Personal Finance

Best Bad Credit Personal Loans in 2025: 7 Proven Ways to Get Approved Fast

Explore the best bad credit personal loans in 2025. Learn how to qualify, top lenders like Upstart and OneMain, and how to avoid payday loan traps

Thushan Weerakoon

May 18, 2025 — 4 min read

Best Bad Credit Personal Loans | Image Credit : Pexels

If you have bad credit and need a personal loan in 2025, you're not out of luck. Many reliable lenders now offer loans for people with low credit scores. Even if your credit score is below 600, there are still ways to get approved. By choosing the right lender and following a few smart steps, you can get the money you need when you need it.

Understanding Bad Credit Personal Loans

Bad credit personal loans are designed for borrowers with a credit score below 600. These loans are often unsecured, meaning you don't need to offer collateral. However, they typically come with:

Higher interest rates
Shorter loan terms
Loan amounts from $1,000 to $50,000
Repayment terms between 36 and 60 months

These loans help cover emergencies, consolidate debt, or manage big expenses even if your credit history isn't perfect.

Top Lenders Offering Bad Credit Personal Loans

Let's take a closer look at the top-rated lenders that help people with bad credit.

Upstart: AI-Powered Lending with Low Credit Threshold

Credit score needed: As low as 300
Loan amount: $1,000 – $50,000
APR: 6.6% – 35.99%
Approval time: As fast as 1 business day

Upstart uses AI algorithms to consider education, employment, and more, not just your credit score. Great for young borrowers or those with thin credit files. But it only offers two term lengths (36 or 60 months), and origination fees can be high.

OneMain Financial: A Go-To for Secured and Unsecured Loans

Credit score needed: Around 550
Offers both secured and unsecured loans
In-person branch support for those who prefer face-to-face assistance

Using collateral can increase your approval odds and potentially lower your interest rate.

Credit Unions: Flexible Lending with Local Touch

Lower rates and fees than many banks
More forgiving approval standards
You must become a member to apply

Local credit unions often work with members individually, making them a great alternative for those with low credit.

How to Improve Your Chances of Approval

Apply with a Co-Borrower

Adding a co-borrower with better credit improves your loan profile and could secure:

Lower interest rates
Higher loan amounts
Better approval chances

Consider Secured Loans

By offering collateral (like a car or savings), lenders are more likely to approve your loan. Be cautious, though, you could lose the asset if you default.

Maintain a Stable Income

Most lenders require:

Minimum annual income: $12,000
Debt-to-income (DTI) ratio below 50%

Lenders want to see that you can afford monthly payments.

Dangers of Predatory Lending

Be very careful with:

Payday loans
“No credit check” lenders
Loans with triple-digit APRs

These loans often seem easy, but can trap you in long-term debt. Always read the fine print, and avoid any lender that doesn't clearly explain terms.

Step-by-Step Application Process

Getting a bad credit personal loan in 2025 is usually a fast, online process. You'll typically need:

Proof of ID and address
Social security number
Employment and income documents
A checking account

Quick Tip:
Platforms like MoneyMutual offer simplified applications with "guaranteed approval" based on basic criteria like being 18+, having a bank account, and earning $800+ per month.

Comparing Terms and Rates Before You Sign

❓ Frequently Asked Questions (FAQs)

What is considered bad credit for a personal loan in 2025?
A score under 600 is typically considered bad, but some lenders accept scores as low as 300.
Can I get approved for a loan with no credit check?
Yes, but these are often payday loans with very high APRs. Avoid unless absolutely necessary.
Who are the best lenders for bad credit personal loans?
Top choices include Upstart, OneMain Financial, and credit unions that accept lower credit scores.
Can I apply with a co-borrower?
Yes, and doing so often improves approval odds and lowers interest rates.
How quickly can I get the money?
Many lenders like Upstart and MoneyMutual offer funding in as little as 1 business day.
What's better: a secured or unsecured loan?
Secured loans are easier to get and often come with better rates, but you risk losing the collateral if you default.

Conclusion: Smart Borrowing for Bad Credit

Bad credit doesn't mean you're out of options. With trusted lenders like Upstart, OneMain Financial, and local credit unions, you can still access fair loans in 2025. To boost your chances, apply with a co-borrower, offer collateral, and ensure steady income. Most importantly, avoid payday loan traps and read all loan terms carefully.

Smart borrowing starts with smart research and now, you've got the tools to do just that.