Bad credit or no credit loan options

Needing a loan is stressful enough—but throw in a bad credit or a lack of credit history, and it can feel nearly impossible to get the cash you need. As frustrating as it may feel, there are still ways to borrow money, even if your credit isn’t in perfect shape.

Whether you’re dealing with unexpected expenses, trying to get a consolidation loan, or simply need a little breathing room—having a low credit score doesn’t mean you’re out of options.

Options for when you need a loan, but have terrible credit

Unsecured personal loans

Personal loans are one of the most common ways to borrow money—no collateral needed, just an evaluation of your financial profile.

These loans are offered through online lenders, credit unions, and even peer-to-peer lending platforms. Because they're so widely available—and with a little research—you can find options where a lower credit score won’t automatically disqualify you.

Key features:

• Rates range anywhere from 7% to 36%
• Fixed monthly payments
• Online application provides funding in just a few business days
• 1 to 7-year term

Reputable low-credit lenders include:

• Moneylion
• LendingPoint

Secured personal loans

A secured loan is a type of borrowing backed by something you own—think bank account, valuables, or even your car. Because the lender has the right to seize the collateral if you default, these loans typically come with friendlier interest rates, higher borrowing limits, and longer repayment terms than their unsecured counterparts. 

The added reassurance also means they can be easier to qualify for if your credit isn’t great. Just remember: if you fall behind on payments, you can lose your collateral, so only borrow what you can comfortably manage.  

Key features:

• Rates range anywhere from 7% to 36%
• Fixed monthly payments
• 1 to 5-year term
• Collateral is on the line

Reputable lenders:

• OneMain Financial (collateral required: car)
• BestEgg (collateral required: home fixtures)

Income-based loans

Have stable employment? An income-based loan may be a solid option. Also known as “ability-to-repay” loans, these focus more on your earnings than your credit score. Lenders will look at your job history, monthly income, and ability to manage regular payments.

Key features:

• Can be secured or unsecured
• Comparable rates to personal loans, but often higher
• 1 to 5-year term

Reputable platform: 

• Acorn Finance 

Payday alternative loan

If you belong to a local credit union, a payday alternative loan (PAL) may be easier to qualify for than a personal loan or income-based loan. PALs are generally small-dollar, short-term financing options.

Since these loans are federally regulated, they're safer and more affordable than traditional payday loans. 

Key features:

• Loan amount up to $2,000
• 1 to 6-month repayment term
• Rates capped at 28% APR
• Must be a member of the credit union to qualify

Cash advance apps

Looking to borrow $500 instantly with bad credit? Cash advance apps allow you to borrow against your paycheck to do exactly that. With a checking account and proof of sufficient income, you can access some of your earnings early and then let your next paycheck automatically repay the loan.

Key features:

• $500 to $1,000 loan amounts
• Loan is repaid with next paycheck
• Will incur transaction fees

Reputable lenders:

• Dave
• Varo

Join loans

If your credit history or a lack of income is holding you back, a joint loan could open the door to funding. A joint loan allows you to apply with another individual—spouse, family member, trusted friend—who will be equally responsible for sharing the debt. 

During the application process, both applicants’ incomes and credit profiles are considered. A co-applicant with good credit can boost your chances of getting approved and potentially help you score better terms. 

Key features:

• Loans up to $100,000
• Standard 1 to 5-year repayment term
• Defaulting or missed payments impact both parties

Reputable lenders:

• MoneyLion
• LendingClub

Home equity investments

If you're a homeowner with sufficient equity, tapping into your home wealth has its advantages. However, given that most HELOC and home equity loan lenders require a credit score above 620, it can feel pretty inaccessible.

Home equity investments (HEIs) are not traditional loans. HEIs help homeowners with less-than-perfect credit unlock their equity for a lump sum payout. There are no monthly payments; instead, the homeowner shares a percentage of the property's future appreciation.

Since equity products typically come with higher closing costs than the origination fees charged on personal loans, they’re usually a better fit when you need to borrow a larger amount.

Key features

• $35,000 to $500,000 loan amount
• No income verification
• 500+ credit score needed to qualify
• No monthly payments
• 30-year term

401(k) loans

Although tapping into your retirement account early is not always the best idea, it can be a real lifesaver in certain situations. If you've exhausted all angles, you may want to explore a 401(k) loan.

A 401(k) loan comes in a lump sum. The loan, plus interest, is repaid into the account through standard payroll deductions. Since your financially stable retirement is on the line, consider talking to a professional before withdrawing from the account.

Key features:

• Up to $50,000 or 50% of the vested account balance (whichever is less)
• 5-year repayment term
• Need an eligible 401(k) account 
• Can become immediately due if you leave or lose your job

Avoiding potential scams or debt pitfalls

When you need a loan, have a bad credit history, and have limited options, it's easy to fall into searching any and everywhere for cash. However, not all options are solutions—some may lead you further into financial trouble. 

Here are some red flags to watch for:

• No credit check at all: Sounds convenient, but it’s often a trap with sky-high interest rates.
• Too-good-to-be-true promises: If a lender offers guaranteed approval or instant cash with no questions asked, it’s generally a red flag.
• Upfront fees: Legitimate lenders don’t ask for money before issuing a loan.
• Unclear loan terms: If you can’t easily understand the loan agreement, interest rates, and fees, walk away.

Do your research and read reviews before sharing personal information (like your social security number)—a little caution now can save you a ton of headaches later.

Frequently asked questions

Is there a way to get a loan with horrible credit?

It’s possible to get a loan, but you’ll have to shop around. Prequalifying at your local credit union or current bank will likely increase your odds of approval and help you secure better rates and terms. 

You can also explore online lenders who specialize in helping borrowers with low credit scores—just be sure to compare offers and read lender reviews. If you have valuables, leveraging a secured loan, like a HELOC, HEI, or 401(k), may be the easiest way to qualify, keep long-term costs affordable, and avoid debt traps. 

Can you get a loan with no credit history?

Having no credit history can make obtaining a loan difficult, but not impossible. A lack of credit score doesn't mean you've made credit mistakes—it simply means there's not enough information to calculate a score. 

If you have the means, consider a credit builder loan or credit card to kick-start a history of borrowing and on-time payments. If you need cash quickly, consider a secured or income-based loan—just ensure you have the means to repay it.  

Can I apply for a loan with a 500 credit score?

You can—but you’ll likely have limited choices and higher rates to offset the risk. Your best bet may be a secured personal loan or income-based loan, or a lender that specializes in bad credit scores. Be sure to shop around and prequalify where possible.

Final thoughts

Need a loan? Have terrible credit? You’re not alone—and not necessarily out of luck. Getting financing with poor credit can be challenging, but also a great way to accomplish what you need and even start building better credit—so long as you do it right.

The key is to do your homework, compare offers, and avoid falling into traps that move you backward on your financial journey.

‍Tap into your equity without all the red tape—explore more at Point.com/hei.