Emergency Loans for Bad Credit: Top Options & How to Qualify

No matter where you stand with your savings, sometimes, life gets the better of you. Even those of us lucky enough to build up substantial cushions have found ourselves in a crunch every once in a while.

Couple an unexpected financial scenario with bad credit, and you’re looking at an even more stressful experience. After all, the creditworthiness you need to obtain those emergency loans is dependent on your ability to repay the debts you already owe. And if you’re having trouble making ends meet, it can quickly become a downward spiral.

Fortunately, though, there are emergency loans online for borrowers with poor credit. This is especially true if you’re in need of a relatively small emergency loan. The loan options below have much better interest rates than you will find with payday loans.

Best Emergency Loans for Bad Credit of 2022

Whether you need a quick $500 or a more substantial, five-figure sum, here are some of the best emergency loans for people with bad credit.

Installment Loans for Bad Credit

Installment loans are a type of personal loan wherein you borrow money to be repaid at regular intervals, usually monthly, over a course of up to five years. Most installment loans offer fixed interest rates, but the actual APR will vary depending on your credit score.

However, today’s personal loan lenders understand that not everybody has a perfect credit history. And some of them are willing to help you with an emergency loan even if your credit leaves something to be desired.

Repaying these loans on time and in full can boost your credit score as long as they are reported to the three major credit bureaus. Having positive payment history on your credit report can make for better repayment terms the next time you’re seeking an emergency loan.

Credit Cards Are Another Option

Using a credit card could be a good alternative, depending on the interest rate. If you have bad credit, credit cards aren’t easy to get and the interest rate will most certainly be higher.

However, if you can get a cosigner or find a good starter credit card online or from a credit union, it might be worth looking into. In fact, just like a personal loan, they can help you build your credit score as long as you make your payments on time.

Why You Should Avoid Payday Loans

Payday loans can be found everywhere and they’re easy to get. Unfortunately, getting a payday loan is almost always a bad idea due to astronomical finance charges you will be charged.

Payday loans are typically small and must be paid back within a week or two. Most payday lenders also don’t require a credit check. You can get them easily as long as you provide proof of income.

Avoid Auto Title Loans Also

Auto title loans require you to put your car up as collateral. The loan is usually for much less than your car is worth. They typically must be paid back within 2 to 4 weeks and you don’t need a credit check for this type of loan either.

So, what could go wrong?

Well, you could lose your car. These loans come with very high interest rates and are notorious for trapping borrowers who can’t afford to pay them back. In fact, they’re so bad that they’re now illegal in 23 states. Getting an unsecured loan, like the ones mentioned above, is always a better option.

Bottom Line

No matter what kind of emergency expenses have popped up in your life, we hope you find the help you need to get back on your feet and to build that credit history for tomorrow. Your future self will thank you!