Online Loans for Bad Credit

Did you know you can still be approved for an online loan with a bad credit score? It's true! There are various loan options designed for people with poor credit. So, regardless of your credit history, you may be able to get the money you need.

Here's a closer look at how online loans for bad credit work, their benefits, and the types of loans you can get with less-than-perfect credit.

What is an online loan for bad credit?

A bad-credit online loan is a type of personal loan available to borrowers with poor credit scores.

Unlike traditional loans that you might find at your bank or credit union, bad-credit loan approvals are based on factors other than your credit history, such as your income, current debts, and employment status. This can increase the odds of being approved for an online loan.

Is it easy to get online loans for bad credit?

Most borrowers find unsecured loans for bad credit easier to obtain from non-traditional lenders. For example, payday lenders offer quick online applications you can complete quickly.

After you apply for an online personal loan, you’ll typically receive a quick or instant online approval decision. This means you may be approved and receive the funds in your bank account within 24 hours, and sometimes even the same day you apply! After you apply for an online personal loan, you’ll typically receive a quick or instant online approval decision. This means you may be able to get approved and receive the funds in your bank account within 24 hours — and sometimes even the same day you apply!

What can a bad-credit online loan be used for?

Bad-credit online loans can help when financial emergencies arise. You can use them to cover expenses such as car repairs, medical bills, urgent home repairs, utility bills, or essential everyday costs. 

Online loans for bad credit can also be used for other expenses like debt consolidation, moving costs, legal fees, funeral expenses, educational costs, or small business expenses.

Common types of bad credit loans

There are several types of loans available to people with bad credit.

Payday Loans

A Payday Loan is a small-dollar, short-term loan that can help you cover an unexpected expense or help pay for necessities between paydays.

When you take out a Payday Loan, you'll repay the amount in full (plus the interest or fee) on your next payday, which is usually within two to four weeks. Advance America offers quick and convenient Payday Loans to borrowers from all credit backgrounds.

Installment Loans

An Installment Loan is another option for borrowers with poor credit. This type of loan allows you to borrow a higher amount than a Payday Loan, which can help with larger expenses like medical bills or car repairs.

With an Installment Loan, you repay the amount borrowed over time in regular installments, which are typically fixed monthly payments. An Installment Loan can be a good solution when you have bad credit and need extra money to tackle big expenses.

Title loans

A title loan is a secured loan that uses your car as collateral. The amount you can borrow is based on a percentage of your vehicle's estimated value. If you own your car, you can exchange your title for a lump sum of money and continue driving your vehicle while you repay the loan.

Line of Credit

A Line of Credit differs from other types of bad-credit loans. It’s similar to a credit card in that you're approved for a certain amount and can withdraw as much or as little money as you need up to your credit limit.

There are some key differences in how you access funds for a Line of Credit. With this type of loan, you'll only pay interest on the amount you borrow, making it an excellent alternative to traditional loans. If you've got upcoming expenses to plan for but your credit is bad, a personal Line of Credit may a helpful solution.

Credit card cash advances

Unlike a Payday Cash Advance, a credit card cash advance is a small loan you can get from your credit card issuer. Since you were already approved for a set credit limit when you received the credit card, there's no additional credit check.

Depending on your credit card issuer, you might be able to withdraw the cash advance from an ATM or request it through the company's website or app. A credit card cash advance typically starts accruing interest from the day it's taken out (unlike credit card purchases) and may involve other fees, as well.

Where can I get a loan for bad credit?

You can get an online loan for bad credit from a reputable lender like Advance America. We offer a wide range of bad-credit loans, including Payday Loans, Installment Loans, and Lines of Credit. We aim to help you quickly get the money you need to cover financial emergencies.

We determine your ability to repay by reviewing your income, employment history, debt-to-income ratio, and other factors besides your credit score, which allows us to approve borrowers with all types of credit scores. We can even pull a soft credit check to give you a pre-approval offer so you know how much you can borrow before applying, all without impacting your FICO credit score!

Benefits of an online loan if you have bad credit

Here are some advantages of getting a personal loan from online lenders specializing in less-than-perfect credit:

Easy online applications

Unlike most banks or credit unions, lenders like Advance America offer streamlined online applications. You can complete an application in minutes, whether at home or on the go. The process goes faster if you've gathered all the required information, including your government-issued identification, proof of income, and bank account information.

Instant loan approvals and quick funding

You'll often receive an instant approval decision when you submit an online application. Once approved, your funds are usually deposited into your bank account within 24 hours. Depending on what time you apply, you may even receive same-day funding!

No minimum credit score requirement

Having a bad credit score doesn't have to prevent you from receiving loan offers. Many online lenders consider factors in addition to a credit check when making an approval decision. These factors include your annual or monthly income, debt-to-income ratio, and employment status. This may mean there's no minimum credit score requirement to get the loan funds you need.

Do online loans for bad credit affect your credit score?

Applying for an online loan for bad credit may hurt your credit score in the short term. If a lender requests a hard inquiry into your credit report, it could lower your score by a few points. But your FICO score won't be affected by a soft credit check.

Even though applying for any new loan can temporarily lower your credit score, making on-time loan payments can improve your credit over time if the lender reports to the major credit bureaus. This may allow you to apply for loans with more favorable terms and competitive interest rates in the future.

How to apply online

If you have bad credit but are interested in applying for an online loan, here's what you need to do:

1. Get your free credit report and check for errors

Request a free copy of your credit report from the three major credit bureaus: Experian, Equifax, and TransUnion. If you notice any errors, dispute them right away.

2. Compare personal loan lenders for bad-credit borrowers

Research a wide range of direct lenders offering online loans to borrowers with bad credit. Check Google and Trustpilot reviews to see what customers say about their experiences with a lender. Compare your options and choose the best online loan for your budget and financial needs.

3. Gather all loan application documents

Before starting the loan application process, be sure you have your government-issued ID, such as a driver's license or passport. You may also need proof of an active checking account, a pay stub, or other documentation showing your income and employment history.

4. Fill out and submit your online loan application

Each online application varies by lender. Many loan companies that work with borrowers with less-than-perfect credit scores have a simple application process.

Go to the lender's website or app and complete the online loan application in minutes. Remember to double-check your information for accuracy before submitting the application to avoid delays in the approval process.

5. Wait for the loan approval decision

After submitting your loan application online, wait for the lender to complete the approval process. Loan approval times vary by lender, with some offering faster approval times than others. For bad-credit borrowers, instant approval odds are better if you have a positive payment history and a steady source of income.

Borrowers with outstanding debt who don't meet the lender's minimum credit score and eligibility requirements may have to wait longer for an approval decision, but usually 24 hours at most.

6. Receive your loan funds

Loan funding methods vary by lender. Some lenders, including Advance America, offer same-day funding, which means the money is deposited into your bank account shortly after approval. If you prefer to pick up your loan funds in-store, you may receive the money via check or prepaid card.

How to compare online loans for bad-credit borrowers

To make an informed decision, consider the following factors when comparing online loans for people with bad credit.

  • Common types of bad-credit loans: Many bad-credit loan companies offer a range of loan options, each with its own loan terms, borrowing limits, and flexible payment options. With so many viable options, comparing the different types of emergency loans is essential. Popular loans for borrowers with bad credit and limited credit histories include Payday Loans, Lines of Credit, and Installment Loans.
  • Desired loan amount: Consider how much money you need when comparing bad-credit lenders and their loan options. For example, since Payday Loans are meant to be repaid in a single payment on your next payday, they typically have a maximum borrowing amount of a few hundred dollars. Installment Loans offer larger loan amounts, making them a good option as a home improvement loan or debt consolidation loan.
  • Flexible repayment terms: Some online loans for bad credit must be repaid in a lump sum, while others have repayment terms of a few months or years. Decide whether you want to repay a bad-credit online loan all at once or over time.
  • Competitive rates: A bad credit score generally means you'll only qualify for high-interest personal loans, but some bad-credit lenders offer more competitive rates than others. Reputable lenders will always be transparent about their rates, so be sure to ask. Remember to account for the interest and fees you'll pay when deciding on your loan amount.

Which bad-credit online loan is right for me?

Online loans for bad-credit borrowers can give you quick access to money to help cover unexpected bills or emergency expenses. But with so many personal loan options, how do you choose?

Knowing how much you want to borrow is a good start. Are you trying to cover a few bills to avoid late fees and missed payment penalties? A Payday Loan might be the right option. Or are you facing unexpected medical expenses and need a more significant loan amount? An Installment Loan may be an option worth looking into.

You'll also want to budget for your loan repayment. Do you need a loan agreement that lets you pay back what you borrowed over several months? Or are you comfortable repaying one lump sum? Being able to keep up with your repayment plan is critical.

Shopping around for a bad-credit loan is key. Remember to compare different loan amount options, personal loan rates, and loan terms to find the right bad-credit personal loan.

Get an instant decision when you apply online at Advance America

You may still qualify for an Advance America loan even with a poor credit score. We offer a variety of loan types online. Simply fill out our easy application online or in store and receive your loan offers. Upon approval, you may receive your loan money in as little as 24 hours.

Visit Advance America today to start your loan application.

About the Author

Bree Ewers has contributed to Advance America since 2023. Writing from her home office in Portland, Oregon, she shares a relatable perspective on the financial triumphs and challenges many readers face.

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Since 1997, Advance America has helped millions of hardworking people with a variety of financial solutions including Payday Loans, Online Loans, Installment Loans, Title Loans and Personal Lines of Credit.
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