Loans > Installment Loans for Bad Credit

Installment Loans for Bad Credit

Banks won’t even look at customers without a good credit score - but there are other, cheaper lenders that will. Check out these top installment loans for bad credit to see if you qualify.

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Updated May 11, 2021

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Whether it’s losing most of your customers, getting your paycheck cut in half, or even losing your job altogether – it’s a sign of the times and it’s a nightmare to deal with.

Millions of Americans have depended on limited unemployment benefits for a long time, and it doesn’t seem like the damage done by the pandemic is going anywhere soon enough.

The economy is down, unemployment is up, and people often have to borrow just to make ends meet. If you have bad credit, this situation might look especially worrisome, but don’t worry – your options are not limited.

It’s true that banks have tightened standards, making loans much harder to get – but this need not concern you. There are plenty of reputable online lenders that don’t care much about your FICO score and offer loans at historically low interest rates.

If you’re asking yourself how this can be true, we’ll tell you – these alternative lenders look at things like your cash flow and income-to-debt ratio to determine if you’re a good potential borrower. That’s why they don’t prioritize a measurement like a credit score to calculate your creditworthiness.

However, as a borrower, you need to know how these loans work so you don’t have to pay more in fees than you want to – the point of a loan isn’t to lose money.

In this article, you will quickly learn what the best loans are, how to meet their requirements, and how to become eligible for even better loans.

Sound good? Alright, let’s get to it.

Top Installment Loans for Bad Credit

Our pick for the best installment loans according to price and accessibility:

  1. Upstart
    Best Overall
  2. Upgrade  
    Best Customer Support
  3. CashUSA.com 
    Best for Small Loans
  4. BadCreditLoans.com
    Lowest Requirements
  5. Earnest
    Best for Large Loans

1. Upstart – Best Overall

Upstart logo banner

Pros

  • Competitive APRs
  • Users with no credit can apply
  • Very quick funding
  • Users can change their monthly payment date at all times

Cons

  • Origination fee
  • Inflexible repayment terms
  • Late payment fee
Visit Upstart on Upstart’s website

If your credit is low or you don’t have a credit history yet, finding a loan might be tricky – but not with Upstart. This company uses AI software to analyze your financial data and quickly determine if you can pay back the loans you sign up for. 

Because of this, clients with no credit can borrow from Upstart, as long as their income/debt ratio and cash flow are healthy enough. Borrowers must have a job or a job contract that starts in 6 months or less. If you have a long enough credit history, however, the minimum credit score required is 600.

If you qualify, you will get approved in minutes and get funding the next day – Upstart claims its loans arrive within 48 hours 99% of the time. The only exception to this rule is educational expense loans which take up to 3 days to get transferred.

The loans range from $1,000 to $50,000 and the APRs are very competitive, ranging from 4.99% to 35.99%. The loan terms aren’t the most flexible – paying off the loan will take from 3 to 5 years, which works if you take out a big loan, but is an unnecessary hassle if you just want to borrow a couple of thousand bucks.

Although repayment terms aren’t very flexible, you can change your monthly payment date whenever you want via Upstart’s website. Also, if you’re using an Upstart loan to pay off other debt (e.g. credit card debt) – Upstart will send the money directly to your creditor to make the entire process more simple.

All in all, Upstart has one of the most solid offers for bad loans in the industry – but there are also a few fees you need to know about. Loans have a 0% – 8% origination fees, and a late payment fee that equals 5% of the overdue payment (minimum 15$).


2. Upgrade – Best Customer Experience

Upgrade Logo

Pros

  • No minimum annual income requirement
  • Free credit monitoring tools
  • Competitive interest rates
  • Soft credit pull

Cons

  • Origination fee
  • Late payment fee
Visit Upgrade on Upgrade’s website

Upgrade is often regarded as one of the best online lenders for bad credit because of their great overall offer and low requirements. To get approved, your FICO must be at least 600 and your debt-to-income ratio must be 60% or lower – which is much less strict than what most lenders require.

There is no minimum annual income requirement but your free monthly cash flow has to be $800 or more to apply. If you still can’t qualify, you can find a co-signer who qualifies and get the loan that way.

The approval process is very stress-free at Upgrade – the company will perform a soft credit pull and offer you free tools to help monitor and understand your credit report. This means you’ll get to see the full picture of your credit and you won’t be in danger of losing points because of Upgrade’s inquiries.

Available loan amounts range from $1,000 to $35,000 but the loan terms are very flexible – paying off the loan will take from 3 to 5 years. The APRs are very competitive, ranging from 7.99 – 35.97%, which is one of the reasons why Upgrade often stands taller than most of its competition.

Upgrade also has a line of credit with annual rates from 6.49% to 29.99% – with this line of credit you can borrow up to $50,000 and pay it back over a course of 5 years. Also worth knowing is that Upgrade charges a 2.9% – 8% origination fee as well as a late payment fee for its installment loans.

Unfortunately, Upgrade’s loans aren’t available in West Virginia, Iowa, and Vermont. Aside from that drawback, Upgrade is one of the finest online lenders for bad credit both in terms of interest rates and ease of use.


3. CashUSA.com – Best for Small Loans

CashUsa.com logo

Pros

  • No credit score requirements
  • Provides multiple lenders
  • Quick approval and funding
  • Very flexible repayment terms

Cons

  • Low maximum loan
  • Not a direct lender
Visit CashUSA.com on CashUSA.com’s website

CashUSA.com is not a lender. Rather, this is a lending platform where multiple lenders offer their loans and lines of credit to all eligible users. As a digital lending marketplace, CashUSA is a good place to visit if you want to get multiple offers and compare them to find the best one.

Since there are many different lenders on CashUSA, loan requirements can vary widely. Many lenders won’t look at your credit rating but there are also some premium loans for scores above 700 – a bit of everything.

To apply for a loan, you only need to have an income of at least $1,000 per month – however, even the most generous lenders will also check your debt-to-income ratio and your free cash flow to see if you can pay them back.

Loan APRs on CashUSA range from 5.99% to 35.99%, which is very competitive. However, you can only take loans ranging from $500 to 10.000$. This makes CashUSA.com great for small loans but not great if you need serious funding. 

The repayment terms are very flexible – you can pay back your loans over a period of between 3 and 72 months. This also makes CashUSA.com perfect for clients who want to get rid of a small loan quickly, but also for customers who need a stretched-out repayment program.

CashUSA.com’s biggest problem is probably bad marketing. The company has an F rating with the BBB, giving users the impression it’s not trustworthy.

However, the platform is secured with government-level data encryption and has only received 6 complaints the past year, four of which were resolved quickly. According to this data and user feedback, CashUSA.com seems like a legitimate and safe lending platform without a history of incidents.


4. BadCreditLoans.com – Lowest Requirements

BadCreditLoans.com Logo

Pros

  • Very low requirements
  • Soft credit check
  • Multiple lenders

Cons

  • Very low maximum loan
  • Not a direct lender
Visit BadCreditLoans.com on BadCreditLoan’s website

BadCreditLoans.com is another online lending platform. And as you might have guessed from the name, it specializes in loans for bad credit scores.

Some lenders on BadCreditLoans.com don’t have a credit requirement, but they will check your income level, income-to-debt ratio, and free cash flow to determine if you are likely to pay them back. Other lenders require a FICO score as tiny as 550, which is indeed very low.

APRs range from 5.99% to 36.99%, which is competitive, but you can only take out loans up to $5,000. The repayment terms for the small loans on BadCreditLoans.com range between 3 and 36 months, which is all the flexibility you’ll ever need to pay off a small debt.

Loans available include personal, home, auto student, and business loans, although you will probably find better lenders if you’re looking for the top business for bad credit. Personal loans are BadCreditLoans.com’s forte.

All in all, BadCreditLoans.com is geared towards customers who have bad credit and only need to borrow a small amount that they can pay off in as little as 3 months if they can. Since this is a loan aggregator, the specific fees of individual loans differ from lender to lender.


5. Earnest – Best for Large Loans

Earnest Logo

Pros

  • Some of the lowest interest rates around
  • Soft credit pull
  • Very high maximum loan
  • No fees

Cons

  • Higher FICO requirements
  • Doesn’t allow co-signers
  • Approval can take 5 to 10 days
  • Hard credit pull
Visit Earnest on Earnest’s website

Earnest is an established player in the online lending industry, with a long track record and a very competitive offer. Aside from being regarded as one of the top lenders for excellent credit, Earnest has premium-level loans for users with suboptimal credit too.

Earnest loans range from $5,000 to $500,000, which is enough to cover most lending needs. The APRs range from 1.99% to 5.99% and the repayment terms can be anywhere from 5 to 20 years – moreover, you can customize your repayment terms down to a month.

This is a more competitive price than most, which is why the requirements here are higher than average. Borrowers need a credit score of 650 but there is no minimum income requirement – you can even qualify if you’ve filed for bankruptcy in the past, which is a very rare offer among lenders in general.

If you manage to get past Earnest’s 650 FICO requirement, what you will get is one of the cheapest loans around today. You even get the option to skip one payment every year and pay it back at a later date without harming your credit score.

Even though, strictly speaking, it isn’t a bad credit lender, Earnest is on this list because a 650 credit score isn’t too far off from a “low credit score”, so reaching it is doable. And, if you can qualify, Earnest has a much more competitive offer with lower prices, more flexibility, and zero fees. 


What is an Installment Loan? 📜

“Installment loan” is a very broad term that refers to many kinds of commercial and personal loans. Essentially, any one-time lump-sum loan payment that’s repaid in a fixed time period by the borrower is considered an installment loan. This is different from a line of credit, which allows constant borrowing.

The main factors you need to look out for when getting an installment loan are the interest rate and repayment terms because they determine how much you will need to pay back. A high interest rate means you need to pay more, and likewise, long repayment terms mean you will end up paying more in total.

What is an Example of an Installment Loan? 🤔

An installment loan is a category that includes most loan types you know about. These include mortgage, auto, personal, and student loans. You can also get an installment loan as part of a larger debt consolidation strategy.

How to Get an Installment Loan with Bad Credit 💰

Getting a loan is a piece of cake with excellent credit – but how do you get the best possible deal with bad credit? There is an abundance of loans for low credit scores nowadays and getting one need not be hard. Here are a few tips you can use when approaching new borrowing options.

Check Your Credit ☑️

Confucius says – “even a journey of a thousand miles starts with a credit check”. Before getting a loan, you must know what your credit score is, and if there are mistakes in your credit report. The state of your credit will determine your next steps.

Fix Your Credit Report ☑️

There’s one way to improve your credit significantly in a matter of days and that is to remove errors from your credit report. Credit bureaus that make our reports often make mistakes that can ruin your credit score. However, this is easy to take care of if you know how to remove errors from your credit report.

Get Help if You Need It ☑️

If your credit report has errors that are damaging your credit, you should remove them before getting a loan. You can either do this yourself or if you want professional help, you can easily get one of the top credit repair companies to do it for you.

Focus Your Search ☑️

There are hundreds of lenders in the financial jungle but you only need one – to be more precise, you need the best one. A good way to narrow down your search is to use a loan aggregator or use something like a credible list of the top personal loans for bad credit.

Cash Flow Is King ☑️

Having a healthy cash flow means you have leftover money after taking care of all your expenses and debt payments. Naturally, you need some excess cash flow to take on new debt – this is why cash flow is a crucial component of any borrowing endeavor.

Get Rid of Other Debt ☑️

Lenders like nothing more than a borrower who is debt-free. If possible, get rid of your debt before applying for a new loan. If that seems impossible, you can try merging all your debts into one with a leading debt consolidation loan for bad credit.

Build Your Credit ☑️

Even if your credit improves a little bit, it can open an avenue to cheaper, better loans. The way to do this is to take out loans and then repay them on time, after which you will build strong credit, which means a high, resilient credit rating. 

Banks Aren’t Cutting It? Try Alternative Lending 🖥️

When we think of loans, we think of big banks and assume that they are the best place to borrow money from. That was the case once but isn’t anymore – there are many cheaper and more time-efficient lenders available online.

Banks won’t even look at you if your credit rating is low. On the other hand, many online lenders don’t care that much about FICOs, but analyze your financial situation by inquiring about your income, debt, and expenditures. This thorough approach allows online lending platforms to assess risk precisely and give out loans to customers with low credit scores.

Even better, alternative lenders are available online and you don’t need to go anywhere to apply or get a loan. If you’re not sure where to look for an online lender, you can review lending platform Fundera to compare multiple lenders to each other.

Even if you have a FICO in the mid 500s, you will likely find good personal and business loans of all kinds at a website like this. Essentially, the arguments for alternative lenders are plentiful, especially nowadays when traditional banks aren’t performing well and are providing a subpar service to clients.

How to Improve Your Credit Score 👍

Even though having a bad credit score won’t leave you without borrowing options, it’s a lot better to just have a great credit score and reap the benefits. These benefits are lower interest rates, better lenders, and lower expenses on all fronts.

FICO score factors
Making payments on time is the most efficient way to boost your credit.

Here are a few tips that can help you improve your credit if your FICO is lower than you like.

  • Pay Everything on Time: Nothing will make your credit score take a nosedive as much as a missed payment. This is why paying off all your credit bills, at least minimally, should be your priority.
  • Lower Your Credit Utilization: Never max out your credit card! If your maximum borrow amount is, let’s say, $1000, don’t use more than $250 per month. Keeping your credit utilization below 25% will improve your credit or maintain it if it’s already good.
  • Pay off the Expensive Stuff First: If you have a debt with a 30% interest rate and a debt with a 10% interest rate – take care of the big one first. The best way to go about this is to pay the minimum for the cheap debt, and then pool as much money as you can into taking care of the big one.
  • Repair Your Credit: Credit bureaus love to make mistakes – reporting mistakes that can drive down your credit score, even if you’ve been an outstanding borrower. You can either fix these yourself or get some of the leading credit repair near you to do it for you.
  • Consolidate Your Debt: Improving credit is easy in theory but the reality is often as messy as a children’s birthday party. Luckily, some companies can help combine all your debt into a single, cheaper obligation and help you pay it off in full. If this is the kind of relief you are looking for, check out how debt consolidation works and you’ll be on your way towards a much more manageable debt.

How to Get an Installment Loan During COVID-19? 😷

The economic landscape isn’t nearly as fruitful now as it was pre-pandemic, and the US is had been hovering on an 11% unemployment for quite a while – according to the Bureau of Labor Statistics at least. However, the real unemployment rate might be higher and this leaves many Americans with no choice but to get a loan to get through the storm.

TT Civilian unemployment rate chart
The chart above shows the approximate civilian unemployment rate from August 2000 to August 2010.

Most unemployment benefits are no longer available, which leaves millions in an even bigger and more immediate need for quick funding. And to make this situation even more of a headache, many lenders are becoming much stricter with credit requirements.

Luckily, there are still many options to get a good loan, even if you have a weak credit rating. 

To help out unemployed workers, federal banks are encouraging small loans and dropping interest rates – perhaps this is one of the reasons why we can find so many great loans online.

If you’re looking for a loan in this environment, your best bet is probably a loan aggregator. This is because traditional banks have become much stricter with loan requirements and some online lenders are struggling to maintain good cash flow due to the high default rates.

💡 Keep in mind: A loan aggregator is not a lender. Rather, it is a platform that connects you with multiple lenders so you can choose from the loan offers you’re eligible for. This is a good way to be aware of your options and compare offers to find the best one. That’s why a loan aggregator is one of the best ways to get a loan and minimize risk in today’s unstable financial industry. 

Getting a Business Loan During COVID-19 🏢

Small businesses have been hit the hardest by the recent financial turmoil. Cash flow is near-frozen in this recession, which is why companies are in dire need of funding to get the liquidity they need to pull through.

Several government programs essentially offer free loans to companies – these are the most cost-effective way to get funding at the moment. Even though the era of PPP loans is at its end, there are other sources of federal funding like 504 loans and loans offered by the SBA.

If federal funding just doesn’t cut it, there are many ways to get very affordable, quick funding from the commercial sector.

Online business loan providers have been on a lending spree lately because they often outshine the big banks with their credit and loan offers. If you’re looking for a loan for your company, you should probably check out the pros and cons of Kabbage, one of the most popular small business lenders today.

Installment Loan Fees You Need to Know About ⚠️

If only the interest was the only expense you need to worry about when getting a loan. But it isn’t and there are a few additional fees that might pop up in the fine print of your loan contract. 

You don’t want unexpected expenses, so it pays to be aware of all the little fees you might encounter. Knowing this will allow you to calculate your expenses correctly, and avoid being surprised by your credit bills every month.

  • APR (Annual Percentage Rate) – This is your interest rate plus all associated expenses – this number is often higher than the interest rate number and it will show you how much you really have to pay on top of the principal.
  • Down payment – Some lenders will require you to pay back a part of your debt upfront. For example, a lender will ask you to give them $5 before they give you a $100 loan – this payment will count toward the full repayment of your debt.
  • Origination fee – Another fee you need to pay upfront. This is the fee that covers the processing of your loan application – origination fees usually range between 0% and 8%. This also counts towards paying off your debt.
  • Underwriting fee – There’s quite a bit of calculation involved in giving out loans. Lenders need to hire underwriters to assess the risk of your loan and they charge a fee to cover this expense.
  • Closing fee – There are some administrative barriers associated with closing a loan deal. This fee covers that.
  • Late payment/prepayment fees – If you are late with a payment, naturally, the great majority of lenders will charge you a late payment fee. Some lenders even charge a prepayment fee to make sure you don’t pay off your debt before it is due.
  • Longer terms mean more expenses – Getting stretched-out loan terms seems like a good thing, but sometimes, this can be a hindrance. Longer repayment terms mean you will need to pay more in interest in total. The interest stacks up the longer the loan terms are – this is why some lenders charge prepayment fees.

Conclusion 

Even if you have bad credit or don’t have a credit rating yet, you will likely find good, reputable online lenders that will give you a loan. Upstart doesn’t require a FICO rating and will rate your eligibility based on your financial health. Similarly, many lenders on CashUSA.com do not even look at credit scores.

On the other hand, Upgrade requires a minimum credit rating (600) but offers a very cheap and user-friendly experience, not unlike the loan aggregator badcreditloans.com which has an even lower credit requirement. If you manage to raise your credit score in the 650 area, you can access much cheaper lenders like Earnest when you want a loan.

Installment Loan FAQs

  • How Do I Get a Loan With No Credit?

    There are ways to get a loan even if you have an empty credit report. Some lenders don’t do credit checks, rather, they just look at your cash flow and debt/income ratio to determine if you will be able to pay them back. Also, you can get a loan with a co-signer who has good credit.

    If you just want to build credit, you can try a secure loan. These are loans that get repaid directly from your savings account – that way missing payments is not an option and your credit will inevitably improve.

  • Do Installment Loans Require a Credit Check?

    Most do but some don’t. Banks almost always do credit checks but online lenders often prioritize looking at your cash flow and debt-to-income ratio. So, getting an installment loan from an online lender without a credit score is very doable as long as you have good financial health.

  • What is a Non-Installment Loan?

    Non-installment credit means a loan you have to pay back with a single lump-sum payment at a future date. Unlike an installment loan that has regular payments, a non-installment loan has a single, big payment that covers the debt in its entirety.

  • What’s Better: an Installment Loan or a Payday Loan?

    An installment loan is a lump-sum loan you have to pay back over time – these loans often have lower interest rates but higher requirements that include having a good credit score. Payday loans don’t have credit requirements and are limited to small amounts of money you need to pay back quickly (usually in a month). 

    However, payday loans can have interest rates of up to 400%, which is why some states heavily regulate or even outlaw payday loans. In conclusion, an installment loan is always a better deal, except if you have very bad credit and need money ASAP.

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

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