If you’re struggling to cover an emergency expense, you’re not alone. Fifty-four percent of those surveyed by the Federal Reserve said they couldn't handle an emergency expense over $2,000 only using savings.
A hardship loan can offer a lifeline. Even if you have bad credit (a FICO score below 580), there are still some loans you might qualify for. We’ll look at which lenders offer personal loans for bad credit, how to improve your application, which loans to avoid, and alternatives if you can’t qualify.
Best for fair credit
Upgrade
Fox Money rating
Est. APR
9.99 - 35.99%
Loan Amount
$1000 to $50000
Min. Credit Score
600
Pros and cons
Fair credit borrowers eligible
Autopay and direct pay discounts
Can fund in as little as 1 business day
Mobile app
Secured loans available
High maximum origination fee
Cosigners not accepted on home improvement loans
Low J.D. Power ranking
More details
Overview
Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don't need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.
However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Repayment terms
2 to 7 years
Fees
Origination fee
Discounts
Autopay and direct pay
Eligibility
Available in all states
Min. income
Does not disclose
Customer service
Soft credit check
Time to get funds
1 business day
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Best debt consolidation loans for bad credit
Universal Credit
Fox Money rating
Est. APR
11.69 - 35.99%
Loan Amount
$1000 to $50000
Min. Credit Score
560
Pros and cons
Borrowers with bad credit considered
No minimum income requirement
Autopay and direct pay discounts available
Can fund in one business day
High APRs
Potentially high origination fees
Not available in Iowa
More details
Overview
Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.
Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you've improved your credit score.
Loan amount
$1,000 - $50,000
Repayment terms
3, 5, or 7 years
Fees
Origination fee
Discounts
Autopay and direct pay
Eligibility
A U.S. citizen or permanent resident; not available in DC, IA, SC, WV
Min. income
Customer service
Phone, email
Soft credit check
Time to get funds
As soon as 1 business day after acceptance
Loan uses
Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
Best for all credit types
Avant
Fox Money rating
Est. APR
9.95 - 35.99%
Loan Amount
$2000 to $35000
Min. Credit Score
550
Pros and cons
Borrowers with bad credit considered
Funds as soon as the next business day
2-year loan terms available
No discounts offered
Origination fee
Not available in HI, IA, MA, ME, NY, VT, or WV
More details
Overview
Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who've prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.
Loan amount
$2,000 to $35,000**
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, and WV
Min. income
$1,200 monthly
Customer service
Phone, email
Soft credit check
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
Repayment terms
2 to 5 years
Best fast personal loans for all credit types
Upstart
Fox Money rating
Est. APR
7.80 - 35.99%
Loan Amount
$1000 to $50000
Min. Credit Score
620
Pros and cons
May fund in 1 business day
No minimum credit score requirement on lender site
Low minimum APR
Trustpilot score of 4.9/5 stars
May charge a high origination fee
No discounts offered
More details
Overview
Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it's also is one of few lenders that doesn't have a minimum credit score requirement (if you apply on the lender's website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.
Loan amount
$1,000 to $50,000
Fees
Origination fee
Eligibility
Available nationwide
Min. income
Customer service
Phone, email
Soft credit check
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
Best bad credit personal loans
OneMain Financial
Fox Money rating
Est. APR
18.00 - 35.99%
Loan Amount
$1500 to $20000
Min. Credit Score
540
Pros and cons
Flexible eligibility requirements
Offers secured options
Competitive bad-credit loans
Physical presence
Availability
Origination fees
High starting APR
More details
Overview
OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can't, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.
Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn't a given.
Loan amount
$1,500 to $20,000
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Min. income
Does not disclose
Customer service
Phone, email
Soft credit check
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
We evaluated the best hardship loans for bad credit based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, fees, discounts, and whether cosigners are accepted. Our team of experts gathered information from each lender’s website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.
Read our full lender rating methodology for more information.
A hardship loan is any type of loan available on short notice to borrowers in financial distress. Some personal loan lenders offer hardship loans for bad credit. Credit card cash advances and cash advance apps also qualify. As do title loans and payday loans, though those are best avoided since they tend to be predatory nature and may cause more financial problems than they solve.
Personal loans are installment loans that can be secured or unsecured. A secured loan uses collateral, like your house or car, to secure the loan. An unsecured loan typically has a higher APR if you have bad credit, up to 35.99%. These loans are available through traditional banks, credit unions, and online lenders.
Personal loans can have some key benefits during difficult financial situations, including relatively quick approvals, loan amounts as low as $1,000, and repayment terms of one to seven years. They also tend to have lower APRs, on average, than credit cards. The average APR for a 24-month personal loan was 12.49% in February 2024, according to the Federal Reserve, while the average for a credit card was 21.59%.
Keep in mind
If you have bad credit, your APR will likely be higher than the average. According to Credible data, borrowers with credit scores between 600 and 639 prequalify for an average rate of 29.97% on 3-year loans.
Learn more: What is a personal loan?
Some borrowers with bad credit may turn to payday loans, which are short-term unsecured loans with fees that are known to amount to incredibly high APRs, typically in the triple digits. The loan is generally repaid by your next payday (two weeks). Payday loans can come with fees that amount to nearly 600% APR, depending on where you reside. Many state laws set a maximum for fees from $10 to $30 for every $100 borrowed.
While payday loans may seem like a good option for struggling borrowers, they should only be considered as a last resort.
Certain federal credit unions offer these as alternatives to predatory payday loans. There are two types: PALs I or PALs II.
- PALs I are available in amounts from $200 to $1,000 — and must be repaid within one to six months. You also must be a member of the credit union for at least one month before applying.
- PALs II have loan amounts up to $2,000 and extended terms from one to 12 months. No waiting period is required to be eligible for this type.
For both types, credit unions are prohibited from charging more than 28% APR, compared with the 400% or more charged on some payday loans. There may also be a required application fee that can’t exceed $20.
If you only need a small amount to cover you in the short term, a cash advance from either an app or your credit card can be less expensive than other types of loans.
- Cash advance app: Usually repaid by your next paycheck, cash advance apps typically don’t charge interest or require a credit check. You can borrow anywhere from $100 or less to $750 per pay period, depending on your credit profile and what the app offers. Some apps charge fees such as expedited funds fees, subscription fees, or optional tips that can equate to high APRs, but they can be more affordable than a payday loan. EarnIn and Dave are two options to consider.
- Credit card cash advance: If you have a credit card, you can typically withdraw cash up to a certain limit from an ATM or with a check. However, using your credit card for a cash advance can be an expensive way to borrow. For example, a cash advance starts accruing interest as soon as you withdraw your funds. There is no grace period, and they usually have higher APRs than a regular credit card charge. Credit card cash advances also have a fee you must pay when you use the service, either a percentage of the transaction or a flat fee.
Check out: Online payday advance apps
Pros and cons of hardship loans
There are multiple types of hardship loans, so some pros and cons may only apply to certain loan types.
Pros
- Fast funding
- Use for any purpose
- Long repayment terms
Cons
- Can be predatory
- High APRs
- Fewer options for bad credit
- Lower loan limits
- Can have short repayment terms
- Fast funding: Many hardship loan types, including personal loans, may allow you to receive your money within just one or two business days. Cash advance apps can typically send you funds in just a few minutes, for a fee. However, some lenders can take up to a week.
- Use for any purpose: Hardship loans can be used for just about any purpose, including debt consolidation, unexpected medical bills, or major repairs.
- Long repayment terms: Some hardship loans, such as personal loans, can have repayment terms of several years, helping to keep your monthly payments low.
- Can be predatory: Certain loans, such as payday loans, prey on borrowers in difficult situations and charge them high fees for short-term loans.
- High APRs: Even if you avoid a payday loan and get a personal loan or PAL, you’re likely to pay a higher interest rate than average if you have bad credit. Lenders typically charge higher interest rates for bad credit, up to 35.99%.
- Fewer options for bad credit: With bad credit, you may have fewer options for a hardship loan. Many personal loan lenders require good to excellent credit to qualify.
- Lower loan limits: You’re unlikely to qualify for a large loan. Additionally, payday loans and PALs are generally only available in small amounts, a maximum of $2,000 for PALs II.
- Can have short repayment terms: Certain hardship loans, such as payday loans and cash advances through apps or credit cards, have repayment terms of just weeks, resulting in large payments.
Hardship loans are designed to provide relief to individuals facing significant financial difficulties. These loans are typically offered by banks, credit unions, or online lenders and are intended to help individuals cover essential expenses during times of hardship, such as medical emergencies, job loss, natural disasters, or other unforeseen circumstances.
- Eligibility criteria: Each lender will have its own eligibility requirements for approval, but common criteria for personal loans include a minimum credit score and/or income and a maximum debt-to-income ratio (DTI). If you are applying for a loan with poor credit, you’ll likely face higher rates than those with fair to good credit. APRs for bad-credit personal loans can reach as high as 35.99%, though this is still significantly lower than on many payday loans.
- Loan amount: The amount of funds you may be eligible to receive from a personal loan will depend on the lender and your credit profile. Amounts on the higher end of a lender’s range are usually reserved for borrowers with excellent credit and incomes. It’s also best practice to borrow only what you need.
- Application process: To apply for a hardship loan, you’ll typically need to submit an application form to the lender and include information like pay stubs, your Social Security number, and proof of identification. Some lenders allow for prequalification, where you can receive estimated rates and terms. This process typically uses a soft credit pull, which doesn’t impact your credit score. Once you move forward with the application, however, a hard credit pull will be done that can impact your score for a short period of time. Prequalification is also only an estimate, and your actual rate may be higher.
- Approval and disbursement: If approved, the loan funds are disbursed to you typically via direct deposit into your bank account or through a check. You can receive funds as quickly as the same day, but some lenders can take up to five business days to disburse the funds.
- Repayment terms: You may be able to get a repayment period up to seven years or more, depending on the lender and the amount you borrow. You’ll pay in fixed monthly installments if you go with a personal loan. However, if you opt for a payday loan, you typically have a repayment period of two weeks.
- Impact on finances: It's essential for you to consider how a hardship loan impacts your overall financial situation. While these loans can provide short-term relief, they also are a financial obligation to be repaid. You should carefully consider whether you can afford the monthly payments and how taking on additional debt will affect your long-term financial goals.
If you have a bad credit score, you’re more likely to land higher annual percentage rates (APRs) and may have fewer loan options available to you. You’ll want to judge the options you do have carefully to find the option that’s best for you. Here’s how to compare hardship loans for bad credit.
- APR: The annual percentage rate outlines how much you’ll pay to borrow money on an annual basis and includes the interest rate and any upfront fees. It is important to pay attention to the APR, especially on payday loans, as the cost is often expressed as a fee rather than an interest rate.
- Repayment term: The repayment term directly impacts your loan’s monthly payment. Terms for personal loans typically range from two to seven years. Payday loans can have terms as short as two weeks, while payday alternative loan (PAL) terms can range from as little as a month to as long as a year, depending on the type. On personal loans, the longer your term, the more you’ll pay in interest. However, it’s best practice to choose a monthly payment that you can comfortably afford for the life of the loan, even if that means more interest in the long run.
- Loan amount: The loan amount can impact your interest costs as well. Personal loan financing limits vary by lender and your credit profile. However, the more you borrow, the higher your monthly payment could be. Only borrow what you need, and make sure you can properly budget for your payments.
- Collateral: Secured personal loans allow you to use an asset as collateral to help you qualify for a loan or secure better terms, which can be helpful if you have bad credit. Collateral could include your house, car, or investment accounts. Using collateral can be a big risk, however. If you can’t make your payments, the lender can seize your asset.
- Cosigner: Some lenders allow cosigners. Their credit and income is taken into account when your application is processed, which can improve your chances of approval. However, they also become responsible for making payments if you default.
- Fees: Some lenders charge fees, such as origination fees. Origination fees are typically 1% to 12% of the loan amount and are deducted from the loan funds before you receive them. Upfront fees like origination fees are reflected in the APR, but penalties like late fees are not.
- Time to fund: Some personal loan lenders can fund your loan as soon as the same or next business day, while others can take up to a week. Payday loans and cash advances can usually get your funds in minutes or as soon as the same day.
- Customer reviews: Consult trusted customer review websites such as Trustpilot and the Better Business Bureau. Getting insight from other borrowers’ experiences can help you make an informed decision.
Tip
When reading reviews, focus on patterns and trends rather than individual experiences alone. While one person's experience can provide valuable insight, multiple reviews can give you a more comprehensive understanding of a product or service.
If you are facing financial difficulties and are choosing to apply for a hardship loan, review the following steps.
Related: What is personal loan pre-approval?
Before deciding whether a hardship loan is right for you, research any alternatives that may be a better fit for your situation or budget.
- Home equity loan or line of credit: If you’re a homeowner, you may be able to get a secured loan or HELOC by borrowing against the equity you’ve built up in your home. You’ll need sufficient equity, typically 20%, and credit to qualify, but you may be eligible for a lower interest rate. Home equity lenders generally look for a credit score of 620 or higher as well as a DTI of 43% or lower. A home equity loan is a lump-sum payment you receive upfront, similar to a personal loan. A HELOC is a revolving account that lets you draw funds up to a certain amount, typically based on the available equity.
- Credit card: While credit cards aren’t ideal for emergencies because of their high interest rates — the average being 21.59% — they may be a better option than payday loans. You can also potentially qualify for a card with a 0% introductory rate. However, most introductory rates end after 6 months to a year, depending on the card.
- “Buy now, pay later” (BNPL) services: With these services, you can split a purchase into multiple fixed monthly payments and, depending on the provider, your credit may not be impacted. Terms vary based on the service, but typical options include interest-free payments every two weeks or monthly installments (with interest) on 3-, 6-, and 12-month plans. Some BNPL services may charge late fees.
- 401(k) loan: If you have money in your employer-sponsored 401(k), you may be able to borrow against your vested balance (if your plan allows 401(k) loans). You’re generally allowed to borrow up to 50% of your vested account balance, up to a maximum of $50,000. You must pay the loan back within five years, but could be required to pay back the entire balance immediately if you leave or lose your job. These loans can have low interest rates (9.50% to 10.50%), and a credit check isn’t required to qualify (since it’s already your money). Defaulting on these loans can come with tax penalties, however, so carefully review your options before opting for one.
Note
If 50% of your vested balance is less than $10,000, some 401(k) plans will let you borrow up to $10,000.
- Hardship withdrawal: An alternative to a 401(k) loan is a hardship withdrawal. The IRS allows you to withdraw from your 401(k) if you’re facing an “immediate and heavy” need. However, the funds are limited to only the amount necessary and you may be subject to a 10% additional income tax.
- Peer-to-peer loan: A peer-to-peer loan is a type of nontraditional financing that allows you to borrow from another individual or investor rather than a bank. They closely resemble personal loans, but you may have an easier time qualifying.
- Government and nonprofit assistance: If you’re struggling to pay your bills, consider contacting your local government or nonprofit organizations for assistance. For example, 211 can be a great resource for community services.
- Credit counseling: A credit counseling service can help you develop a debt management plan and work with your creditors on your behalf. Some services may require a small fee. The National Foundation for Credit Counseling is one place to start.
Unfortunately, there are no guaranteed hardship loans. However, there are several lenders that offer loans to borrowers with bad credit. You also have other options, including applying with a cosigner or seeking non-loan assistance in the form of grants.
You don’t necessarily need a cosigner for a hardship loan. However, if your credit makes it difficult for you to qualify on your own, a cosigner could improve your chances. Keep in mind that a cosigner is responsible for making payments if you miss them.
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Meet the contributor:Erin Gobler
Erin Gobler is a freelance personal finance writer with more than eight years of experience writing online. She’s passionate about making the financial services industry more accessible by breaking down complicated financial topics in simple terms.
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