Updated November 2026 ยท National Loans USA is not a lender. How we make money.
Can you borrow with bad credit? Usually yes, but it costs more. Bad credit loans are personal loans and other credit for people with low scores, often below 580 on the FICO scale. Expect higher APRs, smaller amounts and larger fees. A credit union, a co-signer or a secured loan may cost far less, so check those first.
Right for you if:
- You face a real, one-time cost, such as a car repair you need to keep working.
- A credit union has already turned you down or is not an option.
- The monthly payment fits your budget even at a high APR.
- The lender reports payments to the credit bureaus, so on-time payments can help your score.
Not right for you if:
- You would use the loan to pay another loan or a payday advance.
- Your budget is already short each month. A new payment would make that worse.
- The lender asks for money upfront or promises approval no matter what.
- You can wait a few months and raise your score first.
What do bad credit loans cost?
Bad credit loans usually carry APRs near the top of the market, often close to 36%. Many lenders publish APR ranges of about 7% to 36%, and low scores land at the high end. Lenders charge more because they expect more borrowers to miss payments. Many also charge an origination fee of up to 10% of the loan, taken out before you get the money.
Some options cost much less. The National Credit Union Administration caps most federal credit union loans at 18%, a limit now extended to September 10, 2027. Federal credit unions may charge up to 28% on payday alternative loans (PALs). At the far end, the CFPB says a typical payday loan fee works out to an APR of almost 400%.
The catch is the fee plus the rate. A loan that looks like 29% can cost well over 33% once the fee is counted. Always compare the APR, which includes fees, and the total you will repay.
| Option | Typical cost | Credit check | Builds credit? |
|---|---|---|---|
| Online bad credit personal loan | Often near 36% APR, plus fees up to 10% | Yes | Usually, if the lender reports |
| Federal credit union loan | Up to 18% APR | Yes | Usually |
| Credit union payday alternative loan | Up to 28% APR, plus up to $20 application fee | Varies | Varies by credit union |
| Payday loan | $10 to $30 per $100; about 400% APR at $15 | Varies | No, per the CFPB |
Example: the same $3,450 at two lenders
Example. You borrow $3,450 for 30 months from an online lender at a 28.9% interest rate with a 5% origination fee. The lender keeps $172.50, so $3,277.50 reaches you. Your payment is about $162.82 a month, and you repay about $4,884.74. Your full cost is about $1,607.24, and the APR is about 33.6%.
Now say a credit union lends you the same $3,450 for 30 months at 17.9% with no fee. Your payment is about $143.49, and you repay about $4,304.57. Your full cost is about $854.57. That is about $753 less, and you get the full amount. These rates are illustrative. Your offer depends on your credit, income and the lender.
⚑ Red flag: Scammers target people with low scores, so watch for these signs.
- “Bad credit? No problem” ads that promise a loan without looking at your credit. The FTC warns that legitimate lenders check credit first.
- A fee you must pay before the loan arrives, called processing, insurance or paperwork.
- A call you didn’t ask for that offers a loan and asks for payment first.
- A request to pay by wire, gift card or cryptocurrency. Read our guide to advance-fee loan scams.
If you want to see what lenders may offer, you can compare offers through our loan request form. National Loans USA is not a lender. Lenders in a third-party network review your request and may check your credit. They set their own rates and terms, and submitting doesn’t guarantee an offer.
Safer options when your credit is low
A cheaper loan, or a way to avoid one, is often within reach. Work down this list in order.
- Ask a credit union. Membership often depends on where you live or work. A federal credit union PAL runs from $200 to $1,000 for one to six months, with an application fee of up to $20. Under NCUA’s newer PAL II rules, some credit unions lend up to $2,000 for up to 12 months.
- Add a co-signer. A co-signer with stronger credit can lower your rate. The FTC warns that the co-signer may have to repay the full debt, plus late fees, if you don’t.
- Use a secured loan. A loan backed by your savings can cost less, but you can lose what you pledge.
- Ask for a payment plan. The hospital, utility or repair shop may let you pay over time.
- Talk to a nonprofit credit counselor. The FTC says these services are often free or low cost.
Payday loans belong at the end of the list, if at all. The CFPB notes that on-time payday payments usually aren’t reported, so they don’t build credit. Our cash advance guide explains those costs in full.
How to compare bad credit loan offers
Compare offers on total cost, not on the monthly payment alone. A low payment can hide a long term and a large fee. Put each offer side by side and check these points.
- The APR, which includes the origination fee. Compare APR to APR, not interest rate to APR.
- The fee in dollars and the amount that will actually reach your account.
- The total you will repay over the full term.
- Whether the lender reports your payments to all three credit bureaus.
- Any prepayment penalty, late fee or returned-payment fee.
- Add-ons such as credit insurance. Ask whether they are optional, and remove any you don’t want.
- Whether the lender is licensed to lend in your state.
Read the full loan agreement before you sign. If a lender won’t show you the APR and total cost in writing first, treat that as a reason to walk away.
How to raise your odds before you apply
Small steps before you apply can lower the rate you’re offered. Start with your credit reports. All three bureaus now offer free weekly reports at AnnualCreditReport.com, the official site. If you find an error, dispute it with the bureau and the company that reported it.
Next, apply carefully. Each formal application usually adds a hard inquiry, which can lower your score. Prequalify first where you can, because a soft inquiry does not affect your score. If you need to build credit from scratch, the CFPB describes secured cards and credit builder loans. With a credit builder loan, the lender holds the money while you make small payments, usually over 6 to 24 months.
If a lender turns you down, it must tell you why or tell you how to ask. Our guide to your rights after a loan denial walks through the notice and your free report.
Frequently asked questions
What credit score counts as bad credit?
FICO labels scores below 580 as poor and 580 to 669 as fair. Lenders set their own cutoffs, so a 600 score may be fine at one lender and declined at another. Most loans for bad credit target the poor and lower fair bands.
Can I get a loan without a credit check?
Some lenders skip a traditional credit check, but those loans usually cost the most. Payday loans are the common example, at an APR near 400% for a typical fee. Mainstream lenders, including those on our form’s network, may check your credit.
Will applying for several loans hurt my credit?
Yes, several formal applications can lower your score, because each one usually adds a hard inquiry. Prequalification often uses a soft inquiry, which does not affect your score. Compare prequalified offers first, then submit one full application.
Does a co-signer really help?
A co-signer with good credit can help you qualify or lower your rate. The trade-off falls on them. The FTC says the co-signer may owe the full debt and fees, and late payments can show up on their credit report.
How can I improve my credit before I borrow?
Pay every bill on time and lower your card balances. FICO says payment history makes up 35% of its score and amounts owed make up 30%. Check your reports for errors too. Fixing a real error may raise your score.
