Hardship Loans for Bad Credit Borrowers

• Medical bills

• Major car repairs

• Unexpected vet bills

• Dental work

• Home repair

• Everyday bills

• Last minute travel

• Funeral expenses

Qualifying for a hardship loan depends on your credit score, income, and overall financial situation. Some lenders like credit unions and online lenders accept borrowers with bad credit or no credit. If you have no income, it may be harder to qualify, but low-income loans are available. You’ll also generally need to prove that you’re facing genuine financial hardship to be eligible. 

• Overview. Upstart is an online lending platform that connects borrowers with banks and credit unions. They use artificial intelligence and non-traditional data like education and work experience to evaluate applicants, so it’s available to those with no credit or bad credit. Upstart operates in all 50 states and funds in 1 business day.

• Features. Loan amounts from $1,000 to $50,000 with APRs from 7.80% to 35.99%. Minimum credit score of 300 and minimum income of $12,000 per year. Loan terms 3, 5, or 7 years and 0% to 12% origination fee.

• Overview. Upgrade is an online direct lender offering personal loans nationwide for all credit types. Fast application process and flexible loan terms.

• Features. Loan amounts from $1,000 to $50,000 with APRs from 9.99% to 35.99%. Loan terms are 24 to 84 months and the minimum credit score is 580. Must be a U.S. citizen or permanent resident with a verifiable bank account.

• Overview. Avant is a direct lender that offers personal loans online and serves people with poor to fair credit. Avant is available in all states except a few. They are known for fast funding and flexible loan amounts, so it’s an option for those with imperfect credit history.

• Features. Avant offers personal loans from $2,000 to $35,000 with APRs from 9.95% to 35.99%. Loan terms are 24 to 60 months. Avant charges an administration fee of up to 9.99% but no early payoff penalty. Poor or fair credit applicants can qualify for and soft credit check for prequalification. The loan process is quick and funding is often the next business day, but they don’t allow co-signers or direct payments to creditors for debt consolidation.

The federal government offers several food assistance programs for individuals and families in financial hardship. The Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, helps eligible individuals pay for groceries using a benefit card at participating stores. Other programs like the National School Lunch Program offer free or discounted meals to school children and the Women, Infants, and Children (WIC) Program helps mothers and young children with access to healthy food and nutrition counseling. There is also the Commodity Supplemental Food Program for senior citizens, offering monthly food packages to ensure their nutritional needs are met.

For those struggling to pay for housing, there are government programs that can help. Public Housing offers low-cost rental homes for families, seniors, and individuals with disabilities. The Housing Choice Voucher Program (formerly Section 8) helps low-income families rent in the private market. The Low Income Home Energy Assistance Program (LIHEAP) helps people with limited income pay for heating and cooling costs and provides home improvements to reduce energy bills.

The government offers medical programs to help individuals and families with healthcare costs. Medicaid provides free or reduced-cost healthcare for low-income individuals, and the Children’s Health Insurance Program (CHIP) covers children from families who earn too much to qualify for Medicaid but still struggle with healthcare costs. Both programs have income and state-specific eligibility requirements.

There are also financial programs for individuals in hardship. Temporary Assistance for Needy Families (TANF), or welfare, offers cash assistance, job training, and childcare for low-income families. Supplemental Security Income (SSI) provides monthly payments to senior citizens and individuals with disabilities who have limited income and resources. These programs can be a lifesaver for those in need.

A 401(k) hardship withdrawal lets you access your retirement savings for qualifying expenses like medical bills, and tuition or to avoid eviction. You don’t have to repay the withdrawn amount, and it won’t affect your credit score, but it’s taxed as ordinary income and may incur a 10% penalty if you’re under 59. This will also reduce your retirement savings. To apply, contact your plan administrator to see if your situation qualifies.

Borrowing from a friend or family member can be a quick and easy option. This type of loan is often interest-free and may let you borrow more than a traditional lender would approve. Since it’s not a credit check, poor credit or recent loss of income won’t necessarily disqualify you. However, nonpayment could strain your relationship, and loans over $18,000 may have tax implications. While this won’t build your credit score, it also won’t be a hard credit inquiry. To set clear expectations, it’s important to create a written agreement that outlines the loan amount, repayment terms, and any interest rate.

Home equity loans and HELOCs let you borrow against your home’s equity. A home equity loan is a fixed-rate lump sum and a HELOC is a variable-rate credit line. Both can be used for expenses like medical bills or debt consolidation, often with lower interest rates than credit cards or personal loans. If used for home repairs, the interest may be tax-deductible.

These loans require a 620 credit score and a home value that exceeds the mortgage balance. They carry the risk of foreclosure if not repaid, and repayment terms can last decades. Be aware that falling home values could leave you owing more than the property’s worth.

Buy Now, Pay Later apps like Affirm and Afterpay let you split a big purchase into smaller, more manageable payments. The most common plan is the pay-in-four model, which breaks the cost into 4 equal payments: 25% at checkout and 3 biweekly payments to follow. These plans don’t usually involve interest but some providers charge fees for late or rescheduled payments.

To use a buy now, pay later option, simply select it at checkout. The app may ask for basic information and sometimes perform a soft credit pull. Approval is usually based on your borrowing history with the app and the funds available on your debit card.

A credit card cash advance lets you withdraw cash up to your card’s cash advance limit. It is quick and requires no approval, but it comes with high costs. You’ll pay a 3-5% fee and a higher interest rate than regular purchases. Interest starts accruing immediately, and cash advances count towards your total credit usage, which can affect your credit score. To get one, check your eligibility and limits, then withdraw at an ATM with a PIN or through a bank that supports your card’s payment network.