Best small personal loans
Borrow no more than you need at an affordable APR.
Fox Money is a personal finance hub featuring content generated by Credible Operations, Inc. (Credible), which is majority-owned indirectly by Fox Corporation. The Fox Money content is created and reviewed independent of Fox News Media. Credible is solely responsible for this content and the services it provides.
The best small personal loans let you borrow the right amount of funds at an affordable APR and pay off your debt over a reasonable period. In contrast, predatory small loans in certain states can cost well over 300% APR and give you two weeks or less to pay off your account.
We'll cover where to get a small personal loan, the different types of small loans, their pros and cons, and how to get one that meets your needs.
Top lenders for small personal loans
Upgrade: Best for fair credit
Best for fair credit
Upgrade
4.5
Fox Money rating
Est. APR
9.99 - 35.99%
Loan Amount
$1,000 to $50,000
Min. Credit Score
600
Pros and cons
More details
Universal Credit: Best debt consolidation loans for bad credit
Best debt consolidation loans for bad credit
Universal Credit
4.3
Fox Money rating
Est. APR
11.69 - 35.99%
Loan Amount
$1,000 to $50,000
Min. Credit Score
560
Pros and cons
More details
Best Egg: Best for high close rates if pre-approved
Best for high close rates if pre-approved
Best Egg
4
Fox Money rating
Est. APR
8.99 - 35.99%
Loan Amount
$2,000 to $50,000
Min. Credit Score
600
Pros and cons
More details
LendingClub: Best online experience
Best online experience
LendingClub
4
Fox Money rating
Est. APR
9.06 - 35.99%
Loan Amount
$1,000 to $40,000
Min. Credit Score
660
Pros and cons
More details
60Month Loans: Best for borrowers with fair credit
Borrowers with fair credit
60Month Loans
4
Fox Money rating
Est. APR
19.00 - 35.99%
Loan Amount
$1,000 to $10,000
Min. Credit Score
580
Pros and cons
More details
OneMain Financial: Best bad credit personal loans
Best bad credit personal loans
OneMain Financial
3.9
Fox Money rating
Est. APR
18.00 - 35.99%
Loan Amount
$1,500 to $20,000
Min. Credit Score
No minimum
Pros and cons
More details
Upstart: Best fast personal loans for all credit types
Best fast personal loans for all credit types
Upstart
3.9
Fox Money rating
Est. APR
7.80 - 35.99%
Loan Amount
$1,000 to $50,000
Min. Credit Score
620
Pros and cons
More details
Zable: Best for short-term loans and same day funding
Best for short-term loans and same day funding
Zable
3.2
Fox Money rating
Est. APR
12.95 - 30.00%
Loan Amount
$1,000 to $35,000
Min. Credit Score
600
Pros and cons
More details
Methodology
We evaluated the best small personal loans based primarily on minimum loan amounts offered, as well as how soon funds are available, the customer experience, minimum fixed interest rates, available repayment terms, fees, discounts, and minimum credit score and income requirements.
Our team of experts gathered information from each lender's website, customer service department, in-house resources, and via email support. Read our full lender rating methodology for more information.
What is a small loan?
A small loan can be any loan for $2,000 or lower. Many different types of accounts can fall into this category, including the following.
Personal loans
Personal loans work by providing a lump sum upfront that you can use for a variety of purposes, such as debt consolidation or emergency car repairs. You must then repay the balance plus interest over the agreed-upon life of the loan. Repayment terms are often available for up to seven years for most loan purposes, and may be available over 10 years for home improvement loans with some lenders. The longer your repayment term, the lower your monthly payment, generally speaking.
Most personal loans require a credit check and have more stringent qualification requirements than other small loan types. However, rates are between around 7% and 36%, depending on your credit, which is much more affordable than some other small loan types like payday loans.
Buy now, pay later (BNPL) loans
Short-term BNPL loans often let you split the cost of a purchase into four interest-free installments. For example, you might have to pay 25% of the purchase price upfront, then pay off the remaining 75% in three biweekly payments at a 0% APR.
BNPL loans may involve a soft credit check but tend to be easier to qualify for than personal loans. Some companies also offer longer-term loans with APRs and repayment periods that resemble personal loans (they typically require a hard credit check).
However, returns are often challenging, and missing payments can cause late fees and damage your credit.
Payday loans
Payday loans are small loans that pay out quickly with almost no qualification requirements, but their fees are extremely high and they often have very short, two-week repayment terms. As a result, many states have restricted or outlawed them. But in places without legal limits, their APRs can go well into the triple digits. For example, the average payday loan APR is 652% in Idaho, according to Pew data.
If you can't repay your principal balance and finance charges on time, payday lenders will often push back the due date for a fee, which can trap you in a cycle of debt. For this reason, payday loans should be a last resort.
Cash advance app loans
Cash advance apps are often marketed as a direct alternative to payday loans. They work much the same way, allowing you to request small loans with no credit check and then repay them on your next payday.
However, cash advance app loans tend to be more affordable than payday loans, though they may not be as cheap as most personal loans. It often depends on whether you leave a tip or pay an express fee to get your funds "instantly" or the same day you request them.
For example, Dave offers cash advance loans up to $500, and the only mandatory fee is a $1 monthly membership charge. However, the fee to expedite funds to an external account can be as much as $25. If you borrowed $400 for two weeks, paid a $25 rush fee, paid the $1 monthly membership charge, and left a $4 tip, your APR would be about 196%.
Credit card cash advance
If you have a credit card with available credit, you may be able to pull cash out at an ATM. This is another type of short-term loan that's a better option than a payday loan. However, cash advance APRs are often higher than your card's standard APR and interest starts accruing at that rate immediately (regular purchases often have a grace period of one billing cycle until interest accrues).
Plus, since cards charge compound interest, you could end up paying interest on any unpaid interest if you make minimum payments only. This is one reason why credit card debt can rapidly spiral out of control.
Payday alternative loans (PALs)
If you belong to or can join a credit union that offers PALs, this could be your best option to get a small loan. Some PALs offer minimum $200 loan amounts, while others have no minimum. Maximums are either $1,000 or $2,000, depending on the type of PAL. Rates are capped at 28% APR, and terms range from one to 12 months, depending on the type of PAL. You may undergo a soft credit check, but since these loans are designed as an alternative to payday loans, qualification is flexible.
Pros and cons of small personal loans
Because they offer longer repayment terms and affordable APRs, we generally recommend personal loans if you need a small loan. But before you apply for one, consider their most significant pros and cons.
Pros
- Relatively low interest rates
- Fixed APRs and payments
- Relatively long repayment terms
- Collateral typically not required
- Flexible use of loan proceeds
Cons
- Terms and availability based on credit and income
- No minimum payment option
Pros
- Relatively low interest rates: Personal loan interest rates typically range from roughly 7% to 36% APR, depending on your credit score. That's much cheaper than alternatives like payday loans and cash advance apps, and often lower than a credit card cash advance.
- Fixed APRs and payments: With most personal loans, your interest rate and monthly payment won't change during your repayment term. That makes personal loans easier to budget for than accounts with variable APRs, like credit cards.
- Relatively long repayment terms: Personal loans usually have repayment terms between two and seven years, which gives you plenty of time to pay back what you owe. If you need to pay for home improvements or repairs, some lenders offer much longer terms like Lightstream (up to 20 years) and Navy Federal (up to 15 years).
- Collateral typically not required: Personal loans are typically unsecured, which means you don't have to offer the lender collateral to qualify. However, you can pledge assets like a vehicle or savings account with some lenders to increase your chances of qualifying or getting a lower interest rate.
- Flexible use of loan proceeds: You can use personal loan proceeds for a variety of purposes, including consolidating debt, covering a surprise emergency, or making a big purchase.
Cons
- Terms and availability based on credit and income: It can be difficult to qualify for a low-interest personal loan without a reliable source of income, such as a salary, and a good (or better) credit score. Good credit is defined as a FICO score of 670 to 739.
- No minimum payment option: Unlike credit cards, you can't opt to make a minimum payment when money is tight.
Tip
Some lenders are willing to work with fair-credit and bad-credit borrowers, and you can prequalify to see if you’re likely to be approved and the rate you might get.
How to get a small loan
To get a small loan, you must meet your lender's qualification requirements. Short-term BNPL apps, payday loan lenders, and cash advance apps may run a soft credit check or review the transaction history in your checking account before approving you. Personal loans typically have minimum income, credit score, and debt-to-income ratio (DTI) requirements.
How to get a small personal loan with bad credit
If you have a bad credit score, which means a FICO score below 580, you'll have more trouble getting a small personal loan at an affordable interest rate. Here are some strategies that may help you get around that issue:
- Apply with a cosigner: Cosigners share liability for your debt. If you have someone with good credit who's willing to cosign your loan, they can make your application more attractive to lenders. However, the account and payment history will appear in their credit reports too, which could affect their credit score, especially if you miss payments.
- Apply for secured loans: Secured personal loans require that you offer some form of collateral, such as a vehicle or savings account, when taking out the loan. That makes them safer for the lender, so they may be more willing to overlook a bad credit score. Just note that you could lose whatever you pledge if you can't repay your loan.
What are small personal interest rates?
Small personal loan interest rates depend primarily on your credit score and the length of your repayment term. Here's what you can currently expect:
How to qualify for a small loan
BNPL loans, cash advance apps, and payday loans rarely have significant qualification requirements, with some not even requiring a credit check. However, personal loan lenders tend to have more rigorous eligibility requirements.
Here's what you need to qualify for a small personal loan:
- Income: Lenders want to know that you earn enough through sources like wages or self-employment earnings to pay back what you owe. For example, Discover's minimum annual income for personal loans is $25,000.
- Credit score: Minimum credit score requirements vary between lenders, but a score of 670 or higher will help you qualify for lower rates. For example, Best Egg reserves its lowest rates for borrowers with FICO scores of 700 or higher and minimum incomes of at least $100,000.
- Debt-to-income (DTI) ratio: Personal loan lenders typically want a DTI ratio below 36%. However, lenders that accept bad credit may also be willing to forgive higher DTI ratios in exchange for a higher rate.
Personal loan application process
Here's a step-by-step guide that can help you navigate the personal loan application process:
- Check your credit: Check your credit score and make sure your credit report is accurate before you start looking for a personal loan. You can get a free copy of your FICO score from Experian and a free copy of all three credit reports from AnnualCreditReport.com.
- Gather your documents: Applying for a personal loan involves sharing personal details like your Social Security number. You may also need to verify your identity, income, and address. As a result, it's helpful to prepare by gathering documents like your driver's license, pay stubs, and a recent utility bill.
- Compare lenders: Fees, rates, available loan amounts, and repayment terms can vary significantly between lenders. Use a loan marketplace or research individual personal loan lenders to find out the minimum credit score and income each requires. Then, review each lender's customer satisfaction ratings on sites like Trustpilot and the BBB.
- Prequalify: Once you have a list of viable lenders, go through the prequalification process. It'll indicate your chances of qualifying for a personal loan and the terms you're likely to receive without impacting your credit score. You can do this with most lenders directly on their site, or through a loan marketplace, like Credible.
- Submit a formal application: Choose a personal loan lender and submit an application online or in person. This usually involves a hard credit check, which can lower your credit score temporarily.
Note
Prequalification may require your Social Security number but won’t ding your credit. Once you apply, however, most personal loan lenders will run a hard credit check which could temporarily bring your score down by a few points.
How to identify a predatory small loan
You can often identify predatory small loans by looking out for the following signs:
- Finance costs above 36% APR: 36% APR is widely considered the maximum interest rate before a loan is considered predatory. States such as Nebraska and Hawaii have capped interest rates at a 36% APR to eliminate predatory lending, especially payday loans.
- No credit check or qualification requirements: Lenders use credit score and income requirements to weed out borrowers who can't pay back their debts. If a lender doesn't care whether you're capable of paying back what you owe, it may indicate that they're offering predatory loans, though it's not a guarantee.
- Unusually short or long repayment terms: Short repayment terms of only a week or two may not give you enough time to pay off your debt. Meanwhile, unnecessarily long or indefinite repayment terms can drag out your time in debt and cause you to incur excessive interest charges.
Alternatives to small personal loans
Small personal loans can be an effective and affordable way to borrow up to $2,000, but they're not right for everyone. There may be cheaper alternatives, especially if you have a credit score below 670. Here are some other options to consider:
- Friends and family: Take out a loan from a friend or family member, or form a lending circle with people you trust.
- Earn extra cash: Generate money through a side hustle, such as driving for a rideshare app like Uber or walking dogs for a platform like Rover.
- Local aid: Get financial assistance from non-profits, charities, or religious organizations in your area. Talk to a credit counselor to explore debt relief options, like a debt management plan. Find a reputable credit counselor through the National Foundation for Credit Counseling.
FAQ
Where can I get a small personal loan?
You can get a small personal loan from many online lenders, banks, and credit unions. However, some lenders have minimum loan amounts that may be higher than the amount you want to borrow, so check their restrictions before you apply. For example, Best Egg personal loans start at a minimum of $2,000 in most states and $6,500 in Massachusetts.
Is getting a small personal loan worth it?
Getting a small personal loan can be worth it if you have a legitimate need, such as repairing your car after an accident, and can qualify for an affordable APR. However, it may be more trouble than it's worth to finance a discretionary purchase like a vacation, especially if you can't qualify for a low interest rate.
What is the smallest personal loan you can get?
The smallest personal loan you can get depends on the minimum principal balance of the lender you work with. They typically range from $250 to $2,000. For example, Oportun offers loans as low as $300, while OneMain Financial's principal balances start at $1,500. However, some payday alternative loans, available exclusively through credit unions, have no minimum loan amount.
What credit score do you need for a personal loan?
The credit score you need for a personal loan depends on the lender, but you may be able to get a personal loan with bad credit or fair credit, depending on the lender.
Just be aware that interest rates increase as your credit score decreases, which could make any loan more expensive than you can afford, especially if you don't have a compensating factor like high income, a cosigner, or collateral.
How does a personal loan affect your credit score?
Getting a personal loan can lower your credit score by a few points due to the hard inquiry you generally must undergo to apply. However, the decrease only lasts for a few months to a year, and your score should actually improve during the life of the loan if you make your payments on time.