Online Lenders for Bad Credit: Where to Find Them and How to Apply

For individuals with bad credit, securing a loan can be a difficult task. However, the rise of online lending has opened up new opportunities for those who are struggling to obtain a loan. Online lenders often have more flexible lending criteria and offer a range of loan options, making it easier for individuals with bad credit to find a loan that suits their needs.

If you have bad credit and are in need of a loan, there are several online lenders that you may want to consider. These lenders provide a variety of loan options and have flexible lending criteria that may be more accommodating to individuals with bad credit. In the following sections, we will explore some of the top online lenders for bad credit loans.

1. Upstart

Upstart is a lending company that utilizes artificial intelligence and machine learning to assess borrowers’ creditworthiness beyond just their credit score. This approach can make it easier for individuals with bad credit to qualify for a loan. Upstart offers personal loans for various purposes, including debt consolidation, and the application process is entirely online. With flexible loan amounts ranging from $1,000 to $50,000 and fixed rates and terms, Upstart provides borrowers with options that fit their needs.

2. is a platform that connects individuals with bad credit to lenders willing to work with them. The platform simplifies the search for a suitable lender by allowing borrowers to submit a single loan request, which will be matched with potential lenders. While interest rates may be higher for bad credit borrowers, the service provides an opportunity for individuals to access loans that they may not have been able to obtain otherwise.

3. Avant

Avant offers unsecured personal loans to borrowers with bad credit. They evaluate other factors besides credit scores, such as income and employment history. This makes Avant a good option for people who want to consolidate their high-interest debts.

4. OneMain Financial

OneMain Financial specializes in providing personal loans, including secured loans, for individuals with poor credit. Secured loans require collateral, such as a car or other valuable assets, which can make it easier to qualify and secure a lower interest rate.

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5. LendingClub

LendingClub is an online peer-to-peer lending platform that offers personal loans to borrowers. They have credit score requirements, but may be more lenient than traditional banks. Borrowers can request loans online and receive multiple offers to choose from.

6. Peerform

Peerform is a peer-to-peer lending platform that provides personal loans to people who have less-than-perfect credit. The platform considers several factors beyond credit scores when assessing loan applications. Here are some key features of Peerform:

  • Loan amounts range from $10,000 to $35,000.
  • Loan terms range from 3 to 5 years.
  • Interest rates vary depending on the borrower’s creditworthiness and other factors.
  • Peerform charges an origination fee of 1% to 5% of the loan amount.
  • Peerform offers debt consolidation loans to help borrowers pay off high-interest credit card debt.

Overall, Peerform is a viable option for individuals who have difficulty obtaining loans from traditional banks due to their credit scores. Peerform’s flexible lending requirements and debt consolidation program make it a good choice for those looking to improve their financial situation.

7. Oportun

Oportun is an online lender that specializes in providing low-cost personal loans to individuals who have a limited credit history or poor credit. They assess creditworthiness by considering alternative data.

Some key features of Oportun’s personal loans include:

  • Loan amounts ranging from $300 to $10,000
  • APRs ranging from 18.99% to 35.99%
  • Fixed interest rates for the life of the loan
  • No prepayment penalties
  • Loan terms ranging from 6 to 46 months

Oportun also offers a variety of savings tools and resources, including an all-in-one app that intelligently saves and invests for you. They have a glossary of financial terms and FAQs available on their website to help customers make informed decisions about their finances.

8. Credit Unions

Credit unions are financial institutions that offer loans, savings, and other financial services to their members. Many credit unions now offer online loan applications and may be more willing to work with members who have bad credit. It is worth checking with them for loan options.

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9. Online Payday Lenders (Exercise Caution)

Online payday lenders can be a tempting option for individuals with bad credit who need quick cash. However, borrowers should exercise caution when considering these lenders due to their high fees and extremely short repayment terms. It is important to explore other options before deciding to take out a payday loan. Some alternatives to consider include borrowing from family or friends, negotiating a payment plan with creditors, or seeking assistance from a nonprofit credit counseling agency.

Here are some things to keep in mind when considering online payday lenders:

  • High fees: Online payday lenders often charge high fees, which can make the cost of borrowing very expensive. Be sure to read the fine print and understand all of the fees associated with the loan before agreeing to the terms.
  • Short repayment terms: Payday loans typically have very short repayment terms, often just a few weeks. This can make it difficult for borrowers to repay the loan on time and can lead to additional fees and charges.
  • Risk of debt cycle: Taking out a payday loan can put borrowers at risk of falling into a cycle of debt. If a borrower is unable to repay the loan on time, they may be forced to take out another loan to cover the costs, leading to even more fees and charges.

In summary, while online payday lenders can be a quick source of cash for those with bad credit, borrowers should exercise caution and explore other options before deciding to take out a payday loan.

10. Family and Friends

When facing financial difficulties, borrowing from family and friends may seem like a feasible option. However, it is crucial to treat these arrangements with the same seriousness as loans from traditional lenders. Formalizing such arrangements can help avoid misunderstandings and maintain healthy relationships.

Before considering borrowing from family or friends, it is important to assess the situation and determine if it is a viable option. If it is, the borrower should clearly outline the terms of the loan, including the amount borrowed, interest rate (if any), and repayment plan. This can help ensure that both parties are on the same page and can prevent potential conflicts in the future.

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While borrowing from family and friends may not require a credit check, it is still important to be transparent about one’s financial situation and have a clear plan for repayment. This can help maintain trust and prevent any strain on relationships.

If borrowing from family or friends is not an option, individuals with bad credit may consider online lenders. Online lenders for bad credit differ from traditional lenders by typically having more flexible eligibility criteria and offering a faster, online application process.

When considering online lenders, it is important to read the terms and conditions carefully, understand the interest rates and fees, and have a clear plan for repayment. Online lenders typically offer a variety of loan types, including personal loans, installment loans, payday loans, and lines of credit. The specific options available may vary from lender to lender.

Interest rates for bad credit loans are generally higher than those for borrowers with good credit. Rates vary among lenders, so it is essential to shop around for the best terms and conditions. The application process typically involves filling out an online form, providing necessary documentation, and waiting for approval. Once approved, the funds are usually deposited directly into the borrower’s bank account.

There are risks associated with borrowing from online lenders for bad credit, including higher interest rates, potential for predatory lending practices, and the risk of falling into a debt cycle. It is crucial to carefully review the terms and choose a reputable lender. Researching multiple lenders, comparing interest rates, fees, and terms, reading online reviews, checking their BBB rating, and ensuring they are licensed in the borrower’s state can help choose the right online lender.

If the borrower makes on-time payments and manages the loan responsibly, it can positively impact their credit score over time. Conversely, missing payments can have a detrimental effect. There are alternatives to online lenders for bad credit, such as credit unions, nonprofit organizations, and peer-to-peer lending platforms. Exploring these options can help find the best fit for one’s needs.

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