Best emergency loans for poor credit of November 2024

There are several kinds of emergency loans for bad credit, such as personal loans, payday loans, title loans, credit card advances, and cash advance apps. But not all are a good idea. The average APR for payday loans in some states is over 600%, according to Pew research, while most personal loans charge no more than 36%, and payday alternative loans are capped at 28%.

Learn about the best emergency loans for poor credit, which to avoid, and alternatives.

Compare emergency loan rates for poor credit of November 2024

Best emergency loans for poor credit

The best emergency loans for poor credit provide fast funding, have annual percentage rates (APRs) below 36%, and come from reputable lenders. All of the loans below are personal loans that fit this criteria.

Methodology

We evaluated the best emergency loans for poor credit based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, fees, discounts, and whether cosigners are accepted. Our team of experts gathered information from each lender’s website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.

Read our full lender rating methodology for more information.

How to compare emergency loan lenders

It’s always important to compare lenders before borrowing — especially during a financial emergency, as some less-than-scrupulous lenders know that you need money now and may be less likely to consider the costs. If you can wait even a day for money, it could save you hundreds or thousands in the long run.

When comparing lenders, pay attention to the following:

• APR: Compare loans by APR, which is the total cost of borrowing, including interest and any upfront fees. The higher the APR, the more you’ll pay over the life of the loan. Most personal loan APRs are capped at 35.99%, depending on the lender.
• Funding time: Depending on the urgency of your situation, you may not be in a big hurry to get your funds — or you may need money as soon as possible. Many lenders fund as soon as the same or next business day.
• Terms: Your loan term is the time you have to repay the loan. The longer the term, the smaller your monthly payment might be, but the more you’ll likely pay overall. Repayment terms for personal loans range from 1 to 7 years. Look for lenders that offer a variety of terms to choose from.
• Qualifications: Your credit score, debt-to-income ratio (DTI) — your monthly debt obligations divided by your monthly pretax income, expressed as a percentage — and income all affect your loan eligibility. If you have poor credit, a low DTI (lenders typically prefer below 35%) and high income can help you get approved.
• Loan amount: Different lenders offer varying loan amounts. Personal loans for those with poor credit tend to max out around $50,000. Consider lenders who offer the amount of cash you need.
• Lender reputation: Read customer reviews to get a sense of a lender’s reputation. The Better Business Bureau (BBB) is a good website to check reviews for reputable lenders.

What is an emergency loan for poor credit?

An emergency loan for poor credit is a type of loan that provides quick access to cash during an emergency situation. Emergency loans aren’t a specific type of loan, like an auto loan or personal loan. Instead, certain forms of short-term borrowing are considered emergency loans.

You can use an emergency loan for things like medical bills, car repairs, or other essentials. A few examples of emergency loans include:

• Personal loans: Typically unsecured, personal loans give you a lump sum upfront that you’ll pay off in fixed-rate monthly payments, plus interest. Terms generally last between 1 and 7 years. You can also get a secured personal loan, but these require collateral, such as your home or car, to secure the loan. If you can’t make your payments, you risk losing your collateral.
• Payday loans: Unlike personal loans, rates on these short-term loans can reach the triple digits — over 400%, in some cases. These loans must typically be repaid within 2 to 4 weeks, often with a postdated check to your lender. Loan amounts are typically capped around $500, though this varies by location, and a credit check is often not required. Due to the high costs, payday loans are generally not a good idea, and may not be available depending on where you live. Payday alternative loans (PALs), which are offered by certain federal credit unions to their members, are often a better option. 
• Title loans: With these short-term loans, your car’s title acts as collateral for the loan. Title loans typically last from 15 to 30 days, and loan amounts vary from 25% to 50% of your car’s value. Like payday loans, title loan APRs can also be in the triple digits, with average monthly finance fees of 25%. Title loans are not legal in every state, and the Consumer Financial Protection Bureau found in 2016 that 1 in 5 title loan borrowers ended up having their vehicles repossessed.
• Credit card cash advances: You may be able to withdraw cash from your credit card with a cash advance. You’ll owe interest on the money immediately, and the APR is generally higher than your card’s normal rate. Check with your bank for details.
• Cash advance apps: If you need to borrow a small amount of money from your upcoming paycheck, you can do so with one of these apps. Like payday laons, cash advance apps can get expensive, especially if you pay an express or expedited funding fee and leave a tip.

How do emergency loans for poor credit work?

Emergency loans provide quick cash upfront, which you then repay in monthly installments.

When you apply for a loan, lenders may look at your financial information and credit history to decide whether or not to approve your application. Your loan term — the amount of time you have to repay the loan — and your APR determine your monthly payments. But certain types of loans, like payday loans, may require you to repay the loan with a postdated check.

Regardless of the type of emergency loan you get, familiarize yourself with how it works, what fees you’ll have to pay, and what your repayment schedule will look like.

Pros and cons of emergency loans

Sometimes an emergency loan is the best solution to a tough situation. But it’s worth weighing the pros and cons before getting one.

Pros: 

• Accessibility: Emergency loans provide cash quickly when you need it.
• Several options: There are several types of emergency loans, with varying APRs, terms, and loan amounts.
• Flexible qualification requirements: Emergency loans have varying qualification requirements, including options for those with poor credit.
• Unsecured loan options: Many emergency loans are unsecured, meaning you don’t have to put up collateral — like your house or car — in order to get one.

Cons:

• High APRs: Because emergency loans are typically unsecured and can have more lenient qualification requirements, they may have higher rates.
• Increased debt burden: Taking out any loan increases your debt burden. And the more debt you have, the more of your monthly budget goes toward loan payments.
• Potential harm to credit score: When you formally apply for a traditional personal loan, for example, your score will take a small hit, but only temporarily. Regardless of loan type, if you miss payments your credit score will drop — making it tougher to borrow in the future.

How to apply for an emergency loan for poor credit

The application process for getting an emergency loan can vary by loan type, but generally, you can get a personal loan with the following steps:

1. Check your credit: Check your credit score to see which loans you may qualify for and what rates you can expect to pay. A higher credit score generally means lower rates. If your score is poor, consider looking for lenders that allow cosigners. A cosigner is a person who agrees to make payments if you don't, reducing the risk to the lender and possibly making it easier for you to qualify or land a better APR. 
2. Compare lenders: Compare different banks, credit unions, and online lenders to find options you may be eligible for. Prequalify with a few lenders, if possible, to judge the rates and terms that may be available to you without impacting your credit. Just remember that prequalification is not an offer of credit, and your final rate may be different. You can also consult customer reviews to gauge lender reputations.
3. Submit an application: Fill out the application and provide the necessary documentation. Typically, this involves providing proof of income, a government ID, and your Social Security number. It is at this point (for traditional personal loans) that the lender will conduct a hard credit check, which can drop your score slightly for up to a year.
4. Receive funding: If the lender approves your application, you’ll receive a loan agreement to sign. Look over it carefully to ensure everything is as expected before signing. After that, you’ll receive your loan funds, typically as soon as 1 to 2 business days.
5. Make your payments: Once you have your funds, begin making payments toward paying off your debt. Setting up autopay is a great way to avoid late payments, and you could net an autopay discount as well, depending on the lender.

Emergency loan alternatives

While emergency loans have their advantages, one of these alternatives may be a better fit in certain situations:

• Payday alternative loans: PALs are available to members of certain federal credit unions. There are two kinds. With a PAL I, you must be a credit union member for at least a month before you can apply for one. You can borrow up to $1,000, and repayment terms range from 1 to 6 months. However, you may also be able to take out a PAL II, which allows you to borrow up to $2,000, with a maximum repayment term of 12 months. You’re immediately eligible for a PAL II upon joining a credit union, no waiting period required.
• Credit card purchase: Your credit card can cover emergency expenses if your available limit allows it, but be cautious. Credit cards charge interest on the interest you owe (also known as compound interest), so only take this route if you can pay off the balance before interest accrues. The average credit card interest rate was 21.19% in August 2023, according to the Federal Reserve, but APRs can range even higher for those with poor credit.
• Help from family or friends: Borrowing from a trusted friend or family member can help you avoid the loan application process and, potentially, interest. If you do, put the agreement in writing so everyone is clear on expectations.
• Paycheck advance: Certain employers offer paycheck advances, which offer you a portion of a future paycheck early. But you’ll have to repay the loan out of your future paycheck, which could make money tight later on.
• Financial assistance: Financial assistance doesn’t require repayment, but you generally have to meet strict eligibility requirements in order to qualify. Government programs or nonprofit organizations provide these types of funds. 211 is a nonprofit organization that can help you connect with local resources.

Emergency loans for poor credit FAQ

Where can I get an emergency loan for poor credit?

You can get emergency loans from banks, credit unions, and online lenders. You can also access emergency cash with your credit card, by getting a personal loan, payday or title loan, or with a cash advance app, but be wary of high rates and fees.

Learn more: Where to get a personal loan

What can I use an emergency loan for?

You can use an emergency loan for just about any unplanned expenses you can’t afford out of pocket. Common uses include paying medical bills, vet bills, funding car or home repairs, or paying for essentials when you’re suddenly short on cash. But emergency loans aren’t advisable for discretionary spending or nonemergency purchases.

How do I build an emergency fund?

Building an emergency fund can happen gradually over time, but eventually, you’ll want to save at least three to six months’ worth of essential living expenses. Start by saving what you can every single month and setting it aside in a separate high-yield savings account. If possible, set up automatic transfers from your checking account into your emergency account so you can put saving on autopilot.

Read more:

• Best personal loan rates
• Best loans for bad credit
• Best hardship loans for bad credit
• Best installment loans for bad credit
• Personal loan for rent
• No-credit-check loans