Unexpected expenses happen. Maybe it’s a broken water heater or a necessary car repair that’s out of budget. When savings fall short, it’s easy to worry about how to cover costs—especially if your credit score isn’t where you’d like it to be. But even with bad credit, you still have options to consider.
This guide explores reliable small loan options, their terms, and tips for responsible borrowing, even if you have poor credit.
Top 4 Small Loan Options for Bad Credit
When you’re dealing with a low credit score, finding a lender who’s willing to work with you can feel challenging. Fortunately, some lenders specialize in small loans for bad credit, making it easier to secure the funds you need without jumping through hoops.
Below, we’ve highlighted four reputable lending options that offer flexible terms and competitive rates, even if your credit history isn’t perfect. Each of these lenders is known for quick application processes, accessible loan amounts, and a strong track record with borrowers from various credit backgrounds.
Let’s take a look at the top choices for small loans that work for bad credit.
MoneyMutual
Features & Benefits
- Application takes less than 5 minutes
- Get a decision on your loan within minutes
- Funds are available within 24 hours
- Trusted by more than 2,000,000 borrowers
MoneyMutual is an online marketplace of lenders. They make it quick and easy to find a short-term cash advance loan in as little as 24 hours.
One application can potentially get you multiple loan offers. MoneyMutual has been trusted by more than two million customers. They serve borrowers with bad credit from all 50 states except New York and Connecticut.
CashUSA
Features & Benefits
- Flexible borrower requirements
- Loan request can be approved within minutes
- Money deposited as early as 1 business day
- All credit types accepted
CashUSA connects borrowers with lenders. Each application is sent to the lender most likely to lend to the borrower. This platform caters to a diverse range of credit profiles, making it more than just a broker for those with poor credit.
Interest rates vary depending on the lender, so make sure you read through the terms for each emergency loan before you choose. Applying online only takes a few minutes, and funds are often available the next day.
PersonalLoans.com
Features & Benefits
- Multiple loan types available
- Fast loan decision
- Funds deposited as soon as you accept an offer
- Nationwide availability
PersonalLoans.com offers access to multiple loan types through a network of lenders, catering to individuals with credit scores as low as 600. Each lender provides unique rates, allowing you to choose the best offer for your needs.
The online application process is quick and easy, taking just minutes to complete. You’ll receive a decision within one business day, and approved funds can be deposited shortly after you accept an offer.
CashAdvance.com
Features & Benefits
- Response by email or phone within minutes of submitting request
- Money deposited as soon as the next business day
- High approval rate even with bad credit
- Trusted since 1997
CashAdvance.com provides a free service that quickly connects customers with lenders that offer short-term loans that may work for them.
Whether you have an emergency or an unexpected expense, this online lender may be able to help you out quickly.
How to Choose the Right Small Loan for Bad Credit
When you’re comparing small loans, it’s essential to look beyond the approval rates. Here’s what to consider:
- Interest rates and fees: Pay close attention to the APR and any hidden fees. Some lenders might have higher rates, so it’s important to compare options to avoid unnecessary costs.
- Loan terms: The length of the loan affects your monthly payments and total interest paid. Shorter terms mean higher monthly payments but lower overall interest, while longer terms provide lower payments but add to the cost.
- Funding speed: If you need funds quickly, some lenders offer same-day or next-day deposits, which can make a difference in emergency situations.
- Customer service and flexibility: Some lenders offer flexible repayment options or customer support to help you stay on track. Look for a lender with good customer reviews, especially for those with credit challenges.
Tips for Improving Your Approval Chances with Bad Credit
If you’re concerned about getting approved due to a low credit score, here are a few strategies that can help increase your chances:
- Show proof of income: A stable income reassures lenders that you can manage monthly payments. Have recent pay stubs or bank statements ready to submit during your application.
- Consider a cosigner: Adding a cosigner with better credit can make a difference, as their credit strength adds security to your loan. Just make sure both parties are comfortable with the arrangement.
- Lower your loan amount: Requesting a smaller loan amount can sometimes improve approval odds. It reduces the lender’s risk, making it easier to qualify.
- Provide additional documentation: Some lenders may consider more than just credit scores. Documents showing consistent bill payments, like utilities or rent, can demonstrate your reliability as a borrower.
These tips can help boost approval chances and make you a more attractive applicant, even with a lower credit score.
Responsible Borrowing with Bad Credit
Taking out a loan with bad credit comes with its own set of challenges, but responsible borrowing practices can help you make the most of your loan and avoid potential pitfalls:
- Borrow only what you need: Taking a smaller loan reduces the interest you’ll pay over time and helps ensure you’re not overextended.
- Focus on timely repayments: Making payments on time not only keeps you in good standing with the lender, but can also positively impact your credit score.
- Avoid unnecessary fees: Read the terms carefully to understand any late fees or penalties. Some lenders even offer a grace period, which can be helpful if you’re worried about timing.
- Set a realistic budget: Before accepting a loan, review your monthly budget to make sure the payments are manageable alongside your other financial commitments.
What to Do If Your Loan Application is Denied
Even with preparation, there’s a chance your application might be denied. Here are steps you can take to move forward:
- Ask for feedback: Some lenders will provide insights into why the application was declined, which can help you address these areas before reapplying.
- Consider other loan types: Look into credit-builder loans, secured loans, or smaller loans that might have less strict approval criteria.
- Work on improving your credit: Paying down existing debt and staying current on bills are solid ways to improve your score and boost future approval chances.
- Apply with a different lender: Each lender has unique criteria, so a different lender may be more accommodating to your financial situation.
Certainly, here’s an expanded version of the “Alternatives to Small Loans for Bad Credit” section, followed by a conclusion.
Alternatives to Small Loans for Bad Credit
If a traditional small loan isn’t an option, here are a few alternatives that might work better for your situation:
- Borrowing from friends or family: This option can provide a flexible, interest-free way to cover expenses, but it’s essential to set clear expectations. Consider drafting a simple repayment agreement to ensure both parties are comfortable with the terms.
- Credit union loans: Credit unions often provide more personalized service than large banks. They may be willing to offer smaller loans with manageable terms, even if your credit score is lower. Many credit unions also offer “payday alternative loans” of PALs, which can be a more affordable choice for those with bad credit.
- Credit card cash advances: If you already have a credit card, a cash advance can give you quick access to funds. Be mindful of the associated fees and higher interest rates on advances, as this can add up quickly if not repaid promptly.
- Peer-to-peer lending: Online peer-to-peer (P2P) platforms connect borrowers with individual lenders willing to fund loans. These platforms may provide more flexibility for those with lower credit scores, but be sure to review the terms and rates carefully.
These options provide flexibility and may help you avoid higher-interest loans, especially if you’re working to rebuild your credit.
Final Thoughts
Taking out a small loan with bad credit can seem challenging, but there are options available that cater to various financial situations. From specialized online lenders to local credit unions, finding the right lender can provide the funds you need without added stress. Remember, taking time to compare loan options, understand terms, and make a solid repayment plan can help you borrow responsibly and potentially improve your credit over time.
Whether you decide on a small loan, an alternative, or focus on rebuilding your credit first, keep your long-term financial goals in mind. With careful planning and a realistic budget, you can tackle unexpected expenses without putting your future finances at risk.
