An installment loan can be any type of loan that is repaid through a fixed schedule. Whether you are financing a big purchase or consolidating other debt, an installment loan can offer a fixed repayment schedule that will fit within your monthly budget.
Installment loans have a lot to offer borrowers, but if you have bad credit it can be a challenge to find the right installment loan for you. Luckily, there are several lenders that may be willing to work with your bad credit.
Let’s take a closer look at the best installment loans for borrowers with bad credit.
Overview of the best installment loans for bad credit
|Lender||Best for||APR||Minimum credit score|
|Fiona||Comparison shopping||4.99% – 35.99%||550|
|Monevo||High loan limits||3.49% – 35.99%||450|
|Avant||Quick application||9.95% – 35.99%||580|
|OppLoans||Credit scores below 500||99% – 199%||350|
|LendingPoint||Quick funding||9.95% – 35.99%||585|
|Upstart||Short credit history||6.18% – 35.99%||620|
Best for comparison shopping: Fiona
Fiona is not a loan provider. But you can compare your installment loan options more easily with the help of Fiona’s aggregator tool. After you fill out some information about your finances and what you are looking for in a loan, Fiona will present a list of the best available options within minutes.
As a bad credit borrower, you’ll quickly be able to see which lenders are willing to work with you. My favorite part is that Fiona keeps the questionnaire very brief. With that, you can see your options quickly without taking up too much of your time. In fact, it should take less than five minutes to fill out the form and check out your options.
Beyond the helpful features, Fiona is absolutely free to use. Why not take advantage of this free tool to explore your options. In fact, you can see some of the most popular lenders Fiona works with below:
Best for high loan limits: Monevo
Monevo is another way to comparison shop for a loan. Although Monevo is not a direct lender, it can help you shop around for the right deal by searching through the loan offers of over 30 providers within minutes.
The lenders that Monevo works with provide loan terms that range from three months to 12 years. Plus, a big range in the loan limits offered. With that, you can search for the right size loan that fits into your budget.
When working with Monevo, you will have to fill out a long form about your finances. Although it won’t take too long, Fiona’s form is much faster to complete. But with more information, Monevo can weed out unsuitable options more quickly.
Best for quick application: Avant
As a borrower with bad credit, you’ll be relieved to find a simple and straightforward application process that will only take minutes to complete. Once you fill out the application, Avant will run a ‘soft’ credit check – that means it won’t impact your score to see your offer.
After accepting the offer, you’ll have to agree to a ‘hard’ credit check and upload several documents. Even with this step, Avant is offering a relatively quick process.
Bad credit borrowers have the opportunity to borrow between $2,000 and $35,000 with an APR range between 9.95% and 35.99%. However, you should expect to be on the higher end of that range if you have bad credit.
Best for credit scores below 500: OppLoans
If you have a very low credit score below the 500 mark, then OppLoans can be a great option. You can potentially obtain an installment loan with OppLoans with a credit score as low as 350.
Of course, there are some other requirements that you’ll need to meet in order to take out this loan. But if you have a steady income and valid checking or savings account, then you have a good chance of qualifying for this loan.
The drawback of working with OppLoans is the very high APRs. Even for bad credit borrowers, some of the interest rates offered by OppLoans seem outrageous. However, the shorter loan terms will set you up to eliminate this debt fairly quickly.
Best for quick funding: LendingPoint
LendingPoint can help you find the funding you need as quickly as possible. With a minimum credit score requirement of 585, bad credit borrowers will be able to access cash through these installment loans.
Although the APR will be fairly high for most bad credit borrowers, you’ll get the funds you need the next business day after approval. This can help you cover your expenses as quickly as possible.
Once you’ve taken out the loan, LendingPoint offers flexibility as you repay. You can set your monthly payment due date, schedule monthly or biweekly payments, and request temporary relief for up to 14 days without a penalty.
One drawback of LendingPoint is that the company will not report your payments to all three credit bureaus. Instead, it only reports to two – TransUnion and Experian. This could hurt your chances of boosting your credit score.
Best for short credit history: Upstart
Upstart takes a different approach when evaluating their borrowers. Instead of relying solely on your credit score, they look at other financial indicators such as your income, education, and job history.
If you are a young professional with a short credit history and solid income, Upstart could be the perfect fit. The lender is especially willing to work with new graduates that are just getting started.
After you fill out a short application, you’ll be able to see your approval in as little as two minutes. Although you might face a higher APR with a minimal credit history, the soft credit pull will allow you to explore your options without any hit to your credit.
Summary of the best installment loans for bad credit
|Lender||Minimum loan amount||Maximum loan amount||Repayment terms|
|Fiona||$1,000||$100,000||3 months to 12 years|
|Monevo||$500||$100,000||3 months to 12 years|
|Avant||$2,000||$35,000||2 to 5 years|
|OppLoans||$500||$4,000||9 months to 2 years|
|LendingPoint||$2,000||$25,000||2 to 4 years|
|Upstart||$1,000||$50,000||3 to 5 years|
How I came up with this list
Here’s why these companies made the cut.
Willing to work with bad credit borrowers
First and foremost, it can be difficult to find lenders that are willing to work with bad credit borrowers. With that, I sought out companies that have a track record of helping people with bad credit secure the funding they need.
Range of repayment terms
Depending on your situation, you may need to borrow a few hundred dollars or several thousand dollars. Since many of these loan options have relatively high APRs, I made sure to look for options that had flexible repayment terms.
When you are looking for an installment loan, you want to work with a lender that you can trust. I sought out companies with transparent lending policies so that you know what you are getting into before you sign on the dotted line.
No one wants to work with a lender that has an iffy reputation. With that, I only included lenders with solid customer reviews and good reputations.
What is an installment loan for bad credit?
Today I explored a specific type of installment loan, personal loans for bad credit. These types of loans offer bad credit borrowers an opportunity to obtain a loan. Although these loans often have higher APRs, it can be an option for bad credit borrowers that need access to funds quickly.
Why should (or shouldn’t) you use an installment loan if you have bad credit
So should you get an installment loan if you have bad credit?
Why should you use an installment loan if you have bad credit?
If you have high-interest debt that you are committed to paying down quickly, seeking out an installment loan with a lower interest rate can be a good option. With bad credit, it might be challenging to find an installment loan with a lower APR. But it could be possible.
Why shouldn’t you use an installment loan if you have bad credit?
If you have an unstable income or are overwhelmed with your current debts, taking out another loan is probably not a good idea. You might find that you are facing APRs that are too high to justify taking out the loan in your case.
Most important features of an installment loan
Here’s what to look for as you explore your installment loan options.
When you take out a loan, the APR is a critical factor to consider. The APR will determine the total amount you will pay in interest for the privilege of borrowing the money.
A lower APR can help you minimize the costs of your loan.
Lenders often charge a variety of fees that can add up quickly. As you compare your loan options, don’t forget to take miscellaneous fees into account. A few to consider are the origination fee, late payment fee, prepayment fee, and transaction fee.
If you have a particular amount of money that you need to borrow, lenders with lower limits might not be a good fit. Of course, you should never borrow more money than you need to. But the ability to borrow all of the funds you need in one place is important.
How long do you want to pay for this loan? You might want to get rid of this debt as soon as possible or decide that a lower monthly payment is a better option for your budget.
If a lender offers autopay, it could potentially save you money over the lifetime of your loan. For most of us, it can be tricky to stay on top of bills every single month. If you miss a payment, that could affect your credit score and corner you with another fee.
Check to see if a lender offers this feature before moving forward.