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As the name suggests, direct deposit loans are loans that are directly deposited into your bank account.
However, while loan companies often market direct deposit payday loans as a fast way to get cash in an emergency, the interest rates on these loans can be sky-high.
Here’s what you should know about direct deposit loans (and less expensive alternatives):
- What are direct deposit loans?
- 9 alternatives to direct deposit loans for quick cash
- What are the pros and cons of direct deposit loans?
- Online personal loans vs. direct deposit loans
- How to get an online personal loan
- Other alternatives to a direct deposit loan
What are direct deposit loans?
Direct deposit loans are payday loans that are quickly deposited into your bank account. You might be able to get a direct deposit loan online or from a storefront lender, often without a credit check.
Requirements for direct deposit loans vary from lender to lender, but in general, you’ll need to:
- Be 18 years or older
- Have a bank account
- Have pay stubs that show a recurring source of income
- Live in a state where payday loans are legal
Depending on the lender, you might end up paying 400% APR or more on a direct deposit loan.
Learn More: Best Personal Loan Lenders
9 alternatives to direct deposit loans for quick cash
There are other options to quickly borrow cash besides direct deposit loans. For example, you might qualify for a personal loan with better terms.
If you’re approved, you could get your loan funds as soon as the same or next business day, depending on the lender.
Here are Credible’s partner lenders that offer fast loan funding:
| Lender | Fixed rates | Loan amounts | Min. credit score | Time to fund | Loan terms (years) |
|---|---|---|---|---|---|
 View details | 9.95% - 35.99% APR | $2,000 to $35,000** | 580 | As soon as the next business day (if approved by 4:30 p.m. CT on a weekday) | 2, 3, 4, 5* |
*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state. **Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33. |
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 View details | 6.49% - 29.99% APR | $5,000 to $35,000 | 740 | Next business day | 1, 2, 3, 4, 5 |
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 View details | 5.99% - 29.99% APR | $5,000 to $50,000 | 600 | As soon as 1 - 3 business days after successful verification | 3, 5 |
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 View details | 6.99% - 24.99% APR | $2,500 to $35,000 | 660 | Funds can be sent as soon as the next business day after acceptance | 3, 4, 5, 6, 7 |
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 View details | 15.49% - 35.99% APR | $2,000 to $25,000 | 580 | As soon as the next business day | 2, 3, 4, 5 |
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 View details | 3.99% - 19.99% APR | $5,000 to $100,000 | 660 | As soon as the same business day | 2, 3, 4, 5, 6, 7 (up to 12 years for home improvement loans) |
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 View details | 18.00% - 35.99% APR | $1,500 to $20,000 | None | As soon as the same day, but usually requires a visit to a branch office | 2, 3, 4, 5 |
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 View details | 6.94% - 35.97% APR | $1,000 to $50,000 | 580 | Within a day of clearing necessary verifications | 3, 5 |
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 View details | 8.27% - 35.99% APR4 | $1,000 to $50,0005 | 580 | As soon as 1 - 3 business days6 | 3 to 5 years4 |
4The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 25.79% and 36 monthly payments of $37 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved. 5This offer is conditioned on final approval based on our consideration and verification of financial and non-financial information. Rate and loan amount are subject to change based upon information received in your full application. This offer may be accepted only by the person identified in this offer, who is old enough to legally enter into contract for the extension of credit, a US citizen or permanent resident, and a current resident of the US. Duplicate offers received are void. Closing your loan is contingent on your meeting our eligibility requirements, our verification of your information, and your agreement to the terms and conditions on the www.upstart.com website. Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100. 6If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law. |
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Avant
If you have less-than-perfect credit, Avant might be a good choice. If you’re approved, you could have your loan funded as soon as the next business day.
Axos Bank
Axos Bank offers personal loans ranging from $5,000 to $35,000. With Axos Bank, you could have your funds deposited by the next business day after loan approval.
Best Egg
Best Egg offers loans for a wide variety of uses, including debt consolidation, major purchases, credit card refinancing, and more.
You can borrow $5,000 to $50,000 through Best Egg and could get your funds within one to three business days after successful verification.
Discover
Discover could be a good option if you’re looking for longer repayment terms — you could have up to seven years to repay a Discover loan.
You’ll likely get a decision on your application on the same day you apply and might have your loan funded as soon as the next business day if you’re approved.
LendingPoint
LendingPoint specializes in working with borrowers who have near-prime credit, which could make it a good choice if you have a credit score in the upper 500s to 600s.
If you’re approved, your loan could be funded as soon as the next business day.
LightStream
LightStream might be a good option if you’re looking to borrow a large loan amount — personal loans from LightStream range from $5,000 to $100,000.
Plus, if you’re approved, you could have your loan funded as soon as the same business day.
OneMain Financial
If you prefer taking out a personal loan in person, OneMain Financial could be a good choice — it has 1,500 branch locations in 44 states.
Loans approved in person at a branch office could be funded on the spot with a check, while online loans will generally be funded within one to two business days by direct deposit.
Upgrade
Upgrade offers personal loans ranging from $1,000 to $50,000. If you’re approved, you could have your loan funds within a day of clearing the necessary verifications.
Upstart
With Upstart, you can borrow $1,000 to $50,0005. Keep in mind that Upstart considers education and job history in addition to credit score, which means that you might qualify for a loan even if you have limited credit history.
What are the pros and cons of direct deposit loans?
If you’re considering a direct deposit loan, here are some points to keep in mind:
Pros
- Could get approved even with bad credit: In many cases, you only need to be 18 or older and have a job to get a direct deposit loan. This means you could get approved even if you have bad credit.
- Easy application: Applying for a direct deposit loan online might take just a few minutes.
- Fast loan funding: Depending on the lender, you could have your money as soon as the next business day — or even instantly.
Cons
- High rates and fees: It’s not uncommon for direct deposit loans to have APRs of 400% or higher.
- Can borrow only a small amount: Direct deposit loan amounts are generally only a few hundred dollars — typically $500 or less. If you need to borrow more (such as for a car repair or major purchase), this might not be enough.
- Payment could be taken from your account: Unless you opt for a direct deposit installment loan, you’ll typically give the lender a post-dated check or provide authorization for them to debit the funds from your bank account. If the due date rolls around and you don’t have the cash, this could put you in a financial bind.
Check Out: How to Get a Personal Loan With Fair Credit
Online personal loans vs. direct deposit loans
Both online personal loans and direct deposit loans can come with fast loan funding. However, they each have different loan terms, amounts, and rates, as well as varying eligibility requirements.
Here’s a look at several important features of online personal loans vs. direct deposit loans:
| Rates | Could be up to 400% APR or even higher | Varies |
| Loan amounts | Typically up to $500 (might be able to borrow $1,000 or more with a direct deposit installment loan) | $600 to $100,000 (with Credible partner lenders) |
| Loan terms | Usually until your next payday | 1 to 7 years (depending on the lender) |
| Time to fund | Immediate or within a few business days | Typically one week or less (some lenders offer same- or next-day funding) |
| Credit score | Any | Usually need good to excellent credit (670 and up), though some lenders offer loans for poor or fair credit |
If you’re looking for next- or same-day loans, be careful — while you can get cash from a direct deposit loan quickly, the high APR could land you in a deeper financial rut.
- If you take out a $1,000 direct deposit loan with a 150% interest rate and one-year term, you’d pay a whopping $982 in interest.
- If you take out a $1,000 personal loan with a 5% interest rate and one-year term, you’d pay just $164 in interest.
No matter which type of loan you choose, it’s a good idea to consider how much a loan will cost you over time. You can estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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Learn More: Emergency Loans
How to get an online personal loan
If you’re ready to take out a personal loan, follow these four steps:
- Shop around and compare lenders. Be sure to compare as many lenders as possible to find the right loan for you. Compare not only rates but also repayment terms and any fees charged by the lender.
- Choose your loan option. After comparing lenders, pick the loan option that best suits your needs.
- Fill out the application. You’ll need to complete a full application and submit any required documentation, such as tax returns or pay stubs.
- Get your funds. If you’re approved, the lender will have you sign for the loan so they can send you the funds. The time to fund for a personal loan is typically a week or less — though some lenders might fund your loan as soon as the same or next business day.
However, these typically come with higher interest rates compared to the rates given to borrowers with good credit.
If you’re struggling to get approved for a personal loan, another option is applying with a cosigner. Not all lenders allow cosigners on personal loans, but some do.
Even if you don’t need a cosigner to qualify, having one could get a lower rate than you’d get on your own.
Check Out: Credit-Builder Loans
Other alternatives to a direct deposit loan
There are also other options besides personal loans if you need quick cash. Here are a few alternatives to consider:
- Pawn shop loans: These types of loans are available from pawn shops and are secured by a valuable item that you own, such as jewelry or machinery. However, pawn shop loans can also come with extremely high rates and fees. Plus, if you can’t repay the loan, the pawn shop can sell your item.
- Cash advance apps: Apps like Earnin and MoneyLion offer members small, interest-free cash advances. Keep in mind that this type of cash advance might be limited to a few hundred dollars or less.
- Credit cards: A credit card could be a simple way to cover small, recurring expenses. Some credit cards even come with 0% APR introductory offers, which means you won’t have to pay interest if you repay your balance by the time this period ends. However, if you can’t repay the card in time, you could be stuck with some hefty interest charges.
- Loans from friends or family: If you have friends or family willing to lend you the money you need, you might be able to avoid interest charges. However, be sure to stick to the repayment terms you agree upon to avoid any damage to your relationships.
If you decide to take out a personal loan, remember to consider as many lenders as you can to find the right loan for your needs. Credible makes this easy — you can compare your prequalified rates from multiple lenders in two minutes.
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Keep Reading: How to Get a $5,000 Personal Loan Fast
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.99-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.
