Ananya 
Having a low credit score can feel like a roadblock when you need money fast. Whether it’s for an emergency, paying off debt, or fixing your car, personal loans for bad credit can be a lifeline. But how do you find the best ones? Don’t worry! in this guide we includes everything you need to know about getting the best personal loans for bad credit in 2025. We’ll share top lenders, a simple step-by-step application plan, and smart tips to save money, even if your credit score is below 500.
What Are Personal Loans for Bad Credit?
Personal loans for bad credit are loans designed for people with low credit scores, usually below 580. These loans help cover things like medical bills, home repairs, or combining multiple debts into one payment. Unlike regular loans, they’re easier to get but come with higher interest rates (7.99% to 35.99%) and sometimes extra fees.
- Flexible Uses: Use the money for almost anything, from emergencies to debt consolidation.
- Loan Amounts: Borrow anywhere from $1,000 to $50,000, depending on the lender.
- Repayment Terms: Pay back over 2 to 7 years, based on what you can afford.
To qualify, you typically need a steady income, a bank account, and proof you can repay. In India, lenders like Moneyview or SBI also look at your job stability, even if your credit isn’t great.
Top Lenders for Bad Credit Loans in 2025
Choosing the right lender is key to getting a good deal. We’ve picked five top lenders for 2025 based on low credit requirements, fair rates, and quick funding.
Lender
Min. Credit Score
APR Range
Loan Amount
Why It’s Great
Upstart
None
7.99%-35.99%
$1,000-$50,000
Uses job and education for approval
Upgrade
600
7.99%-35.99%
$1,000-$50,000
Great for debt consolidation
OneMain Financial
None
18%-35.99%
$1,500-$20,000
Offers secured loans
Moneyview (India)
None
15%-24%
₹5,000-₹5,00,000
Fast funding for Indian borrowers
SBI (India)
None
11.05%-14.05%
Up to ₹25,00,000
Low rates for stable income
Check Your Budget First
Before you pick a lender, know what you can pay each month. High EMIs can stress your wallet. Use our EMI Calculator to enter your loan amount and see affordable monthly payments instantly. It’s free and super easy!
Why these lenders stand out from others?
- Upstart: Perfect if you have little credit history. They look at your job and education, not just your score.
- Upgrade: Awesome for combining debts—they pay your creditors directly, saving you hassle.
- OneMain Financial: Ideal for very low scores, offering loans backed by your car or savings.
- Moneyview: A go-to for Indian borrowers, with quick approvals and flexible terms.
- SBI: Offers some of the lowest rates in India, especially if you have a steady job.
How to apply for a loan with bad credit
Getting a loan with bad credit isn’t as hard as it seems if you know the steps. Follow this simple plan to boost your chances of approval and avoid mistakes.
Step 1: Check Your Credit Score
Start by knowing where you stand. Use free tools like Experian or CIBIL (in India) to check your score. If it’s below 500, you may need extra steps, like adding a co-signer or using collateral.
Step 2: Gather Your Documents
Lenders need proof you can repay. Have these ready:
- ID (driver’s license, Aadhaar, or PAN card)
- Proof of income (pay stubs or bank statements)
- Address proof (utility bill or rental agreement)
Indian borrowers may also need salary slips or ITR forms for NBFCs like Moneyview.
Step 3: Research Lenders
Don’t pick the first lender you see! Compare:
- Interest Rates: Aim for the lowest APR (7.99%-35.99%).
- Fees: Watch out for origination fees (1%-10% of the loan).
- Reviews: Check sites like BBB or Trustpilot for lender reliability.
Many lenders let you prequalify online, showing you rates without hurting your credit score.
Step 4: Apply Smart
Fill out the application carefully. Double-check details like income and address to avoid errors. To improve your chances:
- Add a co-signer with good credit.
- Apply for a smaller loan amount.
- Consider a secured loan if your score is very low.
Step 5: Review Loan Offers
Once approved, compare offers. Look at the total cost (loan amount + interest + fees) and monthly payments. For example, a $10,000 loan at 20% APR over 3 years costs about $3,600 in interest. Avoid lenders charging over 36% APR—they might be predatory.
Secured vs. Unsecured Loans: Which Is Better?
If you’re not sure which loan type to choose? Here is a quick comparison to help you decide.
Secured Loans
- What Are They?: You pledge something valuable, like your car or savings, to get the loan.
- Pros: Easier to get, lower interest rates, good for scores below 500.
- Cons: You could lose your collateral if you miss payments.
- Example: OneMain Financial offers loans backed by your vehicle.
Unsecured Loans
- What Are They?: No collateral needed, just your promise to repay.
- Pros: No risk to your assets.
- Cons: Higher rates, harder to qualify with very low scores.
- Example: Upstart’s loans use your job history for approval.
Why Loan Terms Matter for Your Wallet
The time you take to repay matters. Here’s what a $10,000 loan at 20% APR looks like:
| Term | Monthly Payment | Total Interest Paid |
|---|---|---|
| 2 years | $529 | $2,696 |
| 5 years | $264 | $5,840 |
Short terms save money but have higher monthly payments. Pick what fits your budget.
Tips for Very Low Credit Scores (Below 500)
If your credit score is below 500, don’t lose hope! Try these strategies to get approved:
- Go for Secured Loans: Use collateral like a car or gold (common in India). OneMain Financial or Indian NBFCs like Bajaj Finance offer these.
- Get a Co-Signer: Ask a friend or family member with good credit to co-sign. This lowers your rate but makes them responsible if you can’t pay.
- Try NBFCs in India: Lenders like Moneyview focus on your income, not just your score. They(‘s) Show readers how to apply for a loan with a low credit score.
- Build Credit Fast: Pay off small debts or use a credit builder loan (e.g., Self Credit Builder) to boost your score before applying.
What to Do If Your Loan Is Denied
Getting a loan application rejected can be frustrating, but it is not the end. Studies show that 48% of loan applicants face rejection. Here is how to bounce back:
- Find Out Why: Ask the lender for the reason (e.g., high debt or low income).
- Try Again Smarter: Reapply with a co-signer, collateral, or a smaller loan amount.
- Explore Alternatives: Consider cash advance apps like Earnin for small amounts or ask family for a loan with a clear repayment plan.
- Improve Your Credit: Pay bills on time, lower credit card balances, and fix errors on your credit report.
Conclusion
Finding the best personal loans for bad credit in 2025 is all about knowing your options and applying smart. Whether you choose Upstart’s AI-based loans, Upgrade for debt consolidation, or Moneyview for fast funding in India, this guide gives you the tools to succeed. Compare lenders, follow our step-by-step plan, and use tips like adding a co-signer to get approved, even with a low score. Ready to take the next step? Check out our top lenders today and start your journey to financial freedom!
FAQs About Bad Credit Loans
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