Unfortunately, life often brings unexpected expenses. Whether it’s your car needing a repair or an important home appliance breaking down, there is never a good time for an unanticipated cost.
In these times of a pandemic where every penny counts, an expense that isn’t covered by your insurance can make or break your monthly budget. Fortunately, there is a solution to this problem, and that is a short-term loan.
Short-term loans can prove to be a great way to cover immediate expenses quickly, given you borrow responsibly. These small loans are typically paid off in a week or two, but some extend as far as three months.
If you’re looking for a loan but you’re afraid your credit won’t allow it, we’ve got you covered. We’ve made a list covering the best online companies that give out short term loans for bad credit.
Best Online Companies Offering Short Term Loans for Bad Credit
- MoneyMutual: Overall Best Choice for Bad Credit Borrowers
- BadCreditLoans: Quick loan with bad credit
- CashUSA: Best for people with bad credit
- PersonalLoans: Get bad credit personal loans with quick approval
Cash advance loans are small-sized credit loans with ending terms usually last a week or two but can sometimes go up to a few months. These types of loans tend to charge a much higher interest rate, primarily done in the form of a flat fee paid at the due time. To apply for a short-term loan, borrowers with low credit will need a valid checking account, as well as monthly income requirements, depending on the lender. Lenders approve loans from $100 up to $10 000.
What’s a bad credit score?
Many credit-scoring models exist, but the most widely used and accepted model is the FICO credit scoring system. FICO (Fair Isaac Corporation) ranges scores from 300 to 850. The lower your credit score, the worse your credit opportunities.
In accordance with the FICO Score model, you have a bad credit score if you fall in these categories:
Fair Credit: 580 to 670
Poor Credit: 300 to 580
Being in one of these bad credit categories can impact you in many ways. You will not be eligible to get a good bank loan without high interest rates, hinder your potential to rent an apartment, or even purchase a home and get a suitable mortgage. Getting approved for a loan while having bad credit almost always means higher interest rates and higher fees.
How a Bad Credit Score is Calculated
FICO Score calculates your score with the following information:
- Payment history(35%)
- How much you owe(30%)
- Length of credit history(15%)
- New credit (10%)
- Credit mix(10%)
Depending on how well you fare in any of these areas, your score might drop. Having a history of paying late will have the most significant impact on your credit score. Credit mix is the variety of different credits you have like credit card debt, mortgage, etc. Things like foreclosures, maximum debt to income, and bankruptcies relative to your income will also have a big impact.
Best Online Companies for Short Term Loans Review
#1. MoneyMutual: Overall Best Choice for Bad Credit Borrowers
Based in Las Vegas, Nevada, MoneyMutual has served more than two million customers since 2010. This free service operates as a marketplace that brings together people in need with lenders.
According to MoneyMutual, 4 out of 10 Americans wouldn’t be able to gather $400 in case of an emergency. MoneyMutual’s mission is to provide individuals with resources to make ends meet. The loans they give out can cover medical bills, car repairs, unexpected bills, holidays, weddings, groceries & gas, and much more.
How it works
MoneyMutual operates independently from the lenders and does not get any information on the loan agreements. You should be careful when reviewing the terms of the loan.
It’s very easy to get started, and you don’t even need an account. You just need to fill out a simple and secure form that takes less than five minutes to provide information for potential lenders.
Potential lenders review this information to see if it matches their own established requirements. If a lender decided that you’re eligible for a loan, you would be redirected to their website, where you will fill out the lender’s forms and be given the terms of the loan. After this, it’s up to you to accept or deny the loan.
To apply for a loan, you will need to be currently employed or receive regular income through benefits, make at least $800 per month, have an active checking account, and be at least 18 years old.
If you accept the loan terms, you will most likely be contacted by the lender and the money will be deposited to your account within 24 hours.
- Quick loans up to $5000
- Online marketplace for more than 60 short-term lenders
- Served more than 2 million customers
- Filling out the form only takes 5 minutes
- Funds will be transferred in 24 hours
- No origination fees for the service
- AES256 bit encryption to protect data
- Does not take responsibility for lenders
- Not available in New York and Connecticut
MoneyMutual has an active and friendly customer support staff. They will generally answer your questions in a timely manner and help you with any problems you might have.
Their FAQs page is also very informative, and you should try going through it to clear out any dilemmas you might have. The customer support staff can be reached via email or through a US phone number. You can also send mail to the company’s address.
Users of MoneyMutual’s service have been super satisfied with how quick and easy it is to fill out the form and how fast they got in touch with a lender. Despite having bad credit scores, many people reported getting loans with okay interest rates and in a brief timeframe of just 24 hours.
MoneyMutual’s loans came at the right time for many people, and they keep your information safe. The only complaints are the receivings of too many emails with offers from lenders.
#2. BadCreditLoans: Quick loan with bad credit
BadCreditLoans are, in their words, the business of helping people. Based in Tacoma, Washington, BadCreditLoans can provide quick solutions to your financial problems, using your information to connect you with various lenders.
Similar to the previous company on our list, BadCreditLoans operates as a free service that makes ties between borrowers and independent third-party lenders. BadCreditLoans can find you loans for personal use, credit card debt, business loans, student loans, mortgage loans, auto loans, and much more.
We liked this company’s dedication to educating you on how the loans work and how to avoid scammers trying to give you “better deals”. They have various articles on scam topics like job scams, wire transfer scams, phishing scams, debt collection scams, and much more.
How it works
To start the lending process, you will need to meet specific requirements like being at least 18 years of age, providing proof of citizenship like a social security number, having a steady and regular annual income, having a checking bank account, providing an email address and a phone number. If you meet those requirements, you will need a few minutes to fill out a convenient online form that will be forwarded to many potential lenders. If a lender is interested despite your bad credit score, you will be contacted by them and redirected to their website.
You should carefully review the loan offer from the lender, and if you agree to the terms, you will need to lock a contract via e-signature. The lender will then provide the funds via direct deposit in your checking account in one business day. You and the lender will agree upon the repayment process after the loan proceeds delivered. If you fail to meet a lender’s requirements, BadCreditLoans will show you ads for other lenders outside of their network.
- Loans of up to $10 000
- Fast Funding
- Fast and easy form fulfillment
- Money are deposited in 1 business day
- Single application for any type of loan
- The platform for loans is easy to use
- Great information about loans and scams
- Repayment between 3 to 36 months
- The application process requires a lot of information upfront
BadCreditLoans will gladly assist you in starting your borrowing process and will clear out any questions you might have. The best way to get an informed response is by sending them an email, or you can call them during business days to talk to a representative.
Customers have been saying that BadCreditLoan and its network of lenders offer some of the best interest rates for bad credit scores. One user noted that many services like these prey on your desperation and give you outrageous offers, but not BadCreditLoans. Many reviews also commended the support staff and their professional and friendly attitude.
#3. CashUSA: Best for people with bad credit
Hailing from Las Vegas, Nevada, CashUSA is one of the most trusted lending marketplace services in the US. CashUSA can provide you with a fast and convenient personal loan from one of their extensive network of lenders. They work with both State and Tribal lenders.
CashUSA has an excellent education section on their website, providing information on debt, banking, finances, and more. You can request loans ranging from a minimum of $500 to a maximum of $10 000, with APRs ranging from 5.99% – 35.99% depending on the lender. The loans are great for people who are strapped for cash and can be used for debt consolidation, auto repair, moving, home improvements, vacations, weddings, medical bills, emergencies, etc.
How it works
You are eligible for a loan if you meet the requirements being at least 18 years old, a US citizen or resident, earning at least $1000 per month after taxes, having an active checking account, a valid email address, and a phone number. Then you can go through the easy process of filling out the online form to fund a loan. CashUSA will protect your information by using the latest encryption.
The form will ask for information like full name, age if you’re an active military member, and your credit score. Additional information may include contact information, your permanent residence, and information about your employment status.
After you provide all this data, CashUSA will connect you with multiple lenders, and if some agree to give you a loan, you will be contacted by them and finish the process independently from CashUSA. The loan terms like amount, annual percentage rates APR, due time, late payment fees, and more will be agreed upon by you and the lender. If CashUSA fails to connect you with an affiliate lender, they will forward some of your information to other third-party lenders in hopes that they will come through and give you a loan when most needed.
- Quick loans ranging from $500 to $10 000
- No rates and fees for using the service
- Receive your funds in 1 business day
- Multi-purpose loans
- Available in all 50 states
- CashUSA might sell your contact data
- Interest rates can go up to 35,99%
Support representatives are always on standby and ready to answer your questions. You can email them with any queries or even get in touch through social media like Facebook. The phone number is toll-free, and support staff can be reached during business hours.
CashUSA is widely accepted as one of the best online services providing short term loans for bad credit. Users have been excited about how quickly they got the loans, and with little to no effort. We found some complaints about the higher APRs, but this is agreed upon between customers and lenders, and CashUSA has no say in it.
⇒ Visit the Official Website of CashUSA
#4. PersonalLoans:Get bad credit personal loans with quick approval
Last but not least, we’ve got PersonalLoans. A company based in Roosevelt, Utah, PersonalLoans has a vast network of third-party lenders that can provide you with loans ranging from $1000 to a whopping $35 000. Having access to this kind of funds on a bad credit score is truly amazing.
You can borrow for any type of reason, like home improvement projects, payday loans, debt consolidation, medical expenses, and much more. Moreover, some lenders in the PersonalLoans network offer lines of credit.
How it works
To start the loan process, you fill out the online form. This requires information like full name, employment, age, credit score, the amount you want to borrow, and the loan reason. Additional data you need to provide is about your banking and income status.
The requirements are pretty similar to other companies who offer short term loans for bad credit scores. Those includes:
You must be above the age of 18, be a legal US citizen or permanent resident, have a valid bank account, and have details about your credit type.
The types of loans they offer are Peer to Peer loans, Personal Installment loans, and Bank Personal loans. These have minimum monthly income requirements of $2000, $ 2000, $3000, respectively. Your monthly income must be verifiable.
The next step in the process is pretty straightforward, your information gets forwarded to a network of lenders, and any lenders that might be interested in giving you a loan will contact you. You will be redirected to their website and give out any further information needed, after which you will be offered a digital contract with the loan terms. If you accept the terms, you will have the money in less than 24 hours.
- Loans ranging from $1000 to $35 000
- An extensive network of lenders
- Fast loan decision and money deposit
- You can use the loan for any given purpose
- Due time from 90 days to 72 months
- The website is secure and encrypted
- Personalized offers in accordance with your financial profile
- Your information might be sold to third-parties
- Not a direct lender
The customer support staff at PersonalLoans are dedicated to customer satisfaction and making your user experience as enjoyable as possible. Feel free to get in touch with their representatives via email or phone.
Questions about the loans should be addressed with your lender. You can also head on to their very detailed FAQ page, providing answers to most questions.
Customers appreciate the service and its honest and reasonable APRs. People have been satisfied with the whole lending experience and the professionalism shown by the customer service reps. We read tons of positive reviews about the speed of applying and deposits, and the decently ranked APRs given bad credit scores.
⇒ Visit the Official Website of PersonalLoans
Steps to take before getting a bad credit loan
Do your research and prepare
Doing your due diligence and getting informed about your financial situation is one of the most critical steps. You should know how your situation looks on paper to have a reference about what kind of APR and terms you are getting.
Check your credit score or min credit score
You are entitled to one free credit report by a reputable credit reporting agency, and many financial institutions can give you a free credit score check.
Be sure you can repay the loan
The worst thing you can do is get yourself into more debt. Always plan an extra monthly payment in your budget.
Compare online bad credit score services
Read upon reviews of lenders and the terms they usually give. Your accounts might be in a better standing than you think, so make sure you research before opting into bad loan terms.
Look over prequalifications
Before applying for a loan, many lenders will allow you to prequalify and check if you’re eligible without a detailed credit check.
Try secured loans
Some lenders might offer you a type of secured loan. These loans are backed by a particular asset like a car and might get you lower interest rates.
Have financial and employment documents ready
Lenders will always ask for important financial documents, like bank statements, previous bankruptcies, foreclosures, credit card debt, tax documents, employment information, title loans, and so on. Having all this information readily available will help you get a loan quicker.
Choosing the best bad credit score company
There is no perfect lender. Choosing a lender may depend on a few factors.
- Loan requirements
Every online bad credit service and lender have eligibility requirements. These include personal information, minimum credit score, minimum income levels, and percentage of debt to income.
Fees and APR (Annual Percentage Rate apr)
Depending on the type of lender(state or tribal) and the lender’s own policies, they might offer you different interest rates. Be sure to try out multiple different lenders and compare the different interest rates they might provide you with.
- Terms of repayment
Again, with so many loan lenders on the market, you will usually get different repayment terms. Shorter repayment times mean you will pay less overall fees and get out of debt sooner. Longer repayment times will increase the interest rate and keep you in debt for longer.
- Deposits and withdrawals
If you’re looking for an online loan on bad credit, it usually means you’re in dire need of the money. Having a lender that will deposit the money quickly is what you need. Most online lenders will be pretty fast and deposit the funds within one business day after signing the online contract.
Also, be careful with the terms of repaying. You don’t want to give access to your checking account to lenders, giving them the freedom to withdraw funds on the day of repayment without your business day after approval.
Spotting a Bad-Credit Loan Scam
Online loans and giving out information about your finances are ‘the bread and butter’ for online scammers. Our list only includes reputable and trustworthy companies, but if you want to go ahead and do your own research, here are some red flags to look out for.
- Lenders that ask for your prepaid card information
One of the common ways people get scammed is by fishy lenders asking for their credit card information. They do this on the basis of having insurance for late fee payments or as a gesture of goodwill.
This is a big red flag and most likely a scam. Any legitimate lender may charge you certain insurance fees, but those are usually deducted from the loan amount, or they have a clause in your contract that they can call upon for legal action to protect themselves. Never agree to use an untraceable payment method like cryptocurrencies, prepaid debit credit cards, or gift cards.
- The lender doesn’t require your credit score and payment history
Another big red flag is that lenders are eager to give you a loan without knowing the details of your previous financial history. Most, if not all, lenders will be interested in your credit score and whether you have a habit of paying your bills on time to make sure that you will repay the loan.
Scam lenders will, in fact, lend you the money, but they will give you enormous interest rates or have obnoxious fees and penalties for untimely payments. Always look for lenders that require information about your payment history, credit scores, employment information, and more. This shows that it’s in their best interest to profit from a legitimate loan and get their money back.
- The lender company does not have a physical address
This should come without saying, a company that does not provide a physical address of its office is definitely a scam. Even if a company has a physical address provided on their website, but you think there is something fishy going on, try and look up that address on Google maps and Google street view. If you can’t find the building or something just feels like it’s not right, we would suggest avoiding the lender.
- Avoid lenders that are not registered in your area
Lenders and loan givers must be registered in the states they conduct business in by the FTC (Federal Trade Commission). Always check the website of a lender for a disclaimer of where it’s registered. If you can’t find any reliable information about the state they operate from, you’re most likely dealing with a scam.
- Avoid lenders that are not upfront about their fees
Always avoid lenders that aren’t transparent about their fees origination fee. Always keep in mind to ask them about the costs of doing business, and if they avoid the questions, this is a big giveaway that they are not legitimate.
Reliable lenders will not impose any fees after loan approval. Avoid any lenders that try to get your money for the paperwork, insurance, or origination fee. The loan itself should cover the expenses of the lender, and these types of payments are clearly a con.
What Makes a Legitimate Loan Company?
Indeed there are lots of companies and services that will connect you with legitimate lenders that provide short term loans for bad credit.
A legitimate lender is easy to spot and will have the following traits:
- Easily accessible contact information
Companies should provide a physical address, phone number, and email followed by active customer support.
- Companies should be registered
Reliable lenders and services must be registered with state agencies and financial authorities to be able to participate in the loan-lending business.
- They should be mentioned in publications and have reviews from real customers
Customer reviews and publications like ours are always a good starting point when doing are search on companies that offer short-term loans.
- Check the Better Business Bureau
Consult with the BBB for the trustworthiness of a company.
Frequently Asked Questions
Q1. Do short-term loans affect credit score?
Yes, as is the case for any monetary loan, short-term loans have an impact on your overall credit score. But these types of loans don’t necessarily affect your credit score in a bad way. If you pay your loans on time in accordance with the terms, your credit score will improve. On the other hand, being late on monthly payments on any type of loan will harm your credit rating.
Q2. Are short-term loans bad?
Short-term loans can be a great way to get out of a sticky financial situation fast. With that being said, these types of loans tend to be more expensive and come with higher interest rates.
Because a lender is willing to provide a loan despite your bad credit score, they are taking a risk, so naturally, the payout should be bigger. Payday loans are widely considered the most expensive short-term loans.
Q3. What will happen if I don’t pay off a short-term loan?
When you stop the loan payments, you will get a default notice warning. This document will notify you that you are late on payments, and you will get around two weeks to catch up on payments, but if you don’t manage to do so, you will probably have to deal with the consequences.
You would either get taken to court or referred to a collection agency. To avoid these, you could take out a debt consolidation loan, but this will further bury you in debt and worsen your credit score.
Q4. Why are short-term loans so expensive?
We’ve already touched on this before, but basically, since your credit score is not the greatest, and short-term online loans are provided in a short time, you will need to pay higher interest rates. This is because when applying for a fast loan, the lender does not have all the necessary information about you, and you are considered a higher-risk borrower, in contrast to a standard bank loan amounts that takes weeks to be assessed.
Final thoughts – Take out loans responsibly
Taking out an expensive loan is sometimes unavoidable. Life comes with many expenses and responsibilities that must be taken care of. Always remember to approach these types of loans with a clever mindset. Taking out loans without thinking them through is not a good idea, always read the fine prints and terms of the agreement, and make sure you can cover the loan in your upcoming month’s budget.
Being late on payments can only further drag you and your credit score down, and that’s not what you want. Moreover, with so many companies offering short-term loans over the internet, you can easily get scammed, so make sure you read up on our guides to avoid them. Choosing one of the services on our list is your safest bet for taking out loans, and we hope we helped you get the best possible loan to cover your situation.