5 Best Personal Loans for Bad Credit That Aren’t Payday Loans


If you’re living paycheck to paycheck, financial emergencies can feel stressful and overwhelming. For example, when a household appliance breaks or your car needs major repairs, these things have to be dealt with. But these emergencies can add up to quite a bit of money you don’t have.

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If you have bad credit due to the financial mistakes you made in the past, you’re in a tough spot. Lenders aren’t fond of consumers with low credit scores, so you may have difficulty getting approved for a loan. Unfortunately, this causes many people to apply for bad credit loans from predatory payday lenders and ultimately worsens their financial situation.

5 Bad Credit Loans That Are Not Payday Loans

If you need money to get you through a financial emergency, personal loans are a much better option than payday loans. Here are the five best bad credit personal loans.


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BadCreditLoans.com is an online service that connects consumers with short-term loans. Of course, you’re not going to find a personal loan with the best rates, but it’s a suitable option for borrowers that can’t get approved elsewhere.

You can take out a personal loan up to $10,000 with APRs ranging from 5.99% to 35.99%. The loan terms range from three to 36 months. Applying is free, and you’re not obligated to take out any loan they offer you, so it could be worth it to try it out.


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PersonalLoans.com is an online marketplace connecting consumers with participating lenders. You can apply for a personal loan up to $35,000 with an APR range between 5.99% and 35.99%.

You’ll need to have a credit score of 580 or higher to qualify. However, since it’s a lending marketplace, there are no guarantees about the kind of lender you’ll get matched with.


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CashUSA is an online platform that bridges individuals with personal loans, catering especially to those who might have credit issues. While they’re not known to offer the market’s top rates, their approach is accommodating for those struggling to secure loans elsewhere.

Applicants can apply for a personal loan ranging from $500 to $10,000 with APRs ranging from 5.99% and 35.99%. Loan terms can be anywhere from 3 to 72 months.

The application process is straightforward, and there’s no commitment needed; you’re not bound to accept any loan they propose, making it worthwhile to give it a shot.


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Avant offers fixed-rate personal loans in amounts ranging from $2,000 to $35,000, with APRs ranging from 9.95% to 35.99%. They do charge an origination fee of 4.75%, but there are no prepayment fees.

There are no minimum requirements to apply, though most approved borrowers have a credit score of at least 600. If you’re approved for a personal loan from Avant, you could receive the funds as soon as the next business day.

OneMain Financial

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OneMain Financial offers personal loan options from $1,500 to $20,000 with APRs ranging from 16.05% to 35.99%. The loan amount you’re approved for will be subject to state minimum and maximum size restrictions. OneMain does charge a loan origination fee; the amount varies by state.

Unlike most personal loan lenders, OneMain Financial doesn’t have a minimum credit score required for approval. And if you’re approved for a loan, you could receive the funds on the same business day.

What is the difference between a payday loan and an installment loan?

An installment loan is a broad term used to describe several types of loans. Mortgages, auto loans, and personal loans would all be examples of installment loans. You borrow a certain amount of money and pay your lender back in agreed-upon monthly payments. These loans are usually done through a bank, credit union, or online lender.

In comparison, a payday loan is a short-term cash advance typically offered by payday lenders, though these can also be done online. You’ll typically borrow a smaller amount of money at a high interest rate. You’ll pay this money back from your next paycheck.

Pros and Cons of Payday Loans

Payday loans offer a quick solution for those in need of immediate financial assistance. They’re easy to obtain and can provide relief when facing sudden financial burdens. But like all financial products, they come with their advantages and disadvantages.


  • Easy access: One of the primary attractions of a payday loan is its ease of accessibility. Even those with poor credit histories can often obtain these loans without much hassle or extensive paperwork.
  • Speed: A payday loan caters to immediate needs. In many cases, applicants receive their funds on the same day, allowing them to address financial emergencies promptly.
  • No collateral: Unlike some other loan types, payday loans are unsecured, meaning borrowers don’t have to offer any assets, like a car or house, as security.
  • Convenience: With countless online lenders and physical storefronts, it’s straightforward to find a payday loan provider, making the process hassle-free and efficient.


  • High interest rates: Often, these loans come with significantly higher interest rates compared to traditional loans. It’s not uncommon for a payday loan to have triple-digit annual percentage rates (APRs).
  • Debt cycle risk: Due to their short-term nature and high interest rates, many borrowers find themselves needing another loan soon after repaying the first, creating a dangerous cycle of debt.
  • Short repayment terms: Payday loans typically have to be repaid by the next paycheck, which might not provide enough time for some borrowers to secure the funds, leading to rollovers or additional loans.
  • Hidden fees: Some lenders include additional fees and penalties that might not be apparent at first glance. Always read the fine print.
  • Potential over-reliance: Given their convenience, some might fall into the trap of using payday loans as a regular financial solution rather than an emergency backup, leading to constant borrowing.

Pros and Cons of Installment Loans

Installment loans offer a structured borrowing solution with predictable payments. Ideal for larger sums and longer repayment durations, they can be a reliable way to manage larger financial needs. However, installment loans also have their upsides and downsides.


  • Predictability: With fixed interest rates and set monthly repayments, borrowers can easily budget and plan their finances without any surprises.
  • Longer repayment period: Instead of a single lump-sum repayment, installment loans spread out the payments over months or even years. This distribution can make it easier for borrowers to manage their debts.
  • Higher loan amounts: Unlike payday loans, installment loans generally offer larger borrowing amounts. This can be beneficial for significant purchases or consolidating multiple smaller debts.
  • Builds credit: By making consistent, on-time payments on an installment loan, borrowers have an opportunity to build or improve their credit scores.


  • Potential high interest: Although typically lower than payday loans, installment loans can still have high-interest rates, especially for those with bad credit.
  • Fees for missed payments: Being late or missing a payment can result in additional charges. Over time, these can add up and further strain one’s finances.
  • Potential for long-term debt: If one borrows more than they actually need, or if they opt for a longer repayment period than necessary, they could end up in debt for a more extended period.
  • Prepayment penalties: Some installment loans come with fees for paying off the loan earlier than the agreed-upon term. Always read the agreement to ensure you’re aware of any such penalties.

Payday Loan Alternatives

While payday loans might seem like a quick fix for immediate financial needs, they often come with high interest rates and short repayment periods. Before committing to such a loan, consider some of these alternatives:

  • Cash advance apps: Apps like Dave offer short-term cash advances ahead of your payday. They’re designed to assist users in avoiding overdraft fees, and some even provide budgeting tools and alerts. While they often have lower fees than payday loans, it’s essential to understand any associated costs and terms. Check out our list of the best cash advance apps for 2024.
  • Payday alternative loans (PALs): Many credit unions offer small, short-term payday alternative loans to their members. They typically come with lower interest rates and more manageable repayment terms than payday loans.
  • Payment plans: If you’re facing a large bill or expense, consider asking the creditor or service provider if they offer a payment plan. This can allow you to break the expense into more manageable chunks without resorting to high-interest loans.
  • Emergency assistance programs: Many community organizations and nonprofits provide emergency assistance, either directly or through referrals, to those in need. This could be in the form of temporary financial aid or services like food pantries.
  • Peer-to-peer lending: Platforms like Prosper or LendingClub connect borrowers with individual lenders. The rates are often more favorable than traditional payday loans, and the repayment terms can be more flexible.
  • Overdraft protection: Some bank accounts offer overdraft protection, which allows you to temporarily spend more than you have in your account without facing hefty overdraft fees. Check with your bank to see if this is an option.

Can I get an installment loan with poor credit?

Even if you have poor credit, you can still obtain a bad credit loan, though it will likely come with higher interest rates due to perceived risk by lenders. The process might also be a bit more challenging compared to someone with a good credit history.

You can expect to pay more money in interest, and your loan terms will not be as favorable. But it will be nowhere near the 400% interest you could end up paying with a payday loan.


The lenders above are a better option than payday loans, but they still aren’t going to give you the most favorable interest rate. Improving your credit score is the best way to find to qualify for a personal loan with lower interest rates.

It will take time, but there are small steps you can take to get started. Keep track of your bills to ensure you’re making your monthly payments on time. Begin focusing on paying down debt and only apply for new credit as needed.

Jamie Johnson
Meet the author

Jamie Johnson is a freelance writer who has been featured in publications like InvestorPlace and GOBankingRates. She writes about various personal finance topics including student loans, credit cards, investing, building credit, and more.