Personal Loans for Bad Credit — Everything You Should Know

Getting a personal loan with a bad credit score can be challenging. Lenders often hesitate when approving personal loan applications for bad credit as it can seem like a risky investment to them. 

However, it is totally possible to get personal loans even with a bad credit score. Many lenders offer personal loans for bad credit if you can prove that you’re a reliable borrower. But what is a personal loan for bad credit? Is it any different from traditional personal loans? How does it work?

In this comprehensive guide, we will discuss everything you should know about personal loans for bad credit. We will also reveal where you can obtain the most affordable bad credit loans.

So read on.

What Is a Personal Loan for Bad Credit?

A bad credit loan is a special type of personal loan designed for consumers who have credit scores lower than 630. You can use these loans to pay for any unforeseen expenses, make a home repair, or consolidate debt.

A bad credit personal loan is an unsecured loan, meaning that it doesn’t require any collateral. Therefore, it has stricter eligibility requirements as opposed to traditional personal loans. 

Most banks and credit unions don’t really offer bad credit loans due to their risky nature. However, you can easily get a bad credit loan from an online lender. 

These loans range from $1,000 to $10,000 with repayment terms of up to seven years. However, people with bad credit may be offered stricter loan terms and a lower loan amount.

How Are Bad Credit Loans Different from Personal Loans?

Here are some key features of bad credit loans that can help you distinguish between the two:

1. Smaller Loan Amounts

While it is possible to get a personal loan with bad credit, it has quite a few limitations. One of these includes a lower loan limit.

For instance, you can get personal loans of up to $50,000 for good or excellent credit scores. But if you have a bad credit score, lenders will only offer loans of up to $10,000.

2. Higher APRs

In addition to smaller loan amounts, personal loans for bad credit also have a comparatively higher Annual Percentage Rate (APR). While the average personal loan rate in 2024 is 12.38%, it can go as high as 36% for bad credit loans. 

3. Stricter Repayment Terms

A personal loan for bad credit also has shorter repayment terms as compared to a personal loan for good or excellent credit scores. While the normal repayment term for personal loans is usually up to seven years, bad credit loans come with a maximum term of five years.

Are Bad Credit Loans Safe?

Online frauds and scams are quite common with bad credit loans. Since not every lender offers bad credit loans, people can get quite desperate when looking for bad credit loans. They overlook clear signs of scams and easily fall victim to online scammers pretending to be lenders. 

You can determine if your bad credit lender is legit if they:

• Have transparently displayed all the loan terms and APRs on their website.
• Received good consumer reviews online on popular forums like Trustpilot, Reddit, or Quora. 
• Offer you a clear loan agreement that is legally binding.
• Request for a hard credit check. If they don’t require a credit check, it can be a sign of a scammer.

Where Can I Get a Loan with Bad Credit?

You can get a bad credit personal loan from online lenders. Cash in Minutes offers personal loans for bad credit at reasonable rates and same-day funding. No matter your credit score, we offer tailored personal loans to meet your unique needs. So apply today to get same-day funding with our fast three-step application process. Don’t let an imperfect credit score hold you back!