If you need to borrow money, you may be able to get a fast and easy loan or a cheap loan, but probably not both. The easiest loans to get approved for may help you get the cash you need when you need it, but there are pitfalls to avoid as well as fine print that you should read carefully before you move forward.

1. Payday Loans

Payday loans are a type of funding that require you to pay back what you owe on your next payday, hence the name. According to the Consumer Financial Protection Bureau (CFPB), there are no set rules that govern which loans are considered payday loans, although all loans in this category tend to be short-term in nature and exorbitantly expensive.

Most payday loans are for $500 or less, and these loans require a postdated check that has you paying off the loan balance the next time you expect to get paid by an employer or through other means like Social Security. The biggest problem with payday loans is the fact that, because they’re often short-term with no credit check required, borrowers can wind up paying interest rates of 400% or higher in the end. Because of the high costs, payday loan users often get caught in a payday loan “trap,” where they are stuck borrowing over and over again to keep up with expenses and bills.

2. No-Credit-Check Loans

No-credit-check loans can also be referred to as bad credit loans, mostly because they are taken out by people who couldn’t get approved based on their credit score. Since most lenders require a minimum credit score of at least 640 for traditional personal loans, this means no-credit-check loans are geared to borrowers with scores below that range.

Despite the fact that these loans are easy to get approved for, bad credit loans can be punishing due to their incredibly high costs. In fact, interest rates on some no-credit-check loans can be as high as 160% with some lenders.

3. Unsecured Personal Loans

If you have a fair credit score, which includes FICO Scores from 580 to 669, you may be able to qualify for an unsecured personal loan from a traditional lender. However, individuals with scores at the lower end of that range will find fewer available options overall, and they may not like what they see when they check. 

For example, OneMain Financial is known for offering unsecured personal loans for individuals with imperfect credit. However, interest rates for their installment loans can be as high as 35.99%, and they charge origination fees of up to 10% of the loan amount.

Because unsecured personal loans for fair credit come with less-than-ideal terms, they are often referred to as emergency loans. This means you should only get one in an emergency, if you truly need the money, and if better options aren’t available when you need them.

4. Retirement Plan Loans

If you desperately need money and you have some retirement savings built up in a traditional plan, you may be able to borrow from your own assets. With a 401(k) loan, for example, you can borrow from your account balance without a credit check. From there, you pay back what you borrowed to your own account, plus interest, over time.

That said, the Internal Revenue Service (IRS) has some warnings about 401(k) loans:

• First off, not paying back the loan according to its terms can mean the money you borrow becomes a distribution from your account.
• You may also be required to pay back the loan in full almost immediately if you leave your job.
• You’re also siphoning funds from your account that are supposed to be compounding over time to help pay for your retirement.

For all these reasons and others, borrowing from your 401(k) should only be done as a last resort.

5. Pawnshop Loans

Finally, you can also “pawn” items you don’t need at a pawnshop and get access to cash that way. This move has you agreeing to loan terms that are never in your favor, although the rates and terms of pawnshop loans vary widely.

When you pawn an item, or let a pawnshop hold it temporarily in exchange for cash, you won’t get anywhere close to the value of your item. The pawnshop also has the right to sell your item if you don’t repay the loan based on the original terms that you agreed to.

That said, pawnshop loans don’t require a credit check and are easy to get approved for if you have anything of value that you can stand to lose. For example, you could take out a pawnshop loan with old jewelry or electronics as collateral.

Alternatives to Easy Loans

If you want to avoid overpaying when you borrow, your best bet is looking for more traditional loan options. Alternatives to easy loans include the following:

• Banks and credit unions: Local banks and credit unions may offer funding options that you can qualify for, and all you have to do is inquire to find out. That said, you may have better luck getting approved for the best personal loans if you apply with a bank or credit union that you have an existing relationship with.
• Borrow from family or friends: Ask family members and friends if they will lend you money for emergency use. Keep in mind that you may be putting your relationship on the line if you fail to pay the money back.
• Credit cards: If you need a line of credit that you can use to make purchases or pay bills, a credit card can be a valuable tool. Just remember that the best credit card options go to those with good credit, and that credit cards for fair credit and bad credit charge higher interest rates and more fees.
• Online lenders: A range of online loan companies offer personal loans that can be secured or unsecured. Most also make it easy to apply online, and some let you “check your rate” and gauge your approval odds before you formally apply.
• Payment plan: If you owe money to a lender or any other company, you can always ask about payment plans. For example, it’s not uncommon for hospitals and other medical providers to offer payment plans for services rendered.

How Do People Use Personal Loans?

venuscurves.commissioned a national survey of 962 U.S. adults between Aug. 14, 2023, to Sept. 15, 2023, who had taken out a personal loan to learn how they used their loan proceeds and how they might use future personal loans. Debt consolidation was the most common reason people borrowed money, followed by home improvement and other large expenditures.

The Bottom Line

The easiest loans to get approved for are rarely the best. You might actually be able to get several loans of this type. After all, lenders that don’t require decent credit or even a credit check have to charge higher interest rates and more fees to account for the additional risk they take on.

With that in mind, you should only take out a personal loan if you absolutely have to—and if you know for a fact you can pay the money back, plus interest and fees, in a reasonable amount of time. If you borrow more than you need and can’t make payments, you can wind up paying more than you should and ruining your credit score along the way. Ultimately, that’s why you should avoid easy loans and wait it out until you can qualify for more affordable loan options if you possibly can.