2017 RANKING & REVIEWS
BEST INSTALLMENT LOANS FOR BAD CREDIT
2017 Guide: Finding Installment Loans for People with Bad Credit
Bad credit installment loans have gotten a bad reputation over the years. Many predatory lenders have disguised their services by adopting phrases like “installment loans for bad credit” and “best long-term installment loans for bad credit.”
Thus, the misconception is that institutions that offer bad credit installment loans are damaging, or even predatory.
Nothing could be further from the truth. Installment loans are everywhere, and chances are, everyone has had at least one installment loan in their lifetime. Auto loans, mortgages, and even student loans operate on the installment model.
Award Emblem: Best Installment Loans for Bad Credit
Installment loans are simply a loan where the borrower receives one lump sum and pays it back over time. Payments are typically once each month, and the interest rate stays the same. Perhaps a better name—without the negative stigma—for bad credit installment loans is simply “personal loans.”
Still, it can be difficult to get these loans through traditional banks without good credit. Installment loans for people with bad credit can provide lending opportunities with lower restrictions on lending requirements.
The key is to find bad credit installment loans and not payday loans. The difference between the two is monumental. Payday lenders are commonly called “predatory lenders,” and with good reason.
Payday loans come with extraordinarily high APR rates and high pressure to continue taking out additional loans. In fact, the average payday loan comes with an APR of nearly 400%. Unfortunately, these types of online installment loans for bad credit often set lenders up for failure.
In contrast, installment loans for people with bad credit are traditional personal loans from lenders that have relaxed credit requirements.
Our review will take a close look at the best lenders of long-term installment loans for bad credit, providing a thorough review of the best installment loans for bad credit.
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AdvisoryHQ’s List of the Top 6 Best Installment Loans for Bad Credit
List is sorted alphabetically (click any of the lender names below to go directly to the detailed review section for that lender):
Top 6 Best Bad Credit Installment Loans | Brief Comparison & Ranking
Bad Credit Installment Loan Lenders | % APR Range | Secured or Unsecured? |
| LendingClub | 5.99%–35.89% | Unsecured |
| LoanNow | 29%–299% | Unsecured |
| NetCredit | 35%–210% | Unsecured |
| OneMain | 12.99%–35.99% | Both |
| Prosper | 5.99%–36.00% | Unsecured |
| Wells Fargo | 6.25%–19.75% | Both |
Table: Top 6 Best Installment Loans for Bad Credit | Above list is sorted alphabetically
Benefits of Bad Credit Installment Loans
The good thing about installment loans for people with bad credit is that these personal loans can apply to just about any financial need.
Image source: Pixabay
Whether a financial emergency consists of medical bills, vehicle repair, home improvements, or consolidating credit card debt, installment loans for bad credit are a popular choice. In fact, some lenders of installment loans for people with bad credit—like OneMain and LendingClub—offer different financial categories for bad credit installment loans.
Perhaps the most common use for monthly installment loans for bad credit is to consolidate and pay off existing debt. Depending upon the lender, long-term installment loans for bad credit can often have lower interest rates, making debt much more manageable.
When considering bad credit installment loans, there are a few key features that make them attractive options. These features include:
- Flexible repayment schedule: The best installment loans for bad credit will allow borrowers to choose repayment dates and terms of the loan. For those who need a longer repayment term, bad credit installment loans can be a great option.
- No damage to credit: Traditional lenders usually run a hard credit inquiry to assess eligibility for loans. This mark stays on your credit report and reflects negatively upon your overall score. In contrast, bad credit installment loans will run a soft credit inquiry, keeping overall credit intact.
- Speedy and convenient: Online installment loans for bad credit can be filled out within a matter of minutes, and funds can be transferred quickly, often by the next business day. In a financial crisis, installment loans for people with bad credit are a timely solution.
- Avoid payday traps: It’s crucial to look for bad credit installment loans and not payday loans. Payday loans come with exorbitantly high interest, trapping borrowers in a cycle of debt. Monthly installment loans for bad credit, however, are responsible financial options to avoid the lure of payday loan traps.
Unsecured vs. Secured Bad Credit Installment Loans
There are two different types of installment loans for people with bad credit: unsecured and secured. Understanding the differences between the two is a crucial factor in
Secured loans require a form of collateral to back the loan, like a title or a deed. These bad credit installment loans are considered less risky for lenders, since the collateral can be seized if the loan is not repaid. For borrowers, the benefit to secured loans is that they often have lower interest rates.
Unsecured loans, however, do not require collateral. These bad credit installment loans are given with a signatory promise to pay back the loan. In fact, most traditional loans fall into this category, including auto loans, mortgages, and credit cards.
Whether unsecured or secured installment loans for bad credit online are a better option largely depends upon the borrower. Secured loans come with higher risk, but tend to offer better interest rates.
If you meet the requirements, unsecured bad credit installment loans tend to be the best choice. Simply put, the risk is much lower, as you won’t potentially lose an asset by failing to make a payment. Understanding the differences between the two is a crucial factor in determining what installment loans online for bad credit are right for you.
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AdvisoryHQ’s Selection Methodology
What methodology does AdvisoryHQ use in selecting and finalizing the credit cards, financial products, firms, services, and products that are ranked on its various top-rated lists?
Please click here “AdvisoryHQ’s Ranking Methodologies” for a detailed review of AdvisoryHQ’s selection methodologies for ranking top-rated credit cards, financial accounts, firms, products, and services.
Detailed Review—Top-Ranking Best Installment Loans for Bad Credit
Below, please find a detailed review of each credit card on our list of installment loans for people with bad credit. We have highlighted some of the factors that allowed these online installment loans for bad credit to score so high in our selection ranking.
LendingClub Review
LendingClub is a unique provider of installment loans for people with bad credit. As a peer-to-peer platform, investors provide loans and earn income from the interest. They offer four different types of bad credit installment loans: debt consolidation, credit card payoff, home improvement, and swimming pool installation.
Image source: LendingClub
Advantages to Borrowing through LendingClub
As a peer-to-peer platform, there are a few unique advantages that LendingClub has to offer. These advantages are:
- Competitive rates: With an APR range of 5.99%–35.89%, these are some of the most affordable installment loans for people with bad credit. In fact, those who use their bad credit installment loans to consolidate debt report a 30% interest rate deduction by using LendingClub.
- No prepayment penalties or hidden fees: Loans through LendingClub are some of the best installment loans for bad credit, as they make getting out of debt into an uncomplicated process. While some bad credit installment loans come with penalties for making early or additional payments, LendingClub loans do not.
- Everything is online: Not only are installment loans online for bad credit much more convenient, but they are also cheaper. By offering installment loans for bad credit online, operational costs are reduced, meaning that borrowers can get better rates.
Additional Considerations
Although lenders who operate through LendingClub may be more inclined to accept applicants with bad credit, the best interest rates will go to higher credit scores.
Additionally, bad credit installment loans through LendingClub are not available for those in Iowa or West Virginia.
Related: Guide: How to Get No-Credit-Check Loans for People with Bad Credit
LoanNow Review
LoanNow seeks to bridge the gap between borrowers who have been turned down by big banks and want bad credit installment loans and not payday loans.
Rather than focusing solely upon credit, LoanNow considers your entire financial profile, making them a great option for long-term installment loans for bad credit.
Advantages to Borrowing through LoanNow
When considering installment loans for people with bad credit, LoanNow is a worthwhile option. A few key advantages to bad credit installment loans through LoanNow include:
- Quick decision process: As a direct lender, LoanNow offers quick loan decisions for all borrowers, eliminating the annoyance and stress of waiting.
- Avoid payday loans: Loans made through LoanNow are bad credit installment loans and not payday loans. Each decision is made through analyzing an entire financial profile, not just credit score.
- Rewards system: Bad credit installment loans online through LoanNow can earn points through a rewards system. Timely payments add points, which can result in credit toward the loan.
Additional Considerations
Although LoanNow offers bad credit installment loans, their high APR rates can potentially be damaging.
The best installment loans for bad credit will have rates that make loans manageable, and with a maximum rate of 299%, these may not be the best long-term installment loans for bad credit for everyone.
Additionally, these bad credit installment loans are only available in select states, including Alabama, California, Georgia, Missouri, New Mexico, South Carolina, and Utah.
NetCredit Review
As a lender of installment loans online for bad credit, NetCredit is a good choice for those with credit scores ranging between 550 and 680.
Their success in offering bad credit installment loans stems from a strong belief that everyone should have access to financial freedom through installment loans for bad credit.
Image source: NetCredit
Advantages to Borrowing through NetCredit
When considering bad credit installment loans online, there are a few key advantages that NetCredit offers. These include:
- Get the right loan with My RightFit Tool™: This tool allows borrowers to customize their bad credit installment loans, including the amount and repayment schedule.
- Increased options with My Choice Guarantee™: If borrowers change their minds and decide that monthly installment loans for bad credit are not for them, NetCredit’s My Choice Guarantee™ is a valuable tool. This allows borrowers to return their loan up to one business day after funding.
- Help build credit score: NetCredit sends reports to two major credit monitoring bureaus. This means that making timely payments on bad credit installment loans can work to improve overall credit score.
Additional Considerations
For those who want to weigh their options before committing to installment loans for bad credit online, NetCredit is a great option. Eligibility can be determined before signing up for a loan and without damaging credit scores.
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OneMain Review
With more than 10 million borrowers, OneMain is a competitive force amongst bad credit installment loans online. For those who prefer to combine a quick online process with face-to-face interaction, OneMain has the best long-term installment loans for bad credit.
Advantages to Borrowing through OneMain
There are a few unique advantages that come with taking out installment loans for people with bad credit through OneMain. These include:
- Personalized support: Although the application process is done online, finalization of the loan is done through a visit to a branch location. With more than 1,800 locations, borrowers have plenty of branches to choose from.
- Wide variety of loan types: There are 17 different types of bad credit installment loans that OneMain offers. Whether looking to use bad credit installment loans online for vehicle repairs, medical bills, vacations, weddings, or debt consolidation, OneMain has a loan to suit individual needs.
- Multiple ways to pay: While most installment loans for people with bad credit can be paid by phone, mail, or online, OneMain extends payment options even further. Borrowers can also pay their loans at a Walmart Service Desk for a small charge of $1.00–$1.50.
Additional Considerations
Although there are no minimum credit score requirements, the average OneMain borrower has a score between 600 and 650.
Better rates come from securing bad credit installment loans. As a result, more than half of OneMain’s borrowers secure their loans with vehicle titles.
Prosper Review
As another peer-to-peer lending platform, Prosper shares many similarities with LendingClub. Perhaps the biggest difference between the two is that Prosper strives to provide a variety of bad credit installment loans across a variety of personal financial situations, calling them “loans for your life.”
Image source: Prosper
Advantages to Borrowing through Prosper
There are a few advantages that allow Prosper to provide some of the best installment loans for bad credit. When considering installment loans for people with bad credit, keep the following in mind:
- Wide variety of options: These “loans for your life” are broken down into six different categories: Debt Consolidation, Home Improvement, Auto and Vehicle, Baby and Adoption, Small Business, and Special Occasion. Attention to individual needs makes bad credit installment loans through Prosper into the best installment loans for bad credit.
- Flexible rates and terms: As a peer-to-peer platform, Prosper has a little more flexibility than other institutions that offer installment loans for people with bad credit. Not only can borrowers apply for loans between $2,000 and $35,000, but they can also choose to repay over 3 or 5 years. Additionally, with an APR range of 5.99%–36.00%, Prosper offers incredibly affordable bad credit installment loans.
- User-friendly website: Borrowers looking for online installment loans for bad credit will be relieved to find that Prosper has a clear, straightforward, and thoroughly helpful website. Key information is boldly stated rather than hidden beneath fine print.
Additional Considerations
If the best installment loans for bad credit need to be the quickest bad credit installment loans, then Prosper may not be for you. As a peer-to-peer lending platform, loans depend on individuals rather than financial institutions, which can alter the timing of the distribution process.
It may take a week or two for your loan to be fully funded by investors. Still, the competitive rates and terms make bad credit installment loans through Prosper well worth the wait.
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Wells Fargo Review
Wells Fargo is a great option for those who want personalized service and the ability to visit a physical location. With a total of 6,200 branches, Wells Fargo is one of the largest financial institutions in the country.
Advantages to Borrowing through Wells Fargo
There are a few key characteristics that allow Wells Fargo to offer some of the best installment loans for bad credit. These include:
- Low rates: With APR rates starting at 6.25%, these installment loans for people with bad credit are certainly the most affordable of the bunch. Even with the maximum rate of 19.75%, Wells Fargo keeps bad credit installment loans accessible and financially feasible over time.
- Secured and unsecured loans: If you are a current Wells Fargo member, you may be able to find the best installment loans for bad credit by securing the loan with a CD or a savings account. In fact, securing installment loans for people with bad credit can not only get better rates, but higher loan amounts, too. Secured Wells Fargo loans can range between $3,000 and $250,000.
- Immediate funding: After bad credit installment loans are approved, Wells Fargo provides funding on the next business day. As an additional benefit, installment loans for people with bad credit can range in amounts between $3,000 and $100,000.
Additional Considerations
Although Wells Fargo offers competitive rates and personalized service, these may not be the best installment loans for bad credit lower than 650. Still, when looking for installment loans for people with bad credit, Wells Fargo is a competitive and worthwhile option.
If borrowers have a previously established banking relationship, they may be much better off seeking bad credit installment loans through Wells Fargo.
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Conclusion—Top 6 Best Installment Loans for Bad Credit
Poor credit history should not block borrowers from getting personal loans to finance changes and needs within their financial lives. Unfortunately, many financial institutions focus solely on credit scores and history to determine eligibility.
Thankfully, installment loans for people with bad credit fill this gap. These bad credit installment loans offer the opportunity to get essential financing by looking at an entire financial profile, not simply a credit score.
When looking for installment loans for bad credit, it is important to ensure that payday loans are avoided. Installment loans for people with bad credit will have relaxed credit terms, flexible payment schedules, and reasonable APR rates. These ensure that borrowing—and paying back bad credit installment loans—is financially feasible and affordable.
Our review of the best installment loans for bad credit will provide expert knowledge when beginning your search for finding installment loans for people with bad credit.
AdvisoryHQ (AHQ) Disclaimer: Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info. Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.
