Low-Income Loans: Choose A Loan With The Best Terms

Living on a tight budget makes you more vulnerable to financial troubles. People who struggle to make ends meet usually don’t have an emergency fund to turn to if an urgent need arises. However, options exist.

Although most financial institutions set certain minimum income requirements, there are lenders that help borrowers with low income and bad credit. Below are the products available.

Where to Get the Best Low-Income Loans

EST.APR

5.99% – 35.99%

LOAN AMOUNT

$1k – $50k

LOAN TERM

12 – 84 months

MIN CREDIT SCORE

300

SEE DETAILS

Known qualification requirements

• Be at least 18 years old
• Prove your US citizenship or permanent residence
• Provide your bank account information
• Show your monthly income by providing pay stubs, tax forms, or bank statements
• Provide an active email address and phone number

Fees

• Origination fees, prepayment penalties, or other fees may be applicable

Pros

• Prequalification for multiple personal loans on one platforms
• Low minimum interest rates
• Fast funding (same-day direct deposit may be available)

Cons

• High maximum interest rates
• Extra fees may be applied
• The company’s partners may perform a hard credit check
• Data privacy concerns

Time to receive funds

One business day (same-day funding available)

WHO IT’S FOR

Borrowers with bad credit scores who want to consolidate debt or cover other significant expenses.

Overview

LendingTre­e serves as a handy platform for seeking personal loans. It allows borrowers to explore a variety of loan offe­rs in one place. Many lenders that partner with LendingTree can provide loans swiftly. However, borrowers with bad credit scores typically get high interest rates.

Why we like it

LendingTre­e has accreditation from the Be­tter Business Bureau, a non-profit group dedicated to customer safety and trust. The BBB rates LendingTree­ as A+, a symbol of excellence­. The BBB’s decisions are base­d on how a company reacts to customer gripes, truth in marke­ting, and openness about company procedure­s.

Lender perks

• The ability to compare multiple loan offers in one place
• Loan funds in one business day

EST.APR

9.99% – 35.99%

LOAN AMOUNT

$1k – $50k

LOAN TERM

24 – 84 months

MIN CREDIT SCORE

None

SEE DETAILS

Known qualification requirements

• Be a U.S. citizen, a permanent resident, or living in the U.S. on a valid visa
• Be at least 18 years old (19 in Alabama and some other states)
• Give a working email address
• Provide valid bank account details
• Confirm a sufficient monthly income to cover your loan payments

Fees

• Origination fees: 1.85% to 9.99%
• Late payment fees: $10
• Non-sufficient funds fees: $10 per payment returned

Pros

• No prepayment penalties
• Multiple rate discounts
• Next-day funding
• The due date may be changed
• Direct payments for debt consolidation

Cons

• APRs may be high
• Origination fees are charged
• Late fees may be applied

Time to receive funds

As soon as one business day after clearing verification

WHO IT’S FOR

Fair-credit borrowers who need the money quickly

Overview

Upgrade is an online financial service that offers up to $50,000 loans to borrowers with good to fair credit. It provides several interest rate reductions and allows you to add a co-applicant or collateral to your application. Choose it if you need money quickly and are not concerned about relatively high interest rates.

Why we like it

Upgrade offers convenient maximum and minimum loan amounts along with flexible repayment terms. It also accepts fair credit borrowers and provides several interest rate discounts.

Lender perks

• Rate discounts for auto pay, direct payment, and reward checking
• Allows to add a co-applicant
• Mobile app for managing your loan

EST.APR

8.99% – 29.99%

LOAN AMOUNT

$2k – $45k

LOAN TERM

36 – 60 months

MIN CREDIT SCORE

640

SEE DETAILS

Known qualification requirements

• Be at least 18 years old
• Prove your US citizenship or permanent residence
• Provide your bank account information
• Show your monthly income by providing pay stubs, tax forms, or bank statements
• Have fair credit (at least 640)
• Provide an active email address and phone number

Fees

• Origination fees of up to 9%
• $15 late fee
• $15 NSF fee

Pros

• Low annual percentage rate
• No prepayment penalties
• Wide range of available loan amounts
• Same-day funding under some circumstances
• Accessible for fair credit borrowers

Cons

• High origination fee (up to 9%)
• Hard credit checks when you select your loan to move forward
• No cosigners are allowed for joint loans
• It is not available in all states
• Limited repayment options set at either 36 or 60 months

Time to receive funds

One business day (same-day funding available)

WHO IT’S FOR

Fair credit borrowers who need to cover various personal needs

Overview

Rocket Loans is a financial platform that allows bad credit borrowers to get personal loans with flexible repayment terms. The potential same-day funding is its main advantage and there is only a soft credit check performed during the prequalification process.

Why we like it

Rocket Loans has low APRs and no hidden fees. Also, consumers may apply earlier in the morning to receive the personal loan by the end of the same day.

Lender perks

• Easy loan application process
• Fast funding
• Low interest rates

EST.APR

11.72% – 35.99%

LOAN AMOUNT

$5k – $40k

LOAN TERM

2 – 5 years

MIN CREDIT SCORE

640

SEE DETAILS

Known qualification requirements

• Your driver’s license or passport;
• Be at least 18 years old;
• Recent pay stubs or your last tax return;
• A fresh bank statement;
• Valid email address and phone number.

Fees

• Potential origination fee;
• No application or late fees.

Pros

• Low APR;
• Monthly payments to creditors;
• Free checking of credit score.

Cons

• Limited loan purposes;
• Potential origination fee;
• Funding in 3 to 6 business days.

Time to receive funds

Three to six business days.

WHO IT’S FOR

Fair or good credit borrowers who want to make a credit card debt consolidation.

Overview

Happy Money, a company focused on financial health, provides loans for debt consolidation. They work with lenders insured by FDIC and NCUA. Happy Mone­y offers its users ways to control their money and debts better. Added to these are quarterly catch-ups during the first year for any que­ries or worries.

Why we like it

Eligible applicants can choose the most suitable plan for their needs. Existing clients can use tools for managing their finances. Happy Money re­frains from adding application and overdue payment charge­s to their clients’ loans.

Lender perks

• Free access to credit score;
• No hard credit check during the prequalification;
• Low APR.

EST.APR

8.99% – 29.99%

LOAN AMOUNT

$5k – $50k

LOAN TERM

24 – 60 months

MIN CREDIT SCORE

620

SEE DETAILS

Known qualification requirements

• You need a credit score­ of at least 620
• Provide proof of income
• Specify your Social Security number
• Provide proof of identity
• Specify your employment status

Fees

• Origination fees from 1.99% to 6.99%

Pros

• Discounts on interest rates
• Debt consolidation loans with direct payments to creditors
• Soft credit check at the prequalification stage
• Opportunity to get joint loans

Cons

• Origination fee from 1.99% to 6.99%
• High minimum loan amount
• No mobile app for Android or iOS

Time to receive funds

24 – 72 hours from approval

WHO IT’S FOR

Fair or good credit borrowers who want to cover their credit card debt.

Overview

Achieve­ can approve loans on the same day, but it take­s one to three days to ge­t money. All personal loans offered by the company are subject to origination fees. Achie­ve’s minimum loan is $5,000. It may not work if you ne­ed a small personal loan.

Why we like it

Achieve’s personal loans offer competitive­ rates and adjustable terms. The­se loans could work well for people­ seeking high loan amounts who don’t mind an origination fee­. The service also provides various interest rate discounts.

Lender perks

• Joint loan option
• Discounts on interest rates

EST.APR

7.40% – 35.99%

LOAN AMOUNT

$1k – $50k

LOAN TERM

36 – 60 months

MIN CREDIT SCORE

300

SEE DETAILS

Known qualification requirements

• Be at least 18 years old
• Prove your US citizenship or permanent residence
• Provide your bank account information
• Show your monthly income by providing pay stubs, tax forms, or bank statements
• Provide an active email address and phone number

Fees

• Origination fees up to 12%
• $15 late fee
• $15 NSF fee

Pros

• Quick access to loan funds
• No prepayment penalties
• Flexible monthly payments
• Soft credit check when prequalifying
• Flexible loan amounts

Cons

• Origination fees up to 12%
• High maximum annual percentage rate
• Co-signers aren’t allowed
• Hard credit checks for final approval
• Limited repayment loan terms

Time to receive funds

One business day (same-day funding available)

WHO IT’S FOR

Poor credit borrowers who can’t qualify for traditional personal loans

Overview

Upstart is a financial platform that enables borrowers with low credit to get personal loans with flexible payback options. Its key advantage is same-day funding.

Why we like it

Upstart does not do hard credit checks when you prequalify. In addition, customers can apply in the morning and receive their personal loan by the end of the day.

Lender perks

• Quick funding (same-day deposit available)
• Available to borrowers with poor credit
• Soft credit checks when viewing your rate

EST.APR

7.99% – 24.99%

LOAN AMOUNT

$2,5k – $40k

LOAN TERM

3 – 7 years

MIN CREDIT SCORE

660

SEE DETAILS

Known qualification requirements

• Be at least 18 years old
• Prove your US citizenship or permanent residence
• Provide your bank account information
• Show your monthly income by providing pay stubs, tax forms, or bank statements
• Have fair credit (at least 660)
• Provide an active email address and phone number

Fees

• Late fee of $39

Pros

• Long repayment periods
• Thre­e options for repayment he­lp
• High level of customer satisfaction
• No origination fees
• Free FICO score monitoring tools
• Competitive interest rates

Cons

• Charges a $39 penalty for late­ payments
• Strict eligibility requirements
• No co-borrower permitted

Time to receive funds

One business day (same-day funding available)

WHO IT’S FOR

Borrowers with fair credit scores who want to consolidate debt, renovate home, or make big purchases.

Overview

Discover is more than just a digital bank known for credit cards. It’s also a loan service provide­r. It gives out fixed-rate personal loans up to $40,000 to people nationwide. The company offers flexible repayment terms and reasonable interest rates to borrowers with fair to good credit.

Why we like it

Discover has some of the best rates in the industry. Plus, they charge no origination fees or pre­payment penalties. This means that the overall cost of borrowing is less. If you are in a rush, Discover can transfer funds to you on the next business day.

Lender perks

• Zero origination fees
• No prepayment penalties
• Loan funds in one business day

What Is a Low-Income Loan?

A low-income loan is a personal loan for those who do not meet the strict income requirements of traditional banks. What is considered a low income is determined by the poverty guidelines. The US Department of Health and Human Services states that in 2024, the poverty line for an individual is set at $15,060, while for a family of four it is $31,200. However, traditional lenders may still apply higher minimums.

But low-income personal loans are different. Lenders offering them also take into account your employment history, income stability, credit score, and payment history. Thus, needy borrowers usually find them easier to qualify for.

How to Qualify for Personal Loans for Low Income?

Getting a personal loan with a low income may be difficult. However, even those who live on a tight budget can be approved. Consider the following strategies to improve your eligibility for low-income personal loans:

• Improve your credit. When your income is low, lenders will be more picky about your credit scores. Start with checking your credit reports for mistakes. Request a free annual credit report from each major bureau, review it thoroughly, and ask for correction if there are any inaccuracies. Paying your loans and bills on time will also help you maintain strong credit;
• Keep your debt-to-income ratio low. Aim for a DTI below 40% for better loan prospects. Pay down high-interest debts like credit cards to decrease your DTI and free up money for your potential loan repayments;
• Consider co-signers. A co-signer with a strong income can significantly increase your chances of approval. Choose someone you trust and who understands the responsibility this option involves. Find out more about personal loans with a co-signer.
• Provide collateral. Collateral serves as a back-up plan and makes lenders more willing to lend you money. By providing a pledge, you offer a repayment guarantee that can be repossessed if you fail to make your monthly payments on schedule;
• Pre-qualify before applying. Many lenders offer pre-qualification that reveals estimated loan terms without impacting your credit history. This will help you compare options and give you a better understanding of what to expect;
• Choose the right lender. Search for lenders who have acceptable minimum annual income requirements. Some lenders that work with underprivileged borrowers offer more flexible eligibility criteria and interest rates than others;
• Review loan terms. Don’t just focus on the lowest interest rate. Consider factors like origination fees, repayment terms, and customer service;
• Mention all your income sources. Ask a lender what alternative forms of income it may consider acceptable. The most typical ones are Social Security benefits, pension, alimony, unemployment benefits, and income from self-employment. The more sources you can add to your application, the higher your chances of getting approved;
• Ask for a lower loan amount. A lower amount is easier to repay, especially if you borrow money for a long period. It also results in a lower monthly payment, decreasing the financial burden that a loan puts on your budget;
• Be transparent. Honesty is the key when you communicate with a lender. Keep in mind that they can always check the data you provide and detect fraud.

Get a Personal Loan with Low Income For Your Needs

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Types of Loans Available to Low-Income Borrowers

Knowing your options will help you choose the one that best suits your needs. Here are the most common loan types for low-income borrowers.

Secured Loans

Secured loans are borrowing options that are backed by your valuable assets. It can be your car, home, or even a savings account balance. Collateral provides a repayment guarantee, making borrowers with low incomes seem more reliable to lenders. Secured loans for bad credit also have lower interest rates and larger amounts. However, there’s a risk of losing your pledged asset if you default.

Joint Loans

A joint loan is an option that allows the involvement of two applicants instead of just one. By bringing on a co-applicant with a high income and strong credit, your chances of approval are significantly enhanced. There are two types of co-applicants available: a co-signer or a co-borrower. While a co-borrower shares the same repayment responsibility with you, a co-signer would only be liable if you default. 

Payday Loans

Payday loans are designed for small emergencies. They are available even with poor credit and low income. Payday loans provide small amounts of up to $1,000 that need to be repaid in full within a few weeks. The money can be transferred to you in a matter of hours. However, loans till paycheck come with high fees and interest rates. Their short repayment periods also make them difficult to handle.

Credit Union Loans

Credit unions offer non-profit options with potentially lower interest rates and flexible terms. Instead of making money on their members, they are focused on helping underserved communities. Therefore, they accept borrowers with low incomes. Membership is typically required and might be based on where you live or work.

Pawn Shop Loans

These loans provide immediate cash in exchange for pawning personal belongings. You can get a portion of your asset’s cost for an agreed-upon time without undergoing a credit check or income verification. However, default results in losing your property. Consider them only for critical small needs and explore alternative options first.

Credit-Builder Loans

A credit-builder loan is an option that helps individuals with bad or no credit boost their ratings. It differs significantly from a regular personal loan. This is because you need to make monthly payments before you receive money from a lender.

Here’s how it works. The loan provider opens a savings account and deposits your payments into it. The funds will only be available to you after the repayment period ends. Your FICO score rises each time you pay on schedule as a lender reports your payments to major credit bureaus. Additionally, you build an emergency fund that can then be used toward your financial goals. 

Compare Low-Income Lenders – Factors to Pay Attention to

Here are some key things to focus on when you compare low-income lenders:

• Eligibility criteria. Income requirements vary by lender, so make sure you can meet the criteria set by a particular loan provider;
• Loan amounts. Loan amounts for low-income loans are typically smaller compared to traditional options. Therefore, you need to ensure they can cover your needs;
• Interest rates. The lower the rate, the less you will have to overpay. Also, pay attention to extra fees a lender charges, as they can potentially affect your final loan cost;
• Repayment terms. Repayment terms for low-income loans are typically shorter compared to traditional loans, ranging from a few months to a few years.
• Your ability to repay. Last but not least, be realistic about whether you can repay the loan without worsening your financial situation.

Take a look at our brief overview of lenders observed above:

Low-Income Loan Cost: Rates, Terms & Examples

The cost of your loan is affected by two main factors: an APR and repayment period. The APR is determined by the lenders based on your creditworthiness. The higher your credit score, the lower your interest rate will be.

The repayment period is a parameter you can choose depending on the amount you can comfortably repay on a monthly basis. While a longer loan term results in a lower monthly payment, it also increases the total borrowing cost. 

Here are representative examples for a $10,000 loan:

When choosing the right loan offer, aim for the lowest possible APR while balancing your repayment period between an affordable monthly payment and a reasonable final cost of the loan. Use our loan calculator to weigh the potential loan terms that will suit your situation.

How to Apply for a Low-Income Loan?

Explore the key steps that will help you navigate the application process with confidence:

1. Know your credit. This will help you understand what options you can be eligible for.
2. Pre-qualify from several lenders and compare offers. Pay attention to loan costs, repayment terms, and other conditions.
3. Submit final application. Choose the best offer and attach supporting documents. Keep in mind that final verification usually comes with a hard credit check. Thus, it can temporarily drop your credit score by 5 to 10 points.
4. Access the funds. A low-income personal loan is usually delivered in 1 to 3 business days. 

Keep in mind that responsible repayment should be a priority. Paying timely will help you avoid late fees and potential credit score damage.

Alternatives to Loans for Low Income

Loans for low income are not always the best choice as they may worsen your tight financial situation. Before obtaining a loan, consider the following alternatives:

• Government programs. The government provides various forms of financial aid. It helps needy people with groceries, housing, medical and child care, and daily essentials. Search for the program that meets your needs and check your eligibility;
• Non-profit and charity organizations. Turn to your local non-profit or charity organizations to get much-needed financial support for your basic needs;
• Cash advance apps. These money-borrow tools can help you get up to $250 or $500 toward your next paycheck. They often offer interest-free loans or charge a small subscription fee;
• Side gigs. Find an extra source of income to finance your needs without going into debt.

Why BadCredify

BadCredify is an all-in-one platform that provides you with the information needed to make smart financial choices. We do our best to help people find suitable loan products for various life situations, compare offers from trusted lenders, and choose the option with the most favorable terms available to you on the market.

Our experts also provide practical financial advice, debt management tips, and ultimate guides on various borrowing products. We also create fair and unbiased lender reviews to help you better understand whether the loan provider can meet your current needs. By choosing us, you choose an independent company that strives to help people better navigate their finances. Just fill out one simple form and access your personalized loan offers in minutes.

FAQ

Veronica Lopez

FINANCE WRITER AT BADCREDIFY

Veronica Lopez writes for BadCredify, simplifying economic forces and lending industry processes. Previously, she worked as a freelance writer and contributor.