How can I borrow money with bad credit

How can i borrow money with bad credit

If you’re a part of the one-third of Americans who have a less-than-perfect credit score, you probably have limited borrowing options.1 Although it may be more difficult with poor credit, it’s still possible to get the cash you need in a hurry, even with a bad credit score. How can I borrow money with a bad credit score? Are there no credit check loans? Is it safe to take out a quick cash loan with a low credit score? Which personal loan is right for me, considering my credit score? These are important questions you should answer before signing for a loan.

There are many personal loan options available that allow you to get quick cash in an emergency, regardless of your credit score. Read on to learn some of the best ways to borrow if you have a bad credit score!

Loans For a Bad Credit Score

For anyone with a decent credit score, borrowing money in a pinch may be as simple as applying for a bank loan or opening a credit card from credit unions, banks, or private lenders

Having a low credit score, on the other hand, tells lenders and banks that you may not be as financially trustworthy. This means that your credit score may subject you to higher interest rates and less favorable terms. These are just some of the consequences of bad credit.

If you’re currently experiencing financial hardship, the following loans will be your best bet for getting cash immediately, despite your credit score. Let’s start with a table comparing them: 

FactorPersonal LoansPayday LoansTitle Loans
Type of LoanTypically Unsecured but secured loans may be an option.Short-term, usually unsecured.Secured loans
Interest RatesTypically lowerExtremely highHigh
Credit Check RequiredYesNo (usually)Yes (usually)
Repayment PeriodMonths to years2 weeks to a monthMonths to years 
Loan AmountsModerate to highLow to moderateModerate to high
CollateralTypically NoneTypically noneVehicle title
Application ProcessMore involved with banks and credit unions, but faster with online lenders.Simple and quickSimple and quick
Approval TimeLonger with traditional lenders but faster with online lenders—can be a few minutes to hours.Minutes to hoursMinutes to hours
Risk of Losing AssetNoneNoneRisk of losing vehicle

Please note that the specifics of these loans can vary depending on the lender and where you are located.

Below are more details on each loan type:

Online Personal Loans For a Bad Credit Score

Personal loan options are considered to be one of the more affordable and safe options when it comes to short-term loans for a bad credit score. 

Personal loans tend to be for larger amounts than payday or some title loans, which are usually also sought out with a bad credit score. The average balance on a personal loan in 2022 was $11,116.2 They’re paid back through monthly installments over a longer period than payday or title loans as well, making them easier on your credit score. 

And so, when looking for bad credit loans, start with personal loan options. Usually, these personal loan options are unsecured, but you may be able to find a secured loan. Secured personal loans may have more flexibility with a poor credit score or credit history. You can find personal loans with online lenders, credit unions, and banks. 

Payday Loans for Bad Credit Scores

Payday loans are very short-term, unsecured loans for a bad credit score, usually paid back within two weeks on the borrower’s next payday. Depending on the lender, your credit score may affect the interest rates and fees for these unsecured loans. However, in other cases, some payday lenders may not check credit history at all. While these cash advance loans may offer fast cash, it’s wise to opt for a lower-interest option, like an installment loan, if possible, to avoid further damaging your credit score.

Title Loans

Title loans are secured loan options, which means that a borrower must offer the lender collateral to get one. The collateral, in this case, is the borrower’s vehicle. The lender will assess the value of the vehicle and offer a loan based on a fraction of the value. Your credit score may not play as big a role here, but if you can’t repay the loan, the lender will take your vehicle and sell it to recoup their loss. And so, before you sign up for one of these secured loan options, you should really think about whether you can make the monthly payments.

Can I Borrow $5,000 With a Personal Loan and a Low Credit Score?

Another important thing to remember with bad credit loans is that they’re usually for smaller amounts due to your credit score. Many payday lenders will offer borrowers only a few hundred dollars at a time, given the risk associated with a lower credit score. You may be able to get a large amount through a title loan if your vehicle has a high value, but you also risk losing your car, truck, or SUV.

An online personal installment loan is likely to offer more cash than other short-term loans, even with a poor credit score. Depending on the lender, you may be able to get several thousand dollars. But your credit score and many other factors that a lender will consider when determining how much they can offer you:

Your Current Income

When it comes to bad credit loans such as payday loans or some personal loans, lenders often prioritize your current income over your credit scores. This is because your income is a direct indicator of your ability to repay the loan. A steady and substantial income can increase your chances of obtaining a bad credit personal loan, even if your credit score is not up to par. 

Lenders typically have a minimum income requirement to ensure that the borrower can make the monthly payments. While there may be a minimum credit score requirement as well, it’s often lower in the case of bad credit loans as compared to traditional loans.

Moreover, some lenders may require proof of income to ensure the information you provide is accurate and reliable. This could be in the form of recent pay stubs, tax returns, or even bank statements showing regular deposits. The higher your income relative to the amount you wish to borrow, the more favorably lenders will view your loan application.

The Overall State of Your Bank Account

Alongside your current income, lenders will scrutinize the overall state of your bank account when considering your application for a bad credit personal loan. They are interested in the funds that flow in and out of your account, as it reflects your financial management skills and the ability to handle loan repayments.

Specifically, lenders may look at the following:

Average Daily Balance

Maintaining a higher average daily balance suggests financial stability, which can be a positive signal to lenders.

Deposit History

Regular deposits into your account indicate a consistent income, which is a favorable factor for loan approval.

Overdraft Incidences

Frequent overdrafts could be a red flag as it indicates financial mismanagement or insufficient income to cover your expenses.

Existing Monthly Obligations

Lenders will assess your monthly obligations, such as other loan payments, rent or mortgage, utility bills, etc., against your income to determine your ability to manage an additional loan payment.

By looking at these aspects of your bank account, lenders aim to gauge your financial responsibility and the likelihood of you fulfilling the loan repayment terms. While a poor credit history or a low credit score may affect the interest rate and terms of the loan, a healthier bank account and a stable income can significantly improve your chances of approval, often allowing for a better negotiation position when discussing loan terms, even if the minimum credit score requirement is not met.

It’s crucial to maintain a healthy bank account and a steady income, which can positively impact your eligibility for bad credit personal loans or another bad credit loan, regardless of your credit scores.

Your History of Borrowing Over Credit Scores

An important part of credit isn’t just a person’s credit score. It is also their credit history, which comes from a credit report. When a lender for a bad credit loan pulls your credit report, they can see what kinds of credit accounts, such as personal loans or credit cards, you have experience borrowing from. Along with that, they can see your history of monthly payments with past credit accounts. 

The Amount of Debt You Have For a Bad Credit Loan

When considering applying for bad credit loans, the amount of existing debt you have is a significant factor that lenders evaluate. It’s essential to understand how your debt levels might impact the likelihood of obtaining a loan, especially if you are dealing with a poor credit history. 

Below are insights on how bad credit loan lenders view your existing debt and the implications it may have.

Debt-to-Income Ratio (DTI) For a Loan With Bad Credit

Bad credit loan lenders often assess your debt-to-income ratio when considering your loan application. This ratio is a measure of your monthly debt payments against your monthly income. A high DTI indicates that a significant portion of your income goes towards servicing existing debts, which can be a red flag for lenders, even those offering loans for bad credit.

Credit History and Credit Scores

Your credit history and credit scores are critical factors for lenders evaluating your loan application. They give an overview of your borrowing behavior and repayment habits. However, bad credit loans are often geared towards individuals with less than stellar credit scores, though the terms may be less favorable compared to conventional personal loans for good credit scores. Check your credit report and score before applying for loan options so you can fix any errors or inconsistencies. 

Secured Loans vs. Unsecured Loans for Bad Credit

Bad credit loans can be either secured or unsecured. Secured loans require collateral, like a home or car, which can be a viable option for those with significant debt, as it reduces the lender’s risk. On the other hand, unsecured loans for bad credit are riskier for lenders, and your existing debt level could significantly impact the loan terms or approval.

Debt Payments and Bad Credit Loans

The payments on existing debts are scrutinized to determine if you can handle additional financial obligations. If your monthly payments towards current debts are high, lenders might be hesitant to offer a new personal loan, fearing you might struggle with repayments. If you are struggling with debt, debt consolidation is one strategy.

Getting Bad Credit Loans For Emergencies

Several common emergencies require fast cash. Whether your vehicle broke down, an appliance in your home stopped working, or you’re facing some large and unexpected medical bills, there are answers out there, even if your credit score is less than perfect.

All three of the bad credit loans described above are common choices for borrowers facing an emergency with a poor credit score. This is because they tend to give borrowers access to the cash they need immediately, despite their credit score. But how fast is that exactly?

With many online personal loans like installment loans, borrowers can apply and get approved within minutes, regardless of their credit score or credit report. Depending on the lender, you may even be able to get your loan funds the same day or by the next business day. Online lenders for bad credit loans tend to be extremely fast.

Are Guaranteed Approval Loans Real for Individuals With Poor Credit Scores?

What is a guaranteed approval loan? Can a lender actually guarantee that I’ll be approved for a personal loan despite my credit score? You’re right to question these things. While you may be more likely to qualify for a specific type of loan with a poor credit score, a credible lender probably won’t tell you that you’re guaranteed to be approved.

Even bad credit loan lenders will have a set of guidelines that determine whether or not a borrower should be offered a loan, often taking your credit score into account. It’s wise to steer clear of any lender that tells you they’ll provide a loan no matter what your credit score is.

FAQS About Bad Credit Loans

What impact does my credit score have on acquiring a personal loan?

Your credit score is a vital factor that most personal loan lenders consider. A higher credit score can get you better interest rates and terms. If you have a low credit score, your borrowing options may be limited, but not impossible.

How do bad credit loans differ from regular loans?

Bad credit loans are tailored specifically for borrowers who might not qualify for traditional loans due to a poor credit history. These often come with higher interest rates but can be a feasible option for those with bad credit.

What’s the difference between secured and unsecured loans?

A secured loan requires collateral, like your car or home. If you default, the lender can claim the collateral. Unsecured loans, like most personal loans, don’t require collateral but may have higher interest rates, especially for those with bad credit.

How can credit unions help if I have a poor credit score?

Credit unions are member-owned and might offer more flexible loan options than traditional banks. They often provide payday alternative loans, which are a more affordable choice than standard payday loans.

How important is my credit history when applying for loans for bad credit?

Credit history is essential. Even online lenders who may offer bad credit personal loans will review your credit history to assess risk. However, other factors, like a bank account and a debt-to-income ratio, also play a role.

Can I get an unsecured personal loan with bad credit?

Yes, some online personal loans are unsecured. However, due to the risk to lenders, interest rates might be higher for those with bad credit.

Why are payday loans often not recommended, even as bad credit loans?

Payday loans can have significantly higher interest rates than other loan types. There are better alternatives, like bad credit personal loans or borrowing from credit unions. Personal loans can come with more competitive interest rates and longer repayment terms and may even be available as bad credit loans.

Is my monthly payment higher with bad credit loans?

Monthly payments depend on your loan’s interest rate and terms. Typically, bad credit loans have higher interest rates, which might increase monthly payments.

What’s an origination fee, and do all bad credit loans have them?

An origination fee is a charge by lenders for processing a new loan. Not all bad credit loans have them, but it’s essential to inquire and understand any fees associated with any loan, including a bad credit loan.

Can I compare bad credit loans from multiple lenders?

Yes, it’s advisable to compare bad credit loans from multiple lenders to find the best terms and rates. Ensure each is a reputable lender for your bad credit loan and review factors like origination fees, loan amounts, and minimum credit score requirements.

CreditNinja’s Thoughts On a Bad Credit Loan

Having bad credit doesn’t mean you are out of options. With a myriad of borrowing alternatives tailored to cater to different financial scenarios, achieving your financial goals is within reach. Among the prominent options is securing a bad credit personal loan, which hinges less on your credit score and more on your current income and the overall state of your bank account.

At CreditNinja, our personal loans are designed for borrowers with less-than-favorable credit. You can apply, get a decision, once approved—get your funds, and make payments all from the comfort of your home. If you need a bad credit loan, CreditNinja is here to help! 


  1. 2022 report | Transunion
  2. How Many Americans Have Bad Credit? | Fox Business

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