Quick Small Loans For Bad Credit

Lyn Ridley - 2020-10-05T21:00:00.000Z

Unscheduled surgery, vehicle repairs, and other emergency expenses have a habit of appearing in your life when you can least afford them. Small loans are an ideal way to pay for these urgent costs.

When it comes to applying for quick loans, bad credit shouldn’t be a deal-breaker. In this article, we'll introduce you to this category of lending products and suggest some strategies that you can use to apply for one even if your FICO score isn’t the best.

The Benefits Of A Small Loan

If you’re looking to borrow less than $10,000 and feel confident that you can repay it within a year or less, then a small loan may be the ideal financial product to consider.

Here are some benefits of opting for this type of lending.

Quick application times. This will help you secure the funds you need to pay your bills without having to wait the typical days or weeks you would for a traditional loan
Only borrow what you need. Small loan amounts mean that you won’t end up borrowing funds that you don’t need and paying unnecessary interest on these larger amounts
Competitive interest rates. By searching for the right small loan, you could find a lender that offers an APR that you can afford even if you have bad credit

The Best Small Lenders To Approach

Now that we’ve covered the advantages of using a small loan to finance your expenses, you’ll probably want to start applying to various lenders. However, what type of loans should you be looking for?

Here are some of the financing products you’ll want to consider before you apply:

Personal loans. This type of financing is extremely popular because lenders in this industry are extremely open to dealing with borrowers who have less than perfect credit. You could qualify for a bad credit loan the same day you submit your application and have the funds you need within 48 hours or less
Payday alternative loans. If the amount you need to borrow is small enough that you can repay it out of your next salary, you’ll want to consider a payday loan with a good APR
Credit card cash advances. If you already have a credit card with an available balance then you could take a cash advance on your card or charge your expenses to it. This option is ideal if you can’t wait for a loan approval

Loan Types To Avoid

Unfortunately, not every lending product out there offers affordable repayments. Thus, you’ll want to avoid those that don’t.

Here are some loan types that you’ll only want to consider as a last resort.

High-interest payday loans. While some payday lenders offer reasonable APRs, others may charge you over 400% interest per year. You’ll want to avoid these
Title loans. This type of lending product requires you to use your vehicle as collateral to guarantee the amount you owe. However, your car could be possessed if you fail to make your payments on time
Your local pawn dealer may be a convenient place to borrow money, but you’ll usually only be able to borrow a small fraction of the value of the item you have pawned. If you don’t make payments then you could lose your pawned object for good

Loan Alternatives For Emergency Borrowing

Sometimes, despite your best efforts, your loan application may be rejected due to bad credit or other factors. Fortunately, there are several alternatives you can explore to secure the funding you need. These options include:

A home equity line of credit will allow you to borrow against the equity in your mortgage at a competitive interest rate. This type of loan is ideal for homeowners we have been paying down their mortgages over several years
Try a cosigner. You may still be able to qualify for a bad credit personal loan if you opt to use a cosigner. Ideally, this should be a person you know very well like a close friend or relative. This individual will need to have good to excellent credit so that their signature increases your chances of approval
Borrow from your savings. If you have a substantial amount saved up in your emergency fund (three to six months worth of expenses or more) then you may want to consider loaning yourself the money you need temporarily

Where To Find A Good Small Loan

Bad credit personal loans are typically the easiest type of small loan to apply for. However, it’s always a good idea to know which lending providers offer the best financing deals.

If you’re new to the lending industry, you’ll want to consider the following companies:

This lender offers loans and credit cards to customers with less than optimal FICO scores
With flexible loan amounts and lending terms, this provider is known for excellent customer service
Navy Federal. If you’re a current or former member of the US Armed Forces then you may be able to secure a highly competitive APR by applying through this lender

The Bottom Line

Small loans are a quick and effective way to pay for unexpected expenses or purchases that simply can’t wait. By shopping around for the best short-term lending product, you’ll be able to finance your expenses at a reasonable APR and pay down your debts in a year or less.