Installment loans give you something even more valuable than money — time. These loans give you a lump sum of cash and let you pay down your debt in regular, scheduled installments. But if you have bad credit, the peace of mind that comes with installment loans may seem out of reach. Fortunately, lenders exist with a reputation of extending good offers to borrowers with bad credit.
Below, CNBC Select rounded up five of the best installment loans for people with bad credit. Read on to see if there’s one that meets your needs. (Read more on our methodology below.)
Best installment loans for bad credit
Compare loan offers
Best for insufficient credit history
Upstart Personal Loans
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Annual Percentage Rate (APR)
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Loan purpose
Debt consolidation, credit card refinancing, wedding, moving or medical
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Loan amounts
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Terms
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Credit needed
Credit score of 300 on at least one credit report (but will accept applicants whose credit history is so insufficient they don’t have a credit score)
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Origination fee
0% to 12% of the target amount
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Early payoff penalty
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Late fee
The greater of 5% of last amount due or $15, whichever is greater
Pros
- Open to borrowers with fair credit (minimum 300 score)
- Will accept applicants who have insufficient credit history and don’t have a credit score
- No early payoff fees
- 99% of personal loan funds are sent the next business day after completing required paperwork before 5 p.m. Monday through Friday
Cons
- High late fees
- Origination fee of 0% to 10% of the target amount (automatically withheld from the loan before it’s delivered to you)
- $10 fee to request paper copies of loan agreement (no fee for eSigned virtual copies)
- Must have a Social Security number
Who’s this for? Upstart looks at more than your credit score and considers factors such as your education and work experience to help them decide on extending you a loan. This makes the lender appealing to applicants with low credit scores (it usually looks for a credit score of at least 300), but Upstart also considers applicants with insufficient credit history.
Standout benefits: Approved borrowers can receive funding as soon as the next business day if they accept the loan before 5 p.m. EST Monday through Friday.
Best for quick funding
Avant Personal Loans
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Annual Percentage Rate (APR)
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Loan purpose
Debt consolidation, major expenses, emergency costs, home improvements
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Loan amounts
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Terms
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Credit needed
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Origination fee
Administration fee up to 9.99%
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Early payoff penalty
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Late fee
Up to $25 per late payment after 10-day grace period
Click here to see if you prequalify for a personal loan offer. Terms apply.
Pros
- Lends to applicants with scores lower credit scores
- No early payoff fees
- Can pre-qualify with a soft credit check (no hard inquiry)
- Quick funding (often by the next day)
- Late payment grace period of 10 days
Cons
- Origination fee
- Potentially high interest (caps at 35.99% APR)
- No autopay APR discount
- No direct payments to creditors (for debt consolidation)
- No co-signers
Who’s this for? Avant typically offers fast funding for borrowers who need cash in a pinch. The application takes just a few minutes to fill out and (according to Avant’s website) applicants get a decision in real-time (as applicable by state law and based on credit determination). Once approved, borrowers can receive their funds as soon as the next business day.
Standout benefits: Avant offers fixed interest rates so borrowers won’t be surprised by sudden rate changes.
Best for buying a car
MyAutoLoan
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Annual Percentage Rate (APR)
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Loan purpose
New vehicles, used vehicles, refinancing, private party and lease buyout
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Loan amounts
Starting at $8,000 (or $5,000 for refinancing)
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Terms
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Credit needed
FICO score of 575 or greater
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Early payoff penalty
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Late fee
Pros
- Open to borrowers with bad credit (minimum 575 score)
- No early payoff fees
- Prequalification available
- Provides multiple offers
- Fully online application available
- Co-borrowers and co-signers allowed
Cons
- Not available in all states
- Limited customer service
Who’s this for? MyAutoLoan is a good place to find an auto loan regardless of your credit, but if you have a low score you definitely want to make this your first stop on your car loan journey. This marketplace will match you with lenders based on the information you provide, which means you don’t have to wade through a pool of loans you’ll (probably) never qualify for before finding options right for you.
Standout benefits: MyAutoLoan performs a soft credit check that won’t damage your credit score to match you to up to four loan offers.
Best for veterans buying a home
Who’s this for? Navy Federal Credit Union is a financial services institution well-known among current or retired military members and their families. This lender doesn’t disclose their exact credit score requirements but it offers to work with potential borrowers to find loan terms they qualify for based on their credit circumstances.
Standout benefits: With Navy Federal Credit Union, private mortgage insurance isn’t required even if you make a low down payment on a mortgage.
Best for student loans
Ascent® Funding
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Eligible borrowers
Qualifying undergraduate juniors and seniors, graduate students
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Loan amounts
Up to $200,000 for undergraduate and $400,000 for graduate loans
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Loan terms
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Loan types
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Borrower protections
Deferment and forbearance options available
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Co-signer required?
Only for international students
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Offer student loan refinancing?
Pros
- Considers borrowers with no credit
- High loan amount
- Variable and fixed rates, so you can choose
- Borrowers have hardship protections
- No co-signer required
- Offers co-signer release
- No origination, application or prepayment fees
- Up to 1% interest rate discount for autopay
- 1% cash back rewards
- Accepts in-school payments
Cons
- Non-cosigned loans tend to charge higher interest rates
- Doesn’t offer student loan refinancing
Who’s this for? Ascent considers borrowers with no credit history, making it an attractive student loan lender for young borrowers who haven’t built much credit history. While a co-signer isn’t required, Ascent still allows you to apply with one to improve your odds of better loan terms.
Standout benefits: Ascent offers grace periods ranging from nine to 36 months. The typical grace period offered by most student loan lenders is only six months.
More on our picks for best installment loans for bad credit
Upstart
Upstart offers loans for a variety of purposes including debt consolidation, auto loan refinance, wedding loans, home improvement loans, moving loans and more. Potential borrowers can go online to Upstart’s website and check their rate without their credit score taking a hit.
Loan amounts
$1,000 to $50,000
Loan terms
3 to 5 years
Avant
Avant has installment loans that can be used for just about anything, and the company even offers special-purpose loans like home improvement loans, emergency loans and debt consolidation loans.
Loan amounts
$2,000 to $35,000
Loan terms
24 to 60 months
MyAutoLoan
MyAutoLoan is a lender marketplace for car loans. Borrowers have several options when it comes to the type of loan they can get matched for: They can choose from auto loans for new cars, loans for used cars, refinance loans, loans for private sales and lease buyout loans.
Loan amounts
Must apply for at least $8,000
Loan terms
24 to 72 months
Navy Federal Credit Union
Navy Federal Credit Union offers several appealing features on their VA home loan products, such as a no-down-payment option and no PMI requirements for low down payments. This lender also lets you get pre-qualified for a loan in just a few seconds.
Loan amounts
Get pre-qualified to view your offer
Loan terms
10 to 30 years
Ascent
Ascent is a financial services provider focused on offering loan products geared toward students. In addition to student loans, Ascent also offers bootcamp loans, which help students interested in developing their coding skills pay for tuition and living expenses at coding bootcamps.
Loan amounts
Up to $200,000 for undergraduate; up to $400,000 for graduate loans
Loan terms
Range from 5 to 15 years
How to compare installment loans
When choosing an installment loan, you’ll want to consider the following:
- APR: A higher rate means the loan is more expensive since you’ll have to pay back more money over the life of the loan. There are ways to try to get the lowest APR possible, including applying with a higher credit score and signing up for autopay for a discount.
- Fees: It’s normal for loan lenders to charge fees, including origination fees, application fees, late payment fees and even prepayment penalties. In many cases, you’ll be hard-pressed to find a lender that doesn’t charge any of these fees, but the goal is to find a good loan with the least amount.
- Loan term: A longer loan repayment term means smaller monthly payments while shorter repayment terms usually result in larger monthly payments (assuming all other loan factors remain the same). While longer repayment terms offer the flexibility of lower monthly payments, you’ll end up paying more in interest over the life of the loan so be sure to keep this in mind.
- Funding timeline: Funding timelines depend on the lender and type of installment loan you’re getting. For instance, most personal loan lenders can fund you within 3–5 business days. However, when it comes to other types of installment loans, like a mortgage, the process is far more complicated and will take longer.
How to apply for an installment loan
Applying for an installment loan is a relatively simple process:
- Figure out what type of loan you need and how much money you need to borrow. Remember that an installment loan isn’t free money and will always need to be paid back in full with interest. Always have a plan for how to pay for what you’re borrowing.
- Prequalify and compare your offers. Most loan lenders run a soft credit check to help you figure out what rates and terms you qualify for without lowering your credit score. Use this to your advantage by shopping around for rates and terms before committing to one lender.
- Gather the required documents and apply. The documents and information you’ll need to submit can depend on the loan you’re applying for. Be sure to discuss requirements with the lender and get a checklist of what you need so you can stay organized throughout the process. When submitting your application, make sure it’s error-free and accurate so you can avoid delays in the approval and funding process.
Frequently Asked Questions (FAQs)
FAQs
What is an installment loan?
An installment loan is a type of loan that is paid back in fixed increments (otherwise known as installments). You have a pre-determined time horizon for paying back the loan.
What are the most common types of installment loans?
The most common types of installment loans are mortgages, auto loans and personal loans.
Can a person be denied for an installment loan?
It’s very possible to be denied for an installment loan since lenders usually have a set of criteria they use to qualify applicants. This includes your credit score, credit history and more.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best bad credit student loans.
Our methodology
To determine which installment loans are the best for borrowers with bad credit, CNBC Select narrowed down a list of lenders that offer loan options for those with low or no credit scores or insufficient credit history. We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.
We then compared these loans based on the following factors:
- What it takes to qualify
- Loan amounts offered
- Loan interest rates (fixed or variable)
- Loan terms in years
- Loan repayment options
- Bonus features like autopay rate discounts
Interest rates offered vary and can change.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
