Can I get a loan with bad credit? 

For those with bad credit, securing a loan can be a long battle as lenders view borrowers with a low credit score as high risk. This can often lead to stricter terms, higher interest rates or even denials. However, finding loans with reasonable terms is crucial for those with bad credit. Finding a loan with fair interest rates and manageable repayment schedules can help them cover necessary expenses without falling further into debt.  

Being able to repay the loan will also provide an opportunity to improve credit scores which can then open the door to more financial opportunities in the future. 

There has been a growing demand for personal loans in the US in 2024 with 93.9 million Americans currently holding personal loans.

This is a 5.3% year-on-year increase. Partly this is due to a rise in accessible loan options for those with bad credit as more lenders are offering bad-credit loans, secured loans, and alternative lending platforms. Navigating your financial choice carefully is essential to avoid high fees and dangerous lending practices.  

You can take out a loan with bad credit but doing so should be carried out carefully. 

What is classed as having bad credit? 

Lenders will assume you are a high-risk borrower if you have a FICO score below 580. Credit scores typically range from 300-850 with higher scores indicating strong creditworthiness. Scores below 580 falls into the ‘poor’ category which then makes it challenging to secure a favorable loan. 

If you miss or make your payments late on credit cards, loans or bills you will damage your credit report and could end up with a significantly lower score. High credit utilization or using a large portion of available credit will also negatively impact your score. If a borrower is unable to repay debts this will be recorded, and future lenders will be more wary. 

Best loans for bad credit October 2024 

When you have bad credit, finding a personal loan can be challenging, but there are several options available, including payday loans, secured loans, and loans from specialized lenders. Personal loans with a bad credit score is possible but should be carefully considered in order to avoid inescapable debt. 

Payday loans 

Payday loans are short-term loans designed to be repaid by your next paycheck. These loans are often marketed to borrowers with bad credit, offering quick cash with minimal application requirements. However, payday loans come with extremely high interest rates, often exceeding 400% APR, and costly fees. While they provide immediate relief, they can easily trap borrowers in a cycle of debt if not repaid on time. Payday loans should only be used as a last resort. Recent regulations in 2024 have introduced more consumer protections, limiting the amount a borrower can take and capping interest rates in some states. Still, they remain risky and should be approached with caution. 

Lenders specializing in loans for bad credit 

Several lenders cater specifically to individuals with low credit scores. These loans often have higher interest rates compared to those available for borrowers with good credit, but they offer better terms than payday loans. Loan amounts typically range from $1,000 to $10,000, with repayment terms usually between 12 and 60 months, depending on the lender. 

In October 2024, lenders like Upstart, OneMain Financial, and Avant continue to offer personal loans for bad credit borrowers. Upstart, for example, uses a unique model that factors in education and employment, while OneMain Financial focuses on offering personalized loan terms based on your financial situation. Avant provides flexibility with repayment and has lower credit score requirements. 

Secured Loans 

Secured loans are another option for borrowers with bad credit, backed by collateral such as a car or home. These loans reduce the risk for lenders, making it easier for individuals with low credit scores to get approved. Common types include car title loans or home equity loans, where the borrower’s asset is used to secure the loan. The advantage is often a lower interest rate compared to unsecured loans, but the downside is the risk of losing your asset if you default on payments. 

Best loan companies for bad credit 

How to choose a loan for bad credit 

When choosing the best loan for bad credit, understanding key criteria can help you make a smart financial decision. Here are the factors you should evaluate: 

Interest rates 

This is one of the most important factors when choosing a loan. Borrowers with bad credit often face higher rates, but there can be significant differences between lenders. Look for the APR which includes both the interest rate and any other associated fees. Make sure you compare rates across multiple lenders to ensure you are getting the best offer available. The lower the interest rate, the lower your monthly payments will be, this will help you repay the loan. 

Fees and Penalties 

Loans often come with various fees and penalties that can add up. Watch out for origination fees, which are usually deducted from the loan amount upfront. Some lenders also impose late payment penalties or prepayment penalties for paying off your loan early. Be sure to read the fine print and ask about any additional costs. Lenders who are transparent will clearly outline all fees upfront, so avoid any that seem to hide or gloss over these charges. 

Repayment terms 

Some loans offer shorter terms with higher monthly payments, while others provide longer terms with lower payments but higher overall costs due to interest. Consider how flexible the repayment schedule is, and ensure it aligns with your budget. Look for options that allow early repayments without penalty, especially if you plan to improve your financial situation over time. 

Approval process 

Some lenders offer fast approvals with minimal checks, whereas others may conduct a thorough credit check and verification process. Being approved quickly will be tempting, however they can often come with higher interest rates and fees.  

Check customer feedback and reviews 

During your research it is important to take a look at past customer reviews and feedback. This will tell you how trustworthy the lenders are and whether this is a good decision for you. 

Alternative to loans for bad credit 

If you cannot find a loan with favorable terms and you have a bad credit score, there are some other options. 

Credit builder loans 

They are designed to help improve your credit while borrowing money. The lender will hold the loan amount, whilst you make regular repayments. This is a way to prove you can be a low risk, trusted borrower and in the future more lenders will accept you. 

Debt consolidation loans 

For those with multiple debts, a debt consolidation loan can combine them into one monthly payment, often with a lower interest rate. This simplifies repayment and can reduce overall interest costs. 

Secured credit cards 

You will have to provide a cash deposit as collateral, this makes them easier to obtain with bad credit. 

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The writer is a former shadow secretary of state for culture, media and sport

There was a clattering of dominoes across UK literature festivals this year when Baillie Gifford was dropped from the commercial sponsorship which supports this world. The asset manager’s exit came after sustained pressure from activists, authors, politicians and others who opposed its funding of the Hay Festival because a small percentage of its investments were in Israel and in oil companies. Elsewhere, the Turner contemporary art gallery in Kent was subjected to protests for not visibly campaigning on Palestine and there were a series of angry protests against oil company sponsorship of museums including the British Museum and the National Portrait Gallery.

Now we find arts organisations are being warned that the government’s proposed tax changes could lead some wealthy people to leave the country, reducing philanthropic donation and putting arts funding at further risk.

Arts organisations are an easy, visible, headline-grabbing target for campaigners. But these bodies do not extract oil or invest in weapons. The consequences of successful campaigns to remove funding does not lead to less oil or fewer arms. It doesn’t end climate change or prevent war. Investment portfolios don’t change. But it does put off sponsors and donors from investing in arts.

I share the aims of getting to net zero, tackling climate change and the nature emergency and transitioning from fossil fuels to renewables. I’m proud of the Labour manifesto I campaigned on during the general election campaign to achieve this. I just don’t think attacking art sponsorship is a valid or productive route and damages our cultural life without helping the cause.

Reduced sponsorship causes financial harm for cultural organisations. This risks livelihoods of staff and creators. Some organisations will simply go bust.

Instead of lying down pretending to be dead in front of gallery visitors, activists could talk with directors about funding and due diligence processes. Better still, talk to the source — the company whose behaviour they object to — or to politicians.

In some cases, it is staff or performers who protest. Yet they have the most to lose and the best chance of entering into constructive dialogue with organisations and sponsors.

Focusing on the oil protests, for example, the private sector is essential for decarbonisation, via direct investment and in manufacturing. More and more companies have net zero strategies. If activists believe these are inadequate, it is the source companies they need to be protesting, not art.

Sponsors and donors need to be willing to explain and discuss their strategies. There may be difficult arguments but they have the capacity to help articulate their goals. Arts organisations frequently do not. At Climate Change Week at the UN General Assembly last month I heard well-informed discussion and interrogation of net zero strategies, investment in new clean tech and more. The private sector is more than capable of explaining what they are doing and be willing to listen to and discuss how they might do more. This should not be left to the cultural world.

I assume activists who are calling on arts organisations to reject money from certain companies nevertheless want the state to continue to tax the same companies to pay for our public services? Why is it OK for the state to take their money but not the arts?

Creative industries are one of the strongest sectors for economic growth in the UK and part of what makes us great. Creators visit public museums for inspiration for costumes for films and TV. People who learnt their craft in the publicly invested cultural worlds go on to start commercially successful production, games and music companies. We need more art and culture, for joy, jobs and growth. Stop picking on art.

Advice business Financial Life Planning has hired Paradigm Norton’s Rebecca Tuck as its new operations director to help drive the expansion of the business.

Kate Shaw launched the firm around 10 years ago and has been running it on her own ever since.

“We both got to the point in our careers where we are ready to do something different,” Tuck told Money Marketing.

“[Kate] could’ve carried on like that indefinitely, I probably could’ve stayed at PN indefinitely, but I just wanted a change.”

Tuck has joined the business to “get it properly ship-shape”. “It’s like phase one in world domination, that’s the plan,” she said.

The first step is to make everything behind the scenes as efficient as possible. This includes making the client journey smooth and enjoyable.

“We are looking to grow, ultimately,” Tuck said. “There is definitely space for more people to join in the not-too-distant future. But by getting me in first, we can just make sure we’ve got that really solid foundation to build on.

The business is also going through a brand refresh and is working on a redesigned website.

“Kate is one of the most genuine people I’ve met in financial services,” said Tuck.

“And she really wants to do what’s best for clients. She is genuinely doing something a bit different.

“It was a really exciting opportunity for me to come in, essentially with a blank sheet of paper, and help design what that looks like and what that experience will be.

Shaw and Tuck first met at the IFW conference in May 2023.

“We got talking and realised we were very much on the same page, and there is a really exciting opportunity to join forces and use each other’s skillsets and do something exciting,” says Tuck.

“Bigger picture, longer term, there is definitely a desire to expand to help more people, to be a place where people can be themselves.”

Shaw said: “We’re very much about doing an absolutely brilliant job for people who don’t feel that they fit into the traditional financial planning firm.

“We want people to land onto our website, which is being updated at the moment, and look at it and go ‘that’s me’.”

She said there are a lot of people, especially Gen X women, who are “quite badly served” by financial services.

“We want there to be a home for everybody,” she added.

In terms of when the business is looking to hire new employees, Shaw said it is to do with when the right person comes along. “If that’s next week, awesome. But we’re keen to make sure it is a very tight ship that we’re running.

“It’s a team effort. We’re onboarding a new client this week and Becca’s going to be involved in that. It’s not just a case of I do the clients, she does the ops, we’re all in it together.

“It’s really important that they know they’ve got a home with us. We’re on their side. We’re independent, we know what we’re doing and we only answer to them.”

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The 2024 Nobel Prize for economics has been awarded to academics Daron Acemoglu, Simon Johnson and James Robinson for their work on wealth disparities between nations.

Acemoglu and Johnson are professors at the Massachusetts Institute of Technology, while Robinson is a professor at the University of Chicago.

They were commended for their work on the impact of institutions and the rule of law on countries’ prosperity.

“This year’s laureates have pioneered new approaches, both empirical and theoretical, that have significantly advanced our understanding of global inequality,” said Nobel committee member Jakob Svensson.

“Reducing the huge differences in income between countries is one of our times’ greatest challenges,” he added.

Svensson said the trio’s work had “helped us understand differences in prosperity between nations” by showing that societies with a poor rule of law and institutions that exploit their populations can struggle to generate growth.

Although the laureates did not propose “simple recipes or concrete policy proposals”, their work had a “huge societal impact”, he said.

The Nobel committee added that their insights showed that democracies were “on average, in the long run . . . better for promoting growth”.

The committee emphasised that while all three worked at US universities, none were Americans. Acemoglu was born in Turkey and his two colleagues in Britain.

Speaking from Athens, Greece, after the prize was announced, Acemoglu said the trio’s work could best be summarised as the study of the “natural experiment” created by colonialism.

This had “divided the world into very different institutional trajectories”, he said, with countries set on distinct paths depending on the resources European settlers had brought with them and the strategies they adopted.

“Broadly speaking, the work we have done favours democracy,” Acemoglu said.

He added that while China’s recent success in high-tech sectors was “a bit of a challenge” to their conclusions, “our argument has been that this sort of authoritarian growth is often more unstable”.

Acemoglu was born in Istanbul and studied in the UK, receiving his masters and doctorate from the London School of Economics after undergraduate studies in York. 

The Turkish-American economist began his academic career at LSE before moving to MIT. He won the John Bates Clark Medal, awarded to the most promising American economist under the age of 40 by the American Economic Association, in 2005. 

Acemoglu worked with Robinson on the best-selling book Why Nations Fail. 

Johnson was born in Sheffield but has spent his working life in the US. Before joining MIT, he worked at the Washington-based Peterson Institute think-tank and served as the IMF’s chief economist from 2007 to 2008.

He received his doctorate from MIT, after completing a masters at the University of Manchester and an undergraduate degree from Oxford university.

Robinson, who holds British and American citizenship, received degrees from the LSE and Warwick before completing a doctorate at Yale.

He has been at the University of Chicago since 2015 and previously worked at Harvard University.

Additional reporting by Claire Jones