As the name suggests, direct deposit loans are loans that are directly deposited into your bank account. While some loan companies market direct-deposit payday loans as a fast way to get cash in an emergency, the annual percentage rates (APRs) on those loans can be sky-high.
Instead, consider a personal loan. It's also a direct-deposit loan (if approved, the lender deposits a lump sum directly into your bank account). Plus, your rate could be much lower than what you'd pay on a short-term payday loan. You could be eligible even if you have bad credit.
Compare personal loan rates
What are direct deposit loans?
Some direct deposit loans are payday loans that are quickly deposited into your bank account. You might be able to get a payday loan online or from a storefront lender, often without a credit check.
Requirements for direct deposit payday 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
Good to know
While fast funding through a direct deposit loan from a payday lender might seem appealing, these loans are notoriously expensive. Depending on the lender and the regulations in your state, you might end up paying 400% APR or more.
But there are other options to quickly borrow cash besides payday loans. For example, you might qualify for a personal loan with a much lower APR and for a higher loan amount.
If you’re approved, you could get money as soon as the same day or the next business day, deposited directly into your account.
Compare: Payday Loan vs. Installment Loan
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.
Personal loans vs. direct deposit payday loans
Personal loans from online lenders, banks, and credit unions and direct deposit payday 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:
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.
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.
While you’ll generally need good to excellent credit to qualify for a personal loan, there are some lenders that offer personal loans for bad credit. However, these typically come with higher interest rates compared to the rates given to borrowers with good credit. Even if you don’t need a cosigner to qualify, having one could get a lower rate than you’d get on your own.
Interest rates and loan amounts by credit score
Borrowers with high credit scores are the most likely to qualify for the lowest interest rates and highest loan amounts. But that doesn’t mean you can’t qualify for a loan with bad or fair credit. Here’s a look at the average rates borrowers with different credit scores got, as well as their average loan amounts and average incomes.
Personal loan interest rates by credit score
Disclosure: Based on Credible closed loans data from September 2024 through August 2025. Source: Credible
If you have bad credit, increase your approval odds by improving your credit before you apply, applying with a cosigner, or applying with a joint applicant.
Related: Best Short-Term 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:
- Pawnshop loans: These types of loans are available from pawnshops and are secured by a valuable item that you own, such as jewelry or machinery. However, pawnshop loans can also come with extremely high rates and fees. Plus, if you can’t repay the loan, the pawnshop 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. Also, various fees and optional tipping can equate to triple-digit APRs.
- 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. The card's regular APR goes into effect after the introductory period and would apply to any unpaid balance.
- 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 minutes. Keep in mind that the rates and terms of a loan offer might differ from prequalification, which isn't an offer of credit.
Editor insight: "Check with your bank for small, same-day loans. Some, like Bank of America and U.S. Bank, offer loans up to $500 or $1,000 without a credit check but with very low fees relative to payday loans and even cash advance apps. You'll probably have a few months to pay the money back, making repayment easier to budget for."
— Meredith Mangan, Senior Loans Editor, Credible
Read More:
- Current Personal Loan Interest Rates
- How Much of a Personal Loan Can I Borrow?
- Best Personal Loans for Fair Credit
- Best Personal Loans for Good Credit
- Best Personal Loans for Excellent Credit
- Best Emergency Loans for Poor Credit
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.
