6 Ways To Get A Loan Without Good Credit (And How You Can Improve It)

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About 16% of Americans have very poor credit, and many more have below-average credit. A low credit score limits your borrowing options, making it difficult to buy a car or a home, finance a car or get a loan for school. While you can take measures to improve your credit, you may need to get a loan before your score goes up.

Fortunately, there are ways to get a loan without good credit. Here are six options for getting a loan without good credit:

1. Title Loans

Title loans near me are one option for getting a loan without good credit. To get a title loan, you use your car as collateral. The lender gives you a loan based on the value of your car, and you keep driving your car while making monthly payments. If you can’t repay the loan, the lender can repossess your car.

Unfortunately, title loans are costly, and you could end up paying much more than the original loan amount in interest and fees.

To qualify for a title loan, you must have full coverage insurance and cannot lease your car. Getting a title loan is quick, and you can usually get the cash you need within 24 hours. Car title loans are best for people who own their car outright and need a small amount of money for a short period of time.

However, if you cannot pay back the loan plus its interest in the near future, consider whether your car is more important to you than the money you need.

2. Payday Loans

A payday loan is a short-term loan with a high-interest rate based on a borrower’s income and credit score. Its principal is based on the borrower’s next paycheck. To qualify for a payday loan, you must show income proof and have an active checking account.

Getting a payday loan is quick, and you can usually get the cash you need within 24 hours. Payday loans are also called cash advances, delayed deposit transactions/checks, or check loans.

Unlike an installment loan repaid in equal monthly payments, a payday loan is usually due in full on your next pay date. If you can’t repay the loan on time, you may have to take another loan to pay off the first one. This is often done by refinancing the loan with another lender. Payday loans are illegal in some states because of their high-interest rates, so check your state’s laws before applying.

If you’re considering taking out a payday loan, understand the costs and risks involved. You could pay much more than the original loan amount if you repeatedly roll over your loan or take out new loans to pay off old ones. Payday loans have also been linked to higher default rates and can trap borrowers in debt cycles. When shopping for a payday lender, here are some essential things to look for:

  • An established business with a physical address
  • A clear explanation of all fees upfront
  • No hidden fees
  • The ability to repay in manageable installments
  • Flexible repayment options
  • A strong Better Business Bureau rating

If you decide to take out a payday loan, read the fine print and ensure you understand all fees and terms before signing any paperwork. Be sure you can afford the payments and will not be extending the loan term needlessly. If you can’t afford them, look for payday loan alternatives.

3. Pawn Shop Loans

A pawn shop loan is a type of collateral loan in which the lender uses the borrower’s personal property as collateral for the loan. The item is stored at the pawn shop until the loan is repaid, at which point the borrower can retrieve the property. 

For example, if you have a gold necklace, you could bring it to a pawn shop and receive a loan for $100. The pawnshop would hold onto your necklace until you repay the $100, plus interest and fees. The pawn shop will sell your necklace to recoup its losses if you don’t repay the loan.

Pawn shop loans are less common than other loans because they require the pawnshop to deem your item valuable enough to offer a loan. It doesn’t matter what your item is worth if they don’t think they can sell it. Pawn shop loans are best for people who have something of value they can use as collateral.

4. Lending Club

Lending Club is one of many online peer-to-peer lending platforms that connects borrowers with investors willing to fund their loans. To qualify for a loan from Lending Club, you must have a fair credit score and a steady income. Loan amounts range from $1000 to $40,000, and terms go from 36 to 60 months.

Lending Club is a good option for people with decent credit who need a loan quickly. One downside of Lending Club is that it charges origination fees ranging from one to six percent of your loan amount. These fees are deducted from the loan proceeds, so factor them into your budget.

5. Credit Cards For Bad Credit

If you don’t need the money immediately, you could consider a credit card for bad credit. These cards can help you rebuild your credit score by reporting your payments to the credit bureaus. You’ll likely have a low credit limit and high-interest rates, but making on-time payments can help you raise your score so you can qualify for better loans in the future.

However, the credit card approval process takes time, so if you need money right away, a credit card for bad credit may not be the best option.

6. Secured Loans

A secured loan is a loan in which the borrower pledges an asset, such as a car, house, or savings account, as collateral. The lender can seize the collateral if the borrower defaults on the loan. Similar to a pawn shop loan, a secured loan allows the borrower to use their assets as collateral to secure a loan.

The main difference is that with a pawnshop loan, the item is sold to repay the debt if you default, while with a secured loan, the lender can seize your asset but won’t sell it.

Secured loans typically have lower interest rates than unsecured loans because they are less risky for lenders. However, borrowers who default on secured loans can lose their collateral, which can be a significant downside. Therefore, before taking out a secured loan, it is important to consider whether you are willing and able to risk losing your collateral if you cannot make your payments.

How To Improve Your Credit Score

Improving your credit score is the best way to ensure that you will be able to qualify for better loans in the future. Here are some tips for improving your credit score:

  • Pay your bills on time
  • Keep your balances low
  • Use credit cards responsibly
  • Don’t close unused accounts
  • Check for errors on your credit report

You can also use cards specifically designed to help you build credit, such as a secured credit card. A few examples of secured credit cards include the Capital One® Secured Mastercard®, the Discover it® Secured Credit Card, and the Wells Fargo Secured Visa® Card.


Various options are available for people who need loans but don’t have good credit. If you need a loan, consider one of the options listed above.