Best Loans for Bad Credit in Alabama for 2024

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Reviewed byAlvin Yam, CFP
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Updated: April 11, 2024

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Happy Money, with a MoneyGeek score of 93 out of 100, is the best personal loan lender for bad credit in Alabama. It stands out for its outstanding customer service, competitive interest rates, credibility and transparency. As the runner-up, Avant is recognized for its broad payment options, quick application and approval process, and strong customer service, holding a MoneyGeek score of 93 out of 100.

MoneyGeek reviewed four personal loan lenders in Alabama that disclosed minimum credit score requirements, ranging from 580 to 640, to pinpoint the best personal loans for bad credit in the state. While these highlighted lenders are solid choices, Alabama Credit Union, Alabama Central Credit Union and MAX Credit Union also present other viable options for localized personal loan services in Alabama.

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Calculate Your Monthly Loan Payment in Alabama

In a recent Credit Industry Snapshot report by TransUnion, the average new account balance for personal loans in Alabama stands at $4,722. When you take out a personal loan, you agree to pay back the principal amount and interest over a specified period, typically in monthly installments. Understanding your monthly payments is crucial to managing your finances effectively if you have a less-than-perfect credit history.

To accurately estimate your loan payments, consider using MoneyGeek's personal loan calculator. This tool can help you plan your budget by clearly showing your monthly financial obligations.

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Best Bad Credit Loans by Credit Score in Alabama

With an average credit score of 692, Alabama's average is below the national average of 715 based on Experian data.

Some lenders in Alabama consider applicants with low credit scores but typically charge higher interest rates and offer less advantageous terms. The table below shows which personal loan lenders are accessible in Alabama based on your credit score.

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What to Do if Your Loan Application Is Denied in Alabama

It's not uncommon to face a personal loan application denial in Alabama, but this doesn't halt your borrowing journey. Here are some measures to enhance your chances for approval on future applications.

1

Find out the reason for the denial

If you are denied a personal loan, it could be due to a poor credit score, a high debt-to-income ratio, insufficient income or mistakes in your application. Review the reasons provided by the lender to address your areas of weakness and reduce the likelihood of future denials.

2

Modify your loan terms

Consider speaking to your lender about changing the loan amount or repayment terms to improve the chances of approval for your personal loan.

3

Find another lender

Lenders have distinct criteria for loan approval. Compare lenders and evaluate key factors to choose one that aligns with your needs and credit profile.

  • Eligibility requirements: Verify each lender's criteria for credit scores, income levels, debt-to-income ratios and employment history.
  • Interest rates: Search for lenders offering competitive interest rates, which is beneficial for applicants with less than perfect credit.
  • Additional fees: Consider lenders' origination, late payment, and prepayment fees. Avoiding these can be advantageous, especially for those with lower credit scores.
  • Loan terms: Assess the various repayment periods lenders provide for personal loans, considering the impact of short and long-term agreements.
  • Customer service and reputation: Research lenders to understand their customer service quality and overall reputation before deciding.
4

Look for alternatives

If personal loans are not currently available to you due to a low credit score, explore other options such as credit builder loans, secured loans or credit union loans that may accommodate borrowers with bad credit.

5

Improve your credit score

Working towards improving your credit score can ultimately enhance your eligibility for a personal loan. Strategies include making on-time payments, reducing debt and regularly checking your credit report for errors.

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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 Alabama

When shopping for personal loans in Alabama, it's common for borrowers, especially those with bad credit, to have questions or concerns. To assist in this process, we compiled answers to some frequently asked questions, offering clarity and guidance to help you make well-informed decisions.

Happy Money is recognized as the best personal loan lender for bad credit in Alabama with a MoneyGeek score of 93 out of 100.

The lenders with the lowest starting APRs are Achieve and Prosper, both offering a rate of 8.99%. Typically, only borrowers with excellent credit profiles are likely to receive this rate.

Avant has the lowest minimum credit score requirement in Alabama, which is 580.

The time to receive funds from a bad credit loan in Alabama depends on the lender. Some lenders can provide funds as quickly as the same day, while others may take from the next business day up to a week.

Yes, you can pay off your personal loan early in Alabama. It is important to check with your lender about any potential prepayment penalties.

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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.