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Best Loans for Bad Credit Borrowers

Having bad credit doesn’t mean you have to have bad luck when applying for credit loans. The top loans for bad credit borrowers include title, payday, cash advance, installment, and credit builder loans.

Installment Loans Title Loans Payday Loans Cash Advance Loans Credit-Builder Loans
Credit Required? Yes No No Yes Yes
Average Loan Amounts $300 - $3,000 $200 - $25,000 $100 - $1,000 $100 - $1,000 $300 - $1,000
Income Required? Yes Yes Yes Yes Yes
Collateral Required? No Yes No No No

Let’s take a closer look at these loans, how they work, and how they may benefit specific borrowers.

Key Takeaways

  • There are many loan options for individuals with bad credit, examining the pros, cons, and suitability of online installment loans, title loans, payday loans, credi card advance loans, and credit builder loans.
  • From online installment loans providing accessibility and quick approval to title loans offering a secured option for vehicle owners, there are many loans available when you have bad credit.
  • Credit builder loans are an avenue for establishing or improving credit without requiring collateral, offering insights to empower borrowers in making informed financial decisions.

1. Installment Loans

Emergency Installment loans give the borrower a set amount of money all at once. The borrower then has to repay the loan in installments or a set number of payments. Borrowers can determine how much they need before requesting the loan.

How Installment Loans Work

An bad credit installment loan is not a payday loanb. An installment loan is small lump sum of money that you will pay back over many months. For example, if there is a 36-month loan for a car, a borrower has three years to pay it off in monthly installments.

There are several different types of installment loans, but they all follow the same essential monthly installment plan with varying interest rates.

Some examples are car loans, usually paid off over 12 to 96 months, and home mortgages, which are usually paid off over 15 or 30 years. Not all installment loans require collateral (such as Simple Fast Online's online installment loan product), and each has varying interest rates. Online loans from Simple Fast Loans are designed to be flexible and can be repaid every month, so you keep your budget in tact.

For auto loans, for example, more extended installment plans mean higher interest rates. Installment loans tend to have the highest interest rates in the installment loan bad credit family. In contrast, mortgages have the advantage of fixed interest rates that do not change over time (unless you want them to as part of a refinance).


  • Accessibility. Online lenders are beacons of hope, often welcoming individuals with bad credit.
  • Quick approval. The online application process is designed for speed, offering rapid approval and swift fund disbursement.
  • Early pay off. Lenders like Simple Fast Loans will let you pay off the loan early without any fees.
  • Consistency. Loan payments are the same throughout the loan term.


  • Small dollar amount. Online installment loans for bad credit may only go as high as a couple thousand dollars, so it will not solve every financial problem.

Who It’s Good For

Online loans are the perfect solution for urgent financial needs when time is of the essence.

2. Title Loans

Title loans are short-term, car title, or auto title loans. A borrower’s vehicle is used as collateral for this loan, and the borrower must own the car outright. Vehicles can be automobiles, trucks, or motorcycles.

Typically, with title loans, borrowers are lent a small amount of money for what is typically a short amount of time.

Borrowers must present lenders with loan applications and show them a car, its title, and photo identification. Generally, title loans will not impact your credit score, and you don't even need a paystub in most cases.

How Title Loans Work

Borrowers give the title to their vehicle in return for a loan. They often also pay lenders a fee for the loan. Borrowers most commonly must repay the loan in about a month.

Title loans are often obtained quickly, typically within a day. Loans can range from several hundred to thousands of dollars. Most title loan terms can amount to up to half the vehicle’s value.

Interest rates vary on title loans; some lenders charge, for example, 10% interest on 30-day loans. Some interest rates can also be "annualized," which means that a short-term rate is turned into an annual rate.

If you cannot pay your lender after the period of your loan, they may tack on another 30 days to the loan, and borrowers will pay another monthly fee. Such “rollover” can happen several times.

If you can't repay your loan, the lender may take your car back, meaning it becomes theirs. For those who struggle to set a budget or plan to pay off their loans, title loans may be challenging to manage.

Also, if you are wondering if title loans build credit, unfortunately, the answer is no. Title loans are a secured loan and you won't see an increase in your credit score if you pay it off. That said, lenders may blemish your credit if you fail to pay.


  • Secured loan. Title loans use your vehicle as collateral, potentially resulting in lower interest rates.
  • No credit check. Similar to payday loans, title loans may not involve an extensive credit check.
  • Bad credit is OK. Since title loans are more about the quality of your car than your credit, it is no problem to have a less-than-stellar credit score.


  • Risk of vehicle repossession. Failure to repay a title loan could lead to vehicle repossession.
  • High costs. While interest rates might be lower than unsecured loans, title loans can still be expensive.

Who It’s Good For

Title loans can be an option for those who own their vehicle outright.

3. Payday Loans

Similar to title loans but without the car, payday loans involve borrowers obtaining small amounts of money with the agreement that the loan will be repaid to the lender after the borrower receives their next paycheck.

Payday loans are short-term loans. A portion of the borrower’s next paycheck is collateral for immediate credit. Payday loans are also known as cash advance loans or check advance loans.

Commonly, $500 is the limit for payday loans, and many loans are for less than $500.

How Payday Loans Work

Payday loans are typically based on the borrower's income, and borrowers typically provide lenders with a copy of a pay stub for reference.

Payday loans, like title loans, can be obtained quickly online or at a payday loan company.

Borrowers often must provide a lender with employer pay stubs showing income. From your pay stub, lenders base their principal on a percentage of the borrower’s short-term income.

Sometimes, collateral is a borrower’s wages. For example, a lender receives a check from a borrower, and the borrower receives cash.

Lenders also charge a fee for these loans, and on the borrower’s next payday, the lender is paid back in cash for the amount borrowed and the fee. Payday loans are helpful in situations where you need a relatively small amount of cash to hold you over between paychecks.


  • No credit check. Payday lenders typically don't perform a hard credit check.
  • Quick approval. Similar to online loans, payday loans offer rapid approval and quick cash.
  • Small dollar loans. Payday loans can be helpful if you just need a small amount of money to help you get through a rough patch.


  • High fees. Payday loans come with high fees and interest rates, contributing to a potential cycle of debt.
  • Short repayment period. Repayment is due on your next payday, which can be challenging for some borrowers.

Who It’s Good For

Payday loans suit those facing unexpected expenses before their next paycheck.

4. Cash Advance Loans

30-day cash advance loans are short-term loans that are similar to payday loans. The borrower gets cash from their credit card balance. Credit card companies often offer them to their customers.

How Cash Advance Loans Work

Banks or alternative lenders issue merchant cash advance loans, including payday loans and merchant cash advances.

The most common type is the credit card cash advance, which borrows money from an existing credit line. The money can come from checks cashed at a bank or deposited at or withdrawn from an ATM.

Borrowers must provide proof of income and personal identification when applying. As usual, fees and interest rates are included, and lenders expect these loans to be paid within a set time period.


  • Immediate access to funds. A credit card cash advance loan for bad credit provides instant access to much-needed funds.
  • No new application. Utilize your existing credit card — no need for a new loan application.


  • High fees and interest. Convenience comes at a cost, with cash advances often laden with high fees and interest rates.
  • Impact on credit score. Regular cash advances can adversely affect your credit score.

Who It’s Good For

If you have unused credit, a cash advance loan for bad credit can be a quick source of cash.

5. Credit Builder Loans

Is your credit score low or nonexistent? If so, this one is for you.

Credit builder loans are made to help people who don't have a credit history or don't have a long enough credit history to buy big things. Obtaining a good credit score with help from a credit builder loan may make it easier.

How Credit Builder Loans Work

These loans work very differently than other common loans. Smaller organizations, including community banks and credit unions, often manage credit builder loans.

Borrowers apply for a loan, and if approved, the borrowed amount is put into a bank account, such as a CD or savings account, as payments are made. Lenders report payments to credit bureaus so that the borrower can get a better credit score.

Borrowers typically cannot access the loan, which ranges from a few hundred dollars to about $1,000, until it is fully repaid. When the loan is paid off, borrowers get the deposited money.

Credit builder loans come with a range of fees for borrowers to keep in mind, including administrative fees. Furthermore, lenders also charge interest, typically ranging from 5% to 15%.


  • Access without extensive credit checks. Individuals with limited or poor credit history can still secure loans. Traditional loans often rely heavily on credit scores, which can be a barrier for those with less-than-perfect credit. Loans with minimal credit checks provide an opportunity for wider accessibility.
  • Borrowers have the flexibility to select reputable lenders. With various financial institutions offering loans, individuals can shop around and choose lenders with trustworthy reputation and transparent policies.
  • No collateral required. Personal property like a car is not required to secure the loan.


  • Initial loans may be limited in size. Lenders may be cautious in granting large loans to those with little credit history, resulting in smaller initial borrowing limits.

Who It's Good For

Those looking to establish or improve their credit. Access to loans with minimal credit requirements provides an opportunity for individuals to build a positive credit history by demonstrating responsible borrowing and repayment habits.

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