• Thu. Dec 1st, 2022

Can’t qualify for a personal loan? 4 alternatives to try

ByCindy J. Daddario

Oct 2, 2022


Personal loans provide quick, unsecured funds that can be used to pay for everything from home repairs to medical emergencies. Rather than asking for collateral like a home or car, many lenders prefer applicants with strong credit and high incomes.

But what if you don’t meet a lender’s requirements? People who don’t qualify for a personal loan have alternatives to high-yield, predatory lenders. These options can help bridge an income gap, but each has advantages and disadvantages.


See if you can raise the money by making room in your budget and pulling in some extra cash, says Tania Brown, an Atlanta-area certified financial planner and financial coach. Check your budget for any expenses you can reduce, even temporarily, like dinner or streaming services.

To save on existing bills, ask billing companies, accounts payable, or doctor’s offices if they offer interest-free payment plans, she says.

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Finally, combine reduced expenses with extra income from a side job like booking rides or selling things you no longer need, says Brown.


If you enjoy asking a family member for money, this could be one of your cheapest loan options. It doesn’t involve a credit check or credit report, but it may require additional planning.

Bring a “game plan” that includes a loan amount, an interest rate, and a repayment period when you bring up the topic to take the guesswork out of the decision, Brown says. With a small loan, an informal deed of credit between you and the lender could be sufficient. Larger loans may require a formal agreement.

Ideally, an attorney will draft a formal loan document that you both sign, says Philip Mock, a CFP based in Tulsa, Oklahoma. You may have to pay a fee for the attorney’s time.

Family loans can have tax implications, Mock says, so do your research when drafting the loan agreement. For larger loans or more complex questions, consult a tax professional.


A “buy now, pay later” payment plan can take the stress out of a large purchase by breaking it up into multiple smaller payments. Available from most major retailers, BNPL plans can cushion the financial hit of a new mattress or computer, for example.

BNPL is an easy and quick option because there’s no rigorous credit check or lengthy application process, says Kristian Brennon, an accredited financial advisor based in Kansas City, Missouri.

Since BNPL providers automatically debit the installments directly from your account, she recommends setting up due reminders and making sure your account doesn’t go overdrawn.


Cash advance apps like Earnin and Dave offer a quick inflow of a few hundred dollars with no credit checks and lower fees than payday loans. But like payday lenders, these apps require access to a user’s bank account in order to withdraw the repayment on the next payday.

While handy, apps should be used sparingly because they can be difficult to budget for, Brown says. The amount you borrow today leaves a hole that size in your next paycheck, so she recommends anticipating that gap before borrowing.

“Make sure you get the exact amount you need and make a plan for how you’re going to pay that off,” she says.


Saving is the interest-free way to pay for emergencies and discretionary expenses. Mock recommends saving three to six months’ worth of expenses, but even a few hundred dollars in savings will help cover most unexpected expenses.

If you need help building your monthly savings, Brennon recommends seeking professional help from the Association for Financial Counseling and Planning Education. It offers free counseling services to the public until about mid-December.

List your upcoming expenses — like Halloween costumes and Christmas gifts — and plan for them ahead of time, says Brown. This allows your savings to be reserved for unexpected expenses or revenue shortfalls.

“Life will always have ups and downs, and the key is learning how to deal with them,” she says. “It helps turn a crisis into an annoying inconvenience.”

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This article was provided to The Associated Press by personal finance website NerdWallet. Annie Millerbernd is a writer at NerdWallet. Email: [email protected] Twitter: @annieanyway.