Why You Should Trust Us: How We Chose the Best Small Personal Loans
Business Insider assigns all personal loan products in our reviews and guides a numeric score on a scale from 1-5. This score reflects how well a given loan provider stacks up across a variety of categories that matter to potential customers. Here is a breakdown of the categories and the weight each category carries:
- Interest rate (20% of rating)
- Fees (20% of rating)
- Term lengths and loan amounts (15% of rating)
- Funding speed (15% of rating)
- Borrower accessibility (15% of rating)
- Customer support (7.5% of rating)
- Ethics (7.5% of rating)
You will notice that categories such as interest rates and fees carry the most weight. This is because these categories have the greatest impact on the borrowing experience.
You may find yourself in a situation where you need just a bit of cash to cover the cost of things like moving expenses or car repairs. A personal loan is one option you can consider.
Most small personal loan lenders offer loan amounts starting as low as $1,000, while some lenders, particularly credit unions, offer even smaller loan amounts as low as $250.
We've gathered the best small personal loans for people with a range of credit scores, with a specific focus on finding companies that offer low APRs.
Best Small Personal Loans
- Best for short repayment terms: PenFed Credit Union Personal Loan
- Best for fast approval and funding: Alliant Credit Union Personal Loan
- Best for excellent credit: Upgrade Personal Loan
- Best for long repayment terms: First Tech Fixed Rate Personal Loan
- Best for extra-small loans: Navy Federal Credit Union Personal Loan
- Best for easy qualification: Upstart Personal Loan
- Best for excellent customer service: Best Egg Personal Loan
- Best for coborrowers: PNC Bank Personal Loan
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Best for Short Repayment Terms
8.99% to 17.99%
$600 to $50,000
Pros
Cons
For borrowers with excellent credit, PenFed Credit Union has great minimum interest rates on its personal loans. The best personal loan for you depends on your credit score, which will determine what you qualify for and can lower your rate.
PenFed Credit Union Personal Loan- Loan amounts range from $600 to $50,000
- Term lengths between one to five years
- Loans originated by Pentagon Federal Credit Union
PenFed Credit Union has the shortest minimum repayment term of any lender on our list. This may be helpful if you can afford larger monthly payments and want to save on the total interest you pay. PenFed also has one of the lowest starting APRs of any of our top picks for small personal loans.
The company's personal loans have no origination fees and no prepayment penalties. You can apply with a co-borrower, which may help you get a better interest rate if your co-borrower has a good credit history.
You don't need to be a PenFed member to apply for a loan, but you'll need to become a member to accept a loan offer. If you've served in the military or work at qualifying associations or organizations, you'll qualify. If that doesn't apply to you, you can join by opening a savings account with a $5 minimum deposit.
Best for Fast Funding
starts at 8.99%
$1,000 to $100,000
Undisclosed
Pros
Cons
- Loan term lengths from one to five years
- Loan amount range from $1,000 to $50,000
- For a small fee, you can cover death, disability, and involuntary unemployment, protecting you from unexpected events that may make you unable to pay back your loan
Alliant Credit Union, like every other credit union on our list, has an unspecified minimum credit score. The higher your credit score, the more likely you are to be approved for a loan with a great rate. The lender charges no origination fees and has no late payment penalty, lowering the overall cost of your loan.
In most cases, you can get loan approval and funding on the same day, which gives Alliant a leg up on competitors whose approval processes are slower.
Alliant offers one of the shortest repayment terms of any lender on our list of top picks. While you'll pay more each month with a shorter repayment term, you'll save in the long term by paying less in total interest.
You'll have to be a member of Alliant to take out a personal loan with the company, but the good news is the eligibility requirements are relatively lax. The easiest way to become an Alliant Credit Union Foundation digital inclusion advocate (Alliant Credit Union will make a one-time $5 contribution to the Foundation on your behalf).
You can also purchase debt protection for your loan that covers death, disability, and involuntary unemployment, safeguarding you from unexpected events that could leave you unable to repay your loan. The monthly cost for debt protection per $1,000 of your outstanding loan balance is $1.99.
Best for Excellent Credit
starts at 8.99%
$1,000 to $100,000
Undisclosed
Pros
Cons
- Loan term lengths from one to five years
- Loan amount range from $1,000 to $50,000
- For a small fee, you can cover death, disability, and involuntary unemployment, protecting you from unexpected events that may make you unable to pay back your loan
Upgrade offers one of the lower minimum APRs among our picks. Keep in mind that you'll only qualify for this rate if you have excellent credit, so if your credit score isn't in the best of shape, exercise caution. People with worse credit scores may end up paying an APR closer to 35.99%.
Upgrade will charge you an origination fee between 1.85% and 9.99%, which will be deducted from your loan proceeds. You may also be charged a late fee of up to $10. However, there are no prepayment penalties with this lender.
You can choose a loan term between two to seven years — a longer term will mean your monthly payments are small, but you'll pay more in total interest. Once you accept your loan offer, you should get your funds as soon as the next day.
Best for Long Repayment Terms
8.44% to 18.00%
$500 to $50,000
Varies based on the amount of money you want to take out
Pros
Cons
- Loan amounts range from $500 to $50,000
- Loan term lengths from 6 months to 84 months
- Eligiblefor First Tech by joining the Financial Fitness Association for $8, or if you live or work in certain parts of Oregon
- Speak to a customer representative at any time over the phone
- Loans are made by First Technology Federal Credit Union
First Tech will lend you as little as $500, which is useful if you're looking for a small amount of cash and want to avoid the high APRs that accompany payday loans. First Tech loans come with no application, origination, or annual fees, and there's no penalty for paying off your loan early.
If you're looking to spread out your payments over a longer amount of time, First Tech has the longest maximum loan repayment length of any lender on our list. You can divide up your payments over seven years, which will reduce your monthly payments but will cost you more overall due to interest.
First Tech doesn't specify its minimum credit score, so you'll have to apply with the lender to see if you're eligible.
While you'll have to join First Tech to be eligible to take out a personal loan with them, it's relatively easy to qualify for membership. The simplest way to qualify is by joining the Financial Fitness Association for $8, though you may also be eligible if you live or work in certain parts of Oregon.
Best for Extra-Small Amounts
8.99% to 18.00%
$250 to $50,000
Undisclosed
Pros
Cons
- Loan amounts range from $250 to $50,000
- Term lengths between six months to five years
- Loans originated by Navy Federal Credit Union
Navy Federal Credit Union offers loans for as little as $250, the smallest minimum loan amount of all the lenders on our list. If you are looking for an alternative to a payday loan with lower APRs, Navy Federal's personal loans may be for you. Keep in mind that while the lender doesn't have a specified minimum credit score, eligibility requirements will likely be higher than those of a payday lender.
Navy Federal's APR range depends on the repayment term length. For loans up to three years, the range is 8.99% to 18.00%, while for loans between 37 and 60 months, you'll pay between 14.79% to 18.00%. You may find a better rate on a longer repayment term elsewhere.
However, you'll face relatively stringent eligibility requirements to join the credit union. You qualify if you are active military or a veteran, as well as an employee or retiree of the Department of Defense. Family members of any of the aforementioned groups are also eligible.
Best for Easy Qualification
6.60% to 35.99% fixed
$1,000 to $50,000 (borrowers in four states are subject to higher minimum loan amounts: Massachusetts: $7,000, Ohio: $6,000, New Mexico: $5,100, Georgia: $3,100)
300
Pros
Cons
Upstart could be the right lender if you have a strong work and education history, but you have a low credit score or limited credit history. The best personal loan for you depends on your credit score, which will determine what you qualify for and can lower your rate.
Upstart- Loan amounts range from $1,000 to $50,000. However, borrowers in four states are subject to higher minimum loan amounts: Massachusetts: $7,000, Ohio: $6,000, New Mexico: $5,100, Georgia: $3,100
- Loan term lengths are either 3 or 5 years
- Can have origination fees up to 8%
- Considers employment and education history when making loan approval decisions
- Loans are made through one of several Upstart-powered bank partners
Upstart personal loans may be easier to qualify for than any other option on our list. The minimum credit requirement for Upstart is 300, the lowest of all of our top picks. However, if your credit score is low, you might end up paying a high APR and may want to consider an alternative to a personal loan.
Upstart's loan repayment term options are fairly limited — you can choose between a three-year or five-year term. On the bright side, the company usually funds loans within one business day, which is useful if you need your money fast.
Best for Excellent Customer Service
6.99% to 35.99%
$2,000 to $50,000
600
Pros
Cons
- Loan amounts range from $2,000 to $35,000
- Loan term lengths range between 3 to 5 years
- You may get your money by the next business day after your loan is reviewed and approved
- Loans made by Best Egg's lending partners
- Unavailable if you live in Iowa, Vermont, West Virginia, the District of Columbia, or U.S. Territories
Best Egg has the highest minimum credit score requirement of any lender on our list but offers a low minimum APR for borrowers with good creditworthiness. Additionally, about half of Best Egg customers will receive their money the day after applying for the loan, so the lender could be a good option if you need money quickly.
If you're looking for a company with great customer service, Best Egg may be a good choice. The company boasts a 95% customer satisfaction rate, which is supported by its top-notch A+ Better Business Bureau trustworthiness score.
While there are no prepayment penalties with Best Egg, you will pay an origination fee between 0.99% and 9.99%, which is included in the APR listed above. Some of our other top picks don't charge origination fees. Best Egg also has a lower maximum loan amount than most of the other companies on our list.
Best for Coborrowers
7.89% to 24.74%
$1,000 to $35,000
Pros
Cons
- Loan term lengths range between 6 to 60 months
- If you're not an existing customer, you may need to visit a branch to get your loan funds, which could take 3 to 10 days to process
PNC Bank is an excellent option for a low-interest personal loan, especially for anyone planning to use a coborrower. Using a coborrower with great credit will help you qualify for the lowest rates, which start as low as 7.89% with PNC Bank. Plus, there's a 0.25% discount when you set up automatic payments from a PNC checking account. This lender offers flexible repayment terms ranging from six to 60 months. Remember that the quicker you pay off your loan, the less you'll pay in interest.
PNC Bank does not charge origination fees or prepayment penalties. However, it does charge a late fee of $40 or 10% of the payment (whichever is greater).
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Small Loan Lender Trustworthiness
Whether you're looking for a $2,000 loan or a $5,000 loan for your small loan, finding a trustworthy lender can help improve your loan experience. We've only selected online personal loan lenders with no public controversies in the last three years. We've also compared each institution's Better Business Bureau score.
The BBB measures businesses based on factors like their responsiveness to consumer complaints, truthfulness in advertising, and clarity about business practices. Here is each company's score:
| Lender | BBB Grade |
| Upgrade Personal Loan | A+ |
| Best Egg Personal Loan | A+ |
| PenFed Credit Union Personal Loan | A+ |
| First Tech Personal Loan | A+ |
| Navy Federal Credit Union Personal Loan | NR |
| Upstart Personal Loan | A+ |
| Alliant Credit Union Personal Loan | A+ |
| PNC Bank Personal Loan | A+ |
All of our top picks are rated A+ by the BBB, with the exception of Navy Federal. Navy Federal is currently unrated as the company responds to previously closed complaints.
Keep in mind that a high BBB score does not guarantee a positive relationship with a lender and that you should continue to do research and talk to others who have used the company to get the most comprehensive information possible.
Factors to Consider When Choosing a Small Personal Loan
- Interest rates. The amount you pay in interest will ultimately increase the overall cost of your loan, so it's worth taking the time to compare small personal loan lenders and APRs.
- Fees. Some lenders charge high origination fees, while others don't charge any at all. Also, be on the lookout for prepayment penalties that will cost you extra to pay off your loan ahead of schedule. Hidden fees are an easy way to add unnecessary costs to your already expensive loan.
- Loan amounts and terms. Calculate what kind of payments will comfortably fit within your budget. Stick to loan amounts and repayment terms that won't cause you to get behind financially.
- Funding speed. Some lenders offer same-day access to your money. Consider how fast a lender releases funds when choosing where to get a loan.
- Credit requirements. Each lender has unique minimum credit requirements. Not only will these requirements determine if your loan application is approved, but they also decide what rates you are eligible for. You can typically find a lender's credit requirements on their website's personal loan product page.
- Customer service. Researching a lender's reputation through customer reviews and guides like the Better Business Bureau will give you an idea of what to expect should you encounter any problems.
Small Personal Loan Alternatives
While personal loans can be a good option to get money quickly, there may be less expensive avenues if you only need a small amount:
- Ask friends or family. It may be uncomfortable to ask friends or family for a loan, but you can often come to an agreement with lower interest rate payments than through an official lender.
- Get a paycheck advance. Certain banks will allow you to receive your paycheck a couple of days early, and you can use apps that allow you to receive a portion of money you've already earned in a pay period. You can also ask your employer for a paycheck advance. However, taking a paycheck advance isn't free — you'll often be charged fees that come out of your earnings when you receive them.
- Take out a credit card. You might also consider a credit card instead of a personal loan. This could be particularly helpful if your credit isn't in the best shape and you qualify for a lower APR with a credit card than a personal loan lender. See our post on personal loans vs. lines of credit for more on which option is better for you.
- Open a 0% APR credit card. Some credit card companies offer an introductory interest-free or 0% APR period. This may be an option to consider if you're only looking to borrow a small amount and know you will be able to pay it off quickly. Be aware that balance transfers to a 0% APR credit card often come with a fee.
- Seek assistance from a local nonprofit or charity. Many local organizations have programs aimed at short-term aid for those in need.
- Take up part-time work in the gig economy. You can work on your own time with gig work like rideshare and food delivery apps. These extra jobs may allow you to make enough money to negate the need for a loan.
The Difference Between a Small Personal Loan and a Payday Loan
People often use payday loans to bridge the gap between paydays or to cover emergency expenses, so their terms are much shorter than those of personal loans.
Payday loans also come with particularly high APRs — the average interest rate on a payday loan is roughly 400% — which is over 10 times higher than the highest APR of any personal loan lender on our list. The high interest rate on payday loans could trap you in a cycle of debt quickly if you happen to miss a payment.
You can also take out smaller amounts of money with payday loans. Minimums generally start around $50, while on our list of top picks, the lowest amount you can borrow is $250.
Payday loans usually aren't as hard to qualify for as personal loans. Many payday lenders don't run a credit check or even ensure you're able to repay the loan. Many states have banned payday loans due to predatory lending practices, whereas personal loans are generally accessible across the country.
FAQs
Why don't many major banks offer small personal loans?
Some major banks don't offer small personal loans because it can cost just as much to service a small loan as a larger one, and many banks don't find the low interest rates and small profit margins worth it. As a result, many online lenders and traditional brick-and-mortar institutions have relatively high minimum loan amounts.
What can I use a small personal loan for?
You can use a small personal loan for a variety of purposes, though the list varies depending on the lender. Some common reasons include: debt consolidation, credit card refinancing, home improvements, moving expenses, travel, car repair, and dental work financing.
Can I get a small personal loan with bad credit?
Although challenging, it is possible to get a small personal loan with bad credit. Lenders such as Upstart have a low minimum credit score requirement of 300. Additionally, you may want to consider finding a cosigner with great or excellent credit to help you qualify for lower rates.
What's the smallest personal loan I can get?
While many lenders offer loans from $1,000 and up, you can get loans in the hundreds of dollars. For instance, you can get a loan of as little as $250 from Navy Federal Credit Union, and you can get a NetCredit personal loan of as little as $500.
How do small personal loans affect my credit score?
When you initially take out a personal loan, it is expected that your credit score will take a slight, temporary dip. However, if you consistently make payments on time, then the loan should help improve your credit score over time.
