Why Trust Us
Investopedia collected and analyzed hundreds of key data points from 59 companies over three months to identify the most important factors for readers choosing an emergency loan for bad credit. We used this data to review each company for rates, fees, repayment terms, credit requirements, and other features. We developed this process to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best personal loans since 2015.
Common Personal Loan Terms
Understanding key terms can help you make smarter purchasing and borrowing decisions.
- Annual percentage rate (APR): The APR for a personal loan is the percentage of the principal you’ll be charged in interest and origination or other fees. It’s calculated by multiplying the periodic interest rate by the number of periods (monthly in most cases) in a year.
- Origination fee: Lenders sometimes charge an origination fee to cover the cost of processing the loan application. The fee is usually charged as a percentage of the total loan amount.
- Credit score: A credit score is based on your credit history and is one way lenders measure your creditworthiness. The most common score is the FICO score, which ranges from 300 to 850. Borrowers with higher credit scores generally receive the best loan offers and terms.
- Joint application: A co-applicant can help with loan approval by providing lenders with an additional source of income and a better credit history to consider. Once an application is approved, co-applicants become co-borrowers, giving them equal access to funds. This is in contrast to a co-signer, who is responsible for repayment without equal access to the funds.
Cost Comparison: Emergency Loan vs. Emergency Fund
An emergency fund is a special savings account where you keep money to help you when you need it. While saving money for a financial emergency ahead of time is difficult, it’s much cheaper than borrowing to pay for an emergency.
Let’s compare the cost of building a $3,500 emergency fund to repaying a $3,500 emergency loan.
We’ll assume an interest rate of 30% for the emergency loan, representing “bad” credit interest rate offers you might receive. Also, let’s assume a four-year repayment term (48 months) and use a loan calculator to find a monthly payment of $113.24. After 48 months, you will repay the $3,500, plus $2,549 in interest expense for a total repayment of $6,049.
Meanwhile, instead of finding room in your budget to repay a loan, you find room to invest in a high-yield savings account that earns 5% interest. You send that same $113.24 monthly to your emergency fund savings account. After two years and six months, your account will have grown to $3,625, with $229 of that interest you earned on $3,397 in deposits. (You can calculate your own savings goals with this online savings goal calculator.) As you can see, the savings are substantial.
| Goal | Interest | Months | Out-of-Pocket | |
|---|---|---|---|---|
| Emergency Loan | $3,500 | $2,549 paid | 48 | $6,049 |
| Emergency Fund | $3,625 | $229 earned | 30 | $3,397 |
How to Apply for an Emergency Loan
To get an emergency loan, you will choose a lender and follow an online application process.
- Check your credit score. Even if you know you have “bad” credit, find out what your score is. Many lenders share their borrower requirements, and if your credit score falls below them, you can save time by looking elsewhere.
- Get several lender quotes. Many lenders offer pre-qualification with no credit check, so start there. Compare the costs, estimated payments, and other loan details that are important to you.
- Choose a lender and fill out the online application. You will provide personal contact information, income information, expenses information, and permission to perform a credit check.
- Gather documents. You may be asked to submit documents such as photos of your identification, proof of address, and proof of income (such as W-2 forms or pay stubs). If a branch visit is required, bring these documents with you.
- Wait for application approval. You may be approved (or denied) within a few minutes. Depending on the lender, it may take a day or two.
- Receive your loan funding. Once approved, your loan funds will be deposited into your bank account. Your first payment will be due the next month.
Frequently Asked Questions
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If your priority is fast cash, you have several options, although some will be expensive, with high interest rates and fees.
- A personal loan from an online lender or your bank: Some online lenders can approve and fund a loan the same day. Similarly, a bank or credit union you already have a relationship with may be able to approve and fund a loan in a day or two.
- A payday loan: Payday lenders can fund these short-term loans the same day. Interest rates and fees can be exorbitant, however, and you’ll have to repay it by your next payday. You’ll generally need to provide some identification and proof of income, as well as a checking account.
- A pawn loan: Pawnshop lenders can provide a short-term loan, secured by your property, the same day. State governments regulate rates and terms.
- A credit card cash advance: If you have a credit card, chances are it allows you to access your credit as cash. You can do this at an ATM, making this a really fast option. (You must know your card account’s PIN.) Generally, you can withdraw a fraction of your credit limit, and the interest rate will be higher than the standard purchase rate. You’ll also pay a fee (typically 3% to 5% of the amount borrowed).
- A cash advance app: For small loans of under a few hundred dollars, a cash advance app can provide money nearly instantly. Some services charge fees, while others suggest voluntary tips.
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Yes, in fact, many types of lenders offer emergency loans for bad credit, including:
- Online lenders
- Credit unions
- Traditional banks
- Credit card companies (cash advances)
- Payday lenders
- Relatives and friends
Not every lender is a good choice, and costs and terms vary. For example, Credit card cash advances are expensive and might damage your credit score by increasing your credit utilization ratio.
It’s also a good idea to avoid payday loans and title loans whenever possible. The Consumer Financial Protection Bureau warns that the average two-week payday loan features a steep APR that’s equivalent to nearly 400%.
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Determining if any financial product is worth it depends on the alternatives available. If an emergency loan is your best option, it may be worth it, even if it’s expensive.
An emergency personal loan for bad credit will usually come with the costs and fees typical of any personal loan—origination fees, interest, and late payment fees. But those fees are likely to be higher than those offered to a person with good credit who can take some time to shop around.
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Upstart, one of the lenders we researched, says it can offer loans to borrowers with credit scores as low as 300, provided there are no adverse entries in their credit histories. Other lenders we looked at require credit scores as low as 580 or 560. Those scores are considered “fair” (580) or “poor” (560).
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Investopedia researched 59 lenders to find the best emergency loan lenders you see above. While we write individual reviews for many companies, we do not always write reviews for companies we would not recommend. Below are the companies we researched along with links to individual company reviews to help you learn more before making a decision:
Achieve, Affinity Federal Credit Union, Alliant Credit Union, American Express, Avant, Axo, Bethpage Federal Credit Union, BHG Financial, Blaze Credit Union, Blue Federal Credit Union, Boeing Employees’ Credit Union, Citibank, Connexus Credit Union, Discover, ENT Credit Union, Fig Loans, First Tech Federal Credit Union, Greenstate Credit Union, Happy Money, Lake Michigan Credit Union, Laurel Road, LendingClub, LendingPoint, LendingUSA, Liberty Federal Credit Union, LightStream, Mariner, Money Key, Mountain America Credit Union, NASA Federal Credit Union, Navy Federal Credit Union, Netcredit, Old National Bank, OneMain, OppLoans, Patelco Credit Union, PenFed, Personify Financial, PNC Bank, Prosper, Reach Financial, Regions, Reprise, Rocket Loans, Santander, Service Federal Credit Union, SoFi, Summit Credit Union,TD Bank, Teachers Federal Credit Union, Truist, U.S. Bank, Universal Credit, Upgrade, Upstart, USAA, Wells Fargo.
How We Choose the Best Emergency Loans for Bad Credit
To evaluate and rank personal loan providers, we collected and scored over 2,600 data points from 59 lenders, including traditional banks, credit unions, fintechs, and finance companies. We researched and evaluated 45 criteria, such as APRs, loan amounts and terms, fees, customer experience, and more. Research and data collection occurred from July 23 to October 18, 2024.
We organized the 45 criteria into four categories and weighted 26 (involving more than 1,500 data points), using the others for background and editorial richness. We then scored and weighted each criterion to develop our overall star rating for each lender. The categories and their weights for this project are:
- Loan Costs: 30%
- Loan Terms: 22%
- Borrowing Requirements: 24%
- Lender Features: 24%
To maintain the integrity of the data following collection and analysis, Investopedia’s compliance team monitors changes to key details, like interest rates and fees. Compliance team members then update our pages to ensure they are accurate as of the date on the byline.
Learn more about how we evaluate personal loans in our complete methodology.
We reviewed APRs, fees, terms, and more to find the best emergency loans for bad credit.
Joules Garcia / Investopedia
