Nearly 30% of Americans have a credit score below 670, which is often considered the cutoff for “good” credit. If you’re in this group, getting approved for a loan—especially on short notice—can be difficult. Traditional banks may deny your application, but some lenders specialize in working with bad credit borrowers and offer fast funding.
The key is choosing the right type of loan—and avoiding ones that could cost more than they’re worth.
This guide covers personal, car, and home loans designed for borrowers with less-than-perfect credit. While interest rates may be higher, these options are often more affordable than payday loans, with some lenders offering funding as soon as the next business day.
Quick Comparison of the Best Loan Options for Bad Credit
| Loan Type | Best For | Typical Loan Amount | Speed of Funding | APR Range* |
|---|---|---|---|---|
| Short-Term Loans | Covering small, urgent expenses | $100 – $5,000 | As soon as next business day | Varies by lender; often high |
| Personal Loans | Borrowing larger amounts with fixed payments | $500 – $35,000 | 1–2 business days after approval | ~5.99% to 35.99% |
| Car Loans | Financing a car purchase quickly | Varies by vehicle | Often within a few days | Varies by lender and credit profile |
| Home Loans | Buying a home with less-than-perfect credit | Based on home price | Several weeks (typical mortgage timeline) | Competitive for FHA/VA; higher for conventional with bad credit |
* APR ranges can vary based on credit profile, lender policies, and loan type.
Best Short-Term Loans for Bad Credit
If you only need a small amount of money to cover an urgent expense and can pay it back quickly, a short-term loan may be a practical option—just be sure to read the fine print.
MoneyMutual
MoneyMutual connects borrowers with a network of lenders offering small, fast cash loans. The platform specializes in short-term loans for those with bad credit, making it a viable option for individuals needing quick access to funds.
CashAdvance.com
CashAdvance.com connects borrowers with a network of lenders offering small, short-term loans, typically ranging from $100 to $1,000.
Before taking out a short-term loan, make sure you can afford the fees and repayment terms. If you need more time to repay, a personal installment loan may be a better option.
Most short-term lenders will check your credit, but they are geared toward working with bad credit borrowers. To qualify, you typically need to show steady income of at least $1,000 per month and have been employed for at least 90 days.
Best Personal Loans for Bad Credit
If you need to borrow a larger amount and want predictable monthly payments, a personal loan is usually your best choice.
CashUSA
CashUSA is an online lending platform that connects borrowers with a network of lenders offering personal loans ranging from $500 to $10,000.
Bad Credit Loans
BadCreditLoans.com connects borrowers with a network of lenders offering personal loans for individuals with poor credit.
PersonalLoans.com
PersonalLoans.com is an online lending marketplace that connects borrowers with a network of reputable lenders offering personal loans.
Try to choose a loan term that balances affordability with minimizing interest costs. While a longer repayment period can lower your monthly payment, it also means paying more in interest over time. Before committing, calculate the total cost of the loan and aim for the shortest term you can reasonably afford.
Best Car Loans for Bad Credit
If you need a car quickly, waiting to improve your credit may not be an option. Many online lenders specialize in auto loans for bad credit, offering fast approvals and flexible terms. These lenders can help you secure an auto loan quickly—so you can get back on the road.
Car.Loan.com
Car.Loan.com connects borrowers with a network of dealerships that offer financing options for people with bad credit, no credit, or past bankruptcies.
myAutoloan
myAutoloan is an online lending platform that connects borrowers with multiple lenders offering auto financing options, including new and used car loans, refinancing, and lease buyouts.
With an online auto loan provider, you’ll typically get pre-approved for a set amount, which can be used like a budget when car shopping. Some lenders provide pre-qualification certificates for dealerships, helping you negotiate. However, interest rates can be high, so if buying isn’t urgent, improving your credit first may save you money.
Best Home Loans for Bad Credit Borrowers
If you’re ready to buy a home but have less-than-perfect credit, these mortgage lenders offer programs designed to help you qualify—often with low down payment options.
Rocket Mortgage
Rocket Mortgage is a leading online mortgage lender known for its streamlined digital application process and a variety of loan options, including conventional, FHA, and VA loans.
Rate
Rate.com is a national mortgage lender offering a range of home loan products, including fixed-rate and adjustable-rate mortgages.
You’ll need to provide income and financial documents when applying for a home loan. If you have bad credit, a larger down payment can improve your chances of approval.
Mortgages and refinancing can be more complex, especially with credit challenges, so it’s important to be prepared before applying.
How to Borrow Smart and Avoid High Interest Rates
Bad credit loans can help in an emergency, but they often come with higher interest rates. Lenders charge more to offset the risk of lending to borrowers with lower credit scores. While you may not qualify for the lowest rates, there are ways to reduce costs and avoid taking on a loan that’s too expensive.
Why Bad Credit Loans Cost More
Lenders set interest rates based on risk. If your credit score is low, they see you as more likely to miss payments, so they charge higher rates to protect themselves. Other factors that can increase loan costs include:
- Income and debt levels: A high debt-to-income ratio may lead to higher rates or borrowing limits.
- Loan type: Unsecured loans, which don’t require collateral, usually have higher interest rates than secured loans.
- Lender policies: Some lenders charge higher fees, while others offer better rates if you meet certain income and employment requirements.
Knowing what affects your rate can help you make better choices when comparing lenders.
Ways to Get a Lower Rate
Even with bad credit, there are ways to reduce the amount of interest you pay:
- Use a cosigner: A creditworthy cosigner can help you get a better rate since the lender considers their credit history.
- Offer collateral: Secured loans, such as auto or home equity loans, lower a lender’s risk and typically come with lower rates.
- Improve your credit score: Paying down debt, making on-time payments, and checking your credit report for errors can help raise your score and improve loan offers.
- Compare lenders: Some lenders offer prequalification, allowing you to check potential rates without affecting your credit score.
Even a slightly lower interest rate can save you money over time, so it’s worth taking the extra steps to qualify for better terms.
What to Watch Out For
Not all bad credit loans are fair deals. Some lenders take advantage of borrowers by charging excessive fees or offering unfair terms. Watch for:
- Hidden fees: Some loans include high origination fees, late fees, or prepayment penalties that increase the overall cost. Always read the loan agreement carefully.
- Predatory lenders: Payday loans and no-credit-check loans often have extremely high interest rates and short repayment terms, making them difficult to pay off without borrowing again.
- Auto-renewal traps: Some lenders automatically renew short-term loans, adding fees and interest that make it harder to repay.
Before accepting a loan, make sure the repayment terms fit your budget, and avoid lenders that don’t disclose their fees upfront. Borrowing responsibly can help you improve your credit and qualify for better rates in the future.
Final Thoughts
Bad credit can make borrowing more difficult, but you still have options. Many lenders offer quick personal, car, and home loans designed for borrowers with less-than-perfect credit. The key is knowing where to look and comparing terms carefully.
Borrow only when you have a clear plan to repay. Short-term loans can be useful in emergencies, but are easy to misuse. Improving your credit score—even by a few points—can help you qualify for better rates over time.
If you can wait, work on building your credit first. If you need a loan now, borrow smart, read the fine print, and avoid offers that seem too good to be true. Making thoughtful choices today can help you save money—and set you up for better financial options down the road.
