10 Best Small Personal Loans of 2024
Updated March 28, 2024 at 6:34 pm
People use small personal loans to cover small expenses, such as car repair or medical bills. These loans can be helpful if you need money fast since some lenders can deposit funds into your account as fast as the next business day.
Depending on how much money you need, it’s not always easy to find small personal loans. Some lenders have high minimum starting loan amounts of $5,000 or more. We’ve created a list of lenders offering some of the best small loans. Some of our top picks have starting loan amounts as low as $250 or $600. Keep reading to learn more and see which loan is the best fit for you.
Our Methodology Newsweek Vault’s loan experts evaluated multiple data points to help our readers make sense of their borrowing options across student loans and personal loans. To narrow down the best available offers, we weigh the product pros and cons across five core categories, including:
- Application process
- Eligibility requirements
- Interest rates
- Loan amounts (minimum and maximum)
- Repayment flexibility
Our Picks - Best credit union personal loan: PenFed
- Best for bad credit: Avant
- Best for minimal credit history: Upstart
- Best for small secured loans: Upgrade
- Best for debt consolidation: Prosper
- Best for homeowners: Best Egg
- Best for members of the military: Navy Federal Credit Union
- Best in-person loan: PNC Bank
- Best for flexible repayment terms: Discover
- Best peer-to-peer loan: LendingClub
Compare Personal Loans
Best Small Personal Loans of 2024
Best Credit Union Personal Loan
PenFed
Vault Verified
Why We Chose It
PenFed’s minimum loan amount is just $600. It doesn’t charge an origination fee, and it allows you to add a co-borrower to the loan application.
Pros
- Low APR range
- Low minimum loan amount
- No origination fee
Cons
- Membership required
- Late fee
Best for Bad Credit
Avant
on Credible’s website
Why We Chose It
Avant offers fast personal loans that can be funded as soon as the next business day and welcomes borrowers with credit scores as low as 580. Read our Avant personal loans review.
Pros
- Accessible to borrowers with bad credit
- Fast funding
- Wide range of repayment terms
Cons
- Administrative fees up to 4.75%
- High maximum rate
- No option to send funds directly to creditors
Best for Minimal Credit History
Upstart
on Credible’s website
Why We Chose It
Upstart offers loans starting at $1,000 that are accessible to applicants with thin credit profiles. If you don’t have a credit score, Upstart will consider recent graduates or students enrolled in eligible degree programs. Read our Upstart personal loans review.
Pros
- Quick funding
- Accessible to borrowers with credit scores of 300 and above
- Option to prequalify
Cons
- High maximum APR
- Limited repayment terms
- Possible origination fee of up to 12%
Best for Small Secured Personal Loans
Upgrade
on Credible’s website
Why We Chose It
Upgrade offers loans starting at $1,000 to borrowers with credit scores as low as 560. The lender may even let you get a secured personal loan using your car as collateral. Read our Upgrade personal loans review.
Pros
- Secured loans available
- Option to prequalify
- Low minimum credit score requirement
Cons
- Late fee
- High maximum rate
- Origination fees
Best for Debt Consolidation
Prosper
Vault Verified
Why We Chose It
Prosper offers one of the lowest starting APRs around, making it a potentially good option for well-qualified borrowers who want to consolidate high-interest credit card debt. Read our Prosper personal loans review.
Pros
- Flexible repayment terms
- Joint loans are available
- Quick funding
Cons
- Late fee
- Maximum APR over 30%
- Origination fees
Best for Homeowners
Best Egg
on Credible’s website
Why We Chose It
Best Egg is open to fair credit borrowers and even offers a personal loan option that allows homeowners to secure the personal loan using house items like lights and cabinets. Read our Best Egg personal loans review.
Pros
- Option to prequalify
- Quick funding
- Option to send funds directly to creditors
Cons
- Limited repayment terms
- Origination fee
- Must earn $100,000 to qualify for lowest rate
Best for Members of the Military
Navy Federal Credit Union
Vault Verified
Why We Chose It
Navy Federal Credit Union offers personal loans with loan amounts as low as $250 with no origination fees to veterans, active-duty military members and their family members.
Pros
- Option to apply in person
- No origination fees
- Secured personal loans available
Cons
- No option to prequalify
- Late fee
- Higher starting rates for loan terms over 36 months
Best In-Person Loan
PNC Bank
Vault Verified
Why We Chose It
PNC offers personal loans with no origination fees and competitive rates. You can apply online or in person in 28 states (and Washington, D.C.) across the U.S.
Pros
- Option to add a co-applicant
- Low starting APR
- No origination fees
Cons
- Approval takes up to a few days
- Rates vary by location
- Not available in all states
Best for Flexible Repayment Terms
Discover
on Credible’s website
Why We Chose It
Discover offers repayment terms of up to seven years and doesn’t charge origination fees. Additional standout features include the option to pay creditors directly and free FICO score. Read our Discover personal loans review.
Pros
- Competitive starting APR
- Option to pay off creditors directly
- No origination fee
Cons
- Late fee
- Joint loans aren’t available
- Minimum income requirement of $25,000
Best Peer-to-Peer Loan
LendingClub
on Credible’s website
Why We Chose It
LendingClub is a peer-to-peer lender that offers personal loans to borrowers with fair-to-excellent credit. Its maximum APR is much lower than many other lenders that welcome borrowers with less-than-stellar credit. Read our LendingClub personal loans review.
Pros
- Option to prequalify
- Joint loan applications available
- Option to send funds directly to creditors
Cons
- High maximum APR
- Limited repayment terms
- Origination fees
What Is a Small Personal Loan?
A small personal loan is an installment loan with set monthly payments you can get from various financial institutions, including banks, credit unions and online lenders. While there is no set definition of what a small personal loan is, minimum loan amounts for personal loans typically range from a few hundred dollars to $5,000.
You can use a small personal loan for just about any purpose, such as debt consolidation, a wedding or unexpected expenses. That said, some lenders prohibit borrowers from using funds to pay for post-secondary education expenses and investing.
How Do Small Personal Loans Work?
Small personal loans work like any other personal loan. They are typically unsecured, meaning you don’t have to pledge any collateral like your car, home equity or a bank account to secure the loan.
After submitting a formal application, a lender usually evaluates your credit history, income and other factors to determine whether you qualify and how much you can borrow. Once approved, a lender deposits a lump sum into your bank account or sends funds directly to your creditors. You then make payments on the loan, including interest, over a set repayment term.
Why Would You Need a Small Personal Loan?
Common reasons to get a small personal loan include:
- Consolidating high-interest debt. Combining multiple debts into a single debt with a small debt consolidation loan can make it easier to manage your debt since you’ll only have one monthly payment instead of several. Plus, you can save money if you receive a lower rate.
- Small medical expenses. You can use a small personal loan to cover various medical procedures, such as routine dental and eye exams.
- Emergencies. Personal loans can be good for emergency expenses since you generally receive funds quickly once approved.
How To Choose the Best Small Personal Loan
While comparing your small personal loan options, keep the following factors in mind.
- Fees. Choose a lender that has minimal or no personal loan fees if you can. Fees such as origination fees and prepayment penalties can increase your total borrowing costs.
- Annual percentage rate (APR). A loan’s APR is a way for you to assess the cost of a loan. The APR takes into account your loan’s interest rate and any fees a lender charges.
- Loan amounts. Minimum loan amounts vary by lender. Pick a lender that offers your desired loan amount.
- Repayment terms. Repayment schedules also vary. Selecting a short repayment term can decrease overall costs, but your monthly payments are usually higher. Longer repayment terms typically have lower monthly payments, but your total borrowing costs are higher.
Pros and Cons of Small Personal Loans
Before applying for a small personal loan, consider the potential benefits and risks. Here are some to keep in mind.
Pros
- Quick funding. Some lenders can deposit funds into your account the same or next business day.
- No collateral necessary. Personal loans are usually unsecured, so you don’t have to risk losing any collateral like your home.
- Fixed payments. Small personal loans come with a set monthly payment, which may be easier to fit into your budget than a financial product that has payments that fluctuate over the life of the loan.
Cons
- Hard credit check. Lenders typically perform a hard credit pull after you submit a formal loan application, which may temporarily ding your credit.
- Origination fees. Some lenders charge origination fees as high as 12% of the loan amount. These fees are usually deducted from your loan amount and increase your overall borrowing costs.
- Potentially high APRs. Some lenders have maximum rates over 35%.
How To Get a Small Personal Loan
Although the application process varies depending on the lender, you typically take these steps to apply for a personal loan.
- Review your credit. Check your credit score to assess your likelihood of meeting a lender’s eligibility requirements. Also, review your credit reports for inaccuracies. You can visit AnnualCreditReport.com for free weekly credit reports from the three main credit bureaus.
- Determine how much you need. Estimate how much you need to borrow and use a calculator to see if the monthly payment and overall costs fit your budget.
- Comparison shop. To find the most affordable personal loan, prequalify with at least three to five lenders to get estimated rates and terms you could receive if approved without harming your credit.
- Submit a loan application. Once you’ve chosen a lender, complete a formal loan application. Lenders typically require you to provide information, such as your Social Security number (SSN), desired loan amount, preferred repayment term, monthly rent or housing payment and income.
Alternatives to Small Personal Loans
Although a small personal loan can be beneficial, especially in emergency scenarios, they’re not right for everyone. Here are some alternatives to explore if a small personal loan doesn’t best suit your needs and budget.
0% APR Credit Card
If you have good-to-excellent credit, you may qualify for a 0 percent APR credit card. These cards give you a chance to avoid paying interest for a promotional period on purchases, balance transfers or both. But you’ll pay interest on any remaining balance after the introductory period expires.
Home Equity Loan or Home Equity Line of Credit (HELOC)
Homeowners with at least 15 percent to 20 percent equity in their homes might be able to borrow a portion of it via a home equity loan or HELOC. These options typically come with lower rates than a personal loan, but defaulting could lead to you losing your home.
Home equity loans are installment loans that usually come with fixed rates and payments. HELOCs are revolving credit products that generally come with adjustable rates. With a HELOC, you borrow as much as you need up to a certain credit limit during the draw period.
Loan from a Family Member or Friend
Although asking a family member or friend to loan you money can be emotionally challenging, they may be willing to offer you a better deal than a financial institution, including a much lower rate and more favorable terms.
If you find someone willing to lend you a small lump sum, put the loan terms in writing. After you receive the funds, pay the loan back on time to avoid a potential rift in your relationship.
Savings
If you don’t need funds immediately, consider saving up for the purchase instead. With this option, you can avoid paying interest. One of the best ways to achieve a savings goal is to deposit a set amount of money each month into a high-yield savings account.
Frequently Asked Questions
What Is the Smallest Personal Loan You Can Get?
Minimum loan amounts vary by lender. Some financial institutions offer loan amounts as low as a few hundred dollars, while others have starting loan amounts of $1,000 or higher.
How Does a Small Personal Loan Affect Your Credit Score?
When you submit a loan application, lenders generally perform a hard credit check to review your credit history, and this can temporarily lower your score. If you don’t miss any payments, it can improve your credit since payments are usually reported to the national credit agencies. But if you default on the loan or make late payments, it can cause major damage to your credit.
Can I Get a Small Personal Loan Without a Hard Credit Check?
Yes, some lenders offer small no-credit-check loans. But a significant disadvantage is that these loans often come with high APRs and origination fees.
From Credible: Rates for personal loans provided by lenders on the Credible platform range between 6.99% - 35.99% APR with terms from 12 to 120 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 12%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 10.43%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 3, 2022, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.
Editorial Disclosure: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved or endorsed by any of these entities.
