Your credit doesn’t have to cut you off from a loan. Payday loans can be a useful tool when you’re facing an emergency expense or trying to make ends meet, but you’ll want to make sure you know exactly how much it’s costing you before you sign on the dotted line.
Payday loan providers that accept bad credit
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How do I get a payday loan with bad credit?
Your credit history likely won’t prevent you from qualifying for a payday loan. In almost every case, lenders that offer payday loans — as well as other types of short-term loans — are more concerned with your ability to repay than with your credit history. As long as you have a steady source of income and meet a lender’s other requirements, your credit likely won’t play a major role in the decision process.
However, this does mean that you will likely face much higher fees and interest rates that you would with a personal loan. If you aren’t careful this can easily add hundreds of dollars to your loan, so read over the terms you’re given and compare your options below to make sure you’re getting a good deal.
What are the benefits of a bad credit payday loan?
- Apply without a checking account. Most lenders require you have a checking account when you reply because they use it to deposit your funds and withdraw your payments. However, you can find some lenders that offer cash loans to borrowers without bank accounts.
- Apply if you’re unemployed. Some payday loan lenders will consider you for a loan if you’re unemployed, as long as you’re receiving some sort of income, such as government benefits or pension income.
- Quick turnaround. When you apply, ask to have your loan deposited into your bank account in as little as one business day. If you opt for cash pickup, you may be able to get your funds on the same day.
What to watch out for
- High interest. Lenders charge borrowers with bad credit higher interest rates. Because of this, payday loans may be illegal in your state. If they are, you could have to pay an APR well above 300%.
- Short repayment terms. Payday loans are known for being costly because of their quick repayment schedule. Many are due two to four weeks after being borrowed, so you’ll need to be sure you can afford it by checking your budget and the lender’s fees carefully.
- Disreputable lenders. Not all lenders follow state laws. Check to make sure yours is licensed and clearly outlines its terms. If you’re unsure, learn how to spot a payday loan scam.
How do I improve my chances of being approved?
Although lenders that offer bad credit payday loans don’t focus on your credit score, you’ll still want to be sure you’re eligible. Follow these four steps to reduce your chances of rejection and to be sure you’re getting an affordable deal.
- Compare your options. It’s important to compare payday loan lenders before you settle. You’ll want to look at the loan amount, repayment terms and the total cost in order to find a loan that meets your needs.
- Review the eligibility criteria. While many payday loan lenders do accept applicants with bad credit, they still have minimum requirements that need to be met. Many require a certain monthly income or proof of employment.
- Only borrow what you can afford. Although lenders can’t offer you more than you can pay for, the terms may still be difficult if the repayment period is too short. You should determine what you can manage and find a loan that works with your budget.
- Budget to cover your payments. When you’re approved for a loan, your repayments will generally start on your next payday. Make sure you’ve budgeted to cover the added expense, which can be anywhere from $10 to $25 in fees for every $100 advanced to you.
What do I need to apply?
Most lenders require you to be 18 years old minimum, a US citizen or permanent resident and have a steady source of income. Beyond that, you may need to provide some of the following information:
- A valid form of ID
- Your contact details
- Proof of income
- Your bank account details
What are my other short-term loan options?
Payday loans aren’t the only option for borrowers with bad credit. These other loans could be helpful for you if you need money but don’t have the credit for a loan from a bank.
- Installment loan. Installment loans last longer than payday loans. If you know you won’t be able to pay back your loan in a few weeks, this may be a better option. However, you may end up paying more in interest and fees over the long run.
- Auto title loans. If you have a car, you could use your title as collateral for a loan. This often results in a lower interest rate, but you run the risk of losing your car if you can’t afford to repay your loan.
- Bad credit personal loans. Personal loans are harder to get if you have bad credit, but there are bad credit personal loan options. However, you’ll likely need to borrow more money at once to be approved.
- Payday alternative loans. Credit unions offer payday alternative loans (PALs). PALs are one of the best options for borrowers needing short-term financing, but you will need to be a member of a credit union to qualify.
- Other short-term loan alternatives. There are other ways to get quick cash, like asking a family member or picking up a second job. And if you’re still struggling, there are multiple state-run programs to help you balance your budget and avoid paying the high fees associated with a short-term loan.
Are payday loans available in my state?
A payday loan can be a good option if you’re facing an unexpected expense and have bad credit. However, high costs and quick turnaround may make one difficult to afford. Before you jump into a big loan decision, compare more payday loan options to find one that fits your needs.
Frequently asked questions
Will a lender still check my credit?
Some lenders will still check your credit file when you apply. However, other lenders will only need to see evidence of your income and your financial situation. In addition, those that do check your credit may not go to one of the major credit bureaus, instead opting to pull from a smaller credit agency like Teletrack.
How long will a bad credit payday loan take to be approved?
Generally, you’ll find out if you’ve been approved a few minutes after submitting your application. However, it may take one to two business days to transfer your loan funds into your bank account.
When will I receive my loan?
If you apply for a loan in-store, you can usually receive your loan within the hour. If you submit your application online, you can expect your funds to be transferred into your checking account as soon as the next business day.
What happens if I know my payment will be late?
The best solution is to contact your loan provider and inform its customer service team. Usually, the lender will be willing to extend the payment deadline.
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