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Best emergency loans for bad credit in April 2022

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An emergency loan is a good option for people with poor credit who need money fast and don’t want to turn to payday or car title loans. Rates and fees are generally better, and borrowers can now choose from many lenders to find the best deal.

What is an emergency loan?

An emergency loan is a personal loan intended to cover large or unexpected expenses. Most lenders allow almost all types of emergency use. When selecting an emergency loan lender, it is essential to carefully consider rates, terms and fees to keep borrowing as affordable as possible.

What are the best emergency lenders for people with bad credit?

Borrowing with bad credit is never cheap, but each of the following lenders offers something that borrowers with bad credit may find beneficial.

1. SeedFi

  • Ideal for borrowing free of charge
  • APR between 7.42% and 29.99%

Insight

Except for the late fees, SeedFi has no setup fees or other charges. Late fees are put into the borrower’s savings account, which is included with the loan. Late fees accrue to the borrower after depositing into a SeedFi savings account if the loan is repaid in full.

Advantages

Although an emergency loan may sometimes be necessary, it can be a slippery slope and make a bad credit situation worse. With SeedFi, the borrowed amount is split between the loan and a savings account. The savings account serves as collateral. Once the loan is repaid in full, the borrower receives the money in the savings account.

SeedFi reports payouts to all three major credit bureausallowing responsible borrowers to rebuild their credit.

The inconvenients

Because part of the loan is paid into a savings account that cannot be accessed until the emergency loan is repaid, some borrowers may not get enough of what they borrowed to meet their emergency needs. Payment schedules are tailored to customer pay cycles. This means that money comes out of each paycheck for loan repayment.

2. Reached

  • Ideal for low credit borrowers
  • APR between 3.09% and 35.99%

Insight

Upstart’s minimum credit score requirement is only 300. Borrowers may need to meet other qualifications. Upstart also considers those with insufficient credit.

Advantages

Upstart considers educational background and earning potential. This can help young borrowers who have little credit but higher earning potential.

The inconvenients

Upstart considers that the candidate debt to income ratio, which may make some potential borrowers ineligible. Borrowers cannot have gone bankrupt within the last 12 months. Borrowers must be employed or have full-time employment commencing within six months or another source of income to qualify.

3. Upgrade

  • Ideal for long repayment terms
  • APR between 5.94% and 35.97%

Insight

The upgrade is ideal for those who need to borrow a larger amount and will need longer repayment terms. Some borrowers can qualify for a loan of up to $50,000 and a loan term of up to 84 months.

Advantages

Borrowers who are ineligible for an upgrade emergency loan may qualify for a secured emergency loan through automatic cash refinancing. An automatic cash refinance can help some borrowers get a better rate than an unsecured emergency loan.

The inconvenients

To get the lowest rates, borrowers must sign up for autopay. Some may be required to repay some of the existing debt directly with the emergency loan, limiting the funds available for emergency use.

The upgrade has high setup fees which vary between 2.9% and 8%.

4.OneMain Financial

  • Ideal for borrowers with co-applicants
  • APR between 18% and 35.99%

Insight

Very few emergency lenders allow co-applicants. This may help some borrowers qualify who might not otherwise.

Advantages

OneMain Financial offers 24, 36, 48 and 60 month terms. It also has a secured loan option.

The inconvenients

Origination fees can be high – for some borrowers they can be up to 10% of the loan amount. The maximum loan amount is $20,000.

5. Rocket Loans

  • Ideal for same day funds
  • APR between 5.97% and 29.99%

Insight

For borrowers who need money immediately, Rocket Loans can obtain funds for some the same day, depending on the bank receiving the funds. In most cases, funds are available within days.

Advantages

Rocket’s minimum credit score requirement is 580. Other factors will also determine eligibility. Borrowers who choose automatic payment benefit from a rate reduction.

The inconvenients

Rocket has an origination fee of 1% to 6% charged with each loan. Loan term options are limited to 36 months or 60 months.

Good to know

An origination fee is charged by the lender when processing a loan. A 10% origination fee means that the borrower only receives 90% of the borrowed amount. Borrowings should avoid high origination fees, if possible.

Final grip

Bad credit emergency loans have allowed borrowers who were previously limited to car titles and payday loans to get the necessary money. Most borrowers with bad credit should be able to find a loan option they qualify for. They might just not be eligible enough, and the rates and fees might be high.

Borrowers should carefully compare options to find the best possible loan terms and rates. Secured loan options and auto-pay enrollment can help some borrowers get a better rate.

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About the Author

Andrea Norris has worked in the web publishing industry for 15 years, both as a content contributor and editor specializing in topics related to personal finance, frugal living, home and automotive . She writes short and long content and is well trained in SEO keyword research and writing.