Best Personal Loans for Bad Credit in 2026

Having bad credit doesn’t mean you’re out of options when you need a personal loan.

While a low credit score can limit which lenders will approve you and what interest rate you’ll get, several companies specialize in working with borrowers who don’t have perfect credit histories. Some use alternative data to evaluate risk, others accept collateral to lower their exposure, and some simply have more flexible underwriting than traditional banks.

Below is a detailed breakdown of the top options worth considering in 2026, what makes each one different, what to expect during the process, and where each one tends to fall short.

1. Upstart

Upstart built its entire lending model around the idea that a credit score alone doesn’t tell the full story of someone’s ability to repay a loan. Instead of relying only on your FICO or VantageScore, Upstart’s underwriting also factors in your education, field of study, job history, and even the specific type of job you hold. This means two applicants with the same credit score can receive very different offers depending on their background.

This approach tends to help younger borrowers or people who are early in their credit history but have stable employment and a solid education. It also helps people who had a rough patch that damaged their score, like a medical emergency or temporary job loss, but who now have consistent income again.

Steps to apply with Upstart:

1. Check your rate: Fill out a short form on Upstart’s website with basic income, employment, and education details. This uses a soft credit check, so it won’t affect your score.
2. Review your offer: If you qualify, you’ll see your rate, term length, and monthly payment before committing to anything. Offers typically range from a few hundred dollars up to $50,000.
3. Submit documentation: Upload proof of income, bank account details, and identification if you decide to move forward.
4. Get funded: Many borrowers receive funds as soon as the next business day after final approval, sometimes even the same day.

The main downside is that interest rates can climb quite high for borrowers on the lower end of the credit spectrum, so it’s worth comparing your offer against at least one other lender before accepting.

2. Avant

Avant focuses specifically on borrowers in the fair to bad credit range, roughly scores between 580 and 700, which makes it one of the more realistic options for people who’ve been turned down elsewhere. Loan amounts tend to be smaller than what prime lenders offer, usually capping out around $35,000, but approval odds are generally higher because the entire platform is built around this credit tier.

Avant also reports payments to all three major credit bureaus, which means consistent on-time payments can help rebuild your score over the life of the loan, something not every lender guarantees.

Steps to apply with Avant:

1. Prequalify online: Enter basic financial details, including income and existing debt, to see estimated rates without a hard credit pull.
2. Choose your loan terms: Select the amount and repayment period that fits your budget, typically between 24 and 60 months.
3. Verify your information: Provide documentation such as pay stubs, bank statements, or tax documents if you’re self-employed.
4. Receive funds: Approved loans are typically funded within one to two business days directly into your bank account.

One thing to watch for is the administration fee, which Avant deducts from the loan amount upfront, meaning the amount you actually receive will be slightly less than what you’re approved for.

3. OneMain Financial

OneMain Financial stands out on this list because it offers both secured and unsecured loans, and it has physical branch locations in most states, which some borrowers still prefer over a fully online process. Using a vehicle as collateral can help borrowers with bad credit qualify for larger amounts or better rates than an unsecured loan would allow, since it reduces the lender’s risk.

This makes OneMain a solid choice for someone who owns their car outright and needs a larger loan amount than pure credit-based lenders would approve.

Steps to apply with OneMain Financial:

1. Start an application: Apply online for a preliminary offer, or visit a branch location in person to speak with a representative directly.
2. Discuss loan options: A representative will walk you through secured versus unsecured terms and explain how using collateral changes your offer.
3. Provide documentation: Bring proof of income, identification, and vehicle title information if applying for a secured loan.
4. Close the loan: Funds can sometimes be available the same day for in-branch applications, which is faster than most fully online lenders.

The tradeoff is that OneMain’s interest rates on unsecured loans tend to run higher than online-only competitors, so the secured option is usually where this lender makes the most sense.

4. Credit Unions

Local and online credit unions often offer more flexible underwriting than traditional banks, especially for members who already have an account history with them. Because credit unions are member-owned and not purely profit-driven, loan officers sometimes have more discretion to approve borderline applications based on context, like a steady job history despite a low score.

Federal credit unions are also required to cap interest rates on Payday Alternative Loans, which can make them notably cheaper than short-term lenders for smaller loan amounts.

Steps to apply through a credit union:

1. Become a member: Most credit unions require membership before applying for a loan, which sometimes just means opening a savings account with a small deposit.
2. Meet with a loan officer: Discuss your credit situation directly, since credit unions often consider context that automated bank systems don’t.
3. Submit your application: Provide income verification, existing account history, and any relevant documentation about your credit situation.
4. Wait for a decision: Approval timelines vary but are often faster than traditional banks, especially for existing members.

The main limitation is availability. Not every credit union offers the same products, and membership eligibility can depend on where you live or work.

5. Secured Personal Loans

If unsecured options aren’t available at a reasonable rate, a secured personal loan backed by savings, a certificate of deposit, or another asset can be a practical alternative, since it significantly lowers the lender’s risk and often results in a better rate than an unsecured loan would offer at the same credit score.

Steps to apply for a secured personal loan:

1. Identify eligible collateral: This is often a savings account, CD, or vehicle title, depending on what the lender accepts.
2. Apply through your bank or lender: Many traditional banks offer this option specifically to existing customers with an account history.
3. Provide asset documentation: The lender will verify ownership and current value of the collateral before approving the loan.
4. Receive funding: Terms and funding speed vary by lender and collateral type, though secured loans are often processed faster than unsecured applications.

The risk here is straightforward: if you default, the lender can claim the asset used as collateral, so this option only makes sense if you’re confident in your ability to repay.

Conclusion

Bad credit limits your options, but it doesn’t eliminate them. Lenders like Upstart and Avant use alternative underwriting models that consider more than your score, OneMain offers a path to larger amounts through collateral, credit unions bring flexibility based on membership history, and secured loans remain a solid fallback if unsecured approval isn’t realistic yet.

Before applying anywhere, check your credit score so you know exactly where you stand and can avoid unnecessary hard inquiries on applications you’re unlikely to qualify for.