Two coworkers park in the same lot every morning. In the same week, both of their cars need about $2,000 of work, and neither of them has it. Both have credit scores in the low 500s, the kind of number that gets a quick no from most banks, so both start looking at bad credit loans.
The first fills in a form on his phone at lunch and has an approval before he is back at his desk. He takes it. The car is fixed by Friday, and it feels like the problem is solved.
The second takes two more days. She calls the credit union where her paycheck is deposited, asks her sister whether she would co-sign, and reads the APR on every offer before she answers any of them. Her car is fixed the following Tuesday.
For a while nothing separates them. Both drive to work, and both make their payments.
A year later the loans are paid off, and the difference shows up. Hers cost about $316 in interest. His cost about $1,240 on the same $2,000, and by autumn he is short again and looking for another loan.
They had the same score and the same repair bill. What separated them was two days, and the habit of reading one number before saying yes.
Bad credit decides how many lenders will say yes. It doesn’t decide which yes you take, and the first one is usually the most expensive.
This page is for anyone in the U.S. looking at bad credit loans. It compares the main options side by side, shows what each one costs on the same $2,000, explains why lenders turn requests down, and says plainly when borrowing is the wrong move.
Loans.net is not a lender. We’re a marketplace. You send one short request, lenders in our network review it, and a lender that can help contacts you directly. Sending a request uses a soft credit check, so your score doesn’t move.
See who can help, then compare
Tell us how much you need and what it’s for. Lenders in our network review your request, and a lender that can help contacts you directly.
Check my options
What is a bad credit loan?
A bad credit loan is a personal loan made to someone whose credit score is low, usually a FICO Score under 580. It works like any installment loan, with a fixed payment and an end date, but costs more, because the lender charges for the higher risk it sees in the file.
Lenders don’t sell a product called a “bad credit loan.” The phrase is shorthand for whatever a lender will offer someone whose file shows missed payments, collections, heavy card balances or very little history. That can be a credit union loan at 18%, an online personal loan at 36%, or a short-term loan priced far above that. The label is the same and the loans are very different.
What counts as bad credit
FICO Scores run from 300 to 850. FICO rates a score below 580 as poor and a score of 580 to 669 as fair. Each lender draws its own line, so a 600 can be an approval at one lender and a decline at the next.
If your score is in the 400s or low 500s, our guide to borrowing with a 400 or 500 credit score covers that range, and what your credit score means explains the bands.
A bad credit loan is priced on risk, so the same borrower can be offered very different costs by different lenders.
Compare bad credit loans: the options side by side
Two people with the same score can end up in very different loans, because “bad credit loan” covers at least eight products. They differ in what the lender asks for, and they differ most in price.
| Option | What it costs | What the lender looks at | Main risk |
|---|---|---|---|
| Credit union payday alternative loan (PAL) | Up to 28% APR, plus an application fee of up to $20 | Membership (at least one month for the standard PAL) and income | Small amounts: $200 to $1,000, or up to $2,000 on the larger version |
| Credit union personal loan | Capped at 18% APR at federal credit unions | Credit, income and your history with the credit union | Harder to qualify for than a PAL |
| Secured personal loan | Usually less than the same lender’s unsecured loan | The collateral (a car, savings or a CD), plus income | The lender can take the collateral |
| Co-signed loan | Often priced closer to the co-signer’s credit than to yours | Both credit files and both incomes | A missed payment damages the co-signer’s credit too |
| Online installment loan | Fixed APR up to about 36%, often with an origination fee | Credit, income and bank account activity | A fee taken out of the loan before you receive it |
| High-cost installment loan | Above 36% APR, sometimes triple digits | Mostly income and bank account history | Interest that can exceed the amount borrowed |
| Payday loan | $10 to $30 per $100 borrowed; $15 per $100 for two weeks is an APR of almost 400% | A paycheck and a checking account | Renewing it and paying the fee again |
| Car title loan | Monthly fees as high as 25%, about 300% APR | The title to your car | Losing the car |
The top two rows have prices set by rule. According to MyCreditUnion.gov, a federal credit union’s payday alternative loan runs from $200 to $1,000, is repaid over one to six months, and carries an application fee of up to $20. NCUA rules cap the rate on a PAL at 28% APR, and other federal credit union loans have a maximum APR of 18%. A larger version of the PAL, also set by NCUA rule, goes up to $2,000 over as long as 12 months. Not every credit union offers these loans, so it takes a phone call to find out.
The bottom two rows are priced by fee. The Consumer Financial Protection Bureau puts payday loan fees at $10 to $30 for every $100 borrowed, and says a common $15 fee on a two-week loan equates to an APR of almost 400%. The FTC says title loans often carry monthly finance fees as high as 25%, which is an APR of about 300%. CFPB research published in May 2016 found that one in five borrowers who took a single-payment title loan had the vehicle seized.
Our guides to secured vs. unsecured loans, installment loans and cash advances go deeper on those rows.
The cheapest bad credit loans are the ones that ask the most questions before they say yes.
What a bad credit loan costs: $2,000 borrowed four ways
Go back to the two coworkers. Each borrowed $2,000 and repaid it over 12 months. The table shows what that costs at four rates.
| Loan | APR | Monthly payment | Total interest | Total repaid |
|---|---|---|---|---|
| Federal credit union loan at the rate ceiling | 18% | $183.36 | $200.32 | $2,200.32 |
| Credit union payday alternative loan at its cap | 28% | $193.01 | $316.12 | $2,316.12 |
| Online installment loan | 36% | $200.92 | $411.04 | $2,411.04 |
| High-cost installment loan | 100% | $269.99 | $1,239.88 | $3,239.88 |
Look at the monthly payments first. From the cheapest loan to the most expensive, the payment rises by about $87. That is why the expensive loan doesn’t look expensive on the day you take it. The interest column shows the difference: about $200 at one end and about $1,240 at the other.
For comparison, the Federal Reserve’s G.19 release of October 7, 2026 put the average rate on a 24-month personal loan at a commercial bank at 11.90% in August 2026, a preliminary figure. At that rate the same $2,000, repaid over the same 12 months, would cost about $131 in interest.
Our lender network is broad. It includes lenders whose loans look like the last row of the table, priced well above 36% and in some cases at triple-digit APRs. Those lenders set their own terms and disclose them to you, and their loans are expensive. Whatever offer reaches you, find the APR and read it before you accept. To run your own numbers, use our loan calculator.
Is 36% the most a lender can charge?
No. Many online lenders advertise top rates just under 36%, which leads people to assume it is a legal ceiling. According to the CFPB, the Military Lending Act sets a 36% cap, measured as a Military Annual Percentage Rate, for active-duty servicemembers, their spouses and certain dependents. For everyone else the limit depends on state law and the type of loan, and in states that permit payday lending the fees work out to triple-digit APRs. If you are on active duty, tell the lender, because the cap applies to you.
With bad credit, the monthly payment hides the cost of a loan and the APR shows it.
The table is an example. Your offer is the real number.
A two-minute request shows whether a lender in our network can help. It won’t touch your credit score, and you can turn down any offer.
Check my optionsHow to get a loan with bad credit, step by step
The second coworker didn’t know anything the first one didn’t. She took the steps in order.
- Check your credit reports. You can get them free at AnnualCreditReport.com. Look for accounts that aren’t yours and for late payments you made on time. A corrected error can change which lenders say yes.
- Settle on the smallest amount that solves the problem. You pay interest on every dollar, and a smaller request is often easier to approve.
- Ask a credit union first. If you belong to one, or can join one through your job or where you live, ask about a payday alternative loan and about its regular personal loans.
- Find out whether a co-signer or collateral is possible. Either one can move you up the comparison table. Both put someone or something you care about at risk if you miss payments.
- Compare more than one offer by APR. A request through Loans.net is one way to do it. You send one short form, lenders in our network review it automatically, and a soft credit check runs when you submit. A lender that can make an offer contacts you directly. Not every request gets an offer, and Loans.net doesn’t make sales calls.
- Read the offer before you accept. Find the APR, the monthly payment, the total you will repay and any origination fee. If you go ahead, the lender will usually run a hard credit check and verify your income.
Most lenders ask that you be at least 18, with a U.S. address, income you can show and a checking account in your name. If paperwork is the obstacle, see our guide to no fax and no doc loans.
Getting a loan with bad credit mostly comes down to asking the cheapest lenders first and comparing every offer by APR.
Ready for step five?
One short request. Lenders in our network review it, and a lender that can help contacts you directly.
Start my requestWhat is the easiest loan to get with bad credit?
The easiest loans to get are the ones that ask the fewest questions: payday loans, car title loans and high-cost installment loans. A payday lender wants a pay stub and a bank account. A title lender wants the title to your car. Neither needs your score to be good, because the paycheck or the car protects the lender.
A lender that barely looks at your finances has set the loan up so that it gets paid either way, and the price covers the borrowers who can’t keep up. Take a $500 payday loan at a typical $15 per $100. The fee is $75 for two weeks. Renew it six times and you have paid $450 in fees and still owe the $500.
The easiest loan that is also reasonably priced is usually a credit union’s payday alternative loan, or a loan with a co-signer. Both usually take longer to arrange.
Easy approval and low cost rarely come in the same loan, so when a loan is very easy to get, look hard at what it costs.
Why loan requests get declined, and what to do next
Two people are turned down on the same afternoon. One assumes it was the score and gives up. The other reads the notice the lender sent, finds a collection account she paid off still listed as open, and disputes it.
A decline comes with information. According to the CFPB, a lender that turns you down has to give you the main reasons for its decision, or tell you that you can learn them if you ask within 60 days. If the decision was based on your credit report, the lender must also give you the score it used and the name of the credit reporting company, and you can get a free copy of that report if you ask within 60 days.
| What the lender saw | What to do next |
|---|---|
| A score below its minimum | Try a credit union, a co-signer or a secured loan. Each lender sets a different floor. |
| Debt payments that take too much of your income | Ask for a smaller amount, or pay down a balance first. |
| Income it couldn’t verify | Have pay stubs, benefit letters or bank statements ready. |
| Recent late payments or collections | Check that each one is accurate, and dispute any that aren’t. |
| Several applications in a short time | Pause, and use soft-check requests while you compare. |
| An error in your credit file | Dispute it with the credit reporting company and with the company that reported it. |
| A state it doesn’t lend in | Nothing is wrong with your file. Try another lender. |
If you send a request through Loans.net and no lender in the network can make an offer, you won’t receive one. That tells you about those lenders on that day. It doesn’t settle what a credit union or a co-signed loan could do. Our guide to improving your credit covers the slower fixes.
A decline is a list of reasons, and most of those reasons can be worked on.
“Guaranteed approval” loans and other red flags
A lot of people search for bad credit loans with guaranteed approval. No real lender offers one, and loan scams are aimed at people with poor credit who need money quickly.
The FTC says banks and other legitimate lenders won’t promise or guarantee you a loan before you apply. They check your credit report and your application first. An ad that says “Bad credit? No problem” is an example the agency gives of scam wording. Other red flags to watch for:
- A fee before the loan. Any charge you have to pay before you get the money is a reason to walk away, whatever it is called. The FTC notes that it is illegal for telemarketers to promise you a loan and ask you to pay for it up front.
- Guaranteed approval before anyone has looked at your credit or income.
- A call out of nowhere offering you a loan or credit.
- Pressure to decide today.
- No APR in writing. If a lender won’t show you the APR before you sign, don’t sign.
- A lender you can’t find registered in your state.
Loans.net never asks you for money and never calls you. A lender that contacts you after your request should tell you who it is and put its terms in writing. You can report a suspected scam to the FTC at ReportFraud.ftc.gov.
No legitimate lender guarantees approval, and none asks you to pay before you receive the loan.
When not to borrow, and what to do instead
A lender’s yes answers one question: whether it expects to be repaid. Whether the loan is good for you is a separate question, and only you can answer it.
A bad credit loan can make sense when the cost is one-time, the payment still fits in a bad month, and the money protects your income, like the car that gets you to work.
It usually doesn’t make sense when the money covers a gap that comes back every month. A loan pushes that gap forward and adds interest to it. The same goes when the only offers are at triple-digit rates and the expense can wait.
Before you borrow, try the options that cost nothing:
- Call whoever you owe and ask for more time or a payment plan, before the bill is late.
- Ask your employer about an advance on your pay.
- Contact your state or local government about emergency assistance programs.
- Talk to a nonprofit credit counselor. You can find one through the National Foundation for Credit Counseling. A counselor can set up a debt management plan, which may lower your card rates without a new loan.
If the expense can wait a few months, waiting is an option too. On-time payments and lower card balances can move you up a row in the comparison table. If the problem is debt you already have, start with our debt consolidation guide. We would rather lose the referral than put you in a debt you can’t carry.
Borrow when the loan ends a problem. If it only postpones the problem, it is the wrong tool.
How a bad credit loan affects your credit score
Sending a request through Loans.net uses a soft inquiry, which doesn’t affect your score. When you apply with a lender, it usually runs a hard inquiry. FICO says one additional inquiry takes less than five points off most people’s scores.
After that, the payments decide. An installment loan that is reported to the credit bureaus adds an on-time payment to your file each month you pay. A missed payment does the opposite, so set up automatic payments if you can. Before you accept an offer, ask whether the lender reports your payments. If it doesn’t, the loan can’t help your score.
A bad credit loan can help rebuild credit only if the lender reports it and every payment is on time.
Bad credit loan FAQ
Can I get a loan with a 500 credit score?
Yes, some lenders work with scores around 500, but the choices are narrower and the rates are higher. FICO rates any score below 580 as poor. At that score, a credit union payday alternative loan, a co-signer or a secured loan will usually cost less than an unsecured loan.
How can I get $2,000 fast with bad credit?
Start with a credit union. The larger payday alternative loan goes up to $2,000 at no more than 28% APR. Online installment lenders are the other common route. Compare the APR before you accept, because on $2,000 over 12 months the interest can run from about $200 to more than $1,200.
Are there guaranteed approval loans for bad credit?
No. The FTC says legitimate lenders won’t promise or guarantee you a loan before you apply. An offer of guaranteed approval, especially one that asks for a fee first, is a sign of a scam.
Does checking my options on Loans.net hurt my credit score?
No. Sending a request uses a soft credit inquiry, which doesn’t affect your score. A hard inquiry happens only if you go on to apply with a lender.
What interest rate will I get with bad credit?
It depends on the lender and the type of loan. Federal credit unions are capped at 18% APR on most loans and 28% on payday alternative loans. Many online lenders top out near 36%, and some lenders charge triple-digit APRs. You only know your rate when you see an actual offer.
Is 36% APR the most a lender can charge?
No. The federal 36% cap comes from the Military Lending Act. It is measured as a Military Annual Percentage Rate and covers active-duty servicemembers, their spouses and certain dependents. For other borrowers the limit depends on state law and the type of loan.
Where can I go when no one will give me a loan?
Try a credit union, a co-signer, or a loan secured by savings or a car. If none of those is possible, a nonprofit credit counselor, a payment plan with whoever you owe, or a local emergency assistance program may cover the need without a loan.
Can a bad credit loan help rebuild my credit?
It can, if the lender reports your payments to the credit bureaus and you pay on time every month. Ask the lender whether it reports before you accept. A missed payment will hurt your score.
Have a question we didn’t cover? See our full FAQ page.
Related guides
- Personal loans
- Secured vs. unsecured loans
- Installment loans
- Debt consolidation loans
- Car loans
- What your credit score means
- Improve your credit
- Loan calculator
Ready to compare?
One short request. Lenders in our network that can help contact you directly. No effect on your credit score.
Compare Bad Credit Loan OffersWritten and reviewed by Zion Rokah, founder, Loans.net Network Ltd · Last reviewed 13 October 2026 · How we source and check this
Important Disclosures
Loans.net is a marketplace and is not a lender. We do not make credit decisions, set rates, or fund loans. We pass your request to participating third-party lenders and lending partners, and a lender that can make you an offer contacts you directly.
Rates, fees, loan amounts, and repayment terms are set by the lender, not by Loans.net, and vary based on your creditworthiness, income, loan purpose, and state of residence. The APR and all fees applicable to your loan are disclosed to you by the lender before you commit. Not all applicants qualify, and not every request receives an offer. All loans are subject to the lender’s underwriting and approval.
Our lender network includes providers of high-cost short-term credit whose APRs may substantially exceed the rates shown on this page, in some cases reaching triple digits. Rate figures on this page are legal caps and published figures from the Federal Reserve, the NCUA, the CFPB and the FTC, or illustrative examples, provided for general comparison only. They are not offers of credit.
Sending a request through Loans.net is free. Loans.net is compensated by participating lenders and partners, and compensation arrangements vary by partner. Lenders set their own rates and terms.
Submitting a request uses a soft credit inquiry, which does not affect your credit score; applying with a lender may result in a hard inquiry. Funding times are estimates and depend on lender verification and your bank. Not available in all states.