Best Small Personal Loans in 2023

Your paycheck may sometimes last shorter than the month. It can be reasonable to obtain a small loan for the short loan terms to finance a big-ticket purchase, fund an emergency, or prevent the bills from becoming overdue.

Thousands of people turn to unsecured lending options to receive quick financial assistance from time to time. There is nothing wrong with asking for some help when you can’t make the ends meet.

However, there is a wide range of crediting companies. Some of them can be a saving grace while others may turn your life into a nightmare and rip you off.

 

 

Don’t hesitate to take some time and review some of the top-rated service providers to make the right choice. Keep on reading if you want to avoid common mistakes and make a smart financial decision when it comes to choosing the best personal loans.

The smallest personal loans are paid back in fixed installments over three months to 7 years. The minimum amount is usually $500-$1,000, and the standard APR will range from 6% to 36%, depending on your FICO score. 

Most often, borrowers borrow money under these terms for the following purposes: 

• To buy something big. 
• To move or make home repairs. 
• To cover unexpected or medical expenses. 
• To pay off a large debt to consolidate it. 

Finding out which banks and financial institutions can lend you money on favorable terms is a good idea, even if you don’t need a new loan right now. This way, you can always make the right choice, even if you are in an emergency and don’t have much time to study the information.

Small Personal Loans: Best Offers 

Personal loans are called so because they are given for personal purposes. For example, you can use them to cover travel expenses, pay bills, pay off old debt, or make a big purchase. The main advantage of this type of credit is that it is unsecured, which means it does not require any collateral. 

Even people with a bad credit history can borrow money on such an offer; they just have to pay more interest and pay it back faster, within a few months or a year. 

Since 70% of all loans are just personal loans, you can find such offers in every bank. However, to save you time and help you find the best option, we have made some short reviews of financial institutions where you can get small personal loans.  

 

Comparing Personal Loans

When an unforeseen expense pops up or you face a sudden emergency, you may feel really frustrated. People start seeking the best place to borrow some cash. While the Internet is booming with plenty of lending services and finance-related service providers, not every local company is willing to help you. 

Some of the services offer instant solutions that are far from being real. Other companies near you may require borrowers to take out a larger amount than they actually need to fund their needs.

This is a common practice when a lender offers you to take out a personal loan in the high four divs when you just need $1000 or less. Why do they offer it? They want primarily to make more money on you so they won’t offer the funding without monthly interest rates. 

The more you take out the more interest you will have to pay and the more lenders will earn in the long run. So, your aim is to find a more flexible creditor who will agree to lend you the exact sum you want at competitive annual percentage rate and with reasonable terms. Here are the top service providers that can personal loan you money in 2021:

OppLoans.com

This lending service is reputable and certified to offer crediting solutions to borrowers across the USA. Keep in mind that this company isn’t available in every state so you should check this information. If you are a good or a low credit holder you may qualify for small lending options here. 

The repayment schedule is usually flexible but the maximum amount isn’t high enough. If you require over $4,000 you may need to search for other places. The funding process is secure and fast as the money can be obtained within one business day.

There is no minimum credit score which is a benefit but in some states, you will have to pay up to a 3% origination charge.

Pros:

• No minimum credit rating;
• Accept bad credit score;
• Flexible terms;
• Soft credit pull;
• Easy application process.

Cons:

• High interest rates;
• Origination fees;
• Only small loans;
• Only online application;
• Some states can’t apply;
• Some military no eligible.

Let’s note that this is not the best option for those with a credit score above 570-600 FICO points because Opportunity Financial has some of the highest rates on small personal loans. For example, you can get from $500 for 9 to 18 months at 59%-160% APR. 

The main advantage of this company is that it does not do a credit check before lending you funds. It also doesn’t charge origination, late, or early fees and 98% of all applicants get their money through its website.   

To get money from OppFi, you need to have $1,500 or more in income, a bank account open 40 days before your application date, and a monthly cash flow of $1,000 or more. 

We don’t recommend this option if your FICO account allows you to get a loan at better terms from one of the best companies we described above. 

Upgrade 

This young company, founded in 2017, has already lent money to more than 10 million Americans. So even if you have a low FICO score, you can still get $1,000 or more in Upgrade. 

Loans are available with the following terms: 

• Origination fees of 2.9% to 8% are deducted from the loan amount. 
• You can borrow money for 3 or 5 years. 
• The late fee is $10, with no early repayment penalty.  
• APR is from 6.95% up to 35.97%. 

To qualify for the Upgrade, you must have a FICO score of 560 or higher, and your pre-loan debt-to-income ratio must be under 45%. The company has no minimum income requirements for borrowers, but your cash flow should ideally be at least $800 per month.   

You can take advantage of Upgrade’s personal small loan terms if you do not use the money for business expenses. This is the only purpose that the company does not finance. 

Why is this organization considered one of the best online lenders? 

1. It has low FICO score requirements. 
2. It has a convenient online app to see your balance, make monthly payments, and improve your financial literacy. 
3. You’ll be able to pay off your credit from Upgrade early and not pay any fees or penalties. 
4. Even if you have less than 560 FICO points, you can get a loan with co-applicants, which is rarely allowed by similar financial institutions. 

The main disadvantages of this company are as follows:

1. It deducts origination and late fees from your account. 
2. It offers only two terms for repayment of loans. 
3. It takes up to 4 days to receive funds through Upgrade, which is long enough for an online lender. 

Overall, it’s an excellent option for those with bad credit. 

Navy Federal Credit Union 

If you are a member of the NFCU, you can borrow from it for $250 for 61-84 months. It is essential to understand that to apply for membership, you must be in the military or have a close relative working in the field.  

Of course, borrowing small personal loans from such unions is the best financial decision because the interest rate here is almost half that of other financial institutions – from 7.49% to 18%. 

In addition, you can make automatic payments and get a 0.25% discount on APRs. 

NFCU can be considered the best lender because: 

• You can get money here at the lowest interest rate. 
• You don’t have to pay extra fees if you repay the loan early. 
• NFCU doesn’t charge origination fees.
• You can get money for any period from 61 to 84 months. 
• Credit Union allows co-borrowers. 

However, it has a few disadvantages: 

• The Union charges late fees of $29. 
• Your FICO score must be a minimum of 670 points for you to be able to borrow money here. 
• You must be a member to be able to receive funds. 

Taking out a small loan from the NFCU is the best decision from a financial point of view since the low interest rate will help you pay off your debt faster. However, if you are not a member and are not eligible to join, you should pick another option. 

PersonalLoans.com

This is not the direct creditor so you should keep in mind that this service can’t make any lending decisions or issue the cash to you. It is a personal loan-matching online company or a marketplace that cooperates with a variety of lenders in many states.

So, once you submit your online request it will be connected with service providers by the company managers. Each borrower may select the lender of their choice as they may get one or several offers.

Only the creditors are accountable for their pricing policy and personal loan  terms. Apart from some other places, here you may qualify for both small and large personal loan amounts.

Pros:

• Apply in every state;
• A huge database of lenders;
• Quick application;
• Soft credit inquiry;
• No prepayment charges.

Cons:

• Not a direct creditor;
• Only online application;
• Higher minimum monthly income.

Prosper.com

This is a peer-to-peer online platform where you may obtain a small personal loan without collateral or other security. It is not available for consumers in every state of the USA but you may apply in 31 states today. 

Investors fund the needs of their peers or borrowers which makes this platform another attractive solution for those who can’t qualify for conventional lending places. Pay attention to the fees and charges though as this service has plenty of them so it may be smart to compare several options.

Pros:

• No minimum monthly income;
• Peer-to-peer lending;
• Fast decision;
• Soft credit check.

Cons:

• Multiple charges and fees;
• Higher interest rates;
• Longer funding.

LendingClub.com

 

This is another peer-to-peer lending place where you can get funded on the web from the comfort of your home. Such places have more flexible eligibility criteria when it comes to the minimum monthly income of the borrowers. 

Those without steady employment may also submit their requests although high income consumers and good credit holders may more chances of getting approved with lower rates.

Pros:

• Fast and easy application;
• Online loan request;
• Small or large amounts;
• Soft credit pull.

Cons:

• Higher interest rates;
• Longer funding period;
• Origination fee.

LendingClub is an aggregator with dozens of lenders where you can get money on excellent terms. Here you can borrow $1,000 or more for 3 or 5 years at an APR of 6.34 percent to 35.89 percent. 

The company charges a one-time origination fee of 3-6 percent of the total loan amount and a late fee of 5 percent. There are no penalties for early repayment. 

The LendingClub website has many valuable features. For example, you can temporarily or permanently change the date of your monthly payments, see your balance, and set up autopay. 

You must have more than 600 FICO points to get money from LendingClub. Also, your DTI ratio must not exceed 40%; the company does not consider your income level. If you have horrible credit, you can apply for money and a co-borrower with a higher FICO score.  

LendingClub is considered one of the most significant lenders because: 

• You can get money here even with a low FICO score, like 600 points. 
• Even if your credit score is below what you need, you can apply for a loan with a co-borrower. 
• In addition, you won’t have to pay any fees for deciding to pay the funds back early.   

Users note that the only disadvantages of LendingClub are origination and late fees and only two repayment terms. 

LendingClub is one of the best options for those with bad credit. Be careful, however, as the BBB website has information that scammers often use the company’s logo. In addition, it never calls its customers and offers personal loans, nor does it ask them to pay an application fee to review your application – only scammers do that. 

Upstart.com

 

Borrowers who want to fund big purchases, consolidate their debt, or solve a temporary financial shortfall may turn to this peer-to-peer lending platform. They accept clients with a good and fair rating and their eligibility criteria are rather simple and flexible.

Upstart even cooperates with conventional banks and credit unions but only creditors make lending decisions to approve or decline the request. This is a long-term solution as the money can be taken out for a period of up to 5 years.

Pros:

• No prepayment fees;
• Quick application;
• Accept low credit borrowers;
• Easy app;
• No minimum monthly income.

Cons:

• Late and origination charges;
• Higher rates;
• Online unsecured long-term loans;
• Available in some states.

PersonalMoneyService

Even if your rating is less-than-stellar and you don’t have the time to repair it, you may opt for this company. This is not a direct creditor but a digital loan-connecting platform to help borrowers reach more lenders online. If you are tired of being rejected you have higher chances of getting approved here. 

This service is fast and certified as it offers quick solutions and matches clients and lenders across the USA. The eligibility criteria are flexible and the lenders conduct only a soft credit inquiry.

Pros:

• Online application;
• Data security;
• Multiple creditors online;
• Accept any credit rating;
• Available across the country.

Cons:

• Higher fees;
• Undisclosed extra charges.

LightStream 

LightStream is considered one of the best lenders for those who want to borrow from $5,000 for 2-7 years for some big purchase, home renovation, travel, or purposes other than education and business expenses. This company operates in all 50 states and has very efficient customer support available online and over the phone seven days a week.

To get money from this organization, you must have a FICO score above 670 or co-borrowers with that rating; it’s the company’s main disadvantage. However, it has a lot more merits: 

• The maximum APR is 20.49%. 
• You can get money the same day your application is approved. 
• You don’t have to pay any extra fees for processing your application, early or late payments. 

LightStream is the best option to borrow $5,000 or more for those with good to excellent credit. 

Universal Credit 

Unlike the previous option, this company may be a better lender for people with a low FICO account. However, its terms are less attractive – you can borrow from $500 for 3 to 5 years at an APR of 11.69%-35.93%. All borrowers must pay a 5.25% to 8% origination fee on the loan amount and a late fee of $10 if they miss the monthly payment deadline.

1. We didn’t name this company the best for bad-credit applicants for nothing because it has the following advantages: 
2. FICO’s minimum approved score is 560 points. 
3. The organization has no minimum income requirements. 
4. It is ready to lend money to anyone with a debt-to-income ratio above 75%, one of the highest rates on the market. 

If you have a credit history of over two years and meet all the previous requirements, Universal Credit may be the best place to get a small loan. 

Rocket Loans 

The company offers some of the best personal loans from $2,000 for 36 or 60 months. If your FICO score exceeds 580 points, you can take advantage of the organization’s fair offers and borrow money at 6.72% to 29.99%. These are some of the best rates for people with bad credit. 

The disadvantages of the company are an origination fee of 1% to 6% and a $15 late fee for each late payment. However, if you pay off your loan early, you will not have to pay any additional penalties. 

This organization is considered one of the best lenders for people with a low FICO score because: 

• It doesn’t conduct hard credit checks before lending you money. 
• You can get the funds the same day you sign a contract with the lender. 
• If you connect autopay, you will have a discount on your APR. 
• You only need 580 FICO points to get money on better terms than other organizations. 

However, this option won’t be best for you if your minimum income is below $24,000 a year and your DTI ratio exceeds 40%. 

What Is a Small Personal Loan?

This name is used for personal loans from $500-$1,000 taken for personal purposes, such as paying for travel, paying off debt, or buying something big. The upper limit, in this case, is usually considered $3,500-$5,000, and the average repayment period for such a loan is 1 to 5 years. 

One of the main advantages of this type of loan is that it can be found at almost any bank, cash advance app, or credit union. The terms, as usual, depend directly on your credit history, but most often, the maximum rate of 26%-36% is legislated in the states. 

You can get several personal loans simultaneously from the same or different financial institutions; the only limitation is your total credit limit. Each lender uses a debt-to-income ratio to decide whether to lend you money, so it’s best not to overextend your credit so you won’t find yourself without options with an adequate APR in an emergency. 

So, what does a small personal loan mean? This is a widespread lending solution obtained by borrowers to cover urgent financial needs, pay bills, or fund a big-picture expense. Small lending solutions can be between $1,000 and $2,000 although in some cases they may be up to $2,500. Many consumers even request smaller amounts of less than $1,000 for their immediate needs.

Lending solutions can be secured and unsecured. The first option requires collateral in the form of your house or auto that you can pledge as a guarantee of debt repayment. It presents higher risks for the clients as the guarantee may be taken away from them in case of default or nonpayment. 

Unsecured personal loans are more flexible and small amounts of cash can be requested without security. The Annual Percentage Rate APR vary among creditors but generally they are below 36% which is the highest rate for a reasonable APR. Of course, some providers claim higher rates but you should do your research and compare rates.

How to Choose a Personal Loan 

To choose the best option for you, use the following plan: 

1. Determine the amount you need to borrow. 

The more money you borrow from the bank, the more interest you will pay. To use a simple example – if you borrow $500 for a year at an APR of 20%, the price of the loan will be $100, and if you borrow $5,000 on the same terms, you’ll pay $1,000. 

If you don’t know exactly how much money you need, you can use the formula “estimated amount required + 15%. For example, if you want to repair a house that the handyman says will cost about $3200, you could add 15% to that amount for contingencies. However, if you don’t do that and take exactly $3200, any breakdown or increase in the price of building materials could force you to take another loan. 

2. Think about how much time you will be most comfortable paying the funds back. 

It’s best to take out a loan for as short a period as possible so you can pay as little interest as possible for using the money. But, again, it’s important to calculate everything in this matter – if you borrow funds for a year but can’t handle the loan because of the high monthly payment, it’s a wrong financial decision. 

So when going through options from lenders, look at two metrics: 

• First, the monthly payment should be within your means. 
• And the length of your loan payments should be optimal; it’s not worth borrowing money for five years for a monthly fee of $50 less. 

Be sure to consider that you are committing for several years ahead. Think carefully about whether you can handle it. 

3. Choose a reliable lender.

If you don’t know much about personal loans, it’s better to use aggregators that have already gathered all the essential information. Keep in mind that all the websites of banks and financial institutions have the most attractive information in big letters, and the most critical information, such as penalties and fees, in small letters below. 

Never take out a loan from an institution that calls you on the phone and offers fabulous terms. Instead, carefully check reviews of all companies and independent ratings such as the BBB. 

4. Look at the rates at different banks. 

The APR is the primary indicator determining how much you will pay to use the bank’s money. So naturally, the higher the rate, the less favorable the loan is considered, but look not only at the APR itself but also the amount of interest paid in dollars. 

For example, getting $500 for one year at 36% APR is a better deal than getting the same $500 for two years at 25%. If you do the math, in the first case, the loan price would be $180, and in the second case, it would be $250. So if you are comfortable with the monthly payment in the second option, you are better off choosing it. 

5. Keep track of what charges go with your loan. 

Many banks try to hide these extra fees behind a low interest rate. For example, they offer a 15% interest rate on all personal loans but impose origination/rollover/late/early fees, which can be as much as 5%-10% of the loan principal. 

Always read the contract carefully and ask directly what the penalties or additional fees might be if you pay back the loan early or late. 

What to Consider Before Choosing a Small Personal Loan? 

Before you apply for a loan, you need to know: 

• Do you meet the requirements of the bank? 

Before giving you money, a financial institution will conduct a credit check, deducting points from your FICO account. To avoid tests doomed to fail in advance, check the bank’s website for borrower requirements and see if you meet them.

Generally, the most popular requirements are a FICO score, monthly income, gainful employment, and U.S. citizenship.   

• What is the purpose of your loan? 

Many financial institutions have restrictions on the purpose of small personal loans. For example, they may not be allowed to be used for certain classes of goods or for paying school fees. Therefore, you must find a company that will accept personal loans for the purposes you want – the easiest way to do this is to use the filters on aggregator sites. 

• What interest rate is okay for you? 

Compare all the lenders’ offers and choose the one that allows you to pay the slightest interest. When comparing APRs, don’t forget to look at the monthly payment – it should be comfortable for you. 

What are the fees associated with the loan? 

Many financial institutions charge borrowers origination and service fees for processing their applications. You can also pay late/early and rollover fees if you don’t repay the money on time. 

• What is the loan term? 

Try to choose the optimal term to pay less interest, but your monthly payments are not too hard for you. 

• How do you plan to pay it off? 

If you are unsure that you can pay back your loan on time, don’t take the loan and try to find an alternative. Remember that this is not just a penalty from the lender, but a lowering of your FICO score, problems with obtaining credit in the future, and even possible difficulties in getting a job.  

Pros and Cons of Small Personal Loans 

Small personal loans have their own merits: 

• Quick turnaround. Since the amount is small, many financial institutions can disburse it within one day of approving the application. 
• No collateral is needed. You must take out home equity or car title loans if you need more money at a low interest rate. 
• Fixed payments. You will know exactly how much you will pay using the bank’s money, at what costs, and on what days before you sign the contract. 
• You can get a loan like this even with a low FICO account. 
• You can even borrow money online, and aggregator websites have dozens of the best offers for you. 

At the same time, the disadvantages of this option are: 

• High rates. Most lenders lend money at 24-36% on this offer. 
• You need official employment and proof of income, without which they will not give you a loan. 
• Many different fees. Lenders can list so many costs (origination, service, late, early, etc.) in your contract that they will total 2%-10% of your loan.  
• This is the simplest, cheapest, and most straightforward way to borrow money if you choose the best offers from banks and financial institutions. 

Where Can I Get a Small Personal Loan? 

As we said before, many financial institutions offer borrowers a small amount of money to borrow. It is much easier to get a small loan than a large amount at once, especially if you don’t have to provide collateral – the whole process can be done online. 

It is better to borrow money from credit unions if you are part of one. This is the most profitable option with the lowest APR, as these organizations don’t just decide to lend you money based on your credit history. The next option is online lenders, who simply transfer funds to your bank account after your application is approved. Finally, a more familiar place where you can get a loan is with banks, but they have their disadvantages.  

Online Lenders 

The ability to borrow money online didn’t come along very long ago, but it immediately became a favorite option for many borrowers. You don’t have to go to the bank, stand in lines, bring a bunch of documents, and spend all those hours of your time because now you can do it in a few minutes on the lender’s website. 

You can get from $500 to $5,000 with online lenders for terms ranging from 3 months to 5 years. An obvious benefit is that they often have many offers you can view immediately after pre-qualification. 

The process of getting money through online lenders is straightforward: 

• First, you register on their website with basic information about yourself: first and last name, age, residential address, place of employment, and Social Security number. 
• Many lenders allow you to compare all the loan options available to you. You can then compare the terms, rates, and terms explicitly calculated for you. 
• Next, you choose one of these options and sign the contract online. 
• After confirming all the documents, the funds arrive in your bank account within 1-3 days. 

Discover, SoFi, Marcus by Goldman Sachs, Capital Good Fund, Best Egg, and Lifestream are the best online lenders. 

Banks 

More often than not, banks lend $2,000 or more. However, a few years ago, there was a trend for small loans, and banks allowed borrowing from $100 to $1,000 for 3-6 months. 

This is an excellent option if you want to borrow money offline because these organizations are reliable and won’t cheat you out of money. In addition, many already work online, although not as well as online lenders. 

The downsides of this option are that it is difficult and, at times, long because you have to go to the bank branch, stand in line, and provide original and copies of documents. In addition, since there is a lot of competition for personal loans, banks often set stricter requirements for borrowers and offer less favorable terms. In addition, you must necessarily have an account at the bank where you want to get funds, preferably opened several months before the application. 

The excellent options for borrowing a small amount of money are The U.S. Bank Simple Loan, Wells Fargo, Truist’s Ready Now loan, and Bank of America’s Balance Assist. 

Credit Unions 

In such organizations, you can get a loan from $200 at a very low APR of up to 18%. Why do they offer such favorable terms? Because only union members can take advantage of them. 

This is the only disadvantage of this option – you must become a member to get a loan. There are credit unions for airline workers, the military, or people who live in certain states. You can find out what organizations there are in your area and try to apply for membership; it’s easy and only costs $5-$15. 

The best credit unions where you can get small credit are Alliant CU, Navy Federal CU, and PenFed CU.  

Cheap Small Personal Loans

It’s hard to find guaranteed lending solutions. Nobody can guarantee your application will be approved. Some service providers claim they approve every personal loan request but in reality, their interest rate may be sky-high. Fast and easy personal loans aren’t always cheap so it’s wise to shop around for the most affordable offer and compare several providers.

You should stay away from services and providers who claim to provide too cheap options. Every lender will charge some interest rates to earn money on each application. Your credit history, rating, employment information, and other criteria may affect your ability to obtain the cheapest solution. 

If your rating is less-than-stellar you may need more time to search for an affordable option. Unemployed borrowers may get the highest rate or even be rejected at all.

Small Personal Loans for Bad Credit Scores

If you are dreaming about a cheap lending solution but your FICO rating is less than 629 it may be hard to find this personal loans options. The majority of credit unions and local banks will reject the application of a low credit score holder as they want to make certain the borrower has enough means to return the debt on time.

Failing to pay the previous debt off may affect your rating and lower it by several points. But anyway you can apply for bad credit personal loan.

Alternative creditors have more flexible eligibility criteria but offer higher rates compared to conventional personal loan lenders. So, it pays to be careful and don’t rush with your decision. Here are a few ways to improve your chances of finding the best solution:

• Check your credit report. There might be some errors on your report that can be easily eliminated. It will boost your rating as well as your ability to obtain various services and personal loans. Make sure you review your report each year as it’s free of charge.
• Add collateral. If you can’t wait to build your credit scores you may want to secure the debt. Use your auto or house as security and the form of guarantee. This way you will be able to qualify for better terms and lower fees.
• Find a cosigner. Those who don’t own a house or a car may find a person who will be responsible for the personal loans repayment. This person is called a cosigner and he or she should also have a stable income source and decent credit scores rating.

Alternatives to Small Personal Loans

Sometimes you may not qualify for personal loans offers from lending companies. It may be frustrating to waste your time in the long queues and submit multiple documents trying to get approved especially with poor credit. Are there alternatives? Yes, you may choose other loan options to receive extra cash for your needs:

• Ask your family. There may be two or three weeks left until your next salary day or your business doesn’t bring profit at the moment. You can ask your relatives or friends to help you out. Make sure you use this option for the short period and always repay the debt as you may risk losing your relationships.
• Turn to charities. Whether you are living in Canada or Australia, you may find some not-for-profit organizations and charities that can help low income families and people in need. Some religious institutions may also help with paying down overdue bills, utility payments, as well as groceries.
• Ask for a cash advance. If you have good relationships with your boss you may also ask for a cash advance against your next paycheck. This way the employer will give you the amount of cash you’ve already earned this month but haven’t obtained yet.