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Loans for Bad Credit in Illinois

Illinois personal loans can provide quick access to cash with flexible terms.

Illinois loans
Updated June 24, 2024
Written by Rachel Alulis
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Key takeaways

  • Online personal loans include installment loans, payday advances, and cash advance apps.
  • Personal loans for bad credit borrowers tend to have higher interest rates and a shorter repayment period.
  • Improving your credit score can open up better personal loan offers in the future.

Personal loans are popular. They give you quick cash with flexible terms for whatever you need. You can use them to cover unexpected expenses, car repairs, medical bills, your choice. When you have bad credit it gets a little harder, but you can find lenders in Illinois willing to work with borrowers with less-than-perfect scores.

Before you take out a loan, it’s important to know what you’re getting into and what to look out for. Let’s go over what to expect and how to choose the best loan for your current financial situation.

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What is a bad credit loan?

A bad credit loan is a type of loan specifically designed for individuals whose score falls below 670 on the FICO scale. These loans typically come with higher interest rates and stricter repayment terms due to the increased risk for the lender.

Bad credit loans can come in various forms, including payday loans and installment loans. Most are unsecured, meaning that they don’t require collateral like a house or savings account.

Types of loans for bad credit

Plenty of lenders offer personal loans in Illinois to consumers with poor scores. The right lending product for you depends on your personal financial situation.

Online loans for less-than-perfect credit

Illinois loans

You can find everything online these days, including loans. You have two basic options for online personal loans: installment loans or payday advances. The installment loans you can find online in Illinois let you borrow a set amount and repay it over a few months to a few years. You will make a fixed monthly payment, which makes it easy to budget for. Installment loans are ideal when you need to cover bigger financial expenses. This is a very common form of borrowing, and you can find lenders willing to offer loans to consumers with low scores.

Online payday loans are an option in Illinois for emergency funding. These are short-term loans designed to be repaid by your next paycheck. Illinois law sets the minimum loan term as 13 days and the maximum loan term as 120 days. Most lenders offer same-day funding and no credit check. Instead, they rely on your pay stub for approval. While payday advances offer fast access to cash, they should be used cautiously. High interest rates and hidden fees are very common.

Payday alternative loans

Payday Alternative Loans (PALs) are a good choice if you are part of a federal credit union. These are small loans designed to be a safer alternative to predatory loans. They have lower interest rates (capped at 28%), longer repayment terms, and no excessive fees, making them a more affordable option for borrowers with low credit scores. PALs are designed to help individuals avoid the high costs associated with payday advances while still providing quick access to funds for emergency expenses or short-term financial needs.

Cash advance app

A modern option to consider is a cash advance app. These apps let you borrow small amounts of money- $20-$500 – before your next paycheck. All you have to do is connect your bank account via the app on your phone. There’s no hard inquiry, no interest, and low to no fees. While not designed for long-term financial relief, cash advance apps can help with emergency expenses without incurring high costs.

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How do bad credit loans in Illinois work?

These loans provide financing to individuals with low credit scores who may not qualify for other financing options. Lenders often focus on factors including:

  • Annual income
  • Employment history
  • Debt-to-income ratio
  • Assets
  • Credit history
  • Education level

This information gives them a better idea of your ability to repay the loan.

Monthly payment amounts

The amount you’ll pay each month on an installment loan varies. Lenders consider your income and how much debt you currently have when determining how much to lend to you. Lenders want to ensure that you are not overextending yourself and can manage monthly payments.

Payday lenders do not do such things. They take your pay stub and a check as insurance that you will repay the money in full, plus fees, on your next payday. Illinois does have a few laws in place to protect borrowers from predatory lending practices. The loan amount cannot exceed 25% of your gross monthly income or be under $1,000. The loan term must be between 13 and 120 days. These regulations make it easier to manage payments.

Loan application process

Most loans in Illinois are easy to apply for. Lenders typically ask for your name, address, social security number, and other debts you may have. They will also need a government-issued ID and proof of income like bank statements or paycheck stubs. After you apply, you should hear back quickly and may even receive the money the same day.

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How to find an online bad credit loan?

Finding an online personal loan for bad credit scores is easier than you might think. First, research lenders who accept applicants with low scores. Be sure to read reviews and check that they are licensed to operate in Illinois.

Online lending marketplaces make the process easier. You submit one application via the website, and they match you with multiple lenders. Often, they only do a soft credit check, which does not impact your score. You then compare rates, fees, and terms from different lenders. Look out for prepayment penalties – imposed if you repay the money early – and origination fees. Select the online lender who offers you the best deal and apply directly with them. Online lending marketplaces help streamline the process and make it easier to find loans and prequalify for offers.

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How to improve your chances of getting bad credit loans in Illinois

The first thing to do is make sure you have a steady income, as lenders focus heavily on your ability to repay the money. Providing proof of consistent employment can increase your chances of approval, even if your credit score is low. It can help to be at your job for at least six months before applying. If you don’t have a steady job, many lenders accept alternative forms of income like child support or government benefits. Have the documents ready to prove that you can afford the loan.

Second, try to lower your debt-to-income ratio by paying down any existing debts. The lower your ratio, the more comfortable creditors will feel about lending to you.

Third, review your credit report for errors. Look for errors like missed payments you didn’t make or wrong accounts. You can get a free copy of your report from each of the major credit bureaus – Equifax, Experian, and TransUnion – once a year via AnnualCreditReport.com. Fixing mistakes can quickly boost your score and make you a more attractive candidate.

What credit score is needed for bad credit loan near Chicago?

The minimum credit score requirement varies by lender. Many lenders offer personal loans for scores below 600, and some even go lower than 550. These lenders will focus on your income and ability to repay rather than your three-digit rating.

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Understanding your credit score

Your credit score is a three-digit number that indicates how likely you are to repay the money you borrow. Your score affects whether you’re approved for a loan and what terms you’ll receive.

Scores range from 300 to 850. The higher the number, the better the score. Your score is based on your:

  • Payment history
  • Amounts owed
  • Length of credit history
  • Types of credit used
  • Recent inquiries

A good credit score is anything above 670, while scores below 580 are classified as poor. Borrowers with poor scores generally receive higher interest rates and extra fees. Whereas borrowers with excellent credit are more likely to be approved and pay less in interest and fees.

Take the time to build credit. Focus on establishing a positive payment history and lowering your credit card debt. A history of timely payments and low usage will do wonders for your score. Once you push your score above 670, you’ll get better loan options and can borrow while saving money.

Frequently asked questions

1. What type of personal loan is easiest to get with bad credit?

The easiest loan to get with a bad credit score is a payday loan or cash advance. Many online payday loans in Illinois have no credit check, meaning the lender doesn’t consider your score. Instead, they prioritize your income and capacity to repay

2. Can you realistically get a personal loan with poor credit?

Yes, but it will come with a higher interest rate and stricter terms.

3. What is the lowest score you can have to borrow?

The lowest score you can have and borrow money depends on the lender you work with. Most banks require a score of 670 or more. A lot of online lenders will work with consumers who have scores above 600. If your score falls between 600-550, you will still find lenders to work with you. Once you’re in the range of 300-550, your choices become very slim, but borrowing is still possible. Look for online lenders or cash advance apps if your score falls in this range.

Bottom line

Personal loans can be a viable option to get fast cash for emergencies. The approval process is generally quick, and the funds will be deposited directly into your bank account. The best loan will often come from online lenders or credit unions willing to work with borrowers with poor scores.

The key is not to take the first loan offer that comes your way. Compare lenders carefully and choose one that offers affordable rates and reasonable repayment terms. If you can wait, take the time to improve your score so that you can secure an even better deal.

Whichever route you choose, you can get personal loans for bad credit in Illinois.

1. Paycheck Advance is For eligible customers only. Your actual available Paycheck Advance amount will be displayed to you in the mobile app and may change from time to time. Conditions and eligibility may vary and are subject to change at any time, at the sole discretion of Finco Advance LLC, which offers this optional feature. Finco Advance LLC is a financial technology company, not a bank. Expedited disbursement of your Paycheck Advance is an optional feature that is subject to an Instant Access Fee and may not be available to all users. Expedited disbursements may take up to an hour. For more information, please refer to Paycheck Advance Terms and Conditions.
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3. Individual results may vary. Using your credit card responsibly may allow you to improve your credit score. Credit building depends on various factors, including your payment history, credit utilization, length of credit history, and other financial activities.
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14. The maximum benefit amount for Trip Cancellation and Interruption Insurance is $10,000 per Covered Trip and $20,000 per Eligible Card per 12 consecutive month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.
15. Baggage Insurance Plan coverage can be in effect for Covered Persons for eligible lost, damaged, or stolen Baggage during their travel on a Common Carrier Vehicle (e.g. plane, train, ship, or bus) when the Entire Fare for a ticket for the trip (one- way or round-trip) is charged to an Eligible Card. Coverage can be provided for up to $2,000 for checked Baggage and up to a combined maximum of $3,000 for checked and carry-on baggage, in excess of coverage provided by the Common Carrier. The coverage is also subject to a $3,000 aggregate limit per Covered Trip. For New York State residents, there is a $2,000 per bag/suitcase limit for each Covered Person with a $10,000 aggregate maximum for all Covered Persons per Covered Trip. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.
16. Car Rental Loss and Damage Insurance can provide coverage up to $75,000 for theft of or damage to most rental vehicles when you use your eligible Card to reserve and pay for the entire eligible vehicle rental and decline the collision damage waiver or similar option offered by the Commercial Car Rental Company. This product provides secondary coverage and does not include liability coverage. Not all vehicle types or rentals are covered. Geographic restrictions apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.
17. Coverage for a Stolen or damaged Eligible Cellular Wireless Telephone is subject to the terms, conditions, exclusions, and limits of liability of this benefit. The maximum liability is $800, per claim, per Eligible Card Account. Each claim is subject to a $50 deductible. Coverage is limited to two (2) claims per Eligible Card Account per 12 month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.
18. When an American Express® Card Member charges a Covered Purchase to an Eligible Card, Extended Warranty§ can provide up to one extra year added to the Original Manufacturer’s Warranty. Applies to warranties of five (5) years or less. Coverage is up to the actual amount charged to your Card for the item up to a maximum of $10,000; not to exceed $50,000 per Card Member account per calendar year. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.
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24. There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.
25. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.
26. Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.
27. Based on a representative study conducted by Experian®, members who made their first purchase with Credit Builder between June 2020 and October 2020 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score.
28. On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
29. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
30. SpotMe® on Debit is an optional, no fee overdraft service attached to your Chime Checking Account. To qualify for the SpotMe on Debit service, you must receive $200 or more in qualifying direct deposits to your Chime Checking Account each month and have activated your Visa debit card. Qualifying members will be allowed to overdraw their Chime Checking Account for up to $20 on debit card purchases and cash withdrawals initially but may later be eligible for a higher limit of up to $200 or more based on Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. The SpotMe on Debit limit will be displayed within the Chime mobile app and is subject to change at any time, at Chime’s sole discretion. Although Chime does not charge any overdraft fees for SpotMe on Debit, there may be out-of-network or third-party fees associated with ATM transactions. SpotMe on Debit will not cover any non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. SpotMe on Debit Terms and Conditions.
31. Tipping or not tipping has no impact on your eligibility for SpotMe®.
32. Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
33. Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.
34. Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.
35. Mobile Check Deposit eligibility is determined by Chime in its sole discretion and may be granted based on various factors including, but not limited to, a member’s direct deposit enrollment status.
36. Funds are automatically debited from your Checking Account and typically deposited into the recipient’s Checking Account within seconds. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed.
37. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed. Non-Chime members must use a valid debit card to claim funds.
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About the author

Rachel Alulis

Rachel Alulis has been the lead editor for Moneyfor’s credit cards team since 2015 and for the financial rewards team since 2023. Before joining Moneyfor, Rachel worked at USA Today and the Des Moines Register. She then established a successful freelance writing and editing business specializing in personal finance. Rachel holds a bachelor’s degree in journalism and an MBA.

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