Best Loans for Bad Credit in Minnesota for 2024

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Reviewed byAlvin Yam, CFP
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Updated: April 9, 2024

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Happy Money stands out as Minnesota's best personal loan lender for bad credit with a MoneyGeek score of 93 out of 100. It is distinguished by its exceptional reputation and transparency, quality customer service, and fast application and approval process. As the runner-up, Avant is also a strong choice in this category with a MoneyGeek score of 93 out of 100, offering competitive interest rates, the most flexibility in loan terms, and a quick application and approval process.

MoneyGeek reviewed four personal loan lenders in Minnesota that disclosed minimum credit score requirements between 580 and 640 to help identify the best options for individuals with bad credit. In addition to the highlighted top two lenders, Minnesota Valley Federal Credit Union, Mid Minnesota Federal Credit Union and Minnco Credit Union are additional providers worth considering for their localized services.


Calculate Your Monthly Loan Payment in Minnesota

According to the Credit Industry Snapshot report, Minnesota's average new account balance for personal loans is $11,740. For repayment, personal loans typically require regular, fixed payments over a set period until the loan is fully paid off.

Managing your loan payments effectively is especially pressing if you have bad credit, as it can impact your interest rates and overall loan cost. To help you estimate your loan payments, consider using the personal loan calculator from MoneyGeek for a clear picture of your potential monthly obligations.


Best Bad Credit Loans by Credit Score in Minnesota

Minnesota's average credit score of 742 is higher than the national average of 715.

Several lenders in Minnesota may consider applicants with lower credit scores, though be prepared for potentially higher interest rates and more restrictive terms. Use the table below to explore personal loan lenders in Minnesota that match your credit profile.


What to Do if Your Loan Application Is Denied in Minnesota

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


Find out the reason for the denial

If a lender denies your loan application, it could be due to a poor credit score, a high debt-to-income ratio, insufficient income, or mistakes in your application. Review these reasons carefully to strengthen your application for next time.


Modify your loan terms

You might reconsider approaching your lender to see if there is flexibility with the loan amount or repayment terms to secure approval.


Find another lender

Lenders have their own approval criteria. This warrants a thorough comparison to identify a suitable lender based on your needs and credit profile.

  • Eligibility requirements: Different lenders set specific benchmarks for credit scores, income levels, debt-to-income ratios and employment history. Understand these before applying.
  • Interest rates: It's beneficial to look for competitive interest rates tailored for less-than-perfect credit.
  • Additional fees: Be aware that lenders may apply origination, late, or prepayment fees. Some lenders, however, do not. This is particularly relevant for individuals with bad credit.
  • Loan terms: Loan terms vary, and the choice between a shorter and a longer term impacts overall costs.
  • Customer service and reputation: The quality of customer support and the lender's reputation are pertinent when seeking personal loans, especially with a bad credit history.

Look for alternatives

Aside from personal loans, there are other options that may suit individuals with bad credit. Researching these alternatives is advisable to ensure you make an informed financial decision.


Improve your credit score

Enhancing your creditworthiness is a process that unfolds over time. Methods to improving your credit score include paying bills on time, reducing outstanding debt and keeping credit card balances low.

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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 Minnesota

When shopping for personal loans in Minnesota, 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.

The best personal loan for bad credit in Minnesota is offered by Happy Money with a MoneyGeek score of 93 out of 100.

Achieve and Prosper both offer the lowest starting APR for personal loans at 8.99%. Keep in mind that only borrowers with excellent credit will likely qualify for this rate.

The lender with the lowest minimum credit score requirement in Minnesota is Avant, with a requirement of a 580 credit score.

The time to receive funds from a bad credit loan in Minnesota varies by lender. Some offer same-day funding, while others may take from the next business day up to a week.

Yes, you can pay off your personal loan early in Minnesota. It's recommended to consult with your lender regarding any possible 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.