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If you’ve just gone through a bankruptcy, you might feel a little vulnerable financially. You’ve been promised a clean slate, but your credit score has taken a hit and it could take months or even years to get to a point where you can qualify for a loan that isn’t highly expensive.

You need credit to build credit though, and one way to start building your credit after you’ve gone through bankruptcy is through a personal loan.

Yes, it is possible to get a personal loan after bankruptcy. But in order to find one that isn’t predatory in nature, it’s important to understand where you stand, how to properly prepare, and where to look.

Part I: How personal loans after bankruptcy can help you build credit

As you work to get your credit back on track after bankruptcy, a personal loan could certainly help. That’s because the most important factor in your credit score is your payment history, and making on-time payments on your personal loan after bankruptcy helps establish a positive payment history.

What is a personal loan?

An unsecured personal loan is a loan that doesn’t require collateral that the lender can repossess if you default on your payments.

What are my odds of getting approved?

Many lenders don’t offer unsecured loans for people who have a bankruptcy on their record, but there are a handful who specialize in exactly this type of loan. The trick is finding one that isn’t predatory in nature.

“When a person files for bankruptcy, they are seeking a debt solution that results in partial or complete liquidation of the debt they owe,” says Bruce McClary, Vice President of communications for the National Foundation for Credit Counseling.

“This leads to a financial loss for their lenders,” he adds. “Because of that fact, and that the set of circumstances leading to their bankruptcy may not be completely resolved, lenders will continue to view bankruptcy filers as a risk.”

There are two types of consumer bankruptcy: Chapter 7 and Chapter 13. Each has a different impact on your credit and your chances of getting approved for after-bankruptcy loans.

Chapter 7 bankruptcy

With a Chapter 7 bankruptcy, you’re required to sell off certain assets to pay off eligible outstanding debts.

A Chapter 7 bankruptcy gives you more of a clean slate, so to speak, than a Chapter 13 bankruptcy. But it remains on your credit report for longer — up to 10 years, according to McClary.

McClary also warns that lenders may look less favorably on a Chapter 7 bankruptcy because it doesn’t involve a repayment plan like a Chapter 13 bankruptcy. As a result, it may be tougher to get a personal loan after Chapter 7 discharge.

You don’t have to wait the full 10 years for your credit score to improve though. As you start establishing positive credit habits, and as your bankruptcy moves further into the past, the positive habits will gain in importance and the negative impact of your Chapter 7 bankruptcy will fade. So the sooner you start rebuilding your credit, the better.

Chapter 13 bankruptcy

While a Chapter 7 bankruptcy eliminates your eligible debts entirely, a Chapter 13 bankruptcy calls for a reorganization of your debts and finances.

You’ll set up a repayment plan through the court system, typically over a three to five year period, during which you’ll make payments to a trustee who then distributes the payments to creditors who have filed claims against you. Unlike a Chapter 7 bankruptcy, Chapter 13 doesn’t require you to sell off any personal property to pay down your debts.

People typically opt for a Chapter 13 bankruptcy when they don’t meet the eligibility requirements for a Chapter 7 bankruptcy.

While you’re stuck making payments for a few years, however, a Chapter 13 bankruptcy won’t remain on your credit report as long as a Chapter 7 bankruptcy.

“Anyone who files and successfully completes a Chapter 13 can see the bankruptcy information on their credit report for seven years,” says McClary

And since it takes much longer than a Chapter 7 bankruptcy, which can be processed in months, McClary says that you may be able to apply for a loan before the bankruptcy is discharged.

But as with a Chapter 7 bankruptcy, your Chapter 13 bankruptcy won’t ruin your credit for the full seven years. If you manage to get approval for a loan during your repayment period, you can start establishing a positive payment history sooner rather than later.

Part II: Applying for a personal loan after bankruptcy

How to prepare your loan application

If you’re interested in getting a personal loan after bankruptcy, it’s critical that you present yourself in the best way possible.

Get a copy of your credit reports
You can get a free copy of your credit reports once per year from all three credit bureaus — Equifax, Experian, and TransUnion — through AnnualCreditReport.com. Once you have your credit reports, you can check to see if the information is accurate and up-to-date.

For example, if you filed Chapter 7 bankruptcy, make sure that all your eligible debts were included in the bankruptcy and that they’re now showing a zero balance. If you filed Chapter 13, check to see that your payments are being applied correctly.

If any information is inaccurate, you can file a dispute to have it corrected or removed from your credit report altogether.

Make sure your income is accurate
Your credit report and score are just two that factors lenders consider. In some cases, proving that you have sufficient income to repay a loan can make you appear less risky.

Your reportable income is based on your current income, so if you’ve received a raise recently, make sure to include that in your calculation. Also, include any other income that you have reasonable access to, such as cash you’ve earned from a side business or a spouse’s income.

Be prepared with the right documents to prove your income. This may include pay stubs, bank statements, a W-2, or tax returns.

Be ready to make your case
If your application gets denied off the bat, you may still have a chance to make your case. Be ready to explain what led you to declare bankruptcy and your commitment to building better credit habits. There’s no guarantee that doing this will overturn a denial, but it doesn’t hurt to try.

Part III: Shopping for an unsecured personal loan after bankruptcy

Finding a lender who’s willing to offer personal loans for discharged bankruptcies can be hard, but it may be worth the effort.

“Although lenders will view a recent bankruptcy filer as a risk, they may still be willing to approve them for financing,” says McClary. “Most lenders will offset the risk with higher interest rates and additional fees, which makes it costlier for the borrower.”

Here are a few options to consider.

Your bank

If you already have an established relationship with a community bank, you may have a better chance of getting approved, especially if you’ve been with the bank for years and know someone at the local branch.

Big banks often don’t specialize in personal loans after bankruptcy, however, so you might not find success going this route.

A local credit union

Credit unions are different from banks in that they’re not-for-profit organizations owned by their members. As a result, credit unions are generally more focused on serving the community than generating profits and may be more lenient with bad credit.

That said, credit unions often require that you become a member before you can apply for a loan. And if you’re a new member without a history with the credit union, it may be more difficult to secure a loan.

Online lenders

There are several online lenders that specialize in loans for people with bankruptcy or generally poor credit.

LendingTree, which owns MagnifyMoney, can help you find these lenders. If you fill out a short online form, you may be able to get some quotes from lenders based on a soft credit check. That way you can compare offers to determine which one best suits your needs and your budget.

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A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

As of 28-Feb-2019, LendingTree Personal Loan consumers were seeing match rates as low as 3.99% (3.99% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected).

Peer-to-peer lenders

Lenders like LendingClub and Prosper are unique in that instead of lending you money directly, they act as an intermediary between individual lenders and individual borrowers.

Since some individual lenders may be willing to invest in higher-risk loans, you might have an opportunity to get approved even with a bankruptcy.

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Other options if you’re rejected for a personal loan

While you may be able to get an unsecured personal loan after bankruptcy, but there’s no guarantee you’ll be approved. Each lender has a different set of criteria, and they consider several factors before making a decision.

So, if you do end up getting denied, it’s important to know what your alternatives are. Here are some of the major options to consider.

Find a co-signer

While it can be difficult to get approved for a personal loan after bankruptcy on your own, you’ll have a much better chance if you can manage to find someone to cosign the loan with you.

This could be a family member or close friend. Keep in mind, however, that cosigning means that they’re lending more than just their good name. Your co-signer will be equally responsible for repaying the debt, and it could hurt their credit if you default.

You may want to avoid this option if you think that something could go wrong and harm your relationship.

Apply for a secured personal loan

If an unsecured personal loan isn’t available, you might have some luck putting up collateral for a secured personal loan. Some examples of eligible collateral include:

  • Vehicles
  • Real estate, such as equity in your home
  • Investments
  • Insurance policies

Before you choose this option, you should understand the risks involved. Your collateral may be worth more than the loan itself, and you could lose your collateral if you default, which could cause more financial problems.

Apply for a secured credit card

Secured credit cards are similar to secured personal loans in that you need to put up collateral to get approved. The difference is that your collateral is a cash deposit, typically equal to your desired credit limit.

Other than the security deposit, a secured credit card functions the same as a conventional credit card. One big benefit of using a secured card to rebuild credit is that as long as you pay off your balance in full each month, you don’t ever have to pay interest.

That said, some secured cards charge annual fees, as well as high APRs, so they’re not ideal if you plan to carry a balance.

Part IV: How to rebuild your credit after bankruptcy

As you’re working to get your credit back on track, it’s important to know how your actions affect your credit score.

Here’s a list of factors that FICO uses to calculate your credit score, along with how important they are:

  • Payment history (35% of your score)
  • Amounts owed (30%)
  • Length of credit history (15%)
  • Credit Mix (10%)
  • New credit (10%)

The most important thing you can do to boost your credit score is to make payments on time. By applying for an unsecured personal loan after bankruptcy, you can get an account with a lender who will report your monthly payments.

How much you owe is also important, so avoid borrowing more than you need. Consider applying for a secured credit card and maintaining a low balance. This will help you maintain a low credit utilization rate, which is an important element of the “amounts owed” factor.

Having both a secured credit card and unsecured personal loan can help diversify your credit mix, but you should be careful about submitting too many applications; too much new credit can hurt your score.

The bottom line

If you’re looking to rebuild your credit after a bankruptcy, using an unsecured personal loan can be a great way to re-establish a positive payment history.

It’s important to understand, however, that these unsecured personal loans can come with high interest rates. Do the math to make sure it’s worth the cost by considering the fees and interest involved, as well as your monthly payments.

It’s best to use a personal loan after bankruptcy if you have a legitimate need for the money. Borrowing and paying interest is a more costly way to build credit than, say, using a secured credit card and paying your balance in full each month, thereby avoid interest payments altogether.

Take your time to consider all of your options before making a decision. Shop around to make sure you’re getting the best deal. It’s not a guarantee that you’ll get a low interest rate, but you can avoid loans with the highest interest rates if you do it right.

Finally, don’t take it personally if you get denied. Lenders often don’t know you personally; all they see is what’s on the paper in front of them. So, if you do get denied, start working on an alternative and improve your credit to increase your chance of getting approved in the future.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Matt Becker
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Matt Becker is a writer at MagnifyMoney. You can email Matt here

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Rising Incomes Outpace Increasing Housing Costs in Every Major American City

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Most U.S. workers’ real wages have been stagnant over the past four decades, according to analysis from the Pew Research Center. With the prices of crucial expenses such as housing and healthcare increasing over these decades as well, consumers’ purchasing power today is about the same as in the 1970s. These circumstances have contributed to the belief that overall, Americans’ incomes aren’t keeping up with the rising costs of living.We set out to analyze U.S. Census Bureau data for America’s 100 largest metros to compare incomes to housing costs. Our findings show that this trend might be reversing — at least for residents of America’s biggest cities.

Compared to three years ago, the typical household in these cities has more money left over after paying for housing. In other words, even though housing costs have risen over the last three years, the dollar amount of wages have grown faster and exceeded the dollar pricing increases for both renting and owning a home.

In fact, famously-expensive metros saw the biggest jumps in the gap between income and housing costs. This trend also holds in places where rents take a greater share of household income.

Key findings

  • The median household in each of the 100 largest metros takes home more cash after paying for housing than they did three years ago.
  • Households in San Francisco saw the biggest gain in gross income after housing costs, up $10,642 more per year compared to three years previous. For renters, the amount is $9,982, and for homeowners with a mortgage the amount is $12,178.
  • Annual savings at the other end of the list are still substantial. The median household in Albuquerque, N.M. has an extra $1,750 a year — $1,438 for renters and $2,194 for homeowners with a mortgage.
  • Rent costs are increasing at a faster rate than costs for households who own their own homes and still have a mortgage in every metro. Even so, wage growth has outstripped those increases.
  • The 2017 homeownership costs in most metros exceeds the 30% marker that is traditionally used as a guideline for affordable housing costs. This suggests that homeownership is still not affordable for most households in those metros.
  • In a few places, the percentage of a household’s income spent on rent has increased — such as in Denver; Colorado Spring, Colo.; and San Jose, Calif. Even so, these households still take home more dollars after paying rent than they did three years ago.
  • The effect is especially pronounced in famously expensive cities; the first seven metros on our list, from San Francisco to Boston, are notorious for high rent costs.
  • Median housing costs have actually dropped in a handful of cities, such as Atlanta (down by $24 per year), Birmingham, Ala. ($24), Chicago ($24), Cleveland ($84), Detroit ($144), Jacksonville, Fla. ($36) and Las Vegas ($216).
  • Rents have risen at a faster rate than homeownership costs, but median costs for the latter are still higher across the board. As a result, homeowners today have more funds leftover after paying their mortgages and property expenses, even though they are spending a greater percentage of their incomes on housing.
  • Median rents in every metro lie comfortably below the 30% mark of median gross income, but homeownership costs exceed the 30% rule in most places.

Our study compared local incomes to housing costs in the top 100 metros. We then ranked them based on how much local wages have increased compared to housing costs, dollar for dollar, with the highest increase starting at 1 (in green on the map above) and going to the lowest at 100 (in red).

Hover over the map to see the ranking of each city and how much incomes after housing costs have increased in the past three years.

10 cities where incomes are rising faster than housing costs

When income rises faster than housing costs, our study found, this puts thousands more dollars per year into people’s pockets.

With these extra funds, households might find they have more funds available to cover other living expenses, from groceries to utilities to healthcare. This money can ease the demands placed on households by consumer debt such as credit cards, auto loans or personal loans. It could even grant them more room in their budgets to save, get out of debt or invest.

Here, we highlight the 10 cities in which the gap between median incomes and housing costs is growing the fastest.

1. San Francisco

San Francisco has become notorious in the past decade for its soaring housing costs, but it appears that local incomes are finally catching up. This city had the highest increase in local incomes left over after housing costs — for both renters and homeowners.

Overall, San Franciscans have $10,642 more in gross income after paying for housing than they did three years ago. That translates to a gain of $9,982 for renters, and $12,178 for homeowners.

Despite these high dollar amount increases, the percentage of the median gross income required to cover the median rent has remained mostly unchanged, falling just 0.2%. By contrast, San Francisco had the steepest decline in the percentage of a local median income required to cover homeownership costs — down 12.3% from three years ago.

2. San Jose, California

Neighboring San Francisco is San Jose, the next city where residents saw the largest increases in incomes overall, rising $12,849 in the past three years. This increase helped typical workers pocket $9,909 more in gross annual income after paying housing costs, compared to three years previous.

Rent costs rose faster than home owning costs over those years, too. Renters’ after-housing income rose $9,117 in the past three years, compared to $11,913 more for homeowners.

Despite having one of the largest increases dollar-for-dollar, however, San Jose’s numbers are less impressive when comparing housing costs directly to income. The percentage of the city’s median gross income required to cover median housing costs fell by just 0.8% in the past three years — the smallest decrease of any city we surveyed.

3. Seattle

In Seattle, the median gross income increased by $8,300 per year in just three years. Local workers’ paychecks increased far faster than their housing costs, which were up $1,164 during the same period — resulting in a net gain of $7,136 overall.

During the three years we looked at, Seattle homeownership costs decreased by 10.3% relative to income while rent costs were up 2.6% compared to incomes. The three-year increase in income after housing costs was $6,272 for renters, and $8,180 for homeowners. In actual dollars, this meant homeowners netted $1,908 more per year from rising incomes than their renting neighbors.

4. Austin, Texas

At No. 4 is Austin, where the amount of a median gross income left over after paying median housing costs increased by $6,737 per year. This number specific to renters is $6,125, and homeowners are taking home $7,025 more after housing costs per year.

This is thanks again to rising local incomes, which shot up $7,817 from 2014 to 2017 while median housing costs increased by just $1,080.

Overall, the percentage of a gross median income required to cover Austin’s median housing costs fell by 4.5% over those three years.

5. Portland, Oregon

Portland is No. 5 among cities where incomes have increased the most compared to housing costs in over the past three years. This net gain in dollars is $6,733, reflecting median incomes that increases $7,825 per year compared to a rise of just $1,092 in annual housing costs.

Homeowners in Portland saw the biggest gains; the percentage of the median income required to cover the costs of owning a home fell by 11.2%. In dollars, homeowners here had an average of $7,693 more of their gross income leftover after covering housing costs than three years previous. For renters, this figure is $6,025.

Notably, Portland ranked No. 7 out of 50 in our rankings of the places where Americans live the most balanced lifestyles.

6. Denver

Next is the Mile High City, Denver, where increases in income outstripped the rise in housing costs to grant locals an average of $6,418 more in annual income, after housing costs. This is based on the $7,678 rise in Denver’s median income in the past three years, which outsrippted the $1,260 rise in housing costs during the same period.

Rising rent costs, however, have countered some of the income gains for Denver residents. For workers earning the local median income, the percentage of their pay that would be devoted to rent costs actually rose by 7.7% over three years — the steepest increase of any city we surveyed. Compare that to a 3.1% fall in costs-to-income for homeowners.

7. Boston

Another high cost-of-living city makes the list with Boston. Fortunately, the median annual income was up $7,344 from 2014 to 2017, helping to make up for some of the city’s high costs. Housing costs rose $1,008 per year during the same period.

In all, a typical Bostonian has $6,336 more in gross income leftover after paying for housing, compared to three years ago. This same figure is $5,952 for renters, specifically, and $7,128 for homeowners.

8. Bridgeport, Connecticut

In the city of Bridgeport, slower-rising housing costs are also contributing to a widening gap between housing costs and incomes. Here, annual housing costs are just $432 higher than they were three years ago — the smallest increase in housing costs among the top 10 cities.

That means that more of the $6,610 increase in incomes from 2014 to 2017 will make its way into Bridgeport resident’s pockets being eaten up by housing costs.

In all, the three-year increase in incomes after accounting for housing costs is $6,178 .This number is actually higher for local homeowners, at $7,018, and lower for renters,$5,266.

9. Nashville, Tennessee

Nashville locals have $5,984 more in gross income after paying housing costs today than they did three years ago. Housing costs rose $576 during that time, while incomes were up $6,560.

While this isn’t the highest dollar amount, it reflects a drop of 6.7 percentage points in the ratio of housing costs to income. In other words, Nashville is the top 10 city where locals who saw the biggest increase in the percentage of their income they get to keep rather than pay toward housing.

10. Salt Lake City

Rounding out the list is Salt Lake City, which ranked in the top cities to live out your golden years. Despite a boom in housing costs in the past 15 years, wages in this Utah city have also increased. From 2014 to 2017, the median household income rose $6,309, exceeding the $456 rise in housing costs for a total gain of $5,853 for Salt Lake City locals.

In all, Salt Lake City residents are still coming out ahead, with more money leftover after paying for housing compared to three years previous.

Understanding the metrics

Comparing data from the American Community Survey for 2017 to 2014, analysts subtracted the change in median household income from the change in median housing costs (annualized) to determine the three-year change in gross income left over after paying for housing.

In addition, we also calculated the change in the percentage of income a median household would spend on median housing costs, and then we repeated the exercise for median rents and median costs for homeowners who have mortgages. In all, this generated the following findings for each city:

  • 3-Year change in gross income left over after housing costs (annual)
  • 3-Year change in gross income left over after rent (annual)
  • 3-Year change in gross income left over after homeownership costs, including mortgage (annual)
  • 3-Year change in the percentage of the median gross income required for median housing costs
  • 3-Year change in the percentage of the median gross income required for median rent
  • 3-Year change in the percentage of the median gross income required for median homeownership costs, including mortgage

Scroll to the end of this piece for a table that includes these full study findings for each city.

The median housing cost estimate is inclusive of every household within a Metropolitan Statistical Areas, which may include a city and surrounding communities. The rent estimate is limited to people who pay rent, and we limited the homeownership costs (which includes costs such as taxes and insurance) to those with a mortgage. We excluded homeowners without a mortgage, as their housing costs are likely to stay close to flat and wouldn’t reflect area changes in housing costs.

In several instances, we found that a higher proportion of median income was required to pay the median rent in 2017 than it was in 2014. Even in these cases, the median households brought home more money after paying rent.

Conventional wisdom says that households should spend no more than 30% of their gross income on housing costs. In every metro we reviewed, the ratio of median income required to pay median rent fall comfortably below this line. Yet rents were more likely to have increased on pace with wages, meaning renters saw smaller gains in after-housing income than homeowners.

The ratio of housing costs to income homeowners, however, exceeds that limit in most metros, implying that homeownership is still not affordable for the typical household. Together, these findings suggest that while homeowners’ housing costs rise more slowly than renters’, they must use a large chunk of income to cover those costs than do renters.

Full rankings

Below is a table with the full findings for all 100 cities in our study. After the column listing the city, the leftmost three columns shows the change, in dollars, of gross income left after paying for housing costs. The rightmost three columns show the change in the percentage of the median income needed to pay for the median housing costs in that city.

Methodology

Researchers compared 2017 and 2014 median household income, as well as 2017 and 2014 median housing costs, median gross rent, and median housing costs for homeowners with a mortgage.  The results were aggregated to the 100 largest municipal statistical areas, and the data is from the American Community Survey 5-Year estimates from the U.S. Census.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
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Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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No Credit, or Poor Credit? Here Are Your Loan Options

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.

Mixed Race Young Female Agonizing Over Financial Calculations in Her Kitchen.

Updated May 01, 2019
Don’t have a credit history established, or have a low credit score? It can be challenging to find lenders that will approve you if you have a thin credit file or poor credit, but it’s not impossible.

You still have options when it comes to personal loans, and these options come from reputable lenders.

What’s even better is that these lenders will only conduct a soft credit inquiry when you apply to find out what rates they can offer you. This means your credit score won’t be negatively affected, so you don’t have to worry about damaging it further.

In this article we’ll review how to find reputable lenders, why you should stay away from two popular options people turn to when they’re in a poor credit situation: payday and title loans. And what you can do to increase your credit score.

Check for approval without a credit hit

It’s worth noting low scores aren’t always indicative of how responsible you are with credit. A low score, or thin file, could just be a result of a short credit history. If you have a clean history (no late payments, low credit utilization, etc.), you’ll have an easier time obtaining a loan over someone who has had delinquencies on their record, but might have a higher score.

If you have bad (or no) credit, you should apply to as many lenders as possible that use a soft pull to ensure you don’t hurt your credit score. We recommend starting with LendingTree, where you can use one short application form to get rates from multiple lenders at one.

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A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

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on LendingTree’s secure website

Avant branded credit products are issued by WebBank, member FDIC.

6.95%-35.99%

36 or 60

months

640

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

For example, a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR. You would receive $9,500 and make 60 scheduled monthly payments of $204.64. Origination fees vary between 2.41%-5%. APRs through Prosper range from 6.95% (AA) to 35.99% (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All loans made by WebBank, member FDIC.

59.00%-199.00%

9 to 24

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree: Dozens of lenders partner with LendingTree – and many of them may approve people with poor or no credit. You can fill out a simple form and compare multiple offers in minutes. We highly recommend starting your shopping experience here first to have a good chance of getting a loan.

LendingTree
APR

As low as 3.99%

Credit Req.

Minimum 500 FICO®

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

Advertiser Disclosure

LendingTree is our parent company. LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by lenders without impacting your credit score. LendingTree is not a lender.


A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

As of 28-Feb-2019, LendingTree Personal Loan consumers were seeing match rates as low as 3.99% (3.99% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected).

Here are 5 personal loan lenders for people who have less than ideal credit (meaning under 700) that will let you check your rate without impacting your credit score:

LendingClub: People with credit scores below 600 may get approved. You can borrow $1,000 – $40,000 and get the money deposited into your account within a few days. Fixed APRs range from 6.95% –35.89% on monthly terms of 36 or 60. LendingClub has an origination fee of 1.00% - 6.00% its loans. LendingClub is not available in Iowa or West Virginia.

APR

6.95%
To
35.89%

Credit Req.

600

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

1.00% - 6.00%

SEE OFFERS Secured

on LendingTree’s secure website

LendingClub is a great tool for borrowers that can offer competitive interest rates and approvals for people with credit scores as low as 600.... Read More

Upstart: Borrow between $1,000 and $50,000 for 36 & 60 months with APRs ranging from 7.69% to 35.99%. While the minimum credit score needed to qualify is 620 (Upstart will also consider applicants who don’t have a score), you must have a clean credit history. You could also be eligible for next day funding.

APR

7.69%
To
35.99%

Credit Req.

620

Minimum Credit Score

Terms

36 & 60

months

Origination Fee

0.00% - 8.00%

SEE OFFERS Secured

on LendingTree’s secure website

Upstart is an online lender created by ex-Googlers.... Read More

Avant: You could borrow anywhere from $2,000 to $35,000 through Avant, and you could receive your funds as soon as the next business day. APRs range from 9.95% – 35.99%. Although the minimum credit score Varies, you have a much better chance if your score is above 580. Avant is available in all states except Colorado, Iowa, West Virginia, and Vermont.

APR

9.95%
To
35.99%

Credit Req.

Varies

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Up to 4.75%

SEE OFFERS Secured

on LendingTree’s secure website

Avant branded credit products are issued by WebBank, member FDIC.

Avant is an online lender that offers personal loans ranging from $2,000 to $35,000. ... Read More

Prosper: Another peer-to-peer marketplace lender, Prosper’s loans are similar to LendingClub’s. You can borrow $2,000 to $40,000 with APRs ranging from 6.95% to 35.99% on 36 or 60 month terms. There’s an origination fee of 2.41% - 5.00%, and its minimum credit score is 640.

APR

6.95%
To
35.99%

Credit Req.

640

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

2.41% - 5.00%

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

Prosper is a peer-to-peer lending platform that offers a quick and convenient way to get personal loans with fixed and low interest rates. ... Read More


For example, a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR. You would receive $9,500 and make 60 scheduled monthly payments of $204.64. Origination fees vary between 2.41%-5%. APRs through Prosper range from 6.95% (AA) to 35.99% (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All loans made by WebBank, member FDIC.

OppLoans: If you have no or bad credit, Opploans is an online lender that could help. If your credit score is below 0 (or if you have no credit score at all), OppLoans will work with you. You can check to see if you are approved without impacting your score. And – unlike payday lenders – OppLoans offers much more affordable borrowing options. They also have great reviews – with a customer service rating of 4.9/5 stars.

APR

59.00%
To
199.00%

Credit Req.

Varies

Minimum Credit Score

Terms

9 to 24

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

There are several other personal loan lenders that will do a soft credit check. You can find them on our personal loan table here. While many of these lenders have minimum credit score requirements, you’ll find they take other factors into account aside from your FICO score.

Additionally, since these lenders only do a soft credit pull, you’re free to shop around for the best rates without fear of damaging your credit score.

Why You need to Stay Away from Payday Loans and Title Loans

Not eligible for personal loans? Don’t turn to payday loans or title loans.

If you’re not familiar with either, you might be wondering what’s so bad about them. After all, they seem convenient – most offer “fast cash,” and if you live in a populated area, you’ll probably find a payday loan or title loan shop nearby.

However, both require you to give something in exchange for funds, and neither require any sort of stringent approval process to ensure borrowers can afford the loans.

Payday Loans

Payday loan companies require you to write a check for the amount you wish to borrow, plus a set fee. The lender holds onto the check until the loan becomes due (typically on the borrower’s next payday, hence the name), and gives the borrower the money they need in the meantime.

The problem? If you can’t pay when the loan balance becomes due, you can choose to extend the term of the loan. When you do, you get hit with more fees. The APR on payday loans is extremely high, so you’ll pay more each time you extend your loan term.

Payday loans are on the smaller side – anywhere from $100 to $1,000. According to PayDayLoanInfo.org, the average term is two weeks, with 400%+ APRs. When you factor in fees, the APR can go up to 780%.

[Stuck in a Payday Loan Trap? Here are the ways out.]

Title Loans

Title loans require you to give your car’s title to the title loan company in exchange for an amount equal to the appraised value of your car. You usually have to own your car outright to be eligible for a title loan, and the term is around 30 days.

Like payday loans, if you can’t pay on time, you may choose to roll the loan over to the next month, incurring more fees. If you can’t pay back the loan at all, you run the risk of the lender repossessing your car.

As you can tell, both of these options are bad ideas if you want to stay clear of getting into a horrible debt cycle. These loans are purposely too expensive for borrowers to afford. If people are looking for quick cash because they don’t have any, it stands to reason they’ll be in the same situation a week or two from the time they borrow.

Non-Profit Credit Counseling to Rebuild Credit Score

You want to make every effort to improve your credit score, even after you’re approved for a loan, because having a good credit score will benefit you in other areas of life. For that reason, you might want to consider teaming up with a non-profit credit counseling service.

These companies can provide you with personalized advice on your specific situation so you can work on rebuilding your credit score. They can also work with your creditors and negotiate on your behalf to possibly lower interest rates or get better terms on your existing debt.

It can be tricky to find a reputable credit counseling agency – even with a non-profit organization. If you’re interested in a credit counseling service, USA.gov lists a few considerations and questions you should ask before committing. You want to make sure the credit counseling agency is actually going to help you get your credit and financial situation under control.

Alternative to Ways to Build Your Credit Score

If you don’t qualify for a personal loan, and don’t want to turn to payday or title loans, there are a few steps you can take to increase your credit score. This post has 6 tips to help get you started. These methods won’t boost your score immediately, but over time, you’ll see an improvement.

The Federal Trade Commission also has 6 alternatives to payday loans on its website, which might apply to your situation. For example, if you’re a member of a credit union, you could inquire about a loan through them as you have an established relationship already.

Also, if you haven’t started budgeting and tracking your spending, you should – doing so can help you spot problem areas with your money.

Read the Fine Print and Shop Around

Regardless of which loan you decide to apply for, always consider the cost. You want to make sure you’re getting the best possible terms, which means getting the lowest APR offered. Typically, cash advances and credit cards are going to have higher APRs than personal loans but lower than payday lenders.

Remember to always read the fine print. Loans of any type have plenty of fees associated with them that you should avoid. Shop around for the best deals and work on improving your credit score so better options become available to you.

*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.

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Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at [email protected]

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