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Loans for bad credit of May 2022 in the United States

For bad credit
Apply loans for bad credit in the US from companies verified by our specialists. On 27.05.2022 you have access to 3 loans with a rate of 0% per day. Increase your chances of getting money — fill out a multi-application with a free credit rating check.

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Loans for bad credit of May 2022

Loans for bad credit

A bad credit score can become a serious obstacle when applying for a loan. The lender considers you a risky borrower if your credit score is lower than average. You are likely to have the loan denied or charged higher interest rates and/or down payments.

What is considered a poor credit score? It depends on the scoring model that your lender uses. The most common ones are FICO and VantageScore. FICO credit score points range from 300 to 850. Borrowers with scores higher than 669 are considered a good credit score. The bad credit score is 580 and below.

Lenders that use the VantageScore model typically expect you to score at least 661 points. Anyone with scores less than 500 can be regarded as unsafe and risky.

If your score is on the lower side of the scale, you might want to review your credit report to check for mistakes and see the reasons for your bad credit history. FICO, for instance, pays specific attention to your payment history and loan amounts you already owe. If you failed to make timely payments multiple times, your score would be negatively affected.

What is a loan for bad credit?

Naturally, bad credit loans are designed for people with poor credit histories and low credit scores. A bad credit personal loan is usually repaid in installments during a period that is no longer than seven years. The monthly payments have fixed amounts, and the interest rates on loans for bad credit are also inflexible.

Lenders who offer loans for bad credit tend to accept scores that lie in the range between 580 and 600. They do so at their own risk, so you should generally expect high-interest rates and limited loan funding.

Applicants with credit scores less than 580 will most likely be dismissed by many personal loan lenders. However, you should always check what minimum credit score your lender asks for, as it may be lower than 580.

What are the major types of loans for bad credit?

There are various loans for bad credit that are suitable for different cases and situations. We have divided them into three major groups: "personal loans," "other loans," and "not exactly loans."

Personal loans

Unsecured Personal Loans

These bad credit personal loans do not require any collateral, meaning that you won't have to use your private property to secure the loan. Unsecured loans come with more risks for personal loan providers, so such loans will typically have a higher interest rate than a secured loan.

Secured Personal Loans

A secured loan must be backed with some sort of valuable belongings. A personal vehicle, a house, or even a sum of savings can serve as collateral. I chose the secured loan option to borrow money. You can have better conditions, such as an easier approval process or lower interest rates. It may seem perfect for a borrower with a low credit score, but you should note that the lender can legally repossess the collateral if you fail to repay the loan debt.

Joint Personal Loans

This is a suitable bad credit loan option if you need to borrow money collectively from another person. In the case of a joint personal loan, both your credit scores and income information will be reviewed, which can improve your chances of getting the loan. This scenario implies that both borrowers can access the money of the loan and are equally responsible for fulfilling repayment terms and conditions.

Co-signed Personal Loans

It is similar to a joint loan, as it also takes two people to borrow money via this option. A co-signer with good credit history can help you qualify for the loan. While you both sign the loan agreement, the co-signer doesn't have access to loan funds or payment details. They will, however, be held responsible if you fail to repay the loan.

Other loans

Payday Loans

Payday loans are short-term loans that are based on the part of your next paycheck. It is possible to borrow a couple of hundreds of dollars that you will have to return on your upcoming payday. Most payday lenders do not run a credit check, but they will definitely ask for proof of income to determine the possible loan amount. The average payday loan annual percentage rate is around 400%, which makes it an incredibly expensive and risky loan to borrow. We recommend considering other ways to borrow money before opting for a payday loan.

Auto Loans

This type of loan requires your car to be used as collateral. Like practically any secured personal loan, it has a risk of your vehicle being repossessed by the lender. That, however, makes it easier to qualify for the loan and makes it cheaper to repay due to relatively low-interest rates.

Student Loans

Out of all student loan options, federal aid suits people with bad credit the best. Unlike private loan lenders, federal loan providers do not run a credit check. If you qualify for a federal student loan, you are likely to get enough funding to cover most of your education expenses. Additionally, federal student aid offers a variety of repayment plans and forgiveness options.

Home Equity Loans

Home equity loans and home equity line of credit (HELOC) are both loan options that use the borrower's house to secure the agreement. If you are to borrow money in this way, you have to meet specific eligibility criteria: have sufficient equity (your home's market value minus mortgage balance left to repay) and a minimum credit score of 600. Private lenders and credit unions rarely allow loan approval for people with smaller credit scores.

If you qualify for a home equity loan, you should expect to receive a lump-sum disbursement of the money. HELOC, though, allows you to acquire needed sums of money on request.

Not Exactly Loans

Cash Advance

Cash advance comes in the form of a mobile app. It allows you to borrow a sum of fewer than one thousand dollars that will be withdrawn automatically from your account on your next payday. A cash advance doesn't require a credit check and has no interest rates, but you would usually have to pay service or subscription fees.

Buy Now, Pay Later

The name speaks for itself: with BNPL, you can purchase an item and pay for it in multiple installments. Companies that offer this service do not run a hard credit check.

How to apply for a loan for bad credit?

The application process for payday loans, personal loans, and every other type differs. Here are some general steps we recommend following to apply for a bad credit loan in better conditions.

  1. Check your credit score. You can do it online and for free using any credit-scoring website. You can study not only your score but also your report and see if there are any mistakes.

  2. Try to improve your score. Relatively easy ways to do than are: repaying any current debt, applying for a credit-builder loan, and being an authorized user of a credit card. The last option practically makes you a "credit card co-signer" and boosts your score if the card user handles it responsibly.

  3. Prequalify. You can assess and compare loan terms, interest rates, and other conditions by prequalifying with several lenders. The prequalification implies a soft credit check that doesn't affect your credit score.

  4. Secure a loan or add a co-signer. It is often common for bad credit loans to have exorbitantly high-interest rates and limited loan amounts. A secured or co-signed loan, however, increases your chances of getting fair conditions.

  5. Finalize your application. Once you have decided on whatever seems the best option, submit the loan application. Online lenders have application forms on their websites, while traditional loan providers, like smaller banks or credit unions, tend to do business in person.

What are the main requirements for obtaining a loan for bad credit?

As we stated earlier, each lender has a unique set of requirements: everything from minimum credit score to proof of income can slightly differ in various financial institutions. Here is a rough list of what you should prepare to qualify for a bad credit loan:

  • Basic personal information (name, address, phone number)

  • A government-issued ID

  • Social Security Number

  • Proof of income

  • Bank statements (and other financial information)

  • An active checking account (or savings account)

  • Minimum credit score requirement

Ways to get a loan for bad credit

Depending on the specific loan terms, you can receive the funds in a few days or a week. How you access the money depends on the purpose of your loan, the type of the loan, and each lender's specific conditions. The basic ways to receive loan funds are:

By cash. If you submit an application in person at a local financial institution and your loan amount is small, there might be an option to receive the loan in cash immediately.

By check. Sometimes financial institutions issue a check equaling the loan sum to get the money to the borrower. A check can be easily sent by mail, which extends the geography of such transactions.

Direct deposit. Most bad credit loans are deposited directly into the borrower's bank account. This option is particularly popular with online lenders.

Certain loans can be received in less common ways:

Prepaid debit card. Borrowers that do not have an open bank account can receive the money on a prepaid card account. Payday lenders offer that option.

Direct disbursement. Student loans can be transferred directly to the university of choice and be used to cover the costs.

How to repay a loan for bad credit debt?

There are multiple repayment options available.

Bad credit personal loans can be repaid via the automatic withdrawal system. You authorize the lender to withdraw monthly payments from your bank account. Most lenders favor this repayment method and even offer rate discounts to make it more customer-friendly.

Another way to repay bad credit loan debt is to consolidate debt. Making multiple different payments to different lenders can be confusing and inconvenient. A debt consolidation loan rolls multiple loans into one and can often decrease interest rates.

Loans can also be repaid with personal checks. For instance, payday lenders sometimes ask you to write a post-dated check that they can cash on your next payday.

Classic repayment options like digital bank transactions and paying in cash are also available with most lenders. Local private financial institutions can accept payment in cash, especially if it is a lump-sum payment. Online lenders, naturally, opt for digital transactions and automatic withdrawals.

Pros and cons of a loan for bad credit

A bad credit loan is usually associated with risks and a lack of safety. There are, nevertheless, both advantages and disadvantages to this loan type.


Fast and easy. People with urgent financial hardship can get the funding they need in a few days. Emergencies take place, and bad credit loans can come in handy.

Longer loan terms. A bad credit loan can both be short-term and long-term. Still, long-term loan conditions allow financially vulnerable customers to design a comfortable repayment plan of regular installments for several years.

Credit-builder. While your credit score might be initially low when you take out a loan, it can improve significantly if you repay the loan amount in time. Note that payday loans do not contribute to credit scores.


Fees. Loans for bad credit scores often have additional charges attributed to them. An origination fee, common with federal student loans, can be charged for processing the application. Late payment fees are charged if you do not make payments on time.

High-interest rate. An average APR for a bad credit personal loan can be 30%. By the time your repayment period ends, you will have paid thousands of dollars to your initial loan amount.

Collateral risks. Secured loans come with a risk of losing whatever serves as collateral. Whether it is a vehicle, savings, or a house, such loss can be incredibly damaging for a financially struggling household.

Debt trap. It is a risk that comes with practically any credit, especially with less safe options like bad credit loans. High APRs and strict loan terms can cause a customer to enter a cycle of borrowing and repaying loans.

Legal regulation of the loans for bad credit market in the USA

Bad credit loans are not a homogenous mass of loan options. They have different natures, conditions, purposes, and specifics. For obvious reasons, they are regulated in various ways.

For instance, personal loans are regulated by Consumer Financial Protection Bureau and specifically the Truth In Lending Act. It is legally prohibited for lenders to withhold essential loan details and financial information such as the Annual Percentage Rate, loan fees, the number of payments to be made, monthly payment amount, early penalty, late fees, and additional charges.

In 2021 National Conference of State Legislatures was held, and 21 states participated in the payday lending legislation. The bill has influenced state laws in different ways. In Missouri, for instance, it now prohibits payday lenders from charging interest rates and fees if they exceed 36% of the remaining loan balance. Whereas Delaware it limits interest rates to 20% for short-term payday loans of $1,000 or less with repayment terms of less than 60 days.

It is important to note that cash advances are not legally regulated. This money-borrowing option is "not exactly a loan," as we mentioned, so it doesn't fall under any current loan regulation bills.

The real cost of a loan for bad credit

To figure out the final cost of a bad credit loan, we need to consider the following: loan terms, APR, and origination fees. One of the companies that are considered at the top of the market offers such conditions: a 3-5 years loan term, 6% to 36% APR and an 8% origination fee of the loan amount. The amount a customer can borrow varies from $1,000 to $50,000.

Let's explore a possible scenario. You decide to borrow $10,000 for four years. The APR based on your credit score and state is 15%, and the origination fee is 8%. By the end of the repayment period, you will have paid $10,000 + $800 + $4,500 = $15,300.

To avoid overpaying, we recommend comparing the conditions offered by lenders: the APRs, additional fees and charges, and the general reliability of the company.


What is the easiest type of loan to get with bad credit?

The most common and easy to get bad credit loans are unsecured personal loans. These loans do not require collateral to secure the transaction. The monthly payments and interest rates are fixed. You can borrow up to $40 000.

Can you get a loan with a 550 credit score?

Some online lenders offer loans for people with a 550 credit score. It is best to borrow small amounts for a short period of time.

What is the easiest personal loan to get?

An unsecured personal loan is generally easy to get. Providing collateral or applying with a co-signer can increase your chances if you have a bad credit history.