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Best Hardship Loans for Bad Credit of May 2024

Hardship loans can help you get through a rough time. We’ve evaluated the best options from legitimate lenders.

Author
By Hilary Collins

Written by

Hilary Collins

Writer

Hilary Collins is a finance writer and editor. She loves taking topics that could be dry and complicated and turning them into engaging stories with actionable takeaways.

Edited by Meredith Mangan

Written by

Meredith Mangan

Senior Editor

Meredith Mangan is a Senior Editor for Personal Finance, specializing in personal loans. Since 2011, she’s helped steer content creation in the areas of mortgages and loans, insurance, credit cards, and investing for major finance verticals, including Investopedia, Money Crashers, Credible, and The Balance Money.

Updated May 2, 2024

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

Featured

A hardship loan isn’t an official type of loan, but rather a loan intended to help you cope with or get through a bad time — surprise medical expenses, a car accident, losing a job, and other challenges might all be made a little more manageable with some extra money. But not all hardship loans are created equal.

We analyzed popular lenders, using factors such as interest rates, loan amounts, funding time, fees, and customer experience, to see which hardship loans are best. Here’s what we found.

Compare hardship loan rates of May 2024

Advertiser Disclosure
3.93.9

Credible rating

Fixed (APR)

7.80% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

620

Check Rates

on Credible’s website

View Details

4.54.5

Credible rating

Fixed (APR)

8.49% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

600

Check Rates

on Credible’s website

View Details

3.93.9

Credible rating

Fixed (APR)

9.95% - 35.99%

Loan Amounts

$2000 to $35000

Min. Credit Score

550

Check Rates

on Credible’s website

View Details

4.34.3

Credible rating

Fixed (APR)

11.69% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

560

Check Rates

on Credible’s website

View Details

3.93.9

Credible rating

Fixed (APR)

18.00% - 35.99%

Loan Amounts

$1500 to $20000

Min. Credit Score

540

Check Rates

on Credible’s website

View Details

All APRs reflect autopay and loyalty discounts where available | LightStream disclosure | SoFi Disclosures | Read more about Rates and Terms

Best hardship loans for bad credit

The best hardship loans for bad credit are personal loans that cater to borrowers with bad credit. This is because they have the lowest costs (relative to other options), the longest repayment periods, and the highest amounts available. 

Compare the annual percentage rate (APR) between loans to see which has the lowest cost. The APR accounts for the interest rate and upfront fees, like an origination fee. Note that you'll need to prequalify first, to get a sense of whether a lender might approve your application and the APR you might be offered once you apply. 

Prequalification won't hurt your credit and only takes a few minutes, but it's not an offer of credit. Once you prequalify, you can compare quotes to choose the best loan and lender. Note that when you formally apply, the lender will conduct a hard credit inquiry that may ding your score temporarily by a few points. 

Upstart: Best fast personal loans for all credit types

Best fast personal loans for all credit types

Upstart

3.9

Credible Rating

Check Rates

on Credible’s website

Est. APR

7.80 - 35.99%

Loan Amount

$1000 to $50000

Min. Credit Score

620

Pros and cons

More details

Upgrade: Best for fair credit

Best for fair credit

Upgrade

4.5

Credible Rating

Check Rates

on Credible’s website

Est. APR

8.49 - 35.99%

Loan Amount

$1000 to $50000

Min. Credit Score

600

Pros and cons

More details

Avant: Best for all credit types

Best for all credit types

Avant

3.9

Credible Rating

Check Rates

on Credible’s website

Est. APR

9.95 - 35.99%

Loan Amount

$2000 to $35000

Min. Credit Score

550

Pros and cons

More details

Universal Credit: Best debt consolidation loans for bad credit

Best debt consolidation loans for bad credit

Universal Credit

4.3

Credible Rating

Check Rates

on Credible’s website

Est. APR

11.69 - 35.99%

Loan Amount

$1000 to $50000

Min. Credit Score

560

Pros and cons

More details

OneMain Financial: Best bad credit personal loans

Best bad credit personal loans

OneMain Financial

3.9

Credible Rating

Check Rates

on Credible’s website

Est. APR

18.00 - 35.99%

Loan Amount

$1500 to $20000

Min. Credit Score

540

Pros and cons

More details

Methodology

Credible evaluated the best lenders offering hardship loans for bad credit based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, fees, discounts, and whether cosigners are accepted. Credible’s team of experts gathered information from each lender’s website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.

Learn more about how Credible rates lenders by exploring our Personal Loans Lender Rating Methodology.

What are hardship loans?

Hardship loans aren’t a particular financial product, but a variety of loan types that are often used by people facing financial hardship. Some don’t require a credit check, but those are usually the ones to be wary of.

Personal loan

When you have bad credit, you may not be able to qualify for the lowest interest rates available, but even a high-interest personal loan will have advantages over some other options.

Compared to cash advance apps, payday loans, and title loans, repayment periods on personal loans are often more manageable — they typically range up to seven years. And APRs tend to be much lower — topping out around 36%. And, unlike a title loan, most personal loans don’t require you to put your personal possessions up as collateral.

Personal loan lenders will check your credit, but there are a few that cater to borrowers with bad credit.

Check Out: 

Payday loan

A payday loan is a small-amount, short-term loan that doesn’t usually require a credit check. Payday loans often have APRs in the triple digits because of the short repayment period and very high fees, relative to the loaned amount. For example, a payday loan that charges $15 for every $100 borrowed has an APR of nearly 400%.

Many states have regulated or outright prohibited payday loans, and research by the Consumer Financial Protection Bureau has found that payday loans often trap borrowers in a cycle of high-cost debt. For this reason, they’re best avoided.

Check Out:

Payday alternative loan

A relatively low-APR option is a payday alternative loan (PAL). PALs are available from many federal credit unions, and are designed to be utilized instead of payday loans.

Amounts can range up to $2,000, and repayment terms can extend to 12 months. Since interest rates are capped at 28%, a PAL is often a wise choice for a small, short-term loan. Even if you aren’t yet a credit union member, some credit unions offer PALs to new members immediately after joining.

Cash advance app

Cash advance apps are similar to payday loans, in that they offer small loans (often less than $500) with the understanding that the amount plus fees will be repaid on your next payday.

While cash advance apps can get you money quickly, you’ll typically pay an expedited funds fee for the convenience, which can rapidly inflate costs — for example, a $500 cash advance due in two weeks with a $20 expedited funds fee equates to a 104% APR. Leaving optional tips, though thoughtful, are another way to send cash advance APRs into the triple digits.

Check Out: Payday Loans vs. Cash Advances

Title loan

A car title loan is a short-term loan, usually due in 30 days, for a small amount where you give the lender your car’s title as collateral — if you default on the loan, the lender can take your vehicle.

Fees on these loans can be as much as 25% of the total loan amount per month. That might not sound like much, but it’s the same as paying a nearly 300% APR. The lender may charge additional fees to roll over the loan from month to month if you can’t pay it off, making the cost of borrowing even higher.

Retirement loan

Some 401(k) plan providers let you borrow against your own retirement account. Loans are usually limited to 50% of your vested account balance or $50,000, whichever is less. And you typically have five years to repay the loan, usually via payroll deductions, unless you leave your job. In that case, you may need to pay the remaining balance immediately or face tax consequences and early withdrawal penalties.

The good news is that the interest you pay goes back into your account, and it’s usually set at 1% to 2% plus the prime rate — which is likely much lower than any other interest rate you’ll get, especially with bad credit. Plus, you don’t have to qualify, other than having a 401(k) that allows for loans and a sufficient balance.

But removing funds from your retirement account can impact the amount you’re able to save for retirement — as there may be years when that money isn’t invested.

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Good to know

Depending on your situation and retirement plan, you may qualify for a hardship distribution: A withdrawal from your retirement account necessitated by an immediate and heavy financial need, that isn’t subject to early withdrawal penalties.

How do hardship loans work?

Each type of loan and lender is different, often having different processes and standards for borrowing. Here are some of the most important things to take into account when considering your options.

  • Interest rates: An interest rate is a percent of the amount you borrow that you pay the lender. Interest rates are usually based on how risky of a borrower the lender perceives you to be: If you are seen as a risky borrower, the rates might be quite high. If you are seen as less of a risk, the rates might be lower. 
  • Fees: An origination fee is a common cost associated with a personal loan that is often deducted from the loan amount before it’s disbursed to you. Depending on the lender, an origination fee could be as high as 12%, but not all lenders charge them.
  • APR