Final Verdict

Contrary to popular belief, it’s possible to get a personal loan even if you have bad credit. This is why it’s important to consider all loan options before turning to high-cost, predatory loans like payday loans when you face an emergency. You may be able to find a more affordable option, even if you have bad credit.

We chose Upgrade as our top lender for the best emergency loan for bad credit because it offers a competitive rate of 6.95% to 35.97%, loans up to $50,000, and repayment terms up to 84 months. Plus, you could qualify with a credit score as low as 550 and you have the option to apply with a co-borrower. What’s more, Upgrade can get you the emergency loan funds you need as quickly as one business day after your loan is approved. 

Guide for Choosing the Best Emergency Loans for Bad Credit

Do You Qualify for an Emergency Loan If You Have Bad Credit? 

Having bad credit doesn’t mean you can’t qualify for an emergency loan. Rather, you’ll need to be able to show that you have income sufficient to repay the loan, usually measured by your debt-to-income ratio. Plus, your credit reports will need to show that whatever caused your bad credit score has been resolved (e.g., you’re not delinquent on any of your loans and you’ve resolved any tax liens or other judgments.)

If your credit issues haven’t been resolved or you don’t have enough income to repay the loan on your own, then you might consider applying for an emergency loan with a co-applicant. This is because you’ll be able to rely on your co-applicant’s good credit history rather than your own to get qualified. If you choose this option, make sure to repay the loan or you could damage your relationship with your co-applicant. Remember, delinquencies will affect their credit scores. 

Comparing Emergency Loan Lenders for Bad Credit

When considering an emergency loan, some of the most important factors to consider include how much the loan will cost, the terms you can get, and how quickly you can apply and get funded. Some of the most important factors to consider when comparing emergency loan lenders for bad credit are:

• How much the emergency loan will cost. The cost of an emergency loan is made up of the interest rate you’re charged and the fees you’ll pay to get the loan. A loan’s APR, or annual percentage rate, represents the sum of these two costs. For this reason, the APR is the most useful cost to evaluate when comparing lenders.
• What terms you can get on the loan. Before choosing a lender, ensure it offers the repayment terms you need. Shorter repayment terms will result in higher payments since you’ll pay the loan off more quickly. This means you’ll also end up paying fewer interest charges over time. Look for a lender that offers the shortest repayment term you can comfortably afford.
• How quickly you can apply and get funded. It’s also important to evaluate how easy it is to apply for the loan and how quickly you’ll get funded. These two factors are often related since lenders that offer an easy online application process may also offer fast funding. Many of the best lenders offer approval in minutes and funding in as few as one to three business days (sometimes even the same day).

How to Apply for an Emergency Loan if You Have Bad Credit

Before applying for an emergency loan, first gather your personally identifiable information (e.g., Social Security Number, date of birth, address), income information, and details about the funding you need (e.g., loan amount and purpose). This will make the application process easier, as lenders will require you to provide this information. 

You’ll usually submit a preliminary application with basic details to see if you can qualify, which won’t affect your credit if the lender uses a soft credit check. The lender will tell you if you can qualify and the rates and terms you might be able to receive. If the rates and terms are acceptable to you, you’ll proceed with the full application. A hard credit inquiry will be performed, which will affect your credit scores, and you may need to provide additional documentation, like pay stubs or bank statements.

If you’re approved for a loan, you’ll need to review and accept the final loan terms. Then, the lender will send you the funds in the manner specified in your application. For instance, depositing the funds into your checking account or disbursing the funds directly to your creditors. Finally, you’ll need to set up your account via an online portal or mobile app so you can manage your loan.

Frequently Asked Questions

What Is an Emergency Loan?

An emergency loan is a term used to describe several different methods of accessing cash for sudden, unexpected expenses. One of the most common types of emergency loans—and often one of the most affordable options—is a personal loan. However, an emergency loan may come in the form of a cash advance, a high-cost payday loan (avoid these if possible), a loan from a friend or family member, or a lower-cost payday alternative loan (PAL) from a credit union.

Where Can You Get an Emergency Loan If You Have Bad Credit?

Multiple types of lenders offer emergency loans for bad credit, including: 

• Online lenders
• Credit unions
• Traditional banks
• Credit card companies (cash advance)
• Relatives and friends
• Payday lenders

Remember, just because a borrowing option is available doesn’t mean it’s a good choice. Credit card cash advances, for example, are notoriously expensive and might damage your credit score by driving up your credit utilization rate. 

It’s also a good idea to avoid payday loans and title loans whenever possible. The Consumer Financial Protection Bureau (CFPB) warns that the average 2-week payday loan features a steep APR that’s equivalent to nearly 400%.

Will an Emergency Loan Impact My Credit Score?

Some types of emergency loans can affect your credit score, while others will not. If a lender doesn’t report your account to the credit bureaus, the loan won’t influence your credit score—unless you default and a collection agency adds the bad debt to your credit reports at a later date. However, if a lender does share your account details with the credit bureaus, that’s a different story.

Banks, credit unions, and online lenders commonly report account details to the credit bureaus. Payday lenders and title lenders generally do not.

When a lender reports an emergency loan to the credit bureaus, the way you manage the account dictates whether it will help or hurt your credit score. If you make your payments on time, the account may benefit your credit score in the long run. However, if you make late payments or become past due on your debt, that emergency loan could hurt your credit score instead.

How Fast Can I Get an Emergency Loan?

Many lenders offer fast funding to qualified borrowers. Some personal loan lenders may even deposit the funds into your bank account the same day you’re approved for financing. 

On the other hand, loan funding can sometimes take several days or even up to a few weeks. Certain lenders may take longer to process your loan application or release your funds than others. There’s also a chance that your personal bank or credit union may hold the funds a lender deposits into your account for a few days before you can access the money. 

Can You Get an Emergency Loan With No Credit Check?

Although some lenders do provide loans without credit checks, they’re not recommended. Such lenders (like payday loan lenders) are typically seen as predatory, and usually have high origination fees, high APRs, and other fees. They may seem like a welcome opportunity if you’re in an emergency, but use extreme caution. Not only are these types of loans very expensive, but you might end up getting stuck in a payday borrowing cycle that’s difficult to escape.

Are There Alternatives to Emergency Loans?

A couple of alternatives to emergency loans include negotiating hardship payment plans with your creditors or asking your employer for a paycheck advance. If these options don’t work for you, then you could possibly get a cash advance from your credit card issuer (use caution as these are expensive) or a payday alternative loan (PAL) of $200 to $1,000 from a credit union. PALs may be a good option as they must be repaid within one to six months and the APRs can’t exceed 28%.

How We Chose the Best Emergency Loans for Bad Credit

Our team evaluated 38 lenders and collected 1,520 data points before selecting our top choices. We weighed more than 20 criteria and gave a higher weight to those with a more significant impact to potential borrowers. 

The top picks were selected based on factors like membership requirements (weighted 15%), average fixed APR (weighted 15%), and average origination fees (weighted 10%). 

We also took into account the flexibility of repayment terms, helpful features like pre-qualification, and whether a co-signer or joint applications are permitted to ensure borrowers get the best possible experience. For further information about our selection criteria and process, our complete methodology is available.