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How to Get an Emergency Loan with Bad Credit

A loan for emergencies can give you the cash you need in a tough financial circumstance, however, if you have bad credit, you may wonder if you are eligible for the loan.

Bottom line: that yes, you can qualify for an emergency loan even if you have bad credit. However, your options could be restricted. 

If you have less than perfect credit scores, it is common to pay a significant amount in interest rates, which is why it’s essential to shop around to reduce your expenses.

Optional Emergency Loan for people with Poor Credit

If you’ve seen some unexpected expenses arise and you need cash fast, plenty of lenders are willing to lend you money.

In reality, getting a loan secured by bad credit can be slightly more difficult due to the potential risks for lenders. Research shows that those with bad credit scores are more likely to fail than those with good credit scores.

To assist you in starting with your research, below are a few alternative loan suitable for bad credit.

Online Lenders

Some lenders manage all their operations online. Since they don’t have the overhead expenses of having branch locations, they’re typically able to offer more access to loans for bad credit than traditional banks.

However, the repayment terms and interest rates differ greatly between online lenders, and some even charge an annual percentage rate (APRs) of three digits for their short-term loans. 

To stay clear of these costly costs, Green Day Online will show you rate offers from a variety of lenders that that could be a good fit depending on your credit scores.

Unions Credit Unions

Credit unions are not-for-profit institutions that are owned through their membership. Therefore, instead of increasing profits for shareholders of third parties, they use their profits to offer lower rates of interest and fees for their members.

The payday-alternative loans are one consequence of this agreement. The loans are available in size from $200 to $1,000, with a repayment term ranging from 1 month up to 6 months. 

By federal regulations, the maximum interest rate that credit unions can set is 28% which can be lower than other options.

There is a caveat that some credit unions do not offer loans for paydays, and you must be a member of a financial institution that provides them for at least one month before you can apply. 

That’s why the credit union is not a good option for urgent costs unless you’re already an active member of one which offers this kind of loan. If you’re already a member in that situation, it could make a huge difference in dollars.

Lending Circles

A lending circle might be a viable option if you have an organization that is a non-profit or community group in your local area that has these.

This type of lending operates by gathering a group of between six and 12 individuals who alternately receive loans from one another and then paying them back each month. The interest rates are usually meager or even zero.

According to the business, the payment may be reported to National credit report organizations (Green Day Online, TransUnion, and Equifax). It will help you build credit the same way as you would get with a traditional loan.

The only downside is that it takes time to be involved in a lending circle. Also, it’s not a guarantee that you’ll be the first to get loan money that isn’t enough for immediate requirements. If you can time it correctly, it may be the most affordable option.

Credit Card Cash Advance

A cash advance on your credit card is an option if you have an account that permits it, but it shouldn’t be the primary item you consider. 

If you want to request cash advances, you need to take the card to an ATM or a bank branch to determine the amount you’ll need and then provide your PIN.

The cost of cash advances is often high. Contrary to regular purchases using your credit card, There is no grace period. Therefore, the interest begins accruing right away.

Cash advance APRs can be greater than those for purchases. Cash advances are typically charged a fee that could be at least 5% of the amount that you advance.

A final thing to keep in mind: The cash advance limits could be significantly less than your card’s spend limit. You can check your online account or your latest statement, or contact the number printed on the back of the card to discover the limit you have set.

In addition, there are no fixed terms for repayment with credit cards, which means should you not be careful, you may end up with excessive interest for a long time. 

However, a credit card cash advance might be better if the only option is triple-digit APRs for an individual loan (or payday loans).

Cash Advances for Payday Loans

It is generally recommended to stay clear of cash advances when you’re in financial trouble. Payday loans have a hefty interest rate–you are likely to see to pay around 400% and more. Additionally, they generally require full repayment within a couple of weeks.

In most instances, you’ll have alternative alternatives that are less expensive and come with better repayment terms. Payday loans are comparable to loans that are same day which both have high rates of interest. Learn more about same-day loans to discover the options.

How to Prepare for Emergencies : Poor Credit Loans

The idea of taking on debt each time an unexpected expense arises isn’t the best, but at times it’s the only option. When you’ve chosen the best solution for your needs, create plans to pay back the loan as fast as you can. Take some time to plan for the possibility of events.

It’s certainly impossible to determine when an incident will occur again, so the earlier you begin the process, the more effective.

The best method to prepare for unexpected expenses is to create an emergency savings account. You can do this using an existing savings account, and certain banks may allow you to establish an account that is not mixed in with other funds you’ve saved to fund the future.

When you’ve got the account, you should set the goal of putting aside the amount you need each month. Based on your budget, this may not be much, but even a small saving can mean a huge difference if you require it. 

If you have space in your budget to reduce certain discretionary expenses, it might be worthwhile to do so for a short period until you have a security net.

These funds can be used if you are fired, get into medical bills, or require repairs for your home or car.

Credit Building Can Also Help You Prepare

When you’re creating your emergency savings account, make time to figure out what you have to take to improve your credit score. Begin by examining your rating and credit history to see the state of your credit and what areas require attention.

For instance, if you’re behind on certain accounts, Make sure you catch up as fast as you can and make payments on time going forward.

If your debts with credit cards are excessive, try to pay them off. If you’ve made an application for lots of credit lately, you should consider taking breaks.

When you’ve taken this and many other ways to build your credit and credit score, you’ll have greater options should you ever require money to cover an emergency or anything else.


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