Best Short-Term Loans for Bad Credit

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Short-term loans for consumers with low credit scores typically have high interest and/or fees that can make a bad situation worse if you’re not careful. However, a few lenders offer better options with lower rates than payday loans and no requirement for collateral, like car-title loans.

Best Lenders With Short-Term Loans for Bad Credit

FICO, the credit-scoring model used by most lenders, considers a credit score below 580 to be a “bad” or “poor” credit score. With a score in this range, you may be more susceptible to predatory lending practices that can trap you in long-term debt through excessive interest and fees.

To help you avoid these risks, GOBankingRates has researched various lenders and compiled a list of the best short-term loans for bad credit:

• OppLoans
• PNC Bank
• Possible Finance
• PenFed Credit Union
• Personify Financial

OppLoans

OppLoans is a lending platform that does not require a minimum credit score, but it performs a soft pull on your credit report to assess your financial situation. You can access loans from OppLoans’ partner lenders in 40 states.

Loan amounts range from $500 to $4,000, and eligibility depends on having a steady income and a checking or savings account with direct deposit. OppLoans offers quick funding, with loans direct deposited as soon as one business day after approval.

• Minimum credit score: No minimum
• Loan terms: Nine to 18 months
• Loan amount: $500 to $4,000
• Interest rate: 160% to 179% annual percentage rate
• Fees: None
• Time to fund: As quickly as one business day

PNC Bank

PNC Bank has the longest application-processing time of any lender in this roundup, but it’s one of the few traditional lenders that offers short-term loans — in this case, as short as six months. If you live in the District of Columbia or one of the 26 states where the loan is available, you can apply for $1,000 to $35,000 with no application fee or origination fee and no prepayment penalty.

Rates are highest on small loans. For example, the APR range for a $1,000 loan is 12.79% to 24.74%, while loans of $15,000 or more charge 7.89% to 19.84%. Enrolling in autopay reduces your rate by 0.25%.

PNC doesn’t disclose the minimum credit score needed for approval, but the bank notes that rates are partially based on the borrower’s relationship with PNC, so having an account there may improve your chances of approval.

Decisions typically take a few days after you apply. To accept the loan, you’ll need to visit a branch to sign documents, at which point you can receive your funds on the spot or request the documents by mail.

• Minimum credit score: Not disclosed
• Loan terms: 6 to 60 months
• Loan amount: $1,000 to $35,000
• Interest rate: 7.89% to 24.74% APR
• Fees: $0
• Time to fund: Immediately after signing documents in person

Possible Finance

Possible Finance is an alternative to payday lenders. The difference is that you repay the loan in four biweekly installments instead of all at once from your next paycheck, and the interest rates aren’t quite as high as payday lenders charge. In addition, Possible charges no penalty or late fees.

However, the loan comes at a steep cost. Possible Finance charges a borrowing fee of 10% to 25% of the loan amount, or an interest rate of 150% to 200% APR, depending on what state you live in. Of course, that’s an annual rate, whereas the loan term is just two months. However, the rate underscores the fact that eliminating late fees won’t necessarily save you money if you don’t repay the loan on time.

• Minimum credit score: No minimum
• Loan terms: Eight weeks
• Loan amount: Up to $500
• Interest rate: Up to 200% APR
• Fees: 10% to 25% of loan amount
• Time to fund: Instant funding in many cases

PenFed Credit Union

PenFed Credit Union suggests a minimum credit score of 580 for a personal loan, so it’s more of a fair-credit loan than one for bad credit. But it’s worth investigating because the rates are much better than you’ll find on a typical short-term non-prime loan — 8.99% to 17.99% APR as of October 2024 — and there’s no origination fee. Plus, you can apply with a co-borrower who has stronger credit to improve your chances of being approved.

You’ll have to join the credit union if you accept a PenFed loan, but it’s an automatic process. PenFed opens a savings account pre-loaded with the $5 membership fee when you receive your loan.

• Minimum credit score: 580
• Loan terms: 12 to 60 months
• Loan amount: $600 to $50,000
• Interest rate: 8.99% to 17.99% APR
• Fees: None
• Time to fund: As soon as the next day

Personify Financial

Personify Financial offers unsecured personal loans to high-risk borrowers in a number of states throughout the U.S. Loan amounts and APRs vary by state. For example, Georgia residents can borrow $3,100 to $10,000 at a rate of 36% APR to 59.99% APR but pay no origination fee. Ohio residents can borrow $500 to $15,000 at rates ranging from 36% APR to 179.50% APR, and they’ll pay a 5% origination fee. Personify doesn’t charge a prepayment penalty, however, so you can reduce your interest charges by paying the loan off early.

• Minimum credit score: None
• Loan terms: 12 to 48 months
• Loan amount: $500 to $15,000 in most states
• Interest rate: 36% to 179.50% APR
• Fees: 5% origination fee in most states
• Time to fund: As soon as one business day

Alternative Short-Term Loan for Bad Credit

If you happen to be a Cash App user and need just a small loan — up to $200, reportedly — you might qualify for Cash App Borrow. Find out if you’re one of the select members eligible for Borrow by logging in to the app and selecting “Banking.” You’ll see a link to “Borrow” if you’re eligible. If you are, you can borrow up to $200 for four weeks for a flat fee Cash App will disclose if you qualify for the loan. If you’re not eligible, Cash App recommends the following steps:

• Use your Cash Card frequently.
• Add at least $200 per month to your Cash App account.
• Maintain a positive balance in your account.

Cash App notes that you’ll be contacted when you become eligible.

Data was compiled on Oct. 3, 2024, and is subject to change.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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