People with really bad credit have options to get a loan. We helped many with a credit score of 500 and below to find a loan.

Payday loans and car title loans can work but are very expensive, and we recommend them only at the end case. Actually, there are many options before them.

Before applying with our list below, try some of these options.

• Apply for a personal loan. Many people with bad credit think that they have no chance to get approved, but they are wrong. Check our list of personal loans for bad credit and apply with all of them. Try, you lose nothing. You should also read our guide on bad credit loans.
• Try loan comparison sites like MoneyMutual, PickaLender, and SuperMoney. Register with them, and they will match you with all lenders in their networks. They work with all big lenders in America. It’s 100% free.
• Try secured or cosigner loans.
• Try alternative payday loans. You should also read our guide on alternative payday loans.
• Wait and work on your credit score, if that is possible. Review your credit report for errors. Many credit reports contain errors. If you find any, report them instantly, and your credit score will boost in less than a month.
• Banks don’t approve people with bad credit, don’t waste time. However, credit unions approve people with bad credit? Their APR is capped at 18%, which is not bad at all. Some credit unions have payday loan alternatives, capped at 28%. Review our list of credit unions.
• Ask for a cash advance from your workplace.
• Try loan apps. Review our list of loan apps.

Shop around! ElitePersonalFinance found the best loans for really bad credit of December 2025!

Best Loans for Really Bad Credit of December 2025

When you have really bad credit, it’s essential to understand one of the lending opportunities you have available. We always steer readers away from Sky High APRs in favor of small, short-term advances, peer-to-peer financing, secured loans, or comparison platforms like SuperMoney that work for you, not against you.

Why Should I Trust ElitePersonalFinance?

At ElitePersonalFinance, borrowers can have a tough time finding the right loan. Today, loans are rife with 400%+ APRs, predatory repayment terms, and hidden fees designed to put you in a vicious cycle. Now, we’ve come to the surface to provide comprehensive education and transparency on the best loans for really bad credit, offering worthwhile solutions backed by real data and verified customer feedback.

Throughout our research, we’ve evaluated hundreds of lenders across marketplaces to offer the best options based on APR ranges, repayment flexibility, borrower requirements, and other key criteria, so you don’t have to do the legwork of researching.

Please keep reading to learn more about the best loans for bad credit, including our top recommended loan options, why you should avoid payday/auto title loans, and how to improve your credit score before any application. Whether you’re looking to compare lenders or explore ways to rebuild your credit, this guide will help you move forward.

What Are My Options for a Loan if I Have Really Bad Credit?

If you have really bad credit, here are some options you can take:

Payday Advance Apps

Payday advance apps like Earnin, Dave, and Brigit allow you to access a portion of your paycheck before your next payday. They can give you anywhere from $20 to $2,000. Unlike traditional payday loans, they come with 0% interest in exchange for a voluntary tip or monthly subscription, making them an excellent choice for short-term emergencies.

All you have to do is use the services: download the app and link a valid, active checking account, preferably one that accepts direct deposits. In addition to cash advances, these services offer extra benefits, such as overdraft protection and financial tools that help you assess your spending across different categories to manage cash flow better.

Credit Union Loans

Thanks to their member-owned, nonprofit status, credit unions offer small personal loans and payday alternative loans (PALs) with more favorable terms than traditional payday loans. They usually come with lower interest rates and longer repayment schedules of 2 to 4 weeks.

To take out a credit union loan, you need to become a member (part of a qualifying organization, affiliation, or geographic location), with loan amounts ranging from a few hundred dollars to $5,000 and terms of 6 months to 3 years. Two highly recommended credit unions are the nationally recognized Navy Federal Credit Union and Alliant Credit Union, which provide specialized programs for bad-credit borrowers.

Online Installment Loans

Platforms like Avant, OppLoans, and OneMain Financial offer favorable loans for borrowers with bad credit in the $300 to $10,000 range, with repayment terms ranging from 6 months to 5 years. Unlike predatory payday loans, they are paid in fixed monthly installments, making it easier to manage your monthly budget.
On top of that, some platforms report to credit bureaus, helping you rebuild your credit.

Peer-to-Peer Lending

Peer-to-peer (P2P) lending platforms like LendingClub and Prosper allow you to connect with individual investors looking to fund personal loans ranging from $1,000 to $40,000 with three- to five-year repayment terms. Expect more flexible approval criteria than banks. Otherwise, options offer slightly higher interest rates than traditional loans, a digital-first application process, and a much broader range of options.

Plus, these platforms let you compare multiple offers and terms from each investor before signing a contract.

Another benefit to using P2P platforms is that they offer unsecured loans, meaning you do not have to put up a vehicle, savings account, or certificate of deposit as collateral. Plus, they report to credit bureaus, which can help you build your credit score over time. Platforms like LendingClub will even let you choose your preferred repayment schedule, offering greater monthly repayment flexibility. In contrast, Prosper is better known for its personalized loan recommendations based on your financial profile.

Secured Personal Loans

Secured personal loans require collateral such as a vehicle, savings account, or certificate of deposit, which allows you to enjoy lower APRs even if your credit score is low. Plus, you’ll be able to borrow larger amounts with lower monthly payments.

Actual loan amounts granted depend on several factors, such as your collateral value, credit score, and other qualifying criteria. Like P2P platforms, a positive payment history is usually reported to all three major credit bureaus.

SuperMoney Loans

SuperMoney is an online marketplace that lets you receive competitive loan offers from bad-credit lenders, with repayment terms ranging from $500 to $50,000 and terms of 1 to 7 years, depending on the lender.

It offers an easy side-by-side comparison of loan details, including rates, fees, and terms, in one shot, so you do not have to visit lenders’ websites individually. Getting pre-qualified with multiple lenders at once is one of the most intelligent decisions you can make to protect your credit score.

Thanks to its excellent service, SuperMoney has won numerous awards, including “Best Financial Product Comparison Service” in the FinTech Breakthrough Awards program for 2023 and a spot on the Inc. 5000 list: Fastest-Growing Private Companies.

What Are the Risks of Payday Loans and Other Bad Credit Loans?

While payday loans and other bad credit loan options may seem like a quick fix, they’re anything but. They come with serious disadvantages that can exacerbate your financial problems.

Some of these risks include sky-high interest rates and short repayment terms, hidden terms and fees, and a negative impact on credit scores.

Sky High Interest Rates

One of the most significant downsides of payday loans is the extremely high interest rates. Whereas you may see anywhere from 10% to 30% APR with a traditional bank loan, payday loans often see 400%+ APRs, which means that a $500 loan could cost you double if you don’t repay it immediately with two consecutive rollovers. If you’re already struggling financially, then these interest rates could be disastrous.

For perspective, a $500 Wells Fargo loan with a 10% or 25% APR over 12 months would result in total interest paid ranging from $25 to $65 in a single year. In contrast, a $500 payday loan with a 301% APR and a 2-week payment term would result in a total interest rate of $50 for just 2 weeks. This is on account of additional fees and a rollover, which subsequently increases the total loan cost.

Short Repayment Terms

Traditional payday loans are often due within two to four weeks or on your next payday. This short repayment window makes it difficult to cover other household expenses, such as rent and utilities. With a single missed payment, one can face late fees, rollover fees, and increased interest, and may even need to take out new loans to pay off the original one.

Plus, some predatory online installment loans require weekly or biweekly payments, which are even harder to deal with.

Hidden Fees

Whether it’s processing fees, service fees, or early repayment penalties, payday lenders are notorious for burying these in the fine print.

One of the most egregious types of fees out there is the origination fee. Also known as a processing fee, this fee is charged only for setting up the loan. For a simple $1,000 loan, this could be as high as $60, which is baked into the APR. It is notable that it provides no real benefit to another borrower and exists solely to increase the lender’s profits.

Other worthless fees you can expect include rollover/extension fees and administrative/service fees charged for processing or handling repayment, which can easily add up to $20 per transaction and are rarely disclosed up front.

Negative Impact on Credit Scores

Most payday lenders do not report on-time payments to credit bureaus. Missing payments or defaulting can severely damage your credit score by up to 100 points, making it harder to qualify for low APR loans.

In the long term, a 30-day late payment could drop your score by 50 to 100 points, depending on your current score and overall record. In turn, this can lower your credit score by an additional 30 to 60 points. To take it a step further, being 90 days late could reduce your score by up to 150 points. Lastly, if you achieve a 120-day late, you may face charge-offs by lenders, followed by an additional 100-point drop (on top of your 30-, 60-, and 90-day lates), and a derogatory mark on your record for up to 7 years.

Aggressive Collection Practices

When dealing with payday lenders and bad-credit installment lenders, expect aggressive collection practices. Sometimes you get calls several times a day, or threats of legal action, to pressure you into paying back the money. In some cases, unauthorized withdrawal from your bank account can also occur, resulting in overdraft fees.

If collections escalate even further, you may even see wage garnishments or frozen accounts, depending on your state’s laws. Note that even a single missed payment can trigger aggressive collections, which you’ll never see with a traditional bank or credit union.

Long-Term Debt Spiral

One of the most disastrous consequences of payday loans is that they create a complex cycle of dependency to climb out of. Sometimes, short repayment windows force borrowers to take out a second loan to cover the original loan, or to take out rollovers, which add new fees and interest charges. Before you know it, that $400 loan can become $800 in debt within two to three months.

If you want to pay your monthly rent, utilities, or groceries, we recommend avoiding payday loans.

What Can I Do to Improve My Credit Score Quickly?

If you have really bad credit, then here are some steps you can take to improve your credit score quickly before taking out a loan:

Ask for a Credit Limit Increase

One of the best ways to increase your credit score by 40 points or more within one or two billing cycles is to reduce your credit utilization ratio by requesting a credit limit increase from your issuer. Even a $500 or $1,000 increase can help you drop your utilization ratio below 40%.

Thankfully, there’s no shortage of lenders that allow you to request a limit increase within minutes by completing a simple online form, e.g., Capital One, American Express, or Discover.

Your best chance of approval is if you’ve kept up with on-time payments for at least 6 months. Plus, we advise not requesting increases from multiple card issuers at once to limit the number of hard inquiries on your record.

Pay Down Small Balances First

If you focus on paying off smaller balances across your cards, then it can really help your credit score. This immediately lowers your utilization ratio and shows credit bureaus that you can manage repayment responsibly.

As a tip, start with smaller balances up to $500 and pay them in full. Remember that legit lenders will report updates to the credit bureaus within 30 days so that you can see a quick improvement after one billing cycle. From there, you can focus on larger balances next and give yourself a psychological boost.

Set Up Automatic Payments

Another way to improve your credit score quickly is by setting up automatic payments. Remember that a single missed payment can drop your score by up to 100 points, so setting up automatic payments for at least the minimum balance required could be very advantageous.

For example, Bank of America, American Express, and Citi all report to Experian, Equifax, and TransUnion, and this strategy allows you to rebuild your score with little effort.

Dispute Credit Report Errors Immediately

One underutilized trick to raise your credit scores is to dispute errors on your credit report. Visit annualcreditreport.com once a year to pull your Equifax, Experian, and TransUnion reports, checking for accuracy, such as accounts mistakenly marked as open that should be closed, incorrect balances, or even outdated collections.

If you spot an error, then follow the dispute with the bureau in question. They usually take up to 45 business days to investigate and correct errors if they’re deemed errors. Even a simple mistake removed from your credit report can raise your score by 50 points or more, allowing you to enjoy lower APRs and more favorable loan terms.

Become an Authorized User on a Credit Card With a High-Scoring Holder

Another way to increase your credit score quickly is by becoming an authorized user on someone with an excellent credit score’s credit card. This could mean a family member, friend, or trusted person. This tactic will immediately boost your average credit age, especially useful if you’re a recent college grad or have a thin or limited credit history.

Best practices are to use a cardholder’s account with a low utilization ratio under 10% with no missed payments, along with an account age of at least three years old. Whether it’s Chase, Discover, or American Express, you should see the on-time payments reported by your cardholder to credit bureaus. If all goes well, then you should see a credit score bump within 30 to 60 days.

Use Experian Boost

If you’re looking for a quick way to boost your credit score, try using Experian Boost. These online tools allow you to add eligible utility, phone, and other types of payments to your credit file, which can boost your score in as little as 5 minutes.

While you can’t expect it to fix the credit issues, it’s a quick win that can help you qualify for lower APRs for other lines of credit in the future.

Pay Your Credit Cards Twice a Month

One often overlooked strategy for boosting your credit scores is to pay off your credit cards twice a month instead of waiting for one large monthly payment. This ensures that your credit utilization ratio remains low throughout the entire billing cycle, which is essential to affect your credit scores and models that matter. For example, instead of showing a 70% utilization ratio on the 15th of next month, you can show 30%, which can bump your score quicker.

Take advantage of lenders like Capital One, Chase, and Discover, which allow unlimited free payments, and watch your score bump up to 40 points within the next one to two cycles with this strategic move.

Frequently Asked Questions

What’s the best loan option for bad credit?

The best loan options depend on your credit profile and how badly you need the money. Nowadays, there’s no shortage of loans for terrible credit, including but not limited to payday advance apps, credit union loans, online installment loans, P2P lending, and secured loans.

All our designs offer lower interest rates and repayment terms to comfortably meet your monthly debt obligations.

How do payday advance apps work?

Payday advance apps like Earnin, Dave, and Brigit let you earn a percentage of your next paycheck before your payday. All you need to do is link a valid checking account and provide supporting documentation, such as proof of direct deposit and employer status.

Unlike traditional payday loans, they charge 0% interest in exchange for a voluntary tip or a small monthly subscription, which makes them an excellent option for covering paycheck gaps.

Why are credit union loans safer than payday loans?

Thanks to being nonprofit, member-owned institutions, credit union loans are much safer than payday loans. Unlike payday lenders, who often charge APRs of 400%+ or more, payday alternative loans (PALs) from credit unions have an APR of 28%.

Plus, requirements are much more flexible. All you need to do is become a member for as little as $5 and set up a checking account, subject to specific requirements such as being part of an employer affiliation, group, or organization, or living within a designated geographical area.

How can online installment loans help rebuild credit?

Offered by lenders like Avant or OneMain Financial, online installment loans allow you to repay your debt in fixed monthly installments, making budgeting more predictable. This, on top of reporting on-time payments to credit bureaus, lets you watch your score gradually increase, allowing you to take advantage of lower APR loans down the line.

What are the benefits of peer-to-peer lending?

Peer-to-peer (P2P) lending platforms like LendingClub and Prosper connect borrowers with individual investors willing to offer favorable rates and terms. Personal loan APRs for Prosper range from 8.99% to 35.99%, whereas LendingClub’s APR range for personal loans hovers around 7.04% to 35.99%, making them a worthwhile alternative to payday loans.

Why choose a secured personal loan?

If you’re willing to put up a vehicle, savings account, or certificate of deposit as collateral to secure lower APRs, secured personal loans are worth a look. Plus, they come with much longer repayment terms than the traditional two to four weeks offered by payday loans, which cuts down on your monthly payments.

How does SuperMoney compare loan offers?

SuperMoney allows you to compare loan offers in one shot with a quick rundown of fees, interest rates, and other key loan details in a side-by-side view. Plus, you can be pre-qualified in minutes with no hard inquiries on your credit report, which can temporarily lower your credit score.

What are the main risks of payday loans?

Exorbitant interest rates, short repayment terms, hidden fees, and potential damage to your credit are four of many risks of payday loans. With APRs exceeding 100% and two consecutive rollovers, you can easily pay more in interest than principal over the life of a loan. Plus, don’t expect the reporting of on-time payments to credit bureaus, making payday loans a complete waste of time.

Conclusion

For bad-credit borrowers, selecting the right loan can make the difference between making comfortable monthly payments and falling into a vicious debt cycle. With careful planning and research, you can access funds with legit direct lenders while rebuilding your credit and avoiding predatory traps.