This guide will direct you to lenders based on your credit score, credit history and the amount of additional debt you can manage.

The Difference Between an Unsecured Bad Credit Loan, Secured Bad Credit Loan, Fair Credit Personal Loan, and a Personal Loan

An unsecured bad credit loan is a loan where the lender offers you money based on your credit score and credit history without asking for any form of collateral or security. If your credit score is below 590 and you do not have anything in collections, bad credit loan providers will offer loans ranging from $500 to $5,000. If your credit score is below 580, we would recommend not applying for more then $1,000 until you can work through whatever is keeping your credit score this low. 

Secured Bad Credit Loan

A secured bad credit loan is a loan that the consumer has provided the lender with something they can repossess if the loan is not repaid in full. Assets that can be used for security include your home, auto, stocks or property. It can be difficult getting a bad credit secured loan and you may need to go outside of traditional lending services like private peer to peer lenders.   

Personal Loan 

A personal loan will be provided based on your credit score, credit history, and your current monthly paycheck will determine the size of the loan you will receive. 

A Title Loan

A title loan is a loan secured against the title of your vehicle. Many lenders in the title loan market are not reputable, and they are hoping you miss a payment on your car.

America Loan Service recommends Lending Tree for New and Used Auto Purchase, Lease Buyout and Vehicle Refinance. Their group of auto loan lenders will provide you with fair service. You will need the ability to repay the loan they will check your credit score and work history 

Debt to Income or DTI

The one item all lenders are looking for is your ability to repay the loan. This is referred to as your debt to income ratio. In simple terms, you can make the payment every month without struggling. The typical debt to income ratio lenders are looking for is less than 40-50% of your monthly income goes towards covering your total monthly expenses. This link will provide you a debt to income calculator to figure out if you will qualify. If your debt and payments are so high every month that you will not have enough money to cover the payment, the lenders will not offer you a loan and if you are in this position

Collections or Loan Default

If you're currently in default or have a collections agency contacting you about a past unsecured loan, we suggest that you do not apply for a loan until you are in good standing.

We would suggest getting some help improving your credit score by contacting Novita.

Debt Collections

The lenders will first try to work directly with you to work out payment terms. If they are unsuccessful, they will contract a collection agency or go court to recover the debt.  If the consumer loses the case, the court can order a judgment that could include taking assets. 

Co-sign Loan 

A Co-signer loan is a loan secured by someone with a great credit score and credit history. The co-signer guarantees the loan if you default on a payment.


Installment Loan

An installment loan is a loan with a set number of monthly payments to repay the loan. Companies Like OppLoans have come into the market to help people that are trapped in high-interest payday loans by offering a loan with 9-16 months of fixed payments.

Payday Loan

Payday loans are unsecured and are to be repaid on your next payday in full. The trap with payday loans is that most people cannot afford to repay them in full with their next paycheck. The payday provider charges a penalty that can be as high as 1500% and this starts a cycle of repeated penalties.

Bridge Loan

A bridge loan is usually taken when someone is purchasing a home or condo and need a loan for a few weeks until the mortgage is in place.

Credit Score

Lenders will review your credit score and work history to review your borrowing activity. If there are collections, bankruptcy, default on any payment, or late payments on credit cards, this will all be listed on your credit report. Before you apply, check your learn more about your credit score and find out what makes up all aspects of your credit report.

Interest rates

Unsecured bad credit loans will have higher interest rates than a secured loan with the lender taking on more risk. The higher your credit score, the better your interest rate offer will be from all lenders. If you can wait to borrow and improve your credit score, we highly recommend it. The monthly interest rates expense will impact your ability to cover your monthly living expense.    


  1. Understanding FICO Scores - Understanding FICO Scores acquired July 2018