9
Best Short-Term Loans For Bad Credit
Compare the Best Short-Term Loans for Bad Credit
| COMPANY | FORBES ADVISOR RATING | MINIMUM CREDIT SCORE | APR RANGE | LEARN MORE |
|---|---|---|---|---|
 
|
580
|
7.74% to 35.99%
|
Via Credible.com’s Website
| |
|
|
600
|
7.99% to 35.99%
|
Via Credible.com’s Website
| |
|
580
|
9.95% to 35.99%
|
Via Credible.com's Website
| |
|
|
560
|
11.69% to 35.99%
|
Via Credible.com’s Website
| |
|
|
620
|
6.60% to 35.99%
|
Via Credible.com's Website
|
Best Short-Term Loans for Bad Credit: A Closer Look
BEST OVERALL SHORT-TERM LOAN FOR BAD CREDIT
Upgrade
Minimum Credit Score
580
APR range
7.74% to 35.99%
Loan amounts
$1,000 to $50,000
580
7.74% to 35.99%
$1,000 to $50,000
Upgrade offers accessible online credit and banking services, including personal loans of $1,000 to $50,000.
Why We Like It
Upgrade allows borrowers to apply with co-signers and sets a low minimum credit requirement of 580, increasing the chances of approval.
What We Don’t Like
Upgrade’s loans only go up to $50,000. The lender also charges origination fees between 1.85% and 9.99% of the loan amount, which can decrease the total borrowed amount.
Who It’s Best For
Upgrade’s personal loans are best for borrowers with poor credit histories who may not qualify for a personal loan without a co-signer.
- Direct payment to creditors streamlines the consolidation process
- 24/7 live chat customer support available
- Offers both co-signer and co-borrower options
- Extended repayment terms of up to 7 years
- Charges origination fees on consolidation loans
- High maximum loan APR (35.99%)
- Average 3-day funding timeline
- Minimum credit score of 580 required
BEST FOR FAST FUNDING & BELOW-AVERAGE CREDIT
LendingPoint
Minimum Credit Score
600
APR range
7.99% to 35.99%
with autopay
Loan amounts
$1,000 to $36,500
600
7.99% to 35.99%
with autopay
$1,000 to $36,500
LendingPoint is an online lender that offers personal loans to prospective borrowers in 48 states and Washington D.C.; it doesn’t offer loans in Nevada and West Virginia.
Why We Like It
LendingPoint offers longer loan terms than many other lenders—24 to 60 months—or two to five years—providing borrowers with more flexibility in their repayment plans.
What We Don’t Like
High maximum APRs and origination fees up to 10% may make LendingPoint more costly for less-qualified borrowers.
Who It’s Best For
LendingPoint is best for borrowers who want a longer repayment period.
- Funding as soon as the next business day
- Low credit score requirement
- No prepayment penalty
- Origination fee up to 10%
- Co-signers or joint loans not permitted
- Not available in Nevada or West Virginia
Eligibility:
- Minimum credit score. 600
- Minimum annual income. $35,000
- Co-signers. Not permitted
Customer service
After testing and evaluating LendingPoint’s customer service, we found it to be one of the most helpful and transparent lenders on our list after waiting only 46 seconds to be connected to a representative. The customer service representative we spoke with shared an in-depth perspective of their loan offers, including information about loan amounts, eligibility requirements, how interest rates are determined and prequalification.
LendingPoint’s team also disclosed late fees but didn’t confirm origination fees. While customer service didn’t share this information wasn’t, the lender discloses a fee of up to 10% on its website. LendingPoint was also one of few lenders that shared how they report payments to credit bureaus, which it typically does at the start of the month.
BEST FOR A RANGE OF REPAYMENT OPTIONS
Avant
Minimum Credit Score
580
APR range
9.95% to 35.99%
Loan amounts
$1,000 to $40,000
580
9.95% to 35.99%
$1,000 to $40,000
Avant is a lender that offers secured and unsecured personal loans through a third-party bank. The lender offers loans in Washington, D.C. and every state but Hawaii, Iowa, Maine, New York, Vermont and West Virginia.
Why We Like It
Avant may deposit loan funds as soon as the next business day after approval, making it a great option for borrowers who need money fast.
What We Don’t Like
Avant’s APRs range from 9.95% to 35.99%. It also charges an administrative fee of up to 4.75% of the loan amount, which further increases the cost of borrowing.
Who It’s Best For
Avant is best for individuals with damaged or limited credit who need quick funding.
- Fast two-day average funding time
- No origination fees
- Mobile app for both iOS and Android
- Prequalification available
- Not available in all states
- Charges late payment fees
- No co-signer option
Eligibility
- Minimum credit score: 580
- Co-applicants: Not accepted
- Direct pays third-party creditors: No
BEST FOR COMPARING MULTIPLE OFFERS
Universal Credit
Minimum Credit Score
560
APR range
11.69% to 35.99%
Loan amounts
$1,000 to $50,000
560
11.69% to 35.99%
$1,000 to $50,000
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.
- Flexible qualification requirements
- Funding within one business day
- No prepayment penalty
- APRs are higher than those offered by top competitors
- Origination fees from 5.25% to 9.99%
- Lowest APR requires choosing direct payment of creditors
Eligibility:
- Minimum credit score. 560
- Minimum income. Does not disclose
- Co-signers. Not permitted
- Co-borrowers. Not permitted
BEST FOR QUICK APPROVALS
Upstart
Minimum Credit Score
620
APR range
6.60% to 35.99%
Loan amounts
$1,000 to $75,000
620
6.60% to 35.99%
$1,000 to $75,000
Upstart uses artificial intelligence (AI) to evaluate applications, allowing the lender to consider factors such as employment and education when determining eligibility.
Why We Like It
Upstart’s minimal credit score requirements allow more borrowers to qualify for loans. The Consumer Financial Protection Bureau estimated Upstart has approved 27% more borrowers than possible under a traditional lending model.
What We Don’t Like
Upstart’s three- or five-years loan terms are more limited than other lenders. However, this is likely an acceptable tradeoff for applicants who might not be approved in a traditional lending environment.
Who It’s Best For
Upstart is best for individuals with limited credit history who want a more inclusive approach to the lending process.
- Accepts credit scores as low as 620
- Alternative credit assessment could allow more borrowers to qualify
- Offers direct payments to creditors
- Loan amounts of max out at $75,000
- Charges origination fees
- Higher maximum APRs (35.99%)
- Shorter maximum loan term (5 years)
- Has a minimum income requirement
Eligibility
- Minimum credit score: 300
- Co-applicants: No
- Direct pays third-party creditors: Yes
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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.