Cheap Payday Loans Alternatives for Bad Credit 2022

Last Update: December 19, 2021 Loan Reviews Loans

Have you been searching for cheap payday loans? If so, don’t waste your time! We’ve done the research, and the truth is – they don’t exist.

After analyzing hundreds of lending products, we know that payday loans are the most expensive. According to the Consumer Financial Protection Bureau (CFPB), the average APR for a payday loan is 400%. With interest rates this high, you end up paying $45 in interest for every $300 you borrow – and that’s just over a two-week span.

Not very cheap, huh?

Moreover, if you find yourself in the unenviable position of defaulting on the loan, you can rollover the proceeds and extend the due date. However, you’ll be charged a late payment penalty. Say your $300 payday loan extends another two weeks. In this case, you’ll be charged a rollover fee of $45, plus another $45 fee at the end of the two-week extension period. This works out to $90 in extra fees on top of the $45 in interest.

So with all of this information at hand, what are your alternatives?

Well, that’s why we created this guide. This article will explain how you can obtain the cheapest loans, even if you have bad credit.

If you have fair or good credit, qualifying for a personal loan with cheap APRs ranging from 5.99% to 35.99% wouldn’t be very difficult. But, if you have bad credit, your options are usually limited. However, before you get too discouraged, there are viable lending solutions out there, and we’re here to help you find them.

Watch our video that shows how people with bad credit can get a personal loan:

Unsecured Personal Loans for Bad Credit

Most borrowers with bad credit don’t realize they can qualify for an unsecured loan. Today, the lending market is much more flexible than in years before, and lenders are more willing to provide cheap loans to borrowers of all credit scores.

See, it all comes down to competition. The lending market is an extremely competitive space. With plenty of companies fighting for your business, many lenders are willing to offer unsecured financing options as a way to increase profitability.

A second reason is the modernization of credit analysis. Instead of focusing on your credit score alone, lenders now take a holistic approach and examine your entire financial situation. Variables like your work history, education, spending activity, and savings balance can all be used to overcome a bad credit score.

Before we get to our top recommendations, you may be confused by the term ‘unsecured.’ Analogous to a standard personal loan, unsecured means you are not required to put up any collateral. As well, unsecured loans have APRs that range from 5.99% to 35.99%, but if you have bad credit, your APR will most likely fall near the top-end of the range. However, compared to a payday loan APR of 400%, 35.99% is still a much better alternative.

Top Recommendations

BadCreditLoans offers cheap personal loans to borrowers with extremely bad credit. And like their motto states – they can help when others can’t.

Loan amounts can extend up to $10,000, and APRs top out at 35.99%. will usually offer up to $3,000 if your credit is extremely poor, while those with higher credit scores can qualify for the full $10,000. So if you’re in the market for a cheap payday loan, consider BadCreditLoans instead.

LendingTree provides cheap installment loans to borrowers with credit scores as low as 500. Loan amounts top-out at $50,000, and APRs range from 3.99% to 35.99%. If you have really bad credit, the amount you qualify for will be much lower, and your APR will most likely fall near the 35.99% mark. However, LendingTree is still a much better option than the cheapest payday loan. Considering that loans are unsecured, you never have to worry about losing any collateral.


As another reliable lender, offers unsecured loans ranging from $1,000 to $35,000. APRs range from 5.99% to 35.99%, making them a great option for cheap bad credit loans. To qualify, you need to have some form of recurring income: full-time employment, self-employment, regular disability, or Social Security benefits. So if you’re looking for a cheap payday loan, check out PersonalLoans instead.

Secured Personal Loans for Bad Credit

Well, with secured loans, your car, home, or any other valuable asset acts as surety in case you default. If you can’t repay the loan, the lender has the right to seize your collateral and sell it to recover the funds.

While this sounds scary, there are plenty of benefits to securing a loan:

  • In many cases, putting up collateral is the only way to obtain a loan. Borrowers with low credit scores often need to provide lenders with security if they default. And providing collateral is the only way to achieve this.
  • Another advantage of securing a loan is it can lower your APR. By providing collateral, lenders have more confidence in your ability to repay the loan, and thus, are more likely to offer favorable terms. In fact, some borrowers with bad credit were even able to lower their APR to 10%.
  • Often overlooked, secured loans can help rebuild your credit score. If you’ve made some mistakes in the past that prevent you from receiving an unsecured loan, securing a loan can help rebuild your reputation. After successfully repaying in full and on time, your credit score will start to move in a positive direction.

Now for the negatives:

  • Most importantly, securing a loan puts your collateral at risk. If you’re not sure you can repay the loan on time, we don’t recommend securing a loan. There are many cases where people put up their car as collateral and end up losing it.
  • A second risk is further deteriorating your credit score. If you happen to default on the loan, it will reduce your credit score and make it that much more difficult to obtain a loan in the future.

Top Recommendation:


Designed specifically for those with bad credit, offers an extremely high approval rate if you put up your car as collateral. But unlike payday loans, CashUSA offers APRs that range from 5.99% to 35.99%, making them a much better option than any cheap payday loan out there. At the same time, those with bad credit can expect an APR near the high-end of the range, the company’s rates still much less than 400%.

CashUSA offers loans up to $10,000, but – according to its website – the amount can be increased depending on your qualifications. And because of their outstanding reputation, we recommend CashUSA as one of the best-secured loan providers in the marketplace today. Check out our CashUSA Review. You can see for yourself how it compares to the cheapest payday loans.

Cosigner Options

If bad credit holds you back from obtaining a loan, a co-signer is a great way to achieve fast approval and avoid even cheap payday loans. While many companies don’t allow co-signers, several reputable lenders support the practice. OneMain Financial, LendingClub, and Wells Fargo offer co-signer loans ranging from $1,000 to $100,000, with APRs ranging from 6.95% to 35.99%. If you have a trusted friend willing to guarantee your loan, a co-signer is a great way to obtain cheap financing.

Alternative Payday Loans

If you’re unfamiliar with the term, alternative payday loans are a hybrid between standard personal and predatory payday loans. See, personal loan APRs top-out at 35.99%, while payday loan APRs average 400%. Alternative payday loans, however, fall right in the middle. They offer APRs that range from 35.99% and up – and our top recommendation caps its APR at 199%. We only recommend alternative payday loans to those who don’t qualify for standard personal loans. So, before you head to a payday lender, check out our cheap payday loan alternative below.


As a relatively new player in the lending space, provides great alternatives to cheap payday loans. But remember, OppLoans are not personal loans because they exceeded the regular APRs range or 5.99% to 35.99%. Their APRs range between 59% to 160%. And while their rates are quite expensive, they’re still much cheaper than any payday or car title loan.

With OppLoans, you have the benefit of easy approval and no credit check when you apply. However, we only recommend OppLoans to those who don’t qualify for a personal loan. With APRs this high, you risk falling into a debt cycle, so only use alternative payday lenders as a second-to-last resort.

Credit Unions

When other lenders are unwilling to provide financing, credit unions can be a viable option. They offer extremely flexible terms and competitive APRs – even to those with bad credit. Moreover, credit unions look at variables beyond your credit score during the application process to determine your creditworthiness. So if you made some mistakes in the past but recently got your finances in order – it can go a long way to obtaining favorable loan terms.

What separates credit unions from other online lenders is they are not-for-profit enterprises. And being more community-based, they often use personal loans as a way to lend a helping hand. To use the service, however, you need to become a member. This typically requires a one-time fee of $25, and their APRs tend to range from 18% to 28%. But remember, federal credit unions cap their APRs at 18%, so they’re a great place to start.

Try and Get The Minimum Loan Amount Possible

A great way to decrease your out-of-pocket costs is to take out the minimum loan amount possible. Calculate exactly how much you’ll need and stick to it. If you follow this advice, you’ll keep your interest charges at a minimum, even with a high APR.

See, when you take out a loan, even with an APR as high as 100%, lowering the principal will help keep interest charges from getting out of hand. We know that taking out the minimum is easier said than done. With all of life’s expenses, sometimes a tiny loan just won’t cut it.

But despite the challenge, we hope a few examples will inspire you the next time you apply for a loan. Remember, the lower your principal, the less you pay in total interest. And to avoid falling into predatory debt traps, keeping your interest payments at a manageable level makes all difference in the world.

To start, let’s compare four 1-year loans repaid over 12-months. Two have APRs of 100% and principal balances of $100 and $1,000. The other two have payday loan APRs of 400%, but with the same principal balances of $100 and $1,000.

Check out the table below:

Loan Amount: APR: Total Interest Paid:
$100 100% $61.99
$100 400% $313.31
$1,000 100% $619.91
$1,000 400% $3,130.65

Notice that you save a lot in total interest, even with a higher APR, only by keeping the principal balance at a minimum. By reducing the 100% APR loan from a $1,000 principal to $100, you save $557.92 in total interest – and that’s just over one year. The 400% APR example is even more substantial. By reducing your principal balance from $1,000 to $100, you save a whopping $2,817.34 in total interest paid.

Now, we know the major downside of small loans is they’re usually not enough to cover all of your expenses. However, small loan amounts can help prevent you from falling into a vicious debt cycle. If you miss a payment or can’t repay the principal, you’ll end up rolling over your current loan or refinancing with another lender. But the negative mark will stay on your credit report. According to the Fair Isaac Corporation (FICO), a missed payment of 30-days can result in a 90 to 110 point decrease in your credit score, with another 60 to 80 point drop if the delinquency extends another 30 days.

So plan your budget ahead of time because if you don’t, obtaining a cheap loan will be the least of your worries.

Do Your Best to Lower Your Repayment Duration

Another way to obtain a cheap loan is to lower your repayment duration. If you’re able to increase your monthly payments, you will save a lot in interest over the life of your loan.

To illustrate, we’ll use the same four loans as above. However, this time, check out how much you save in interest by lowering your repayment duration.

Loan Amount: APR: Total Interest Paid: 1-Month Loan: Total Interest Paid: 3-Month Loan: Total Interest Paid: 6-Month Loan: Total Interest Paid: 12-Month Loan:
$100 100% $8.33 $17.10 $31.11 $61.99
$100 400% $33.33 $72.96 $143.30 $313.31
$1,000 100% $83.33 $171.11 $311.03 $619.91
$1,000 400% $333.33 $729.72 $1,433.06 $3,130.65

When comparing the 100% APR, $100 loan repaid for a month versus the one-year repaid loan, we see that we can save $53.66 in total interests. Even more, when comparing the 400% APR, $100 loan repaid over one month versus the one-year loan, you save $279.98 in total interest paid.

The results are even more staggering when we increase the loan amount.

When comparing the 100% APR, $1,000 loan repaid over one month versus the 1-year loan, you save $536.58 in total interest paid. And when comparing the 400% APR, $1,000 loan repaid over one month versus the 1-year loan, you save $2,797.32 in total interest paid.

As you can see, reducing your repayment duration has a significant impact on your total borrowing cost. But again, we know it’s difficult to increase your monthly payments, especially when times are tough. If it were that easy, everyone would do it, right? Either way, we want to provide you with the best advice possible, and finding ways to lower your interest costs are critical to getting your finances back in order.

Always Shop Around for The Best Offer

Another great way to obtain a cheap loan is to shop around for the best offer. Remember, just because you submit a request does not mean you’re required to accept the loan offer. Ensure you carefully read the terms and conditions to determine if the arrangement is right for you. When you shop around, you can find other lenders willing to provide more attractive terms.

Tips to Help You Obtain The Cheapest Loan Possible

Don’t worry if you’re burdened with a bad credit score – it’s not the end of the world. Plenty of people take small steps to rebuild their credit score, which, in turn, helps them obtain more favorable loan terms.

Here are some tips to get you on the path to the cheapest loans possible:

  • Use a cosigner

A co-signer is a great way to obtain a cheap loan. Acting as a guarantor, a co-signer promises to pay back the debt proceeds if you default. You benefit by receiving a lower APR, and the lender benefits because a co-signer decreases the default risk.

  • Increase your credit score

Considering 35% of your FICO score is attributed to your payment history, staying up-to-date on your bill payments can help move your credit score in the right direction. About 30% of your FICO Score is the credit utilization ratio. Try keeping your credit card spending less than 30% of your total balance and pay off your debt rather than transferring it from one card to another.

  • Lower your credit risk

Your spending behavior can make a huge difference in the eyes of lenders. Remember, they pay close attention to how you spend your money, so if a lender finds plenty of frivolous spending, it can be a red flag regarding your creditworthiness.

Next, try and build a predictable employment history. When you change jobs frequently, this can be a red flag regarding your ability to repay a loan. If you lose your job or receive a significant reduction in hours, lenders believe you may lack the experience or track record to land an identical position.

Last, do your best to increase your level of education. Education helps measure your earning potential and, more importantly, your ability to repay debt. If you show lenders you’re taking classes or working towards certifications to increase your attractiveness in the job market, they will look at your application more favorably.

On a side note, you can also look for benefits beyond whether it’s the cheapest loan possible.

Certain loans will be more expensive and come with higher APRs, but they can offer more flexibility, lower fees, and charge 0 repayment penalties. Other benefits include an easy approval process, immediate access to funds, low annual income requirements, and zero loan origination fees.


If you take any advice from this guide, we hope it’s our advice to avoid payday loans. They are extremely expensive and do much more harm than good. At ElitePersonalFinance, we could promote payday loans and even make money doing so – but that’s not what we’re about. Our goal is to provide you with the best advice and help you make smarter financial decisions. And without a doubt, payday loans are not up to that standard.

If you’re suffering from bad credit and feel like payday loans are your only option, we recommend you first consider one of the loans above. They will save you both time and money and keep you from falling into predatory debt traps. We’ve encountered plenty of stories that show the harm payday loans bring upon unsuspecting borrowers. For an in-depth look, check out the testimony critics gave to Congress regarding Federal Payday Loan Policy.

Now, if you’ve exhausted all of your resources and still can’t obtain a loan, we recommend you work on your credit score before settling for a payday loan. By utilizing some of our tips above, we assure you, better alternatives will eventually come your way.



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