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Personal Loans for People with Bad Credit

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Personal Loans for People with Bad Credit

Updated July 20, 2016

When your credit is less than satisfactory, it can be difficult to find a lender willing to give you a personal loan. That doesn’t mean it’s impossible to find one – there are more options available now than ever before to get a personal loan with bad credit. What’s better is you can easily apply online to see the rates for which you qualify – without hurting your credit score.

In recent years, lenders like Springleaf, Avant, and LendingClub have been making loans to people with less than perfect credit. They each have lower credit thresholds and none rely solely on your FICO score when deciding to lend to you, making it easier to qualify.

Even though you might have a poor credit score, your actual credit history may not be that bad. Your credit file could be thin because you didn’t start building any credit until recently, or maybe you’ve only ever had one open line of credit. Whatever the reason, just because your score is low doesn’t mean you’re not creditworthy, and these lenders know that.

Therefore, it’s worth making sure you’re still getting a decent deal on personal loan terms. It can be easy to think that because your score is low, you’ll be approved for a less than ideal interest rate, but you shouldn’t accept the first offer that comes your way.

Start Shopping for a Loan Here – LendingTree

LendingTree

With LendingTree, you can shop for a loan through dozens of lenders with a single online form. LendingTree will perform a soft credit pull – which means your credit score will not be harmed. Lenders will compete for your business and will let you know how much you can borrow. You will also be told the interest rate. Because LendingTree works with so many lenders, this is a good place to start if your credit isn’t perfect. Rather than taking time to apply (one at a time) to multiple lenders, a single online form can save you a lot of time.

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Avant Personal Loan

You could borrow anywhere from $1,000 to $35,000 with a personal loan through Avant. Specific rates and terms vary depending on your state of residence, but in general APRs range from 9.95% to 35.99%.

Checking your rates through Avant doesn’t affect your credit score – it’s initially just a soft pull. On its FAQ, it states most customers have a credit score ranging from 600 to 700, though you can still qualify with a lower credit score.

Its customer service team is on staff seven days of the week to assist you in case you have any questions. It’s also possible to receive your funds as soon as the next business day.

There is no prepayment fee. Loans are available in all states except Colorado, Iowa, Massachusetts, New York, Vermont, and West Virginia.

Avant

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LendingClub Personal Loan

LendingClub* is different than Springleaf and Avant because it’s a peer-to-peer lender. Individual investors can choose to put their money toward your loan – the money isn’t coming from a bank.

You can borrow anywhere from $1,000 to $40,000 with LendingClub. You can borrow for up to 5 years. Its APR ranges from 5.99% to 35.89%.

For example, if you borrow $20,000 on a 5 year term at an APR of 8.91%, your monthly payment will be around $185.24. That’s including an origination fee of 3% (or $600), so the total amount you receive would be $19,400.

There’s no prepayment penalty, but you need to watch out for the origination fees. These range from 1% to 6%, depending on your loan grade. Remember to factor this in when receiving offers, because being charged an origination fee lessens the amount of money you actually receive.

To be eligible for a loan with LendingClub, you must be 18 years or older and have a verifiable bank account. You must be a U.S. citizen, permanent resident, or have a valid long term visa. Your credit score should be at least 600 to qualify.

LendingClub does not offer loans in Iowa and West Virginia.

When determining creditworthiness, it takes the following into consideration:

  • Debt-to-income ratio
  • Credit score
  • Length of credit history
  • Number of open accounts
  • Usage and payment history
  • Other credit inquiries over the past 6 months

It has an A+ rating with the BBB and has been accredited since 2007

Lending Club

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*referral link

Springleaf Personal Loan

Springleaf offers personal loans ranging from $1,500 to $10,000. You can apply for a secured or unsecured loan. You can also apply online and have a decision within a day.

Springleaf has been around for over 90 years, has an A+ rating with the BBB. It is a brick-and-mortar bank with over 800 branches across 27 states. Unfortunately, that means it’s limited to those with branches nearby, as you need to physically sign for the loan.

Its website has minimal information on APRs, terms, and fees for loans, but from the calculator provided, we know the APR range is 15.99% to 39.99%, and 2 to 5 year terms are offered.

Springleaf also has a track record for working with borrowers who have low credit. You need a minimum credit score of 550 to qualify.

What would an example loan look like? If you borrow $4,000 on a 3 year term, at an interest rate of 30%, your monthly payment will be around $169.81.

You can check to see if Springleaf has a pre-qualified offer for you, as it doesn’t affect your credit score. If you do accept its offer, then a hard credit inquiry occurs.

*referral link

Which Lender is the Best Choice?

It’s largely going to depend on the rates you receive. Luckily, with Avant and LendingClub, you’re able to apply without a hard inquiry on your credit, which allows you to shop around without worry. It’s smart to start with these two lenders and see which of the two offers you better terms.

Here’s a side-by-side comparison of the rates and terms offered by all 3 lenders:

Criteria Springleaf Avant LendingClub
Amount Borrowed Up to $10,000 Up to $35,000 Up to $40,000
APR Range 15.99% – 39.99% 9.95%-35.99% 5.99% -35.89%
Length of Loan Up to 5 years Up to 5 years Up to 5 years
Min. Credit Score 550 580 600

Your best option is to shop around. You can apply to LendingClub, Prosper and Avant without hurting your score. We recommend you start there first.

If you need the money today and live near a Springleaf branch, that is your best option. But if you can wait a day, Avant is able to get the funds to you in one business day.

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We’ll receive a referral fee if you click on the “Apply Now” buttons in this post. This does not impact our rankings or recommendations You can learn more about how our site is financed here.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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Personal Loans

SoFi vs LendingClub: Which is Better If You Have Good Credit?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Student Loan Mod_lg

Updated March 4, 2016

If you have good or excellent credit, you have your choice of options when it comes to taking out a personal loan. This is good news, as there are plenty of affordable options out there, and you’ll be able to take advantage of great interest rates.

SoFi * is one of the leading options for personal loans out there right now, especially if you have good credit.

LendingClub* is actually a peer-to-peer lender. This means investors are loaning you their money. Lending Club states this allows lower rates to be passed down to borrowers: “Borrowers who used a personal loan via LendingClub to consolidate debt or pay off high interest credit cards report in a survey that the interest rate on their loan was an average of 6.8 percentage points lower than they were paying on their outstanding debt or credit cards.”

If you have good credit, which company is the better choice? Let’s review each and see how they compare.

SoFi vs LendingClub: Comparing the Terms

The most important factor, of course, is the APR available to you from each of these lenders.

SoFi currently offers a fixed APR range of 5.49% – 14.24% and variable APR range of 5.17% – 11.32% (if enrolled in Autopay) on its personal loan, while LendingClub offers an APR range of 5.99% – 35.89%. However, if you have a good credit score, then you should be looking somewhere in the middle of that range.

SoFi offers loans ranging from $5,000 – $100,000, while LendingClub offers loans ranging from $1,000 – $40,000.

LendingClub offers loans up to 5 years, whereas SoFi will lend up to 7 years.

What does this look like on paper? If you take out a $10,000 loan with SoFi on a 3-year term with an interest rate of 5.50%, your monthly payment will be $301.96. You’ll pay a total of $10,870.56.

If you take out the same loan with LendingClub, with an interest rate of 6.50%, your monthly payment will slightly increase to $306.49.

SoFi vs LendingClub: Credit Score Minimums

SoFi doesn’t have a clear-cut minimum credit score, but it’s recommended to have a score of 700 or greater. Those with strong repayment histories will also have a good chance at getting approved, as SoFi doesn’t approve applicants based off of FICO score alone.

LendingClub’s minimum credit score is 600 for its personal loan.

SoFi vs LendingClub: Fees to Watch Out For

SoFi doesn’t have any fees associated with its loans. Not even an origination fee.

However, a late fee will apply if you’re 15 days past due on your payment. This will be the lesser of $5 or 4% of the amount due.

If you’re unable to make a payment because of a job loss, you should contact SoFi immediately. You could be eligible for the Unemployment Protection service it offers. This grants you forbearance, so you don’t have to make payments for a set period of time. However, the interest on your loan would still accrue.

[Read Full SoFi Review Here.]

LendingClub has the following fees:

  • Origination Fee: Ranging from 1%-6%, depending on the loan grade you receive.
  • Late Payment Fee: LendingClub gives borrowers a 15-day grace period for making a payment on their loan. On the 16th day, a late fee will be assessed. The amount of the fee is the either $15 or 5% of the unpaid installment amount, whichever is greater.
  • Check Processing Fee: This $15 fee only applies if you wish to pay by check. LendingClub allows borrowers to make automatic payments with direct debit.
  • Unsuccessful Payment Fee: A $15 fee is charged if your automatic payment to LendingClub is unsuccessful (i.e. there’s not enough money in your account to cover the payment, or if you closed your bank account and didn’t update your information).

[Read Full LendingClub Review Here.]

There is no penalty for paying off your loan early with LendingClub or SoFi. If you can afford to, you’ll pay less over the life of your loan if you make more than the minimum payment amount.

SoFi vs LendingClub:  Eligibility Requirements

For both SoFi and LendingClub, you must be 18 years or older, and be a United States citizen. SoFi also requires you to be currently employed.

SoFi personal loans aren’t offered in the following states: Idaho, Louisiana, Mississippi, Nevada and Tennessee.

LendingClub is unable to offer loans to those who reside in the following states: Iowa and West Virginia.

SoFi vs LendingClub: Application Process

SoFi and LendingClub have applications that you can complete online. Both are straightforward and easy to fill out, in case you need the loan quickly.

If required, you’ll be able to upload any documents requested. You should at least be prepared with proof of income.

After filling out the application, you’ll be presented with your rates. If you choose to move forward with a loan, then you should receive the funds within the next few business days with SoFi, or within 7 business days with LendingClub.

Neither application process is as time-consuming as getting a personal loan with a bank.

Both SoFi and LendingClub Conduct a Soft Pull on Credit

LendingClub and SoFi allow you to check what rate you’ll qualify for with a soft pull on your credit. That means your score won’t be affected.

This is great for you as a borrower, because you can shop around and get the best rates possible before committing to a loan.

SoFi vs LendingClub: What Can You Use the Loan For?

According to both sites, a popular reason for taking a personal loan out is to consolidate debt or pay off credit card debt. Both companies boast that it offers lower rates than what borrowers would get if they kept their credit cards, which is mostly likely true if you have good credit.

Personal loans can be used for almost any purpose. If you need extra help funding your vacation, wedding, down payment on a home, or education, personal loans can help.

SoFi

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Lending Club

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SoFi vs LendingClub: Which Company is Better?

If you have good credit, you should shop around for the best rates. That said, between SoFi and LendingClub, SoFi will likely be the better bet.

As it has a better APR range, you’re going to pay less over the life of your loan if you can actually get the lowest rate available. Additionally, SoFi’s maximum loan amount is much greater. If you have more debt to consolidate or pay off, that increased amount will help cover the excess.

Again, SoFi offers unemployment insurance, which can help you out in the event you lose your job and are unable to make a payment on your loan. It also offers job placement help if you have trouble finding a new job.

The bottom line: look out for yourself. With good credit, you should be able to get approvals from just about any lender, so be sure to check around. You want the best rates possible so you pay the least amount.

promo-personalloan-wide *We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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Get A Pre-Approved Personal Loan

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Won’t impact your credit score