthly net income is also reviewed. This facet answers questions: Is the net income enough to cover basic needs and bills? or does the borrower make enough to fulfill the repayment schedule? If there are other debt obligations, and the income earned doesn’t meet the mark, a bad loan lender might increase the interest rate due to high risk. Finally, comes a borrower’s assets, including money in bank accounts, investments, and other financial supports.
Step 3: Gather the Essentials for the Application
Fortunately, with our top picks, the essentials for the application are straightforward. For a bad credit lender, the most critical pieces of information are the desired loan amount, full name, date of birth (must be at least 18 to qualify), Social Security Number (SSN), employment status, monthly net income with income sources, frequency of pays, whether one has access to a checking account and direct deposit, complete address, etc.
Step 4: Submit the Application
Once individuals gather the fundamentals, it is as simple as completing the online application and awaiting a response. Individuals don’t have to lose hope because of a poor credit score. However, this doesn’t mean that one will always get the rates they prefer because, for a lender, making an offer in the first place is risky business. The annual percentage rate is likely lower if other requirements are passed with flying colors.
Top 3 Types of Bad Credit Loans
If we had to recommend the top three types of bad credit loans, we would go with credit union loans, joint personal loans, and home equity loans. Below is a quick overview of each type:
Credit Union Loans
Credit Unions offer similar financial products and services as banks, but the former is member-owned, cooperative institutions [3]. In other words, when a loan is approved at a credit union, the funds are provided by other members’ savings. Their non-profit status promotes higher interest on a savings account than a bank. To access said funds, one must become a member, where eligibility requirements vary from group to group. The National Credit Union Locator can locate a nearby credit union [4].
Joint Personal/Co-Signed Loans
Joint personal loans are when individuals with poor credit combine their credit history and income with another person’s information to qualify for a lower rate or a higher amount [5]. To put things into context, two people are responsible for the repayment. When co-signing is involved, this implies having someone in good standing vouch for the borrower and take responsibility in the event of a missed payment. It is risky for the signer because they will be contacted if things go south. Still, it is equally frightening for the borrower because such an agreement can easily jeopardize one’s relationship should something go wrong.
Home Equity Loans
Lastly, we have the home equity loan [6], where one’s home serves as the collateral for the loan. This makes a borrower less of a financial risk to the lender, yet conditions exist. For an individual to be an attractive borrower, they must have paid a decent percentage of their homes. Ideally, the more equity one has, the better the rates on bad credit loans. There are two types to play with. The first entails borrowing a lump sum of money and repaying it in regular installments (at a fixed interest rate) for an extended period. The second, called the Home Equity Line of Credit (HELOC), is where the lender sets aside an amount that individuals can borrow as needed. Bear in mind that the lender can choose to charge adjusted interest rates because of flexibility, offer interest-only payments, and have 5 to 10 years where funds can be accessed.
Frequently Asked Questions About Bad Credit Lenders
Q: What is a bad credit loan?
A: A bad credit loan is an amount of money offered to borrowers with credit scores below 575. These are often subjected to higher interest rates; however, when handled properly, it provides a borrower the opportunity to reclaim their credit score.
Q: How old do I have to be to qualify for a bad credit loan?
A: You must be at least 18 years old to apply for a bad credit loan.
Q: Can I get a bad credit loan with poor credit?
A: Yes, a credit score is the last factor that a bad credit lender will assess. In its place, lenders will review employment, assets, credit history, and effort to reverse a poor credit score.
Q: What is a credit score?
A: A credit score is a number that depicts a borrower’s risk to lenders. Namely, it suggests the likelihood of a borrower making repayments in a timely fashion.
Q: What influences a credit score?
A: Payment history, debt, credit history, utilization types, new history, derogatory marks, the average age of credit, and total accounts.
Q: Is there a restriction on what the bad credit loan can be used for?
A: No, there are usually no restrictions on how a bad credit loan can be spent. Questions may be asked depending on the lender, but this is merely to assess a borrower’s ability to repay the funds.
Q: What does APR stand for?
A: APR stands for annual percentage rate, and it determines the yearly cost of a loan to a borrower, including fees. Like the interest rate, the APR is also expressed as a percentage, ranging between 5% and over 100%.
Q: What might a personal loan APR look like by credit score?
A: Irrespective of the type of loan, the APR will decrease as the credit score increases.
Q: What interest rates can I expect with a bad credit loan?
A: The interest rates on bad credit loans will vary based on one’s credit score and the lender.
Q: What are the terms like for bad credit loans?
A: Once again, it depends on the type of loan, the lender, the offer they present. This loan is often given over a short-term, but, depending on several criteria, the lender may choose to extend the duration over the years.
Q: What happens if a repayment is missed or delayed?
A: A missed or delayed payment will seriously affect a credit score and risk lender and borrower relations.
Q: Are online platforms genuinely safe?
A: Not all online platforms are made with the right intentions, but our top contenders have enforced measures that guarantee security and data protection.
Q: Is there a cap on the maximum amount I can get for a bad credit loan?
A: So far, we’ve seen platforms that are willing to offer up to $50,000. The cap on the maximum amount will be determined on a case-by-case basis.
Q: Does unemployment influence the decision for bad credit loans?
A: Yes, but it might be more challenging to secure, not to forget the expected interest, which is likely higher than usual.
Q: What steps should one take to increase credit scores?
A: The first steps entail catching up on past-due accounts and ensuring that future payments are not missed. A secondary action might entail limiting the number of new accounts opened and increasing your credit limit (should you feel ready and more responsible).
Q: How does a credit monitoring service work?
A: A credit monitoring service records one’s credit information daily and sends an alert anytime a change needs to be brought to the borrower’s attention. They are a means of protecting oneself against potential fraud while making sure progress is made in one’s creditworthiness.
Q: What is the difference between payday and installment loans?
A: A payday loan is an installment loan with shorter terms, higher interest rates, and rarely conducted credit checks [7].
Q: Does self-employment negatively impact the application process?
A: No, self-employment will not negatively impact the application process, as long as the income made is adequately documented.
Q: Do social security, pension, disability, and other kinds of benefits qualify as income?
A: It depends on the lender, but in the majority of the cases, SSN, pension, disability, and other kinds of benefits qualify as income.
Q: Are bad credit loans regulated?
A: Yes, bad credit loans are federally regulated in the U.S.
Q: Do bad credit loans require security or collateral?
A: No, bad credit loans do not require security or collateral.
Q: Where can I submit my application?
A: Refer to our top contenders for connecting with lenders. We hope that everyone will do their due diligence before applying.
The Top 9 Bad Credit Lenders in 2022 Final Verdict
Ultimately, people with poor credit scores are not doomed for the rest of their lives. Society has long played a role in instilling such a fear, but even those with poor credit can manage to 1) recover from it and 2) secure loans through bad credit lenders. Of course, it is not all sunshine and rainbows because the lender will have to decide whether the amount requested is reasonable and if the borrower can keep their end of the bargain. Also, bear in mind that there will be more fees and higher interest rates, but it beats having access to nothing. Moving forward, individuals interested in applying for bad credit loans must prepare themselves for any unforeseeable question from the potential lender, and this means being transparent and fully aware of one’s finances. Try a top bad credit lender above today!
