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Whether you’re facing an emergency expense like a surprise medical bill or renovating your home, chances are you need a loan. But not all loans are created equal—or for the same purpose.

Before you apply for a loan, it’s important to familiarize yourself with the different types of loan options. After all, many different types of loans exist, each suited to a different borrower with a specific financial need. Options include home equity, title, online payday, pawnshop, and personal loans (like debt consolidation or installment loans).

Every loan also comes with its own annual percentage rate (APR), repayment terms, and credit score requirements. Some are available through online lenders, which is convenient if you need a quick, streamlined application process. Others— such as those offered through more traditional credit unions or banks—might require an in-person application.

The good news is that there’s a loan option for nearly anyone, regardless of their financial or credit situation. Whether you need personal loans for bad credit or something else, here are your best options if you need to borrow money.

Home Equity Loans

If you’re a homeowner and have equity in your property, you could qualify for a home equity loan. This type of loan lets you borrow against your home’s equity to pay for things like home improvements or repairs. You could also use the loan for debt consolidation or emergency expenses.

Home equity loans usually have lower interest rates than traditional home improvement loans. However, they might have higher interest than your current mortgage. It all depends on a few factors, such as whether you have a conventional or FHA mortgage loan. The rate could also increase based on the loan amount.

The amount you can borrow depends on your property's loan-to-value (LTV) ratio. Most lenders will let you borrow up to 85% of your LTV ratio. See an example below:

  • You have a home valued at $300,000 and an existing mortgage balance of $200,000.
  • Multiply $300,000 (the value of your home) by 85% (maximum LTV ratio). The result is $255,000.
  • Subtract $255,000 from the current mortgage balance of $200,000. The result is $55,000.
  • You could take out a home equity loan for up to $55,000 (depending on your credit score).

Most home equity loans come with 5 to 30-year repayment terms. The interest rate is usually fixed, meaning you will pay the same amount each month. You may need a 620+ FICO credit score to qualify.

If approved for a home equity loan, you will receive funds in a lump sum. After that, simply make monthly payments until you have repaid the loan in its entirety (principal and interest).

  • Usually come with a lower interest rate than other home repair loans and certain personal loans
  • Straightforward application process with potentially fast funding times
  • Option to borrow a large amount (based on your home equity)
  • Secured by your mortgage, so failure to pay back the loan could put your home at risk
  • Could end up borrowing more than you need and paying more in interest
  • May come with credit, debt, income, or other loan requirements
Title Loans

A title loan is a cash loan secured by your vehicle. These short-term loans are usually easy to get since they use your car as collateral and don’t always require a credit check. However, these bad credit loans may come with higher interest rates than other options—like most installment loans. If you fail to make payments, you could lose the vehicle.

To get a title loan, you’ll need to own your car outright. You can then go to a lender and show them the title as proof of ownership. The lender will appraise your vehicle and, in most cases, offer a loan for between 25% and 50% of your vehicle’s value. The lender will also often take the vehicle’s title until you’ve repaid the loan.

Title loans typically have short repayment terms of about 15 to 30 days. The standard APR on one is around 300%. Some lenders also charge additional fees, like processing or processing fees.

The advantage of title loans is that they can help if you’re facing a difficult financial situation. But they can be expensive, so be aware of these costs before applying.

  • Quick cash loan with low or no credit score requirement
  • Easy loans with a simple application and approval process
  • Access to the funds you need when you need them (sometimes the same day you apply)
  • Interest rates and other financing fees can be extremely high
  • Short repayment terms, especially when compared to other loan options
  • Although you may be able to roll over the loan into a new one, this can come with additional charges
  • The lender can seize your car if you don’t pay off the loan
Best for

This may be an option if you need a bad credit loan quickly and can comfortably repay it (with additional fees and interest) on time. Title loans are also best for borrowers with limited to no credit history who can’t get financing elsewhere.

Payday Loans

Payday loans are short-term, no credit check loans for when you need money now. They’re sometimes called cash advance loans. These loans are generally for borrowers who need emergency cash via a direct lender bad credit loan.

Most payday loans come in small amounts ranging from $500 to $1,000. They also come with high interest rates. In fact, the average payday loan has a 391% APR.

Unlike installment loans, payday loans have very short repayment terms—usually two to four weeks. When you take out a payday loan, you will either write a post-dated check or authorize an account withdrawal for the entire loan amount (plus financing fees). When it comes to qualifying for a payday loan, most lenders have minimal loan requirements. You’ll need to be at least 18 years old. You will also need a valid ID, an active checking account, and a steady source of income.

Although expensive, payday loans can help in niche situations. Most lenders will approve a payday loan application within minutes of receiving it. Once approved, the lender will typically give you the money upfront in cash or check. Similar to small installment loans, you can use a payday loan for minor emergencies.

  • No credit check required
  • Easy application process with same-day or next-day funding
  • No risk of losing an asset
  • Can help in a pinch, such as when a bill is due before you get paid
  • Come with high interest rates and other lender’s fees
  • Short repayment terms can make it difficult to repay on time
  • Some lenders let borrowers roll over or refinance their loans, leading to additional fees and a cycle of debt
Best for

A payday loan might be a good option if you have limited to no credit history and need cash now. With one of these loans, you could pay an unforeseen bill without worrying about a complicated loan application. Make sure you can reliably repay the loan with your next paycheck before applying, though.

Pawnshop Loans

A pawnshop loan is a secured loan—or collateral loan—you can get by exchanging an item for cash. The loan amount usually depends on the value of the item. However, the average pawnshop loan is for just $150. Most pawnshop loans come with short repayment terms of 30 to 60 days. As long as you repay the loan on time, including any financing fees or interest, you’ll get the item back. If you fail to pay, the pawnshop could sell your item.

Most pawnshop loans come with minimal eligibility criteria. All you’ll need to do is bring an item worth something and a valid ID showing you’re at least 18 years of age.

Although it’s generally best to avoid pawnshop loans, there are times when using one could be helpful—or even necessary. But before taking one out, consider a few alternatives. For example, you could apply for a personal line of credit or sell the item for cash rather than pawning it off. Or you could ask friends and family for help.

  • Typically don’t require a credit check, income verification, or bank account
  • Could pawn off items that you aren’t using or don’t need for a small cash loan
  • Even if you lose the item, you won’t have to worry about debt collectors or hurting your credit score
  • Most borrowers—around 85%—pay off their loans on time
  • Pawnshop loans come with 152% APR, on average
  • Failure to repay the loan could mean losing your items
  • Loan terms may be vague
Best for

These no-credit-check loans could be helpful for borrowers with no credit history, limited income, and no bank account. They could also be a good option if you need to cover a small, immediate expense and don’t want to risk damaging your credit.

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Personal Loans

Many types of personal loans exist, including credit-builder, vacation, debt consolidation, and installment loans. Regardless of type, personal loans are either secured or unsecured:

  • Secured personal loans: These require you to put up collateral to get funds for the loan. If you default on payments, the lender could seize the collateral instead. Secured loans are usually easier to get because they are less risky to the lender. This makes them a good option for borrowers needing a personal loan for bad credit.
  • Unsecured personal loans: These loans do not require collateral in exchange for funds. Instead, lenders check your credit score, income, and other factors when deciding whether to lend to you.

Many banks, credit unions, and online lenders offer personal loans. As a borrower, you can use the funds for nearly anything. This includes things like debt consolidation, large purchases, or home improvement.

When you take out a personal loan, you’ll typically have to make monthly installments (payments) on the principal balance (the amount borrowed) and interest. Personal loans can come with either long or short repayment terms,. The term you choose will typically influence your monthly payment amount and how much you pay in interest.

Many personal loan lenders have higher eligibility requirements, especially if you’re applying for an unsecured loan. For example, you might need a minimum credit score—usually at least 560. You might also need to meet specific income and debt-to-income ratio (DTI) requirements.

Personal loans usually come with a fixed APR based on the borrower's credit score. Repayment terms also range from a few months to five or more years. The higher your credit score, the better your terms and rates.

Even though most lenders require a certain credit score, there are also installment loans for bad credit. Some personal loans can even help you build credit, provided you make the monthly payments on time.

  • With good credit, you could qualify for higher loan amounts, better terms, and lower interest rates
  • Quick loans with funds you can use for nearly anything
  • You don’t have to worry about losing collateral
  • Many direct personal loan lenders offer fast cash and fast approval
  • The best interest rates and terms may require good credit
  • Some lenders charge additional fees, such as application, origination, or late fees
Best for

Personal loans are versatile, making them ideal for borrowers who need cash for long-term or immediate purchases. They’re also good for those who need a loan with a fixed interest rate and fixed monthly payments.

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Types of Online Loans

From credit-builder loans to debt consolidation loans to direct lender installment loans, there’s a personal loan for nearly anyone. Although most of these loans work similarly, some have different requirements.

Some lenders offer loans for people with bad credit. Others require a high credit score and a minimum income. You can use a personal loan for nearly anything. For example, you could use the funds to finance furniture, pay for emergency expenses, help with rent or other bills, or even handle taxes. Here are the main types of personal loans available.

Credit-Builder Loans

Credit-builder loans are a type of reverse personal loan.

With a traditional loan, you typically receive the money upfront and repay it over time with interest. But with a credit-builder loan, you’ll need to make fixed payments to a lender until the loan term ends and you’ve reached the agreed-upon amount. At that point, you’ll receive access to the funds. As with traditional personal or installment loans, your monthly payments will typically include interest. Some lenders do not charge interest, though they may charge an upfront fee.

For the duration of the loan, your lender may report your payment activity to the credit bureaus—Experian, TransUnion, and Equifax. This will help you build credit.

Most credit-builder loans have terms ranging from 6 to 24 months. Since the loan is designed to help you establish or repair your credit, you don’t need a minimum credit score to qualify.

Vacation Loan

Some online lenders, banks, and credit unions will require you to state your purpose for taking out a loan. One common reason for using a personal loan is to fund an upcoming vacation or holiday trip.

Vacation loans are generally unsecured personal loans. With one, you can pay for any costs associated with the trip, including hotels, transportation, food, and entertainment.

These loans usually come with fixed monthly payments and repayment terms.

Debt Consolidation Loans

A debt consolidation loan lets you combine several high-interest debts (like other loans) into one simple loan with a single monthly payment and fixed interest rate. This can simplify your finances and make it easier to keep up with—and repay—what you owe.

Typically, debt consolidation loans are unsecured personal loans. However, you could also use a 401(k) loan to consolidate debt.

Debt consolidation loans are best for borrowers who:

  • Have good credit (660+ FICO) and qualify for a lower interest rate than what they’re currently paying on their debts
  • Can get a loan large enough to cover their smaller, high-interest debts
  • Need help managing multiple monthly payments
  • Want to pay down debt faster

You can apply for these personal loans online or in person.

Before taking out a debt consolidation loan, calculate the new interest rate and other fees first. That way, you can determine how much you’ll be spending on the new loan and whether it is worth the cost.

Medical Loans

The purpose of a medical loan is to pay for medical or dental expenses. The time to funding is often quick, but it depends on the lender.

You can get online loans for medical purposes through online direct lenders or some local banks and credit unions. Some healthcare providers also provide these types of loans.

Medical loans are usually unsecured and come with a fixed interest rate and repayment term. To qualify for the best rates and terms, you’ll usually need good credit. However, some lenders offer medical loans for borrowers with bad credit but good income.

Before applying with an outside lender, ask your doctor or medical billing department if they offer in-house financing or repayment plans. If yours does, compare the rates with other lenders to find the best option.

Home Improvement Loans

Like home equity loans, home improvement loans are a good option if you want to repair, renovate, or modernize your home. They may come with higher interest rates than home equity loans. For the most part, they have similar requirements to other personal loans—such as a low DTI ratio, good credit, and verifiable income.

One alternative to home improvement loans is a home equity line of credit (HELOC). A HELOC is an open-ended line of credit that lets you borrow against your home equity over time. HELOCs have a draw period and a repayment period:

  • Draw period: During this time, you can borrow as needed against your home equity up to a certain limit. Many lenders have a maximum draw period of 10 years. You may need to make minimum interest payments on the account.
  • Repayment period: After the draw period is the repayment period. During this time, you’ll need to make regular payments on the principal and interest. The repayment period is often as long as the draw period, though it can be much longer. This period ends when you bring the HELOC balance to zero.

HELOCs typically come with a variable interest rate that can change over time. This means your monthly payments might not always be the same.

Frequently asked questions
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Jora offers two types of loans, depending on your state of residence – installment loans and lines of credit. To see which type of loan is offered in your state, please view the What it Costs page and select your state.

Jora Credit is the Lender. Jora Credit operates under state specific companies, licenses, and rules for the states that it services. Jora Credit does not lend or arrange loans or lines of credit in all states. Please see What it Costs for the serviced states and applicable terms.

Online Installment Loans

So, what is an installment loan?

Online installment loans are another good emergency loan to consider. They usually come in amounts ranging from a few hundred to a few thousand dollars.

Direct installment loan lenders like Jora offer installment loans online with different repayment terms and rates. Each installment payment includes a portion of the principal balance and interest. Unlike traditional personal bad credit loans, you can apply for an online loan from the comfort of your home. The time to funding varies by lender but is often fast. Jora, for example, offers quick loans if you accept a loan by 10:30 AM Central time (Monday through Friday). This means you could receive funds the same day you apply, making this one of the best loans for bad credit.

Most installment loans come with fixed interest rates and a predictable repayment schedule. Unlike other loan options, like payday loans, installment loans have longer repayment terms that make them easier to pay back. Loan amounts range based on the lender and, in some cases, your state of residence. Many lenders also check your credit score to determine your eligibility. Some lenders, like Jora, offer fast loans to borrowers with bad or limited credit. Interested in applying for an installment loan? Learn more about how Jora’s installment loans work.


From online installment loans to debt consolidation loans, there are many different types of loans to choose from. Consider your options before applying for one. Ask yourself why you need the loan and whether you can comfortably repay it on schedule.

If you’re looking for a flexible installment loan with an easy online application, fast approval and funding, and no hidden fees, apply for a Jora loan.