Best Bad Credit Loans in Texas of 2025

Everything is bigger in Texas — except for credit scores. According to Experian and Equifax data, Texans have some of the lowest average credit scores in the country, across both FICO and VantageScore, which can make it more challenging to qualify for loans.

But if you’ve got poor credit in the Lone Star State and need access to cash fast, you’re not out of luck. Below, you can explore the best bad credit loans in Texas without turning to a predatory payday loan lender.

Compare bad credit loans in Texas

Only a couple of lenders offer bad credit loans in Texas. If you’re able to nudge your credit score higher than 580, you’ll have more lenders to consider.

Types of bad credit loans

“Bad credit loans” is a catch-all term for loans you can qualify for even with bad credit (a FICO score below 580). Texans have a wide array of options, some more ideal than others, including:

Bad credit personal loans

Personal loans are much easier to qualify for with good or excellent credit, but having poor credit doesn’t make you ineligible. You’ll just have to set your sights on the more limited pool of bad credit personal loans and be prepared to pay higher interest rates and fees for less money borrowed. But if you can qualify, they’re often a better choice than all other bad credit loan types — loan amounts are typically higher, interest rates and fees lower, and repayment terms longer.

These personal loans work like any others, for the most part. One key difference may be the collateral. Many personal loans for bad credit are secured personal loans, meaning you need to offer collateral (such as your car) to secure the loan. Proceed with caution.

Another option is a high-rate personal loan — loans that cater specifically to borrowers with bad credit and have the APRs to prove it (often well over 100%). Opploans is one example. The lender offers loans up to $5,000 and reports to the credit bureaus, but APRs can reach as high as 195%. 

Cash advance apps

Another way to get a small loan fast, even if you have bad credit, is through a cash advance app, such as Dave or EarnIn.

Each app works a little differently, but generally, you’ll connect the bank account where your paychecks are directly deposited, and once verified, you can borrow a portion of your next paycheck before it actually arrives. Then, what you borrowed will be deducted from your account — generally on your next payday.

You might pay a monthly fee for this service, or you may pay extra for instant funds. In some cases, apps suggest you add a tip.

“I’ve found the popular cash advance apps to be a decent option for very small amounts. For example, needing $50 to $100 to cover utilities,” says Weiss. “But when you get into larger amounts, which is the trend they’re moving toward, they become similar to payday loans once you actually read the fine print.”

Buy now, pay later (BNPL)

Increasingly, consumers are using buy now, pay later (BNPL) as an easy way to finance purchases, even with poor credit. Rather than pay for a purchase all at once, such as a new dishwasher or even your groceries, you’ll pay a portion of the cost upfront and then pay the rest in small payments, often in three biweekly installments over the next six weeks.

According to the Consumer Financial Protection Bureau (CFPB), BNPL loans are most common among borrowers who have bad credit. But BNPL loans aren’t without risk for such borrowers. 

“The risk of BNPL is that it tends to be used for discretionary expenses,” says Weiss. “In other words, things most people shouldn’t be borrowing money for, like furniture or even clothing. Yes, it sounds enticing upfront since it seems like a way to pay in four equal installments without true interest. But … one late or missed payment can lead to fees and interest charges, similar to a credit card. It’s another vulnerability that can set your finances in a downward spiral.”

Small bank loans or payday alternative loans (PALs)

Your local Texas bank or federal credit union may also offer small loans, even if you have bad credit. These loans tend to have shorter repayment periods than traditional personal loans.

Payday alternative loans (PALs), for instance, are available through some federal credit unions and often don’t require a credit check. Interest rates are capped at 28% and loan amounts may be available up to $2,000 with repayment terms up to 12 months. Here are a few popular Texas-based credit unions that offer some form of PALs to members:

• Mobility Credit Union
• Credit Union of Texas
• River City Federal Credit Union

Payday loans

Notably, if you live in Texas and have bad credit, you can also turn to payday lenders. And that seems to be a common move for Texans.

According to a 2025 report from the Center for Responsible Lending (CRL), Americans paid $2.4 billion in payday loan fees in 2022 — and Texas was responsible for $1.3 billion of that total, or roughly 54%.

We urge you to explore every other option available to you before turning to payday loans. Also, according to CRL, the average $400 payday loan in Texas has a 662% APR — which makes Texas the most expensive state to get a payday loan in the entire country. 

Title loans

A title loan requires that you pledge your car as collateral on a loan — the loan may be due in as little as 30 days, but some title loans have longer terms of at least 90 days or up to 60 months. In general, the shorter-term loans are the ones to stay away from, especially if the lender doesn’t advertise or can’t tell you the loan’s APR. But no matter what type of car title loan you get, if you default on the loan, you can lose your car. 

401(k) loans

If you have a 401(k), you may be able to borrow from it if your plan allows. This can be an easy option since no credit check is required (you’re borrowing from yourself), and the interest rate is low, plus interest goes into your own account. However, if you can’t repay a 401(k) loan, you could owe steep income taxes on the amount you didn’t repay, along with a penalty tax if you took the loan before you were 59 ½. 

Another consideration is that 401(k) and other retirement plans are often protected from your creditors in bankruptcy. If you need money to pay off debt, it might not be the best idea to tap your 401(k), especially if you think you might file for bankruptcy. 

How to compare bad credit loans

Comparing multiple personal loans is usually easy, since you can quickly prequalify to compare rates and loan amounts between lenders. (Prequalification is free and there’s no hard credit check, but if you apply for a personal loan, most lenders will check your credit.)

But comparing multiple bad credit loan formats, from secured personal loans to cash advance apps to BNPL programs, can be more challenging, since each product is unique.

That said, here are some questions you should ask yourself as you consider these various products.

What is the actual cost of the loan?

Personal loans advertise APRs (annual percentage rates), which consider both the interest rate on the loan and any upfront or required fees. A lower APR means a less expensive loan.

But cash advance apps don’t have traditional APRs; instead, you may pay a membership fee or an instant transfer fee, which can be high when you factor in the small loan amount and short repayment period. The CFPB found that the average APR equivalent for cash advance apps is 290%, while the CRL found that the average $400 payday loan in Texas has a 662% APR. Compare that to a maximum APR of 36% for most personal loans and 28% for payday alternative loans. This can give you a sense of the high cost and predatory nature of some bad-credit loans. 

How much time do you have to repay?

Many bad credit loans have little to no wiggle room on payment due dates. Plus, they tend to be due quickly (payday loans, cash apps, and some BNPL), which can make it tough to come up with the cash.

Think about how you’ll get the funds to repay the loan, and make sure the repayment timeline is manageable.

Do you want to boost your credit score?

Not every bad credit loan gets reported to credit bureaus, including cash apps, payday loans, title loans, and 401(k) loans. 

If you want to use this loan as an opportunity to boost your credit score, think about options that get reported to the bureaus, such as personal loans and BNPL.

Can you borrow what you need?

If you only need a few hundred dollars, you might be able to use a cash app, small bank loan, payday alternative loan, or BNPL. But if you need to borrow more than $1,000, your options start to get limited — to personal loans, payday alternative loans, and some BNPL plans.

Current rates on bad credit loans

Either through fees or interest (or both), you’ll usually pay a pretty penny to borrow money when you have poor credit. The table below explores what these rates and fees (APR) may look like:

How to qualify for bad credit loans in Texas

The type of loans impacts the qualification process. 

• Personal loans: Use an online loan marketplace to prequalify with multiple lenders at once. Then, compare quotes to see which are more likely to approve your application. Once you’ve chosen a lender, submit a formal application and expect a hard credit pull. Note that only a few lenders consider borrowers with FICO scores below 580. If you can improve your score before applying, you can improve your chances of qualifying.
• Cash advance apps: As long as you have a qualifying bank account that receives your paycheck via direct deposit, you should be able to set up a cash advance app quickly and start borrowing ahead of your next payday. Look for an app, like Chime, that has no or low fast-funding fees.
• Buy now, pay later: Most BNPL lenders use a soft credit pull to check if you qualify. But you may need to sign up and download the BNPL lender’s app to get started. If you qualify, you’ll typically get instant access to a wide range of retailers where you can spend.
• Payday alternative loans: To get a PAL from a credit union, you’ll need to be or to become a member, which has its own set of requirements, like having a specific employer. If you’re a new member, you may need to wait up to 30 days to be eligible for a PAL, but some PALs are available immediately to new members. Check with the credit union to see which type they offer. 
• Small bank loans: These are usually offered to existing customers for up to $1,000. Bank of America and U.S. Bank, for example, both offer small loans due in 3 months without a credit check and for modest fees. 
• 401(k) loan: Reach out to your plan administrator or look for a loan option in your plan’s online portal. This could be as easy as filling out an online form and waiting for the funds to arrive in your account. Payments are typically deducted from your paycheck.
• Title loan: You generally need a paid-off or mostly paid-off car to qualify — the lender will attach a lien to your title and can take the car if you don’t repay the loan. 

Alternatives to bad-credit loans

If you don’t have the money or assets for a secured personal loan and you want to avoid potentially expensive borrowing options, consider these bad-credit loan alternatives.

Family loan

Asking a loved one to borrow money can be uncomfortable, but if you’re facing a true emergency and have a good relationship with a friend or relative, it’s worth asking for help. Make sure you have a solid plan to repay them (and fast) so you don’t strain your relationship.

“The best advice I have is to have a signed agreement and treat it like a true loan, with defined terms and a clear repayment schedule,” says Weiss. “This is not only best for tax purposes but also helps set expectations on both sides.”

And, of course, always be understanding if your loved one declines.

Payment plan

If you’re looking for a bad credit loan to help pay for medical care, start with the hospital before looking for high-interest loan options. Some medical facilities may offer low- or no-interest payment plans to make the cost of medical care more manageable.

For instance, the three largest Texas hospitals (by number of beds) all offer payment plans and financial assistance programs:

• Houston Methodist Hospital
• Memorial Hermann - Texas Medical Center
• University Hospital - University Health

Methodology

To evaluate the best bad credit loans in Texas, Credible evaluated 32 lenders across 1,216 data points. After identifying lenders with minimum credit score requirements at or below 580, we considered criteria including interest rates, fees, loan amounts, loan purposes, funding times, customer service, whether secured loans or cosigned loans are available, and whether loans are available in Texas.

We scored lenders based on the following:

• Rates and fees: 18.75%
• Eligibility and options for bad and no credit: 17.5%
• Availability: 12.5%
• Loan amounts and terms: 10%
• Customer satisfaction: 10%
• Customer service: 10%
• Efficiency and fund delivery: 10%
• Discounts: 7.5%
• Credible proprietary data: 3.75%

Credible's team of experts gathered information from each lender's website and from our partners directly. We also considered each of our partner lenders' statistics over a 12-month period — including average funding times, average credit scores for approved applicants, and average rates. Each data point is verified by a senior editor to make sure it's accurate at the time of publication

Learn more about how Credible rates lenders by exploring our personal loans lender rating methodology.