Short Term Loans for Bad Credit: How to Get the Financing You Need

How do short term loans for bad credit work?

While getting a loan can feel confusing, we’re here to explain the process and make it simpler! While each lender will have slightly different procedures and requirements, the general process for getting a short term loan with bad credit is usually the same:

• Do your research and compare your options - The first step is to understand your budget, how much you can afford, how much you need and what you can qualify for. You can review offers from top national lenders in just seconds with no impact on your credit score, which can help you understand your options. 

• Apply - Once you’ve compared your offers and determined which lender to go with, you’ll submit a formal application. This will usually include a soft credit check to verify all your information and confirm you’re qualified. 

• Disbursement of funds - Once you’re approved, you’ll accept the terms and get the money wired to your bank account! This usually happens fast — sometimes within a day — but funding times can vary by bank and financial institution. 

Make monthly payments - You’ll start making your monthly payments until the loan is paid off. With regular payments, you can gradually increase your credit score.

What are the best loans for bad credit in 2024? 

With bad credit you may have fewer options when it comes to borrowing money. Two types of loans that might be worth considering are personal loans and secured loans. Personal loans are unsecured usually meaning they do not require collateral or a down payment. Secured loans on the other hand are backed by collateral and or may require a down payment. An auto loan is an example of a secured loan. At Acorn Finance our lending partners specialize in personal loans. Within seconds you can check offers with no impact on your credit score. Most lenders on the Acorn Finance platform have a credit score cutoff of 600 or above.

How do you compare bad credit loans in 2024?

Comparing loan offers can help you determine what a fair offer is. While lenders often den bad credit borrowers, the opposite can happen to and bad credit borrowers can be preyed on. Be on the lookout for rates that are just too high and terms that are entirely unfavorable. While there’s more risk to loan money to a bad credit borrower as opposed to a good credit borrower, the offer should be fair for both parties. To compare loan offers with no impact to your credit score, visit Acorn Finance. Our platform helps borrowers check real offers, not just advertised rates, so that you know what you actually qualify for. 

What are bad credit loans?

Bad credit loans are loans, but offered for borrowers with bad credit. Lenders that work with bad credit borrowers are often referred to subprime lenders. Ultimately the loan should not work any differently, but requirements may be more strict and offers may not be as generous. Bad credit borrowers can expect to pay high rates and fees. If managed responsible though, a bad credit loan repaid on-time can help improve your credit score over time. On the flipside though, if you default on a bad credit loan you could worsen your credit score, thus setting you back even farther. 

What is the easiest way to get a loan with bad credit?

Bruised credit can complicate getting a loan. Despite past mistakes, or accidents, some lenders are more willing to give borrowers a second chance than others. With that being said, finding the right lender to work with is important when trying to qualify for a bad credit loan in 2023. Before starting your search, take advantage of one of the many credit monitoring service our modern world offers. Reviewing your credit report to understand what’s dragging it down and what exactly your score is can help you start the process with realistic expectations and awareness. To increase your chance of qualifying for a loan, invest time boosting your score or apply with a cosigner, or do both. 

When are bad credit loans worth it?

Sometimes we find ourselves in a position where we need money. For emergencies, home repairs, medical expenses, or things that can put you ahead a loan might be worth it - even if you have bad credit. Consider the cost of the loan and how it can help you as part of your determination. You should also consider how the payments will impact your current budget and what your backup plan is to repay the loan in the event finances change. If you take out a loan with bad credit (or good credit) you should do everything you can to keep up your end of the deal, as doing so can help you improve your credit score in a positive direction. 

List pros & cons of bad credit loans:

Pros 

• Opportunity to buld/boost credit score 
• Access to the funds you need 
• Fixed monthly payments 

Cons

• High interest rates and fees
• Potential to default and worsen credit score 
• Unfavorable offers 

Loans for Bad Credit:

Upgrade

Best for bad credit personal loans 

Upgrade is a top choice, and Acorn Finance lending partner, for bad credit personal loans. With no collateral requirement and no down payment, you can get funding quickly without strings attached with Upgrade. A loan with Upgrade may cost more than competitors, but in general loans for bad credit usually do cost more. If possible, repay your loan early to potentially save on interest. 

Minimum qualifications:

• Minimum credit score requirement of 560 or above 
• No minimum income requirement

Pros:

• Low credit score requirement
• No early payoff penalty
• Joint applications allowed
• Funding as soon as one business day on approved loans, although funding times can vary

Cons:

• Origination fees between 2.9% to 8%
• Higher APRs, especially for subprime borrowers

Best Egg

Best for personal loans for borrowers with fair credit 

Best Egg may not offer as much flexibility as other lenders, with fair credit you may not have as many options available. Best Egg can offer fast funding and competitive loan offers. Plus, they do not have a minimum income requirement. As an Acorn Finance lending partner, you can access offers from Best Egg and other competitive lenders through the Acorn Finance platform. 

Minimum qualifications:

• Minimum credit score requirement of 600 or above 
• No minimum income requirement 

Pros:

• Fair credit scores can qualify
• No minimum income requirement
• Same or next day funding available, although funding times can vary

Cons:

• Not available in some states
• Origination fees between 0.99% and 6.99%
• Higher APRs

Prosper

Best for peer-to-peer loans

Peer-to-peer loans cut out financial institutions. This can work to benefit borrowers by offering them more flexibility and opportunity. If you have credit challenges or lack of income (or provable income), you may want to consider a peer-to-peer lender such as Prosper. With no minimum income or credit score requirement, loans can be approved on an individual basis. If you have bad credit, this can especially work in your favor. 

Minimum qualifications:

• Minimum credit score requirement of 600 or above 
• No minimum income requirement 

Pros:

• Low threshold for credit score
• No minimum income requirement
• Flexibility to change payment dates

Cons:

• Long funding times
• Origination and late fees may apply
• No rate discount for autopay available
• Restrictive repayment periods
• Funding may take about 5 business days 

LightStream

Best for good credit borrowers and home improvement loans 

While LightStream may be reserved for borrowers with good credit, you can work toward boosting your credit score to potentially qualify for a loan. Alternatively, they do allow co-signers so you may be able to apply jointly to increase your chance of qualifying. 

• Minimum credit score requirement of 660 or above 
• Minimum income requirement of $50,000/year

Pros:

• No origination fees
• Funding as soon as one business day on approved loans, although funding times can vary
• Competitive loan offers
• Allows co-signer
• Large personal loans available 
• Flexible repayment periods up to 12 years

Cons:

• Strict qualification requirements
• No access to pre-qualify through the LightStream website (When applying directly, you can get pre-approved but not pre-qualified, therefore, you may be subject to a hard credit pull. To get pre-qualified with LightStream, check offers through Acorn Finance to see if you qualify.)
• No direct payment to creditors for debt consolidation loans

SoFi

Best for online personal loans for borrowers with next-to-perfect credit

SoFi is another lender you will need to improve your score for. With competitive offers, no origination fees, and large loan amounts available, setting a goal to qualify with SoFi is something motivating to work toward.

Minimum qualifications:

• Minimum credit score requirement of 680 or above 
• Minimum income requirement of $50,000/year

Pros:

• Flexible loan amounts and repayment terms
• No origination fees
• Competitive interest rates
• Funding as soon as one business day on approved loans, although funding times can vary
• Allows cosigner applications
• Unemployment protection available

Cons:

• High credit score requirement
• Approvals may take 3 days or more

OneMain Financial

Best for borrowers with less than perfect credit that need fast funding for a personal loan

OneMain Financial is another top contender for bad credit loans. With online and in-person services, OneMain Financial is growing rapidly. Take advantage of the opportunity to work with OneMain as they want to help as many borrowers as they can. OneMain Financial is a well-known lender that you should consider. As an Acorn Finance lending partner you can check offers from OneMain Financial and other top national lenders through the Acorn platform. 

Minimum qualifications:

• Minimum credit score requirement of 600 or above 
• Minimum income requirement $7,200/year

Pros:

• Low credit score requirement
• Offers secured loan option
• Low income requirement
• Flexibility to choose your payment date
• Fast funding times

Cons:

• High interest compared to similar lenders
• Origination fee between 1% – 10% (or flat fee up to $500 depending on state)

LendingPoint

Best for fair credit personal loans with fast funding

LendingPoint is a go-to for fair credit borrowers that need funds fast. They can check off most all of the boxes, making them a top lender to consider, even without perfect credit. You can check offers from LendingPoint and other top lenders on our platform to determine who best meets your needs. 

Minimum qualifications:

• Minimum credit score requirement of 600 or above 
• Minimum income requirement $30,000/year

Pros:

• Low origination fees
• Relaxed credit score and income requirements
• Same or next day funding available, although funding times can vary

Cons:

• No joint applications
• High loan costs
• Short repayment periods 

Lending USA

Best for low interest personal loans (hint: promotional period available)

LendingUSA offers loans for intended uses, such as cosmetic surgery financing, pet financing, funeral costs, and so forth. They are well known for low interest loans and even offer a promotional period. If  you pay your loan off within six months no interest will be charged to the principal. With fast approval decisions and loans as small as $1,000 available, Lending USA is another lender to consider for a $2k personal loan. While they are not an Acorn Finance lending partner, you can visit their website to check offers. 

Reprise Financial

Best for small personal loans with fast funding

Reprise offers a similar platform to Acorn Finance that helps consumers check personal loan offers. In order to help borrowers obtain funds quickly, Reprise works to streamline the personal loan process. With customized payment options and fixed rates, check personal loan offers at Reprise Financial. 

Universal Credit

Best for bad credit borrowers that need to build credit

Lastly, Universal credit is not an Acorn Finance lender but they are an option for bad credit borrowers to consider. With a minimum credit score requirement of only 560, Universal Credit is a top choice for subprime borrowers. Borrowers with bad credit may pay higher loan costs and have fewer options, therefore, exploring as many lenders as possible that can work with you is important.