Short-Term Loans for Bad Credit

Writer and editor - Joseph Smith | Updated on 2020-03-27
Disclosure: Our goal is to help you find a lender even if you have a bad credit score. To maintain this site we may receive compensation from the products listed here. See our Advertiser Disclosure. Thanks for understanding.

What Does “Short-term Loan for Bad Credit” Mean?

Normal loans usually have terms lasting from a year to 20 years, depending on the type of loan. A short-term loan, on the other hand, is a loan that is repaid in under a year. Payday loans are an example of a short-term loan, where the full amount gets paid back in a lump sum after the next payday.

Short-term loans often have higher interest rates than long-term loans due to the risk and expense involved in funding a short-term loan. While people with bad credit can get loans, they often get them with worse interest rates than people with good credit. Short-term loan amounts are also often smaller than long-term amounts, owing to the difficulty of paying off a large lump sum in a short space of time.

What this means is that if you’re looking for a short-term personal loan and you have bad credit, you can expect to pay high interest rates.

Loans Amount Cost / APR ? Bad Credit Features
CashUSA
$500 - $10,000
Individual rates
Bad credit allowed
Allowed
  • Loan terms start at 3 months.
  • Next-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
QuickLoanLink (Personal loan) $300 - $35,000 APR:
Starting at 6.90% ?
Bad credit allowed
Allowed
  • Loan term 2 months to 7 years
  • Credit check type: Soft ?
  • Next-day deposit: In some cases ?
  • Min creditscore: 550
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
HonestLoans
$400 - $5,000
$30 - $750 ?
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
CreditLoan (Personal loan) $100 - $40,000 APR:
Starting at 5.34% ?
Bad credit allowed
Allowed
  • Loan term 2 months to 7 years
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
LifeLoans (Personal loan) $500 - $40,000 APR:
Starting at 5.99% ?
Bad credit allowed
Allowed
  • Loan term 2 months to 5 years
  • Credit check type: Both ?
  • Next-day deposit: In some cases ?
  • Min creditscore: 580
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
GazelleLoans
$300 - $5,000
Individual rates
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
OppLoans (Direct Lender)
(Personal loan)
$1,000 - $5,000 APR:
Starting at 99.00% ?
Bad credit allowed
Allowed
  • Loan term 9 months to 3 years
  • Next-day deposit: In some cases ?
  • Low approval rates ?
  • Time for decision: 1.5 min ?
RubikLoan
$100 - $1,000
$1,000 - $5,000
$15 - $300 ?
APR from 6.9% ?
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
Personal Loans (Personal loan) $500 - $35,000 APR:
Starting at 5.99% ?
Bad credit allowed
Allowed
  • Loan term 3 months to 6 years
  • Credit check type: Soft ?
  • Next-day deposit: In some cases ?
  • Min creditscore: 580
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
BadCredit.com
$100 - $5,000
Individual rates
Bad credit allowed
Allowed
  • Next-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
OpenCashAdvance
$200 - $5,000
Individual rates
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?

Where to Find a Short-term Loan with Bad Credit

Many online lenders offer short-term loans for people with bad credit. If you’re considering taking out a loan, be sure to do your research before signing. Compare interest rates and repayment terms to find a suitable balance that allows you to pay off the loan comfortably without incurring too much interest.

Many loan sites allow you to enter the amount you want and will show you several options of lenders and loans. Using a site like this will remove a lot of the guesswork in finding the ideal loan for your circumstances.

Basic Requirements

Lenders have a variety of eligibility criteria that you have to meet. In general, all lenders will require that you:

  • Are 18 or older
  • Have a monthly income of at least $800, preferably $2,000 before tax
  • Have a valid ID
  • Proof of income
  • Have an active bank account

How Can I Fix My Credit to Get a Better Short-term Loan?

Unfortunately, there is no easy fix for bad credit. Any solution requires a long-term commitment to improving your financial status and credit management skills. That said, improving your credit score is a great way to save money in the long run, so that you can get better terms for both long-term and short-term loans.

While not an exhaustive list, here are some of the strategies you can use to fix your credit and get better interest rates on your short-term loan:

  • Check your credit history for mistakes – the three main credit bureaus get a lot of data daily, so some mistakes will inevitably come through. These mistakes can negatively affect your credit score, so it’s in your best interest to get them addressed. TransUnion, Experian, and Equifax all offer free annual credit reports that you can use to look for any mistakes. If you find any, use their disputes process to correct them before they affect your credit score.
  • Minimize hard credit checks – hard credit checks get noted on your credit history. Too many of them can look like you’re taking on a lot of debt at once, which can tank your credit score. There is one important exception to this rule, and that’s when you get multiple hard checks from similar loans in a short space of time. For instance, if you’re looking for a home loan, you can shop around and deal with multiple lenders, each of whom will request a hard credit check. All of these checks will only count as one when it comes to calculating your credit score as long as they occur within 45 days of each other.

Pros and Cons of Short-term Loans

Pros

Short-term loans are a viable way of getting funds for emergencies or unexpected costs. They have several benefits that make them a good choice over other short-term credit options, including:

  • Unsecured loans – short-term loans are typically unsecured, so you don’t need to put up collateral to take out the loan. If you ever wind up defaulting on your loan, at least you won’t have to worry about losing a prized possession or your home as well.
  • Quick access to cash – short-term loans have less stringent requirements than long-term loans, which helps speed up the application process. In some instances, you may get the decision about the loan on the same day you applied and your money on the business day after.
  • Flexible – some lenders are willing to negotiate a payment plan that works for you. They can find the right balance between the length of the loan term and the interest rate, ensuring that you can afford to pay off the loan in full.
  • Short-term commitment – unlike larger loans, a short-term loan doesn’t take years of your life to pay back. At worst, you’ll have extra repayments to worry about for a year and then you can move on.

Cons

While short-term loans can help you out of a sticky situation, you shouldn’t rely on them too much. They come with several drawbacks that can negatively affect your financial future, so consider them with care. Some of the drawbacks of short-term loans include:

  • High interest rates –  short-term loans already have high interest rates, without taking into account bad credit history. The amount of interest you pay directly affects the size of the total loan cost, and higher-interest-rate loans are more expensive to pay off. Not only that, but a higher interest rate also means you’re paying more every month.
  • Short-term solution – short-term loans are an emergency measure for when you’re in a pinch. Their high interest rate and costly fees mean that they’re not a long-term solution to financial woes.
  • High fees – many people forget about the various fees associated with loans. These can include routine costs such as administration fees, but can also include late fees for missed payments. These fees can cause your debt to skyrocket as you try to pay off a larger and larger sum every month.
Joseph Smith

Joseph Smith
Writer and editor

Joseph Smith is an experienced freelance writer with over 11 years of experience. His area of expertise includes finance, loans and lending. His work has been featured on various large websites including this one.
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