Best Online Cash Advance Loans for Bad Credit
You can get approved for a payday loan with bad credit, as many lenders that offer payday loans and other types of cash advances rely on factors besides your credit score to approve you. However, these types of loans typically come with high interest rates and costly fees, so it's important to fully understand the repayment terms before you apply.
The 7 Best Cash Advance Loans and Credit Card Advances for Bad Credit
Fortunately, a bad credit score doesn't have to hold you back when it comes to getting a loan. There are a number of reputable companies that offer cash advance loans and credit card advances to borrowers with less than perfect credit.
MoneyMutual does not fund or service loans itself. Instead, it connects borrowers with a network of lenders willing to work with people who have bad credit or other factors that might otherwise stop them from getting a loan through more traditional means.
While some borrowers might be able to get up to $2,500 through the MoneyMutual network, you're unlikely to qualify for this big of a loan amount if you're a first-time borrower or you have very poor credit. However, many borrowers in online reviews say they qualified for payday loans in the $1,000 range.
One of the main benefits of using a site like MoneyMutual being able to submit a single application to connect with multiple lenders. This gives you the ability to compare loan offers so you can find the best deal.
To apply, you must receive at least $800 per month in income, be at least 18 years old, and maintain an active checking account. MoneyMutual is a member of the Online Lenders Alliance (OLA), which requires cash advance and payday lenders to adhere to ethical industry standards.
CashUSA.com is a network of lenders that offer short-term loans, personal loans, installment loans, and peer-to-peer loans to people with bad credit. Like other loan networks, CashUSA.com does not offer or service loans itself.
If bad credit has stopped you from getting a loan in the past, you might be able to qualify with a lender in the CashUSA.com network, as many of the lenders offer tribal loans. While Native American tribal loans are subject to federal regulation, they aren't regulated by state laws, which means they aren't required to cap interest rates like other kinds of lenders.
Borrowers can get a loan ranging from $500 to $10,000, although people with poor credit are less likely to qualify for a higher loan amount. To qualify, you must meet the following criteria:
- At least 18 years old
- Employed for the past 90 days, earning a minimum of $1,000 a month
- Be a U.S. citizen or permanent resident
- Have a valid checking account
- Have a working email address
- Have work and home phone numbers
In addition to these criteria, you may need to provide other information depending on what each individual lender requires.
As the name suggests, BadCreditLoans.com offers lending options to people with less than stellar credit. Like other loan marketplaces or aggregators, it connects borrowers with a network of lenders rather than servicing or funding loans itself.
Interest rates range between 5.99% and 35.99%, and you can borrow up to $5,000 depending on your creditworthiness. It's free to apply, and repayment terms go from 90 days to 36 months.
To apply, borrowers must be at least 18 years old, a U.S. citizen or permanent resident, have a checking account, a valid phone number and email address, and proof of income or employment.
PersonalLoans.com is another loan marketplace that connects borrowers with bad credit with a network of flexible lenders. Unlike many of its competitors, however, it allows loan applicants to request up to $35,000, which is considerably higher than most lenders.
According to PersonalLoans.com, the majority of its lenders offer interest rates ranging from 5.99% to 35.99%, with repayment terms ranging from 90 days to 72 months.
#5. Surge Mastercard
Credit cards offer another way to get a cash advance, and they can be a good alternative to payday loans or installment loans when you need quick access to emergency funds.
The Surge Mastercard from Continental Finance gives cardholders access to a credit limit ranging from $300 to $750. Cardholders who use their account responsibly may also qualify for a credit limit increase after six months.
Continental Finance reports to all three major credit bureaus, which means you can use your Surge Mastercard to help build good credit. Cardholders who sign up for electronic statements also get access to their credit score for free.
On the downside, the Surge Mastercard comes with a broad menu of fees. In addition to an annual percentage rate (APR) that can top 29.99%, the annual fee ranges between $75 and $99, and the monthly fee can be as high as $10 per month.
#6. Indigo Platinum Mastercard Credit Card
The Indigo Platinum Mastercard from Celtic Bank is another credit card that lets cardholders get a cash advance. The card reports to all three credit bureaus, making it a good option for people who need to repair their credit.
However, those with bad credit will probably end up paying an annual fee, which can be $59 or $99 depending on your creditworthiness. This fee drops to $75 the first year you own the card.
With a maximum credit limit of $300, this probably isn't the best option if you need a larger loan. And at 29.90%, the cash advance interest rate is among the highest out there.
#7. PayPal Prepaid Mastercard
The PayPal Prepaid Mastercard is a reloadable debit card that links to your PayPal account, letting you access funds in your account. While this isn't a credit card, it does give you the ability to earn cash back when you use your card.
Because the PayPal Prepaid Mastercard also offers direct deposit, you can receive cash faster through your PayPal account than you would via a paper check.
Keep in mind, however, that this is not a credit card, and it doesn't offer cash advances in the usual sense. On the other hand, if you're a frequent PayPal user and often receive payment through your PayPal account, it might be worth opening a card as a way of getting immediate access to cash.
What is a Cash Advance Loan and How Do They Work?
A cash advance is a short-term loan meant to be repaid relatively quickly — often by your next payday. You might also see them referred to as payday loans or no-credit-check loans, and some lenders may also advertise "guaranteed approval" loans even though there is really no such thing.
The drawback of these loans is that they generally come riddled with fees and high interest rates. If you're not careful, you can become dependent on cash advance loans as a constant source of funding, trapping yourself in a spiral of debt.
Cash advance loans work by letting you borrow against a future payday. When you take out this type of loan, you usually give the lender a check for the amount of the loan — or authorize the lender to withdraw money from your bank account.
When you get paid — or when the loan comes due — you either pay the lender back or they cash your check or debit money from your account. Because these types of loans often come with extremely high interest rates, it's quite common for people to end up taking out a string of cash advance or payday loans as they try to catch up with what they owe.
How to Apply for a Cash Advance Loan with a Bad Credit Score
The process for getting a cash advance loan is fairly straightforward, especially if you're using an online lender. Whether you apply online or in person, you must fill out an application and submit it.
If you're approved for a cash advance loan, you receive your funds right away, less any fees the lender deducts from your loan amount. If you apply in person, the lender will typically ask you to write a check for your loan amount, which the lender will cash on your next payday.
Lenders that offer cash advance loans online usually require borrowers to provide their bank account information, as well as authorize the lender to directly debit their account. When the loan comes due, the lender can automatically withdraw its money.
Pros vs. Cons: Bad Credit Cash Advance Loans
There are pros and cons to using cash advance loans. There are far more drawbacks than advantages, however, so it's important to look for alternative sources of funding if you need to borrow money.
However, that's not to say cash advance loans aren't appropriate in some cases. If you need a quick infusion of cash to cover an emergency, here are some reasons why you might want to consider a cash advance loan.
- Easy to get - Generally, it's easy to qualify for a cash advance loan, even if you have bad credit. As long as you bring in a minimum amount of income each month, you shouldn't have a hard time qualifying, as many payday and cash advance lenders don't require a credit check.
- Apply online - There are a number of reputable online cash advance lenders. This gives more people access to loan funds, as there is no need to restrict your search to a lender in your immediate area.
- Build credit - Some cash advance lenders report your payments to the three major credit bureaus. This gives borrowers with bad credit a chance to rebuild their credit score by making their payments on time.
Unfortunately, cash advance loans also come with a number of drawbacks. Before you borrow, here are some cons you should know about.
- High interest rates - Cash advance loans are known for having high interest rates, with some soaring as high as the triple digits. In fact, many states have enacted outright bans on payday loans and cash advance loans to protect consumers from usurious interest.
- Easy to fall into a cycle of debt - For some people, cash advance loans become a habit. In some cases, cash advance lenders offer borrowers a new loan when a borrower comes up short and can't repay the first loan. The problem is the lender simply rolls the outstanding balance and all the old fees into the new loan, saddling the borrower with even more debt. According to a report from the Consumer Finance Protection Bureau, a typical cash advance borrower refinances a cash advance loan nine times in a 12-month period, paying an average of $458 in fees.
- Not always good for credit building - While some cash advance lenders report borrower payment activity to the credit bureaus, not all of them do. If you're hoping to use your loan to boost your credit score, it's important to confirm whether the lender reports payment activity to the credit bureaus.
Cash Advance Loan vs. Credit Card Cash Advance
Cash advance loans and credit card cash advances share a lot of similarities, but there are important differences. Namely, most credit card issuers report to the credit bureaus, and state and federal laws make it difficult for credit card companies to charge extravagant interest rates.
Cash Advance Loans
With a cash advance loan or payday loan, you get charged up front, and the fees for these types of loans can be quite high. To make them more accessible, many cash advance lenders take the fee out of the loan amount, which reduces the total amount you get in your pocket.
To ensure you don't default on the loan, the lender will either require access to your bank account or ask you to write a check dated to your next payday. The interest rate for cash advance and payday loans can be extremely high, with some lenders charging 400% interest or higher.
Cash advance loans like this aren't available everywhere. Some states have put consumer protection laws in place to cap interest rates, while other states have outlawed cash advance and payday loans entirely.
Credit Card Cash Advance
A credit card cash advance is an advance of cash against your credit limit. While most credit card companies charge a fee for cash advances, they tend to be much more reasonable than fees associated with cash advances from payday lenders.
However, most credit card issuers also start charging interest on a cash advance right away, eliminating the grace period you typically get on regular purchases. Likewise, you will probably pay a higher interest rate on a credit card cash advance compared to your rate for everyday purchases.
A credit card cash advance can also lower your credit score by affecting your credit utilization ratio. If you max out your credit card with a cash advance, you reduce your available credit, which can do serious damage to your score.
Tips for Using Cash Advance Loans Responsibly
Cash advance loans come with high fees and even higher interest rates, so it's usually best to look for alternative sources of funding. If you must take out a cash advance, however, it's important to do so responsibly.
1. Check your credit score before you apply
While many online cash advance loans don't require a credit check, some do, and the majority of lenders will do a hard pull of your credit before approving you for a loan. If you apply too many times in a short period of time, all these hard pulls can lower your credit score, making it even harder for you to qualify for a loan.
You can increase your chances of getting approved by knowing your score in advance. You should also make sure you meet all the other criteria, including steady employment and income requirements.
2. Make sure you can repay the loan
Don't take out a loan if you're not certain you can pay it back on time. If you're already mired in debt, the last thing you want to do is take on more.
Keep in mind that cash advance and payday loans are among the most expensive types of loans you can get. When your finances are in bad shape, it's generally a bad idea to take out a short-term, high-interest loan.
3. Shop around for the best deal
Be willing to compare loans to find the one that offers the most favorable rates and terms. This is where a loan marketplace or aggregator can be helpful, as it lets you receive loan offers from multiple lenders without hurting your credit score.
With a loan marketplace, you submit a single application and receive offers from lenders willing to work with you based on your preliminary information. If you decide to pursue an offer, you usually have to submit additional info, and the lender will typically pull your full credit file.
4. Only borrow for a good reason
Before you take out a cash advance loan, ask yourself if you're borrowing for a legitimate reason. Do you need the money to pay a mechanic to keep your car on the road, or are you borrowing to finance a weekend getaway with friends?
In other words, reserve cash advance loans for true emergencies, like medical treatment, a flooded basement, or a blown tire. Avoid using expensive cash advance loans for things you can probably go without.
5. Only borrow what you need
Just because a lender is willing to offer you more money doesn't mean you should accept a higher loan amount. While it might be nice to have some extra cash in your bank account, remember that you'll have to pay it back eventually.
Not only do you increase your chance of getting approved by applying for a smaller amount, but you reduce the likelihood that you will default on the loan or fall behind on your payments. You'll also pay less interest, which can help you stay out of debt.
6. Consider alternatives
Cash advance loans should be a last resort for emergency funds. If possible, get money through other means, such as a personal loan from a friend or a more affordable installment loan from your bank.
Online cash advance loans can be a lifesaver when you have bad credit and need quick funds to cover an emergency expense. Because they come with high fees and interest rates, however, it's important to make sure you understand the repayment terms and conditions before you apply.
About the Author
Mike is a recognized credit expert and founder of Credit Takeoff. His credit advice has been featured in CNBC, Investopedia, CreditCards.com, Bankrate, Huffpost, The Simple Dollar, Reader's Digest, LendingTree, and Quickbooks. Read more.