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Kacie Goff

Kacie Goff is a personal finance and insurance writer with over five years of experience covering personal and commercial coverage options. She's also dedicated to besting her brother, a financial advisor, with insider insight into the personal finance industry and spends hours researching the latest rates and regulations.

If you’ve got no credit or bad credit, your loan options will be fairly limited. You might be able to get certain loans — like a smaller auto loan — but you’ll probably be stuck with a much higher interest rate than someone with better credit.

But that’s not your only option for getting financing if you need some cash-in-hand right now. In some cases, you might be able to get a short-term loan that doesn’t even require a credit check. These payday loans for bad credit and no credit can help if you’re in a pinch. But how do they work — and how can you decide if they’re right for you? That’s what we’ll figure out in this article.

What are Bad Credit Payday Loans?

Payday loans are short-term loans that generally have less strict requirements than other types of loans. These loans are usually for smaller dollar amounts — from a few hundred to $1,000 — and are due soon. In fact, they’re called payday loans because you usually need to pay them back by your next payday.

Because these loans are short-term and smaller-dollar, they don’t require the stringent requirements of other types of financing. In fact, you might not even need to get a credit check to get this loan. That’s why payday loans for bad credit or no credit individuals can be such a helpful tool.

Another benefit of a payday loan is that it’s generally unsecured. That means you don’t have to put up any collateral for the loan. While you’d have your home as collateral for a mortgage or your car for an auto loan, you won’t need to risk anything to get this loan.

That said, missing any payments for your payday loan will negatively impact your credit. And if you’ve already got bad credit, you don’t want to dig yourself any deeper there.

All told, a payday loan can help you bridge a cashflow gap — but it’s important that you’re able to pay your loan back by the due date. Only take out this type of loan if you have a plan to pay back your loan amount in full.

What Is Considered Bad Credit?

If you’re looking to get a loan, you’ll want to know your credit score. A better credit score will open up new loan options, including loans with lower interest rates.

But a bad credit score doesn’t necessarily disqualify you from getting a loan. As we’ve mentioned, you have options like payday loans for bad credit.

So, what is bad credit, exactly? It all comes down to a number.

Your credit score is a three-digit number ranging from 300 to 850. The higher your number, the better your credit.

Generally, credit breaks down like this:

  • 800-850: exception credit
  • 740-799: very good credit
  • 670-739: good credit
  • 580-669: fair credit
  • 300-579: bad credit

Basically, if your credit score is 579 or lower, you’ve got bad credit.

You can check your credit score for free at this federally-approved website.

If you check your score and find out you’ve got bad credit, you might be wondering why. Here are the factors that play a role.

Missed Payments

Your payment history is the single biggest factor in determining your credit score. In fact, payment history alone accounts for more than a third of your credit score.

By payment history, we mean a history of on-time or missed payments. The more you make on-time payments on things like credit card bills and loan payments, the better your credit score will be. Each time you miss a payment, though, your score takes a dip.

Defaults and Collections

Whenever you default on a loan — meaning you continually missed payments on it — or any other account of yours goes into collections, your account’s status gets reported to credit bureaus. And this means your credit score takes a serious hit.

Public Records

Certain public records, like bankruptcy or a tax lien, will show up on your credit report, negatively affecting it.

Foreclosure and Repossession

Again, missing car or mortgage payments hurts your score. But continually miss them to the point that your house gets foreclosed on or your car gets repossessed, and your credit score will almost certainly dip into bad territory.

High Credit Utilization

To determine how good you are at managing your money, lenders look at your credit utilization ratio. Credit utilization also accounts for nearly a third of your credit score.

Basically, you never want to be using too much of your available credit. If you do, financial institutions have concerns you’re living beyond your means and bridging the gap with credit.

Aim to use less than 30% of your available credit. So if you have a credit card with a limit of $10,000, don’t keep a balance of more than $3,000 on it.

What Is The Process of Getting a Payday Loan With Bad Credit?

All told, any of the above factors can bring your credit score down to a number lenders technically consider bad.

That said, payday loans for bad credit do exist. If you need a short-term loan, seek out payday loan lenders who don’t perform a credit check before issuing a loan.

But remember, you should never take out a loan you’re not certain you’ll be able to repay. If you miss payments on your loan, you’ll only make your credit score worse. And if you default on the loan, your credit score will be hurt even more.

How Do You Get a Payday Loan With Bad Credit?

More and more payday loan lenders offer loans online. Find a lender you can trust (it pays to do your homework and read reviews about a potential lender before working with them) and go through their application process to get the loan you need.

How To Apply For a Payday Loans With Bad Credit

If you’re interested in getting a payday loan for bad credit individuals, you can start your application online today. Usually, that will mean providing some personal information. Many online payday loan applications take just a few minutes.

Ultimately, payday loans for bad credit are available, but it pays to do your homework and to make sure you have a plan to repay the loan. Also, you can take steps to improve your credit score so you’ll have more financing options in the future.