Best Short-Term Loans For Bad Credit Of 2024

Best Short-term Loans for Bad Credit

BEST OVERALL SHORT-TERM LOAN FOR BAD CREDIT

Upgrade

4.0

Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.

Minimum Credit Score

580

APR range

8.49% to 35.99%

Loan amounts

$1,000 to $50,000

Compare Rates

Via Credible.com’s Website

580

8.49% to 35.99%

$1,000 to $50,000

Editor’s Take

Upgrade was launched in 2017 and provides accessible online and mobile credit and banking services. Since that time, the platform has made more than $3 billion in credit available to over 10 million applicants and continues to expand its online and mobile services. Although maximum APRs are on the high end compared to other online lenders, Upgrade makes loans available to those with poor credit history.

Loans amounts, which range from $1,000 to $50,000. Upgrade has two- to seven-year terms  available. Upgrade charges an origination fee between 1.85% and 9.99% of the loan, and borrowers will encounter a $10 fee if their payment is more than 15 days late or if the payment does not go through; there are no discounts for autopay. That said, Upgrade borrowers are not subject to a prepayment penalty, so you can reduce the overall cost of the loan if you’re able to pay it off early.

Beyond offering accessible personal loans, Upgrade streamlines the lending process with a mobile app that lets borrowers view their balance, make payments and update personal information. Upgrade’s Credit Heath tool also makes it easy to track your credit score over the life of your loan.

Pros & Cons

• Low minimum credit score requirement
• Borrowers can use loans to cover business expenses
• Offers direct lender payoff for debt consolidation loans

• High APR range
• Charges fees for origination, late payment and insufficient funds

Details

Eligibility: 

• Minimum credit score: 580
• No minimum income requirement
• Allows co-applicants

Loan uses:

• Debt consolidation
• Home projects
• Large expenses
• Business expenses

BEST FOR FAST FUNDING & BELOW-AVERAGE CREDIT

LendingPoint

4.0

Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.

Minimum Credit Score

600

APR range

7.99% to 35.99%

with autopay

Loan amounts

$2,000 to $36,500

Compare Rates

Via Fiona.com’s Website

600

7.99% to 35.99%

with autopay

$2,000 to $36,500

Editor’s Take

LendingPoint is an online lender based in Atlanta that offers personal loans to prospective borrowers in 48 states and Washington D.C.; it does not offer loans in Nevada and West Virginia. Prospective borrowers in eligible states can apply online and benefit from quick funding.

LendingPoint personal loans range from $2,000 to $36,500; Georgia loans have a minimum loan amount of $3,500. Repayment terms range from 24 to 72 months—or two to six years.

There are two main disadvantages to LendingPoint: high maximum APRs and origination fees. While you can typically avoid high APRs by maintaining a high credit score, LendingPoint origination fees (up to 10%) depend on the state you live in.

Pros & Cons

• Quick funding
• Low credit score requirements
• No prepayment penalty

• Origination fee up to 10%
• Co-signers or joint loans not permitted
• Not available in Nevada and West Virginia

Details

Eligibility: 

• Minimum credit score: 600
• Must live in a state other than Nevada or West Virginia
• Doesn’t allow co-signers or co-applicants

Loan uses:

• Debt consolidation
• Home project
• Medical expenses

BEST FOR A RANGE OF REPAYMENT OPTIONS

Avant

3.5

Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.

Minimum Credit Score

580

APR range

If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.

9.95% to 35.99%

Loan amounts

Example: A $5,900 loan with an administration fee of 4.75% and an amount financed of $5,619.75, repayable in 36 monthly installments, with an APR of 29.95% would have monthly payments of $250.30. If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.

$2,000 to $35,000

Compare Rates

Via Credible.com’s Website

580

If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.

9.95% to 35.99%

Example: A $5,900 loan with an administration fee of 4.75% and an amount financed of $5,619.75, repayable in 36 monthly installments, with an APR of 29.95% would have monthly payments of $250.30. If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.

$2,000 to $35,000

Editor’s Take

Founded in 2012 and based in Chicago, Avant is a consumer lending platform that offers secured and unsecured personal loans through a third-party bank (WebBank). Unsecured loans are available in Washington, D.C. and every state but Hawaii, Iowa, New York, Vermont, West Virginia and Maine. The platform specializes in middle-income borrowers with fair to good credit and only requires a minimum score of 580 to qualify.

Maximum loan amounts are low compared to other lenders, but the low minimum amount and flexible repayment terms (two to five years) make it an accessible option for borrowers. However, as with many loans for subprime borrowers, Avant personal loans come with a price. In addition to charging an administrative fee of up to 4.75% of the loan amount, Avant’s APR range (9.95% to 35.99%) is on the high end for applicants with a good to excellent credit score—and there is no autopay discount. Still, the platform earns top marks for borrowers with less than stellar credit who need quick access to funds.

Pros & Cons

• Secured and unsecured loan options available
• Low credit score requirement (580)
• Loan terms available up to 60 months

• Charges an upfront administrative fee
• High starting APR for prime borrowers
• Co-signers and co-applicants not allowed

Details

Eligibility: 

• Minimum credit score: 580
• Minimum income: $20,000
• Doesn’t allow co-signers or co-borrowers

Loan uses:

• Debt consolidation
• Large expenses
• Home projects

BEST FOR COMPARING MULTIPLE OFFERS

Universal Credit

3.5

Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.

Minimum Credit Score

580

APR range

11.69% to 35.99%

Loan amounts

$1,000 to $50,000

Compare Rates

Via Credible.com’s Website

580

11.69% to 35.99%

$1,000 to $50,000

Editor’s Take

Universal Credit is an online lending platform that offers personal loans between $1,000 to $50,000 through its partners. Repayment terms range from three to seven years.

While Universal Credit makes finding a personal loan accessible even to those with damaged credit, it comes with a few tradeoffs. First, it charges high APRs, well above the most competitive rates seen on our list. Second, Universal Credit charges a 5.25% to 9.99% origination fee on all personal loans. Because this is deducted from your loan proceeds, you’ll need to factor this in when determining your loan amount to ensure you receive the necessary amount after the fact.

Pros & Cons

• Flexible qualification requirements
• Next-day funding
• No prepayment penalty

• High APRs
• All personal loans charge a 5.25% to 9.99% origination fee

Details

Eligibility:

• Minimum credit score: 580
• Minimum income requirement: Does not disclose
• Doesn’t allow co-signers or co-borrowers

Loan uses:

• Debt consolidation
• Large expense
• Home project

BEST FOR QUICK APPROVALS

Upstart

3.5

Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.

Minimum Credit Score

300

APR range

7.80% to 35.99%

Loan amounts

$1,000 to $50,000

Compare Rates

Via Credible.com’s Website

300

7.80% to 35.99%

$1,000 to $50,000

Editor’s Take

Upstart has made a mark on the personal loan space because of its artificial intelligence- and machine learning-based approach to borrower qualification. In fact, Upstart estimates that it has been able to approve 27% more borrowers than possible under a traditional lending model. With competitive APRs, Upstart is not a top lender for borrowers who can qualify for more competitive rates. Even so, the platform’s minimum 300 credit score makes it an accessible option to those with fair credit.

Upstart also offers a pretty flexible range of loan options, with amounts ranging from $1,000 to $50,000 so you don’t have to borrow (or pay interest on) more than you really need. And, while Upstart’s loan cap is lower than some lenders—this is likely to be enough for many prospective borrowers.

Even though Upstarts three-, five-, seven-year loan terms are more restrictive than other lenders, it’s likely to be an acceptable tradeoff for applicants who might not be approved in a more traditional lending environment. Plus, it’s available in every state except West Virginia and Iowa, so it’s as widely available as many other top lenders.

Pros & Cons

• Accessible to borrowers with fair credit
• Offers prequalification with a soft credit check
• Ability to choose a custom payment date

• Charges an origination fee up to 8% of the loan amount
• No secured or co-signer option
• Loans only available for three-, five-, seven-year terms

Details

Eligibility: 

• Minimum credit score: 300
• Minimum income requirement: $12,000
• Doesn’t allow co-signers or co-borrowers

Loan uses:

• Debt consolidation
• Medical expenses
• Educational expenses

Summary: Best Short-term Loans for Bad Credit

COMPANY	Company - Logo	Forbes Advisor Rating	Forbes Advisor Rating	MINIMUM CREDIT SCORE	APR RANGE	LOAN AMOUNTS	Learn More CTA text	Learn more CTA below text	Learn More
Upgrade		4.0		580	8.49% to 35.99%	$1,000 to $50,000	Compare Rates	Via Credible.com's Website
LendingPoint		4.0		600	7.99% to 35.99%	$2,000 to $36,500	Compare Rates	Via Fiona.com's Website
$2,000 to $35,000		3.5		580	9.95% to 35.99%	$2,000 to $35,000	Compare Rates	Via Credible.com's Website
Universal Credit		3.5		580	11.69% to 35.99%	$1,000 to $50,000	Compare Rates	Compare rates from participating lenders via Forbes Advisor
Upstart		3.5		300	7.80% to 35.99%	$1,000 to $50,000	Compare Rates	Via Credible.com's Website

Tips for Comparing Short-term Loans for Bad Credit

While finding short-term loans for bad credit can be challenging, it’s not impossible. Many lenders let you prequalify for a loan online so you can check to see if you qualify without impacting your credit score. As you compare personal loans, here are some tips for selecting the right one:

• Look at the high end of a lender’s interest rate range. If you have bad credit, you’ll likely get an interest rate near the top end of a lender’s range of rates. Some personal loan lenders have rates as high as 36% while others set a lower maximum. A lower rate could mean more affordable monthly payments and lower costs over time.
• Keep an eye out for loan fees. Some lenders charge origination fees on personal loans, which may equal between 1% and 8% of your loan amount. Other fees that could add to your costs of borrowing include administrative fees, late fees and prepayment penalties.
• Compare repayment terms. Look for a loan with a short-term repayment schedule that matches your budget and goals. If you want to pay your loan off ahead of schedule, check to see if the lender levies a fee for prepayment.
• Find out about your co-signer options. Adding a creditworthy co-signer or co-borrower to your application could help you qualify or access better rates. Note that a co-signer is responsible for repayment if you fall behind, whereas a co-borrower shares the debt equally from the beginning. As you compare lenders, find out if any allow you to apply with a co-signer, co-borrower or both.
• Seek out customer support. A lender’s customer support options can make or break your experience borrowing a loan. For instance, a support team may be able to offer options if you run into financial hardship and are struggling to pay your bills. As you compare lenders, review their customer service resources and check out reviews to see what other borrowers have to say.

What Is a Short-term Loan?

A short-term loan is a personal loan with terms between one and three years or shorter. Traditional personal loans typically have terms that range anywhere from one to seven years, with some lenders offering terms of up to 10 years.

By paying off your loan in a short period of time, you can get out of debt faster and reduce the amount you pay in interest charges. However, your monthly payment will be higher than it would be on a longer repayment term. Make sure you can afford the monthly bills before applying for a short-term loan.

How Do Short-term Loans Work?

Short-term personal loans provide a set amount of funding that you pay back over one to three years. You’ll typically make payments on a monthly basis until you’ve paid the loan off in full.

Consider the following example of a $2,000 loan at a 20% interest rate. On a one-year term, you’d have a monthly payment of $185.27 and pay $223.23 in total interest charges. On a three-year term, your monthly payment would go down to $74.33, but your interest charges would increase to $675.78.

Short-term loans can come with lower interest costs overall, but they also tend to have higher monthly payments. When you borrow the loan, you can use it for almost any legal purpose, including home renovation, debt consolidation and personal expenses.

How to Get a Short-term Loan With Bad Credit

The process for getting a short-term loan with bad credit will vary by lender, but here are some steps you’ll likely need to take:

1. Start by reviewing your credit. Lenders will check your credit when you apply for a loan, so it’s important to know what you’re working with. Check your credit score and review your credit report for any inaccuracies. If your score is lower than a lender’s requirement, you won’t have to waste your time applying with that lender.
2. Take steps to improve your score. If you don’t need the loan right away, consider spending some time increasing your credit score. Making on-time payments on loans, reducing your credit utilization ratio and disputing any errors you find on your credit report are all steps that can help.
3. Prequalify with more than one lender. Some lenders let you check your rates online with only a soft credit check, which won’t impact your score. Shopping around can help you get a sense of your loan offers and whether you qualify.
4. Consider submitting a joint application. If you’re having trouble qualifying due to bad credit—or want to get a better interest rate—consider adding a co-signer or co-borrower to your application. A joint applicant reduces risk in the eyes of the lender and could help you get a better loan offer.
5. Submit a full application. If you find an offer you wish to move forward with, you’ll submit an official application. Along with providing your personal details, you may need to upload documentation, such as pay stubs or tax returns.
6. Receive your loan funds and start repayment. Review your loan agreement so you know exactly how much your first payment will cost and when it’s due. Consider setting up automatic payments so you never miss a bill.

Pros of Short-term Loans for Bad Credit

• Can use funds for almost any purpose: Personal loans are flexible sources of funding that you can use for almost anything, including home projects, debt consolidation and travel. The main restrictions are that you usually can’t use a personal loan for investing, gambling, college expenses or a down payment for a house.
• Will charge less interest than a long-term loan: Since you’ll be paying off your loan quickly, interest will have less time to accrue. A short-term loan, therefore, will have lower interest costs overall than a long-term one with the same rate.
• May boost your credit if you make on-time payments: Your payment history makes up 35% of your FICO score. By paying off your personal loan on time and in full, you could increase your score and improve your credit.

Cons of Short-term Loans for Bad Credit

• May come with lower loan amounts: Some lenders might set lower loan amounts on a short-term loan, especially if you apply with bad credit.
• Will have higher monthly payments than a long-term loan: Because you’re paying off your loan on a condensed timeline, expect higher monthly bills than you would with a longer repayment term.
• Could have an interest rate up to 36%: Bad credit borrowers will get interest rates on the higher end of a lender’s range, which could go up to 36%. If this is the case, you might consider whether a credit card would be a better financing option.
• May charge an origination fee: Some lenders charge origination fees on personal loans, especially loans for bad credit. This fee could cost 1% to 8% of your loan amount and add to your total costs of borrowing.

Methodology

We reviewed 29 popular lenders based on 14 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose lenders that have a minimum credit score requirement of 600 or lower, offer terms between one and three years, and ranked them based on the weighting assigned to each category:

• Eligibility and accessibility: 30%
• Loan cost: 25%
• Loan details: 20%
• Customer experience: 15%
• Application process: 10%

Within each category, we also considered several characteristics, including loan amounts, repayment terms, APR ranges and applicable fees. We also looked at whether each lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like prequalification and mobile apps.

Where appropriate, we awarded partial points depending on how well a lender met each criterion.

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