Best Hardship Loans for Bad Credit in October 2025

If you need a loan but don’t have good credit, you need to know which lenders are most likely to work with bad-credit borrowers. We’ll cover lenders that consider applicants with either bad credit (a FICO score below 580) or fair credit (a FICO score between 580 and 669), plus what to expect, and steps you can take to improve your application.

Best hardship loans for bad credit

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. 

We recommend personal loans because: 

• APRs generally top out at 36%, potentially saving you money on interest
• Lenders report to credit bureaus, which can improve your credit 
• Repayment terms are years-long, making payments affordable

If you're facing financial hardship, you can use a personal loan to pay for necessities. According to 12 months of Credible personal loan statistics, more than 10% of borrowers who were approved with bad credit used the Credible marketplace to get a loan for paying bills or rent.

Types of hardship loans

Personal loans

Recommended

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. 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. 

Compared to cash advance apps, payday loans, and title loans, repayment periods on personal loans are often more manageable — they can 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.

Also, many personal loan lenders let you prequalify to get an estimate of the rates and terms you might qualify for. 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. 

Small bank loans

Recommended

Some banks offer small loans to help customers cover short-term financial needs — fees are often low and no credit check is required. For example:

Bank of America’s Balance Assist loans are available up to $500 with a $5 flat fee and no interest. The loan is repaid in three equal monthly installments automatically from your Bank of America checking account, making it a much better option than payday loans and even cash apps for short-term borrowing.

U.S. Bank’s Simple Loan provides loans up to $1,000, also repaid in three monthly installments. The loan carries a flat fee of $6 for every $100 borrowed with automatic payments, which is equivalent to a 35.65% APR.

Payday loans

Not recommended

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.

Compare: Payday Loans vs Personal Loans

Payday alternative loans

Recommended

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.

Related: How To Get a $2,000 Personal Loan

Cash advance apps

Use with caution

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 $100 cash advance due in two weeks with a $5 expedited funds fee equates to a 130% APR. 

Leaving optional tips, though thoughtful, is another way to send cash advance APRs into the triple digits.

Compare: Payday Loans vs. Cash Advances

Title loans

Not recommended

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.

401(k) loans

Avoid if possible

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.

Compare: 401(k) Loan vs. Personal Loan

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.

• APR: The annual percentage rate, or APR, is a great way to compare loan options apples to apples. The APR accounts for both upfront fees and interest to show you the total cost of the loan, expressed on an annual basis.
• 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.
• Repayment terms: A repayment term is how long you have to repay the loan. For hardship loans, this can vary widely, from 2 weeks for payday loans and cash advance apps, to multiple years for personal loans and 401(k) loans. Repayment terms are important because, generally speaking, the shorter the repayment term, the higher the monthly payment amount.
• Amount: It will be easier to qualify for a very small amount of money, like a sum under $500, as neither payday loan lenders nor cash advance apps typically consider your credit. Even if you qualify for a personal loan or other installment loan that runs your credit, you may still not qualify for a large amount if the lender doesn’t feel confident that you can repay it.
• Credit score: A low credit score can affect your borrowing options, putting many affordable loans out of reach. Loans like payday loans and title loans that don’t weigh your credit score are usually high-cost and high-risk borrowing options.

Related: How Do Personal Loans Work?

How to get a hardship loan with bad credit

If you have a low credit score, you’re not without options. Here are some things to consider when applying for loans:

• Offer collateral: Putting up collateral (like your car) to secure a personal loan can increase the amount you're eligible to borrow, lower the cost of the loan, or help you qualify. OneMain Financial, Upgrade, and Reprise are all recommended lenders that offer secured loans, but not all personal loan lenders do. If you miss payments, you could lose your collateral.
• Apply with a cosigner: A handful of lenders, like OneMain Financial, allow you to apply for a loan with a cosigner. A cosigner should be someone with a good credit profile who will take on responsibility for the loan with you — if you don't pay, they're on the hook.
• Apply with a joint applicant: If you'll be using the loan for joint needs, like a new appliance or home repair for you and your partner, it could help to apply for the loan together. This way, the lender will consider your joint applicant's income and credit as well as yours.
• Look for low credit score requirements: Some lenders offer loans to borrowers with low or no credit scores. Look for lenders with low minimum credit score requirements and prequalify with them before choosing a higher-risk option.
• Become an authorized user: If a close friend or family member has good credit and is willing to make you an authorized user on their credit card, it could go a long way to improving your credit score. This, in turn, could help you qualify for a loan.

Alternatives to hardship loans

If you’re struggling to qualify for a personal loan or PAL and don’t want to take out a riskier loan, consider other options:

• Grants and financial assistance: If you are struggling to make rent, pay for medical expenses, or afford basic necessities like food and utilities, you may be eligible for financial assistance. Use the search feature at 211.org to see what’s available in your area.
• A family member or friend: If you have someone in your life who would be willing to help, it may be worth it to reach out. Come to a mutually agreeable repayment schedule with specific dates for when payments are due — and make a record of it for both of you to reference.
• 401(k) $1,000 emergency withdrawal: If your plan allows, you can withdraw up to $1,000 for an emergency personal expense without penalty once per year. You’ll still need to pay income tax on the withdrawn amount, but can avoid the 10% early withdrawal penalty that’s typically assessed if you’re under 59 ½.
• Debt management plan (DMP): Either as an alternative to or in conjunction with a hardship loan, a DMP through a credit counselor could lower your current monthly debt payments and/or save money on interest — potentially freeing up cash so that you don’t have to borrow.
• BNPL: If you need to borrow money to make a purchase, a buy now, pay later app may be a good option. BNPL apps like Affirm and Klarna have looser credit requirements than personal loans, and may only run a soft credit check when you apply. Interest and fees can be low or $0, especially if you choose a pay-in-4 plan over 6 weeks. But you typically will need to make the first installment upfront.

How to improve your credit

Getting a loan is much easier if you don’t have bad credit. But it often takes time to improve your credit — which you may not have if you’re facing a hardship now. So in addition to tried and true ways of improving your credit long-term, we’ll cover a couple of quick-win ways to boost your score within a month. 

Quick credit boosters

• Become an authorized user: As noted above, becoming an authorized user on the credit card of someone with good credit can improve your credit score. How? Because their credit card account — including payment history and available credit — is typically reported on your credit report once you become an authorized user. And most credit card companies report monthly, meaning you could see your score improve within one month. 
• Use a rent- and utility-reporting service: Services like Experian Boost report your on-time rent and other payments (like utilities and cell service) to one or more credit bureaus, which can increase your score almost instantly. 
• Ask for a credit line increase: If one or more of your credit card balances are high, but you’ve been making on-time payments, you may be able to request and be approved for a credit line increase. This can help reduce your credit utilization, and thereby increase your score once the new credit limit is reported (typically, within one month).

Long-term credit gains

• Make payments on time: Since payment history makes up 35% of your FICO credit score, making payments on time is the single most important thing you can do to raise your score and keep it up.
• Keep credit utilization low: Since credit utilization — the amount of credit you’re using compared to the amount you have —  contributes up to 30% to your score, keeping it low or reducing it can result in big credit score gains. In addition to quick-win ways of lowering credit utilization, work on paying down your credit card balances. Or better yet, don’t run them up in the first place.
• Get a credit builder loan: A credit builder loan works like a loan in reverse. Instead of getting all the money you borrow upfront, you receive it once the loan is paid in full. As a result, these types of loans are much easier to get approved for and can help your score since payments are reported to the credit bureaus. 
• Get a secured credit card: Unlike a typical unsecured credit card, you’ll need to put down a security deposit to get a secured credit card. The amount of the deposit typically indicates the amount of your credit limit initially. 

Methodology

Credible evaluated 32 lenders across 1,216 data points to find the best hardship loans for bad credit. We considered lenders with minimum credit score requirements of 580 or lower, and gave preference to lenders that allow cosigners, joint applicants, and/or offer secured loans. 

Lender star ratings were established based on the following weighted categories:

• 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.

Disclosure: Some lending partners that participate in Credible’s comparison marketplace offer loans to borrowers with scores as low as 550. Borrowers with low scores will have fewer lending options than borrowers with higher credit scores.