Best personal loans for bad credit

If you have bad credit, you may feel like a personal loan is out of your reach. But many of today’s lenders are willing to look outside of the credit score box and consider other factors, including education, earning potential, and even support from family and friends.

And what if your credit score is below 600, the lowest accepted by the bulk of personal loan issuers?

No matter what, do not resort to payday loans, which can carry annual percentage rates in excess of 1,000% and trap borrowers in a cycle that is hard to escape. Other options, many of which are outlined in this NerdWallet piece on payday loan alternatives, are available to you. The other path — assuming this loan isn’t an immediate need — is to work on building your credit score, which will qualify you for more loan opportunities, lower interest rates and better loan terms.

NerdWallet has picked the best lenders who are open to borrowers with credit scores that fall in the fair-to-poor range.

Best personal loan if you have a solid job history

Upstart looks beyond credit score at factors such as education and employment.

Upstart knows you’re not just a number, and it’s willing to prove it by looking not just at credit score and payment history, but also at factors other lenders don’t consider: job history, education, and even area of study are all factors in the underwriting process.

APR: 4.67% to 29.99% fixed Loan amount: $3,000 to $35,000 Loan terms: 3 years Minimum credit score: 640 Time to funding: Next business day Fees: 1% to 6% loan origination fee depending on loan grade, included in APR. Late fee is the greater of 5% of the payment due or $15.

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Best personal loan if you have a cosigner

Vouch allows friends and family to “sponsor” your loan.

One lender, Vouch, has designed an innovative lending program not around the traditional cosigner, but around sponsors — friends and family members who are willing to step up and, well, vouch for you. Sponsors agree to pay a set amount if you don’t repay the loan; the number and creditworthiness of the sponsors you have could increase the amount you’re approved to borrow and decrease your interest rate. Vouch loans require at least one sponsor, and sponsors must also meet credit criteria, including a credit score of 580 or above.

APR: 7.35% to 29.99% fixed Loan amount: $500 to $15,000 Loan terms: 1 to 3 years Minimum credit score: 600 for borrower; 580 with a qualified sponsor. Time to funding: Applications are approved within 1 to 2 business days, with loans funded 1 to 2 days after that. Fees: 1% to 5% origination fee, included in APR. Late fee is 5% of payment due, with minimum of $15.

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Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter: @arioshea.

from NerdWallet Credit Card Blog
http://www.nerdwallet.com/blog/loans/personal-loans-bad-credit/