Alternatives to direct deposit loans | The bank rate


Direct deposit loans are for borrowers with previous credit problems and experiencing financial difficulties. These debt products are typically deposited into your bank account on the same or next business day, making them a convenient option if you need cash quickly.

Still, there are downsides to consider. Direct deposits often come with exorbitant interest rates, which means the cost of borrowing is much higher than other financing solutions. So, you should avoid these loans if possible.

What is a direct deposit loan?

A direct deposit loan is a type of payday loan readily available for those who need money quickly. Most lenders don’t require a credit check, and you may qualify for financing if you’re at least 18 years old (21 in some states) and can provide a recent pay stub. You must also reside in a state that allows payment loans.

The downside is that you’ll likely be priced at a high interest rate — often up to 400% — instead of offsetting the risk of default, and you’ll have to repay the loan within two weeks or before your next payday. . Plus, loan amounts are usually much lower than what you would qualify for with a traditional personal loan or other debt product. Therefore, you should explore other options as they might be better suited to your financial situation.

What types of loans are an alternative?

Instead of settling for a direct deposit loan if you’re in dire financial straits and need cash fast, consider these alternatives:

  • Personal loan: Unlike direct deposit loans, personal loans come with extended repayment periods, usually between one and five years or more. You’ll also likely get a much lower interest rate than a direct deposit loan, even if your credit score is lower. The average interest rate on personal loans ranges from 10.3% to 12.5% ​​for borrowers with excellent credit ratings, and from 17.8% to 19.9% ​​for borrowers with average credit. Consider an online lender as many will disburse funds to you electronically within one or two business days.
  • Home Equity Loan: Approval for a home equity loan may take a little longer, but you will be able to access a larger amount if you have substantial equity built up in your home. Most lenders require a good or excellent credit score to qualify, and the interest rate is usually lower than what you’d get with a personal loan or credit card. Plus, you may be eligible for a loan term of up to 30 years.
  • Loan from family or friend: Even if you’re not comfortable asking a relative or friend for a loan, you could save a fortune if they agree. Just be sure to come up with an arrangement that works for both parties and put it in writing to avoid disagreements later. Most importantly, only borrow what you can comfortably afford to repay in a timely manner.

9 alternative options with fast funding times

If you’re not sure where to look for a personal loan with fast funding times, these lenders are worth considering:


Avant offers personal loans between $2,000 and $35,000, and you could receive funds as soon as one business day. The loans are available to borrowers with credit scores as low as 580, and there are no prepayment penalties if you decide to pay off the loan early.

best egg

If you have a credit score of at least 700, a personal loan from Best Egg could be a viable alternative. Loans range from $2,000 to $50,000 and overnight financing is available.

loan club

Lending Club is another online lender with fast funding times, usually within two days. You can borrow up to $40,000 and the minimum credit score required is 600 to be considered for a loan. Joint applicants are also welcome to apply.


Same-day financing for personal loans is available through LightStream. It also features some of the lowest interest rates in the industry for borrowers with strong credit ratings. However, you may qualify for a loan with a credit score of 660 or higher.

PenFed Credit Union

PenFed Credit Union is viable if you are looking to borrow a small amount or apply with a co-borrower. Most loans are available within one or two business days of approval, and there are no origination fees.


This online lender offers personal loans between $1,000 and $50,000 at competitive rates. The upgrade doesn’t disclose a minimum credit score or income requirement, but if approved, you could have the funds in your account within a day.


Upstart might also be a good choice if you have a lower credit score. Although you can receive an APR of up to 35.99%, it is far less than what you will pay with a direct deposit loan. Plus, you may be eligible for next business day financing.

At the end of the line

Direct deposit loans are a convenient option if you need cash quickly. However, they should only be used as a last resort as they often come with high interest rates and are payable over a short period.

Instead, consider a personal loan from the recommendations above to meet your short-term financing needs. Many offer online prequalification so you can assess your eligibility for a loan and view potential rates.


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