Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

Full Bio →

Written by

Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

Full Bio →

Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Sep 12, 2011

Advertiser Disclosure

Advertiser Disclosure: We strive to help you make confident loan decisions. Comparison shopping should be easy. We are not affiliated with any one loan provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about loans. Our goal is to be an objective, third-party resource for everything loan related. We update our site regularly, and all content is reviewed by experts.

One of the key determining factors in establishing the interest rate and terms of a loan and a loan’s basic availability is the prospective borrower’s credit. People with bad credit face more restrictions and disadvantages when attempting to secure a loan – and personal loans are not exempt. While having a high credit score may enable greater borrowing opportunities, people with bad credit may still be eligible for a variety of personal loans with a number of different terms and requirements.

Government data on the U.S. lending industry reveals an estimated 11 percent of loans consist of secured personal loans for consumers, a percentage that likely relies on borrowers with poor credit. By taking out a secured loan backed by equity, an automobile or other valuable possessions, those with bad credit may be able to obtain more attractive interest rates and convenient repayment plans.

Unsecured personal loans for borrowers with poor credit may also be available from some lenders, though particularly bad credit may result in less appealing loan conditions, including the maximum amount that may be borrowed. Recent interest rates for UK borrowers seeking small personal loans have reached over 20 percent, making repayment potentially challenging and forcing some loan seekers to offer collateral or seek credit rating improvement services prior to signing.

Bad credit is often a hindrance for securing an agreeable personal loan, but it does not make finding a suitable lender impossible. Whether through researching potential lenders alone, employing the services of a loan assistance agency or compromising on loan terms, borrowers with bad credit have several options for finding funding.