6 Types of Online Loans for People with Bad Credit

It’s not hard to figure out why online loans appeal to many people nowadays. The benefits that borrowers get from them are different from that of traditional loans. For instance, applying for online loans is no hassle since the application can be done without going to the lender’s office. It’s fast and simple! 

Another thing that people love about online loans is the lenient credit requirements. It’s possible to borrow money despite the borrower having a bad credit history. If you want to get the loan, the lender will only determine if you have a stable income. 

You can also find different types of online loans for people with bad credit that will suit your financial situation. Here’s a list of online loans that you should consider if you have bad credit. 

Online Personal Loans


Online personal loans are useful for every type of purchase. It can be used to finance a car repair or pay off multiple debts. You can also pay back what you owe in monthly installments, which is more advantageous compared to lump-sum repayment. 

In contrast to payday loans, online personal loans have lower interest rates. Just make sure to find a good lender for this type of financing online. Moreover, be wary of the extra fees associated with this loan. Typically, there are origination fees that you have to pay to the lender for processing the loan.

Yes, it’s common to find online personal loans without stringent credit checks. However, not all online personal loans are like this. There are still lenders who will require you to have a good credit score before you can borrow. 

Online Payday Loans

Many people see online payday loans in either a positive or negative light. Those who criticize online payday loans assert that online lending companies charge too much interest on their payday loans. 

Some online lending companies indeed charge exorbitant rates on the payday loans they lend to borrowers. But not all of them do these predatory practices. So, you should make sure that the lender has an excellent track record before sending your loan application. 

In contrast to the criticism of online payday loans, many borrowers commend this type of financing because it’s highly accessible. If you need money fast, you can apply for this loan online with less hassle. Most payday lenders also cater to borrowers with poor credit scores. 

In the United States, there are cities that impose a limit of 36% for annual percentage rates of online payday loans. Also, you can’t borrow more than the $1,000 principal amount to ensure that you won’t have a hard time repaying the loan for a short period of time. 

Cash Advances

Credit card companies offer cash advances to people who want to borrow money. Through this program, cardholders can borrow cash via ATM or face-to-face bank transactions. 


One advantage of cash advances is that you can use the money for whatever purposes, and you can ensure to pay what you owe through a repayment plan. If you want to avail of a cash advance, go to your credit card provider’s website to enroll for this type of financing. 

Guarantor Loans

Don’t worry too much if you have a low credit score and you need to borrow money. There’s a solution to your problem: guarantor loans. This type of loan enables you to borrow cash through the help of a guarantor who has a good credit score. 

While this loan sounds like a good option to people with bad credit, the catch with it is that you have to find and convince someone to serve as your guarantor. Now, that’s not an easy feat and you need to have some luck with this endeavor. But you can ask friends and relatives to act as your guarantor for the loan. 

Online Small Business Loans

Do you need some funding for your business operation? If yes, you should opt for an online small business loan. This online loan differs from that offered by banks since you can qualify for it even with a not-so-good credit rating. It’s also possible to avail of a low interest rate if your business is promising. 

P2P Loans

P2P or peer-to-peer loans are also making waves in the world of online financing. This loan enables you to borrow money from someone who is in a peer-to-peer network. Unlike credit unions and banks, you won’t have to go through a strict credit evaluation when you apply for this loan. You can also avail of a low-interest rate loan through the network. 


Now you know the six types of online loans that you can get if you have bad credit. If you badly need cash and you have a low credit score, you can try applying for a P2P loan, guarantor loan, online payday loan, online small business loan, online personal loan, or cash advance.

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