What types of loans are available for bad credit?

I’ve faced some financial difficulties in the past due to unexpected medical bills and job loss, which caused my credit score to drop significantly—now in the low-500s. I need to borrow about $5,000 within the next month to cover urgent car repairs and catch up on some overdue bills to avoid late penalties. My income is stable now, but most traditional lenders are rejecting my applications due to my credit history. What types of loans (besides payday loans) are realistically available for someone with bad credit like mine, especially options where I might have a reasonable chance of approval and won’t be crushed by predatory interest rates or hidden fees? Are there any government-backed, nonprofit, or specialized lenders that might work with my situation? Also, what documentation would I typically need to improve my chances when applying?

Types of Loans Available for Bad Credit:

1. Payday Loans:
   Short-term, high-interest loans (typically $50–$1,000) due on your next paycheck. No credit check required, but APRs can exceed 400%. Repayment is usually via post-dated check or electronic withdrawal.
2. Title Loans:
   Secured loans using your vehicle as collateral. Loan amounts are typically 25–50% of the car’s value. Risk of repossession if you default; APRs often exceed 100%.
3. Installment Loans for Bad Credit:
   Fixed, regular payments over a set term (e.g., 6–60 months). Lenders focus on income and employment status. APRs range from 20–100+%, with amounts up to $5,000. Examples include tribal loans and online lenders like OppLoans or LendYou.
4. Secured Credit Cards:
   Require a cash deposit (usually $200–$500) acting as your credit limit. Reports to credit bureaus to help rebuild credit. May have annual fees and no rewards.
5. Credit Builder Loans:
   Small loans ($300–$2,000) held in a bank account until repaid. Payments are reported to credit bureaus. Once paid, funds are released to you.
6. Pawn Shop Loans:
   Collateral-based loans using items like jewelry or electronics. No credit check. Loan values are a fraction of the item’s worth (25–60%), with high interest rates.
7. Guaranteed Approval Loans (from Alternative Lenders):
   Offered by online lenders (e.g., Upstart, Avant) using non-traditional data (employment, education). Higher APRs (36–35.99%) than prime loans but better than payday loans.
8. Co-signed Loans:
   A trusted individual with good credit agrees to repay if you default. Improves approval odds and may lower interest rates.
9. Home Equity Loans or HELOCs (for homeowners):
   Borrow against your home’s equity. Bad credit may qualify if you have sufficient equity, but risk of losing your home if you default.
10. Payday Alternative Loans (PALs):
    Offered by credit unions (for members), capped at $1,000. APRs capped at 28%+ a $20 fee, with repayment over 1–6 months. Requires 1+ month of membership.
11. Emergency Loans from Non-Profits/Charities:
    Small, interest-free or low-interest loans for emergencies (e.g., utility bills, medical costs). Often based on income and need.
12. Bad Credit Personal Loans:
    Unsecured loans up to $50,000 with flexible terms. APRs typically 30–35.99%, but rates vary by lender. Example: BadCreditLoans.com.
13. Loans from Credit Unions:
    More lenient approval criteria than banks. Offer small loans ($500–$5,000) with lower APRs (8–18%) if you have a relationship or enroll in financial counseling.
14. Debt Consolidation Loans for Bad Credit:
    Combine high-interest debts into one payment. Requires fair income/collateral. APRs may be high but can reduce overall interest rates.
15. Peer-to-Peer (P2P) Loans:
    Borrowed from individual investors via platforms like LendingClub/Prosper. Rates based on credit risk (often 6–36%), but bad credit may reduce approval odds.

Key Considerations:

• APRs: Most bad credit loans have rates >20%, with payday/title loans exceeding 400%.
• Fees: Watch for origination fees, prepayment penalties, and hidden charges.
• Repayment Terms: Shorter terms increase monthly payments but reduce total interest.
• Alternatives: Explore non-profit assistance, grants, or financial counseling before borrowing.
• Scams: Avoid lenders demanding upfront fees or “guaranteed” approval without credit checks.

Always verify lender credibility via the CFBP or ConsumerFinance.gov.