Skip to Main Content
Advertiser Disclosure

In each article, Credible will identify if the lender is a partner lender. If the lender is described as a partner or partner lender, Credible receives compensation from the lender. Compensation will not impact how or where products appear on the Credible platform when requesting prequalified rates and loans. Not all lenders participate in the Credible marketplace. Any opinions, analyses, reviews, or recommendations expressed in these articles are those of Credible (and the author) alone and have not been reviewed, approved, or otherwise endorsed by any lender or other provider.

Direct Deposit Loans and Alternatives

If you need cash fast, a personal loan is typically a much less expensive option than a direct deposit loan.

Author
By Taylor Medine
Taylor Medine

Twitter

LinkedIn

Written by

Taylor Medine

Freelance writer

Taylor Medine is an authority on personal finance. Her work has been featured by Bankrate, USA Today, The Balance, Business Insider, Credit Karma, and MSN.

Taylor Medine

Twitter

LinkedIn

Written by

Taylor Medine

Freelance writer

Taylor Medine is an authority on personal finance. Her work has been featured by Bankrate, USA Today, The Balance, Business Insider, Credit Karma, and MSN.

Edited by Meredith Mangan
Meredith Mangan

LinkedIn

Written by

Meredith Mangan

Senior editor

Meredith Mangan is a senior editor at Credible. She has more than 18 years of experience in finance and is an expert on personal loans.

Meredith Mangan

LinkedIn

Written by

Meredith Mangan

Senior editor

Meredith Mangan is a senior editor at Credible. She has more than 18 years of experience in finance and is an expert on personal loans.

Updated May 2, 2025

Editorial disclosure: Please note that this article contains affiliate links. If you click through and purchase a product from one of our advertising or lending partners, we may earn a commission. The amount of commissions do not affect our editors' opinions or recommendations. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.” Please read our affiliate disclosure for more information.

Featured

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 annual percentage rates (APRs) on those loans can be sky-high. Consider a personal loan, instead. 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

Advertiser Disclosure

The rates that appear are from companies from which Credible receives compensation. This compensation does not impact how or where products appear within the table. The rates and information shown do not include all financial service providers or all of the displayed lenders' available services and product offerings.

All APRs reflect autopay and loyalty discounts where available | Read more about Rates and Terms | Terms of Service | Privacy Policy

What are direct deposit loans?

Direct deposit loans are often 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

Keep in mind: While fast funding through direct deposit might sound appealing, these small loans are notoriously expensive.

Depending on the lender, you might end up paying 400% APR or more on a direct deposit loan.

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 or 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.

Get your financial goals on track

Free credit score, automatic debt tracking, and goal setting all in one place.

Get Started

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:

Direct deposit payday loan
Personal loan
Rates
Could be up to 400% APR or even higher
Typically between 6.49% and 35.99%
Loan amounts
Typically $500 to $1,000
$1,000 to $100,000 or more, depending on the lender
Loan terms
Usually until your next payday
Typically 2 to 7 years
Time to fund
Immediate or within a few business days
Typically one week or less, although some lenders offer same-day funding
Credit score
Any
Usually need good to excellent credit score (670 and up), al 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.

Here’s what you might expect to pay if you borrow $1,000 with a direct deposit loan vs. a personal loan:

  • 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 30% interest rate and one-year term, you’d pay just $170 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.

How to get an online personal loan

If you’re ready to take out a personal loan, follow these four steps:

  1. 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.
  2. Choose your loan option. After comparing lenders, pick the loan option that best suits your needs.
  3. Fill out the application. You’ll need to complete a full application and submit any required documentation, such as tax returns or pay stubs.
  4. 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.

Tip: 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 median income.

Personal loan interest rates by credit score

FICO score range
Avg. interest rate
Avg. loan amount
Avg. income
Excellent (800 and above)
11.44%
$27,161
$132,326
Very good (740 - 799)
14.01%
$23,244
$112,402
Good (670 - 739)
20.96%
$20,706
$93,964
Fair (580 - 669)
29.70%
$10,230
$71,733
Poor (< 580)
31.83%
$6,092
$55,295

Disclosure: Based on Credible closed loans data from August 2024 through July 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.

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.

Expert 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 Personal Loans Editor, Credible 

Read More:

Meet the expert:
Taylor Medine
Taylor Medine

Twitter

LinkedIn

Taylor Medine is an authority on personal finance. Her work has been featured by Bankrate, USA Today, The Balance, Business Insider, Credit Karma, and MSN.