Best Loans for Bad Credit in California for 2024

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Updated: July 26, 2024

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Happy Money stands out as California's best personal loan lender for bad credit, with a MoneyGeek score of 94 out of 100. It provides quality service, a quick application and approval process, and is transparent about its loan terms. Avant is a close runner-up, scoring 92 out of 100. It showcases broad payment options, a swift application process and competitive rates.

In search of the best options for individuals with bad credit, MoneyGeek reviewed four personal loan lenders in California that disclosed minimum credit score requirements between 580 and 640. Apart from the highlighted best and runner-up lenders, the California Credit Union, 1st United Credit Union and Credit Union of Southern California also offer localized services that borrowers might find suitable for their needs.

MoneyGeek Logo IconBest Bad CreditLendersCalifornia
2024

Best Bad Credit Loans in California

Best Overall - Happy Money
Runner-Up - Avant

MoneyGeek scored personal loan lenders in California that explicitly disclose their minimum credit score requirements on their websites to find the best personal loans for bad credit. Only 12% of lenders disclose this information.

We filtered our analysis to include lenders with minimum credit score requirements between 580 and 640, which meets Experian's definition of fair credit. Our research did not find any published minimums lower than 580.

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Our analysis was completed in April 2024 and considers banks and lenders who are licensed to do business in California. We also consider financial companies that partner with federally insured institutions to offer competitive rates.

34Lenders Analyzed

    Overall Best Bad Credit Loan Lender in California

  • Happy Money
    • 94MoneyGeek Score
    • 11.72% to 17.99%APR Range
    • 640Minimum Credit Score
    • $5,000 to $40,000Loan Amount Range
    • 24 to 60 monthsRepayment Terms

    Happy Money is MoneyGeek's pick for the best personal loan lender for bad credit in California, with a MoneyGeek score of 94 out of 100. This fintech company collaborates with lending partners insured by the National Credit Union Administration (NCUA) to originate loans. It accommodates those with a minimum credit score of 640 and provides loans typically available the following day. For bad credit borrowers, this can mean access to funds ranging from $5,000 to $40,000 relatively fast. Happy Money doesn't impose late payment or early repayment charges and provides flexible repayment periods of 24 to 60 months. On the flip side, loans are solely for debt consolidation, and it does charge an origination fee.

    Pros

    • Doesn't charge late, early repayment or bounced check fees
    • Flexible repayment terms
    • Lower maximum APR than competitors

    Cons

    • Only offers loans for debt consolidation
    • Charges an origination fee
    • No co-signers or co-borrowers
    Happy Money

    Runner-Up for Best Bad Credit Loan Lender in California

  • Avant
    • 92MoneyGeek Score
    • 9.95% to 35.99%APR Range
    • 580Minimum Credit Score
    • $2,000 to $35,000Loan Amount Range
    • 12 to 60 monthsRepayment Terms

    Avant is the runner-up for the best bad credit loan lender in California, with a MoneyGeek score of 92 out of 100. It works with WebBank — a state-chartered, member FDIC bank — to originate personal loans. This lender caters to borrowers with a minimum credit score of 580, provides a wide loan amount range from $2,000 to $35,000 and ensures swift next-day fund disbursal. Avant doesn't impose a prepayment penalty and offers a broad repayment period from 12 to 60 months. However, applicants should consider the administration fee (up to 9.99%) and the possibility of late payment fees.

    Pros

    • Doesn't charge a prepayment penalty
    • Flexible repayment terms
    • Offers next-day funding

    Cons

    • Charges an administration fee up to 9.99%
    • Has late fees and dishonored payment fees
    • Doesn't allow co-signers or joint applications
    Avant

Calculate Your Monthly Loan Payment in California

The average new account balance for personal loans in California is $8,890, according to TransUnion's Credit Industry Snapshot. A personal loan, typically an unsecured loan, is repaid in fixed monthly payments over a set period until the total amount (including interest) is paid off.

Accurately calculating your monthly loan payments can be especially significant when you have a less-than-perfect credit history. To help estimate your costs before taking out a loan, consider using MoneyGeek's personal loan calculator.

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Updated: Nov 21, 2024

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Best Bad Credit Loans by Credit Score in California

The average credit score in California is 722, slightly above the Experian data-reported national average of 715.

Some lenders in California specialize in servicing borrowers with poor credit, though the tradeoffs may be higher interest rates and terms that are not as favorable. Use the table below to find available bad credit loan lenders in California based on your credit score.

Avant5809.95% to 35.99%$2,000 to $35,00012 to 60 monthsNext Day92
Prosper6008.99% to 35.99%$2,000 to $50,00024 to 60 months1 business day90
Achieve6208.99% to 35.99%$5,000 to $50,00024 to 60 monthsSame Day 92
Happy Money64011.72% to 17.99%$5,000 to $40,00024 to 60 months3 to 6 Business Days94

What to Do if Your Loan Application Is Denied in California

Personal loan application denials are common, especially when your credit score is lower than average — but it doesn't have to halt your borrowing journey. Here's what you can do to enhance your chances of approval for future applications.

  1. 1
    Find out the reason for the denial

    If a lender denies your loan application, it could be due to several factors such as a low credit score, high debt-to-income ratio, insufficient income or errors in your application. Review the explanation given by the lender to pinpoint areas for improvement to mitigate the risk of future denials.

  2. 2
    Modify your loan terms

    After a denial, consider discussing with your lender the possibility of changing the loan amount or repayment terms. These adjustments could influence the lender's decision and potentially lead to approval.

  3. 3
    Find another lender

    Keep in mind that lender criteria for approving loans can vary. Seek out different lenders, evaluating each on certain elements to find the best match for your financial profile and needs. Here are factors to consider:

    • Eligibility requirements: Credit score, income level, debt-to-income ratio and employment history differ across lenders. Knowing the requirements can guide you to a suitable one.
    • Interest rates: Seek lenders with competitive interest rates to minimize borrowing costs, which is especially significant for those with lower credit scores.
    • Additional fees: Origination, late and prepayment fees can add to your loan cost. Some lenders do not charge these fees, which could be beneficial.
    • Loan terms: The loan repayment duration can impact your monthly payments and total interest. Both short and long terms have their advantages.
    • Customer service and reputation: Research lenders for quality customer support and a solid reputation, as this affects your loan experience.
  4. 4
    Look for alternatives

    Alternatives to personal loans might be more suitable for individuals with bad credit. Exploring options such as credit-builder loans, secured loans or peer-to-peer lending could offer more favorable conditions or ease of approval.

  5. 5
    Improve your credit score

    Enhancing your creditworthiness is a methodical process that can increase your chances of personal loan approval in the future. Ways to start improving your credit score include making timely payments, reducing debt, and checking your credit reports for inaccuracies.

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EXPERT TIP

Work on improving your credit score before applying for a personal loan to increase your chances of approval and getting better terms. Here are some long-term steps to consider:

  • Monitor your credit utilization ratio: Keep your credit utilization ratio low, as high credit utilization can negatively impact your credit score. Aim to use less than 30% of your available credit limit.
  • Don’t close old credit cards: The length of your credit history contributes to your credit score. Even if you no longer use a credit card, keep it open unless it has an annual fee.

—Alvin Yam, CFP

FAQ About Bad Credit Loans in California

It's common for borrowers to have questions or concerns about personal loans, especially if they have less-than-perfect credit. We compiled answers to frequently asked questions to assist in this process, offering clarity and guidance to help you make well-informed decisions.

What is the best personal loan lender for bad credit in California?
Which lender in California has the lowest interest rates for bad credit?
Which lender in California has the lowest minimum credit score requirement?
How to apply for a personal loan for bad credit in California?
How long does it take to get a bad credit loan in California?
Can I pay off my personal loan early in California?
Is there a difference between personal loans and installment loans in California for bad credit?

Sources

Experian. "What Is the Average Credit Score in the U.S.?." Accessed April 4, 2024.

TransUnion. "Credit Industry Snapshot." Accessed April 4, 2024.

About Zachary Romeo, CBCA

Zachary Romeo, CBCA headshot

Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.

Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.

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The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.

Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about our editorial policies and expert editorial team.

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