Best Small Personal Loans in March 2024 | LendingTree (2024)

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Read more about how we chose our picks for best small personal loans.

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See personal loan offers

See personal loan offers

See personal loan offers

See personal loan offers

See personal loan offers

See personal loan offers

See personal loan offers

See personal loan offers

See personal loan offers

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Small personal loans range from $1,000 to $5,000 and are typically repaid within two or three years, making the monthly payment extremely low. Whether you need to pay for an auto repair, take your dog to the vet or fund a minor medical procedure, a personal loan could help.

While applying for a personal loan may not be the most exciting process, it doesn’t have to be stressful. Here are the steps you’ll follow when seeking a small personal loan:

• Check your credit score and report: It’s important to know your credit score and understand your credit profile so you know which lenders you may qualify with. Remember that it’s common for errors to show up on your credit report, which can impact your score. Before applying for a personal loan, dispute credit report errors you find and work to have them removed for a potential credit score boost. You can check your credit score with LendingTree and look at your credit report on AnnualCreditReport.com.
• Shop around for lenders: Shopping around for competitive interest rates from lenders can help to ensure that you find a loan that best fits your budget and needs. Many lenders allow you to prequalify for a loan so you can see what rates you may qualify for without impacting your credit score.
• Verify your information: If you decide to follow through with a lender after filling out an initial application, you’ll need to verify your personal and financial information. For instance, lenders may require that you upload or provide a copy of your pay stubs or W-2s to verify your income information. They may also require that you show a government-issued ID and proof of residence.
• Submit to a hard-credit inquiry: As part of the final approval process, many lenders will run a hard credit inquiry on your credit profile. They are checking your creditworthiness, or how likely you are to repay the loan. A hard credit pull can cause your FICO credit score to drop about five points, but it will only stay on your credit report for two years or less.
• Accept your loan: Once you’ve completed the application process and are approved for a loan, you’ll need to sign documents and wait for the funds to be deposited in your bank account. How long it takes to get a personal loan depends on the lender, but funding generally takes anywhere from one to five business days after you’ve been approved.

Many types of financial institutions offer small loans to consumers; however, the availability, terms and eligibility requirements will depend on the lender you choose.

Banks

Before launching into your search for a small loan, consider checking with your current bank first. Some banks, like Wells Fargo Bank, require you to be a current customer in order to access personal loan products.

The personal loan application process may take a bit longer to complete compared to online lenders, but you may access perks like no-fee loans. Banks may also require that you visit a local branch in person in order to close on your loan.

Credit unions

To get a small personal loan from a credit union, you’ll typically need to become a member of the credit union first. This may require a small fee or deposit. Check membership requirements before applying for a loan, as some credit unions only cater to certain groups, such as people with military ties.

Credit unions also typically tend to offer smaller loan amounts than banks and online lenders. Navy Federal Credit Union, for instance, offers loans as small as $250. Another benefit to credit unions is that the APR is capped at 18%, which is particularly good news if you’re having trouble finding lower rates elsewhere.

Online lenders

Online lenders offer flexibility to consumers who don’t want to become a credit union member or bank customer. Because everything is done online and you don’t have to worry about creating a membership or banking account, online lenders may take less time to approve and fund your small personal loan.

When it comes to personal loans online, amounts typically start at $1,000 to $2,000. This may be higher than what other types of lenders — such as credit unions — offer.

It’s always a smart idea to receive several loan offers when shopping for a personal loan. Once you have multiple offers in hand, consider the following factors to decide which offer is best for you:

• Amounts: You’ll want to make sure the lender you choose offers the amount you need to borrow. For instance, if you can only afford to borrow $1,000, then lenders like Wells Fargo and SoFi may not be a good fit for you since the lowest amounts they offer are $3,000 and $5,000, respectively.
• APR: The APR on your loan will determine how you’ll have to pay in interest. Typically, borrowers with good to excellent credit are eligible for a lender’s lowest interest rates. When you get a loan with bad credit, however, you are likely to receive much higher interest rates. The higher your interest rate, the more you’ll pay overall.
• Fees: Some lenders charge fees for their personal loans, including origination fees, late fees and failed payment fees. Origination fees — which typically run from 1% to 8% — are taken out of the total balance of your loan. Be sure to factor in any fees when you budget for your loan.
• Loan terms: Personal loans are repaid over a fixed term, commonly 12 to 84 months. The longer your loan term is, the lower your monthly payments might be but the more you’ll end up paying in interest. A shorter loan term may come with higher monthly payments, but you’ll pay less in interest over the life of the loan.
• Credit score requirements: A lender’s credit score requirements can play a large role in whether you qualify for a personal loan. Lenders typically look for a credit score of at least 640, but some lenders accept borrowers with scores of 600 or lower. To increase your chances of getting approved for a loan, you can work on building your credit score.
• Other eligibility requirements: Always read the fine print before applying for a loan and learn about the qualifications lenders are looking for beyond credit score. For instance, some lenders don’t offer personal loans to residents in certain states, while other lenders require that you have a low debt-to-income ratio.

Unfortunately, if you have a low credit score, it can be challenging to find a lender that’s willing to work with you. In the eyes of lenders, the lower your credit score, the riskier you are as a borrower. Lenders use credit scores to evaluate how likely you are to repay your loan.

If your credit score needs work but you need a personal loan, here are a few strategies that may improve your chances:

• Consider a secured loan: While most personal loans are unsecured — meaning they don’t require collateral — some personal loan lenders offer secured loans. With a secured loan, you’ll offer valuable collateral, such as a vehicle or bank account, to back your loan. If you are unable to repay the loan, the lender can confiscate the collateral to recoup their losses. With a secured loan, however, interest rates are generally lower. This can be a good option for borrowers with lower credit scores who have valuable collateral to offer and are sure they can repay their loan.
• Find a co-borrower: A co-borrower with a good credit score and income can help you secure a personal loan. Because you and your co-borrower are both on the hook for repaying the loan, the risk for the lender is decreased. This also means that if you fall behind on payments, both of your credit scores will be impacted.
• Improve your credit before applying: In some cases, it may be best to wait to apply for a personal loan until you’re able to increase your credit score. Improving your credit score can help you secure a better interest rate and be approved by lenders that offer perks like no-fee personal loans.

While there are many trustworthy small personal loan lenders out there, it’s important to be cautious and research lenders before signing the contract. Here are a few red flags to look out for and avoid:

No credit checks: No credit checks may sound like a dream come true if you have bad credit and are in need of some extra cash. However, any credible lenders will require a credit check to ensure that you can afford to repay a loan. Payday loan lenders, for example, don’t require credit checks and should be avoided.

Require access to checking or savings accounts: Some predatory lenders may require you to provide your checking or savings account information. Once you do, these lenders are able to withdraw money from your account to repay your loan, even if it overdrafts your account and costs you bank fees.

Lack of transparency: If a lender isn’t upfront about its fees and interest rates, you may want to rethink getting a loan with them. A trustworthy lender will make that information readily available on its website or during the application process.

Sky-high fees and interest rates: Some loans, such as payday loans, come with interest rates as high as 400%, which can make it challenging to repay that debt. Many borrowers end up having to take out more loans to pay off their original loan, trapping them in a cycle of debt.

Repayment lengths: The length of time you have to repay a loan can also be an indicator of a predatory lender. Predatory lenders sometimes offer only two to four weeks for a borrower to repay a loan. This short repayment period can make it difficult to keep up with payments.

If you’re in need of extra funds, a small personal loan isn’t the only option on the table. Here are a few other alternatives to explore:

0% intro APR credit card

To avoid paying interest, you can apply for a 0% introductory APR credit card. During the introductory period, your balance does not accrue interest, and every payment you make goes directly to the principal.

Once that promotional period ends, however, you’ll have to pay interest on the remaining balance. These promotions can last anywhere from 12 to 21 months. If you’re certain you can pay off your balance before the end of the introductory period, these cards can be a great option.

Buy now, pay later apps

Since many retailers offer buy now, pay later (BNPL) services, you may be able to get a mini loan through a service such as Affirm or Klarna.

The most common form of buy now, pay later financing is a Pay in 4 plan. Your balance is split into four payments repaid over six weeks, with a payment due every two weeks. In many cases, these BNPL plans do not charge interest. Other common BNPL financing includes monthly installments or Pay in 30 days, though these plans sometimes come with interest charges.

Credit card cash advance

If you need emergency cash, you can use a cash advance credit card to access funds quickly.

You can withdraw funds by going to your bank’s branch, visiting an ATM or getting a convenience check in the mail. Keep in mind, however, that cash advances typically have fees attached, as well as interest rates that can be much higher than your typical credit card APR.

Borrow from a friend or family member

If you have a loved one with the financial flexibility to offer you a loan, receiving a family loan and signing a loan agreement may be a good way to avoid fees and high interest rates.

However, when borrowing from a friend or family member, be aware that the loan could impact your relationship. According to a 2021 LendingTree study, nearly half of the people who are owed money from a loved one reported that they regretted lending it in the first place. About 1 in 6 claimed that money had ruined a relationship.

We reviewed more than 28 lenders that offer personal loans to determine the best small personal loans. To make our list, lenders must offer competitive annual percentage rates (APRs) as well as loan amounts $2,000 and below. From there, we prioritize lenders based on the following factors:

• Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
• Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
• Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

LendingTree reviews and fact-checks our top picks on a monthly basis.