Best Small Personal Loans

PenFed offers the best small personal loans

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38 Lenders reviewed
40 Loan features considered
9 Best of awards

Sometimes you just need some extra cash. Whether you’re renovating your bathroom, buying a new car, or trying to lower the interest rate on some of your debts, getting a small personal loan can help. But some personal loan lenders have higher minimum borrowing amounts, and others charge higher rates to borrowers who need a small amount of cash.

The best small personal loans come with affordable rates, a low minimum borrowing amount, flexible repayment terms, and fast funding. You can get a small personal loan from an online lender, bank, or credit union. It’s a good idea to compare a few different lenders during your search. The right small personal loan for you will depend on your timeline and credit score, and the features you think are most important.

All of the lenders you see here offer loan minimums no higher than $2,000, with some as low as $250.

Best Small Personal Loans of February 2023

If youre not seeing anything in the results that are a good fit for your needs, consider warranties from these companies:
Company APR Credit Score est. Loan Amount More Details
Best Overall PenFed Credit Union
4.7
APR Range
7.74% - 17.99%
Recommended Minimum Credit Score
650
This lender does not disclose its minimum credit score requirements.
Loan Amount
$600 - $50,000
See Details Check Rates
Best Big Bank U.S. Bank
4.7
APR With Autopay Discount
8.74% - 21.24%
Recommended Minimum Credit Score
660
This lender does not disclose its minimum credit score requirements.
Loan Amount
$1,000 - $50,000
See Details Check Rates
Best for Debt Consolidation Best Egg
4.1
APR Range
8.99% - 35.99%
Recommended Minimum Credit Score
600
This lender does not disclose its minimum credit score requirements.
Loan Amount
$2,000 - $50,000
See Details Check Rates
Best for Flexible Repayment Terms First Tech Federal Credit Union
4.1
APR Range
8.99% - 18.00%
Recommended Minimum Credit Score
600
This lender does not disclose its minimum credit score requirements.
Loan Amount
$500 - $50,000
See Details Check Rates
Best for Poor Credit Upstart
3.7
APR Range
6.50% - 35.99%
Recommended Minimum Credit Score
300
This lender does not disclose its minimum credit score requirements.
Loan Amount
$1,000 - $50,000
See Details Check Rates
Best for Quick Funding Rocket Loans
4
APR With Autopay Discount
8.42% - 29.99%
Recommended Minimum Credit Score
Not Disclosed
This lender does not disclose its minimum credit score requirements.
Loan Amount
$2,000 - $45,000
See Details Check Rates
Best for Secured Loans OneMain Financial
3.7
APR Range
18.00% - 35.99%
Recommended Minimum Credit Score
Not Disclosed
This lender does not disclose its minimum credit score requirements.
Loan Amount
$1,500 - $20,000
See Details Check Rates
Best for Fair Credit Upgrade
4.3
APR With Autopay Discount
7.96% - 35.97%
Recommended Minimum Credit Score
560
This lender does not disclose its minimum credit score requirements.
Loan Amount
$1,000 - $50,000
See Details Check Rates
Best for Military Members Navy Federal Credit Union
4
APR Range
7.49% - 18.00%
Recommended Minimum Credit Score
600
This lender does not disclose its minimum credit score requirements.
Loan Amount
$250 - $50,000
See Details Check Rates
Filter (9)

These lenders offer very small loans, but there are many other loan companies out there. See a broader selection with our picks for the best overall personal loans.

Best Overall : PenFed Credit Union

Investopedia's Rating
4.7

  • APR Range: 7.74% - 17.99%
  • Time To Receive Loan: 1 day
  • Loan Amount: $600 - $50,000
Pros and Cons
Pros
  • Competitive rates

  • Next-day funding on some loans

  • Borrow as little as $600

Cons
  • PenFed membership required

Why We Chose It

PenFed is a national credit union that offers banking services as well as personal loans to members. Loans as little as $600 are available, and there are no origination fees charged. 

PenFed offers pre-qualification allowing you to see your potential rates and terms by filling out a short application, which does not hurt your credit score. After completing your application, funds may arrive as soon as the next business day. There are no hidden fees on PenFed loans.

PenFed is our top pick for small personal loans, and applying is simple. Although membership is required, you can easily sign up as you apply for a loan by opening up a $5 savings account.

Qualifications

To qualify for a PenFed personal loan, you must meet the following eligibility criteria:

  • Be a PenFed member
  • Live in the United States
  • Be the age of majority as defined by state of residence
  • Be a United States citizen (PenFed does not support permanent residents)
  • Recommended minimum credit score of 650
  • Qualify based on financial history, credit history, and other factors

Best Big Bank : U.S. Bank

Investopedia's Rating
4.7

  • APR Range: 8.74% - 21.24%
  • Time To Receive Loan: 0 days
  • Loan Amount: $1,000 - $50,000
Pros and Cons
Pros
  • Minimum loan only $1,000

  • No origination or prepayment fees

  • Same-day funding available

Cons
  • Not available in all states

  • Late payment fee of $29

Why We Chose It

If you want the backing and security of a big bank, even for a small loan, U.S. Bank is a great choice. It’s a large national bank that offers personal loans starting at $1,000. You can apply for a loan with a 660 credit score (or higher), and you don’t need to be a U.S. Bank customer to qualify. You can pre-qualify online to check your rates without hurting your credit score as well.

U.S. Bank’s repayment terms run from 12 months up to 84 months in length. There are no origination, application, or prepayment fees applied, though you may have to pay a late payment fee of $29 if you miss a payment.

U.S. Bank loans are only available in 26 states, and you need to be within a 50-mile radius of a branch to qualify. You can’t apply for a U.S. Bank personal loan in Alabama, Alaska, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, Texas, Vermont, Virginia, or Washington, D.C.

Qualifications
  • U.S. citizen or permanent resident, or living in the U.S. on a valid visa
  • At least 18 years old
  • Valid address
  • Valid Social Security number
  • Valid government-issued ID
  • Qualify based on credit score, credit usage, and payment history

Best for Debt Consolidation : Best Egg

Investopedia's Rating
4.1

  • APR Range: 8.99% - 35.99%
  • Time To Receive Loan: 1 day
  • Loan Amount: $2,000 - $50,000
Pros & Cons
Pros
  • Pays your creditors directly

  • Minimum credit score of 600

  • Minimum loan amount is $2,000

Cons
  • Not available in all states

  • Origination fee of 0.99%–8.99%

Why We Chose It

Best Egg is an online lender that offers personal loans for a variety of use cases, including debt consolidation. You can borrow as little as $2,000, and the lender will pay off your creditors directly, making it easy to consolidate or refinance your debt.

Best Egg offers a simple online application to pre-qualify, which allows you to see your potential interest rates before completing your application. Funds may be deposited as soon as the next business day. Unfortunately, you can’t apply with a co-applicant to improve your chances of qualifying (and getting a lower rate), but Best Egg does offer secured loans.

Best Egg charges an origination fee on all loans, which can reach 8.99% of the loan total. There’s no fee for late payments, but there is a returned payment fee. Best Egg is a great option for consolidating your debt into a single payment; just keep an eye on the fees.

Qualifications
  • U.S. citizen or permanent resident, or living in the U.S. on a valid visa
  • At least 18 years old (19 years old in Alabama and certain other states)
  • Live in a state supported by Best Egg (not available in Iowa, Vermont, West Virginia, or Washington ,D.C.)
  • Recommended minimum 600 credit score
  • Verifiable income and employment
  • Minimum $3,500 annual income

Best for Flexible Repayment Terms : First Tech Federal Credit Union

Investopedia's Rating
4.1

  • APR Range: 8.99% - 18.00%
  • Time To Receive Loan: 0 days
  • Loan Amount: $500 - $50,000
Pros & Cons
Pros
  • Easy membership requirements

  • Same-day funding available

  • Loans as small as $500

Cons
  • Must be a First Tech member

  • Rates higher for longer-term loans

Why We Chose It

First Tech Credit Union offers loans starting at just $500 to First Tech members; luckily, membership is available to anyone in the U.S. Loan terms are available from 24 up to 84 months, giving you flexibility in your term length and monthly payments.

First Tech has a minimum recommended credit score of just 600 to apply, making it relatively accessible. Like many lenders, it offers pre-qualification to check your rates without a hard credit pull. Both secured and unsecured loans are available, and there are no origination fees on personal loans.

First Tech is a flexible option for smaller personal loans, and can save you on rates and fees compared to many competitors despite the membership requirement.

Qualifications
  • Be a U.S. citizen or permanent resident
  • Be at least 18 years old
  • Have a minimum credit score of 600
  • Qualify based on financial history, credit score, and other factors

Best for Poor Credit : Upstart

Investopedia's Rating
3.7

  • APR Range: 6.50% - 35.99%
  • Time To Receive Loan: 0 days
  • Loan Amount: $1,000 - $50,000
Pros & Cons
Pros
  • Minimum credit score of only 300

  • Can borrow as little as $1,000

Cons
  • Up to 10% origination fee

  • Not available in all states

Why We Chose It

Upstart offers personal loans as small as $1,000, and only requires a 300 credit score to apply (that’s the lowest possible credit score). This means that anyone with any credit history at all will be considered. Pre-qualification is available within a few minutes, meaning you can check rates without a hard pull on your credit.

Upstart charges up to 10% of the loan as an origination fee, which is taken directly from your loan. And the lender is not available in West Virginia and Iowa. But overall, Upstart is a great option for borrowers with poor credit who can’t qualify elsewhere.

If you have bad credit, you have to expect to pay more for loans. That means you’ll probably get something closer to the high end of Upstart’s APR range, and the high end of the origination fee range.

Qualifications
  • Must be a U.S. citizen or permanent resident
  • Must not live in West Virginia or Iowa
  • Must be at least 18 years old
  • Must have a valid email account
  • Must have a verifiable name, Social Security number, and birth date
  • Minimum credit score of 300
  • Must have a full time job, a full time job offer starting in 6 months (except if accepted to a partner bootcamp and seeking employment after graduation), a regular part time job or another source of regular income
  • Must have a personal banking account at a U.S. financial institution with a routing transit number

Best for Quick Funding : Rocket Loans

Investopedia's Rating
4.0

  • APR Range: 8.42% - 29.99%
  • Time To Receive Loan: 0 days
  • Loan Amount: $2,000 - $45,000
Pros and Cons
Pros
  • Same-day funding easier than with most lenders

  • Borrow as little as $2,000

  • Recommended minimum credit score of 640

Cons
  • Origination fee up to 7%

  • Limited repayment terms

Why We Chose It

Rocket Loans is an online lender (the sister company of Rocket Mortgage) that famously offers loans with same-day funding. 

You can pre-qualify to see your rates in just a few minutes, and if you complete the application and sign the promissory note by 1 p.m. Eastern Time, you can receive funds on the same business day. Rocket Loans will send the funds to your bank account by ACH, but your actual access to the money will depend on your bank’s processing time.

Rocket Loans offers smaller personal loans starting at $2,000, going up to $45,000; the loan terms are relatively restrictive, as you can only choose between 36 months or 60 months. Rocket Loans recommends having a 640 credit score for the best shot at approval, so it’s possible to qualify without having the best credit.

The upper end of the APR range is fairly high, and there’s also an origination fee that could reach 7%; so if your credit isn’t the best you may end up paying some decent fees. Rocket Loans is ideal for borrowers that need funding quickly, especially those with better credit who won’t be charged the origination fee.

Qualifications
  • Must be at least 18 years old
  • Must be a U.S. resident
  • Credit score and credit history are reviewed
  • Monthly income is reviewed
  • Tax forms may be reviewed
  • Debt-to-income ratio (DTI) is reviewed

Best for Secured Loans : OneMain Financial

Investopedia's Rating
3.7

  • APR Range: 18.00% - 35.99%
  • Time To Receive Loan: 1 day
  • Loan Amount: $1,500 - $20,000
Pros & Cons
Pros
  • Offers secured loans

  • Next-day funding

  • Can borrow as little as $1,500

Cons
  • Not available in all states

  • Origination fee up to $500 or 10% (varies by state)

  • Late fee up to $30

Why We Chose It

OneMain Financial offers secured personal loans, allowing you to put up collateral to help you qualify for the loan. This collateral (such as an automobile) acts as a guarantee for the loan in case you are unable to repay, making the loan easier to qualify for. 

Loans are available from $1,500 up to $20,000, and interest rates start relatively high at 18%. Loans can be used for almost anything, and borrowers may receive funding as soon as the next business day.

OneMain Financial charges an origination fee that is deducted from the total amount of the loan. The fee may be as high as 10% of the loan, or $500. Late fees may also be assessed, costing up to 15% of your monthly payment (or $30). These fees vary by state, unlike most lenders.

Overall, although OneMain Financial charges higher rates than competitors, if you’ve struggled to obtain an unsecured loan it could be a good pick for you.

OneMain Financial is available in most states, but is not available in Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island, Vermont, or Washington, D.C.

Qualifications

To qualify for a OneMain Financial personal loan, you must meet the following eligibility criteria:

  • Must be at least 18 years old (or age of majority in your state)
  • Must be a U.S. resident with a Social Security Number
  • Must live in a supported state (not Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island, Vermont, or Washington, D.C.)
  • Must pledge collateral for secured loans
  • Qualify based on financial history, credit score, collateral, and other factors

Best for Fair Credit : Upgrade

Investopedia's Rating
4.3

  • APR Range: 7.96% - 35.97%
  • Time To Receive Loan: 1 day
  • Loan Amount: $1,000 - $50,000
Pros and Cons
Pros
  • Low minimum recommended credit score of 560

  • Pays creditors directly

  • Next-day funding

  • Can apply with a co-applicant

Cons
  • 1.85% to 8.99% origination fee

  • Late payment fee of $10

Why We Chose It

Upgrade is an online lender that offers personal loans to borrowers with credit scores as low as 560. With a loan minimum of only $1,000, you can borrow small amounts, and qualify even if you have fair credit. 

Loan terms are available from 24 to 84 months in length, giving you flexibility for your repayment timeline and monthly payment amount. There are origination fees included, ranging from 1.85%–8.99%. Interest rates can reach as high as 35.99%, which is expensive, but these are the trade-offs you typically have to make if you don’t have the best credit.

Upgrade makes it easy to apply with online pre-qualification, and you can receive funds as soon as the next business day. Overall, Upgrade can offer decent terms for borrowers with less-than-stellar credit, but if you’re in that boat you may get something on the higher end of the APR range unless you apply with a co-signer.

Qualifications
  • U.S. citizen or permanent resident, or living in the U.S. on a valid visa
  • At least 18 years old (19 years old in Alabama and certain other states)
  • Must have a verifiable bank account
  • Must have a valid email address
  • Qualify based on credit score, credit usage, and payment history

Best for Military Members : Navy Federal Credit Union

Investopedia's Rating
4.0

  • APR Range: 7.49% - 18.00%
  • Time To Receive Loan: 0 days
  • Loan Amount: $250 - $50,000
Pros and Cons
Pros
  • Can borrow as little as $250

  • Flexible loan term lengths

  • No application, prepayment, or origination fees

Cons
  • No pre-qualification available

  • Requires membership

Why We Chose It

Navy Federal offers personal loans with excellent rates to its credit union members, with membership open to all military members and their families. Loans are available starting at only $250, and there are no origination or prepayment fees on loans.

NFCU’s low rates make it a good choice for any kind of loan, but it’s particularly useful for debt consolidation and refinancing to lower the rate on your high-interest debts. Loan terms are available up to 15 years on certain loans as well, giving you comfortable monthly payments.

Like other lenders, Navy Federal charges a higher APR for longer term lengths, and there is a $29 fee for late payments. You also need to be a member, but membership is free if you are a military member, veteran, or family of either.

Qualifications
  • Must be a Navy Federal member
  • Must be at least the age of majority in your state
  • Must be a United States citizen, eligible permanent resident, or non-permanent resident alien
  • Available in all 50 U.S. states and Washington, D.C. 
  • Qualify based on credit history, income, and other financial factors
  • Meet minimum borrowing requirements

Compare the Best Small Personal Loans of February 2023

Overall Rating Best For
APR Range
Average Origination Fee
Late Fee
Time To Receive Loan
Loan Amount
Latest Repayment
Reset All
PenFed Credit Union
4.7
Best Overall 7.74% - 17.99% 0.00% $29.00 1 day $600 - $50,000 60 months Check Rates
Hide, not for me
U.S. Bank
4.7
Best Big Bank 8.74% - 21.24% 0.00% $29.00 0 days $1,000 - $50,000 84 months Check Rates
Hide, not for me
Best Egg
4.1
Best for Debt Consolidation 8.99% - 35.99% 0.99% - 8.99% $0.00 1 day $2,000 - $50,000 60 months Check Rates
Hide, not for me
First Tech Federal Credit Union
4.1
Best for Flexible Repayment Terms 8.99% - 18.00% 0.00% $0.00 0 days $500 - $50,000 84 months Check Rates
Hide, not for me
Upstart
3.7
Best for Poor Credit 6.50% - 35.99% 0.00%–10.00% 5% of the late payment amount or $15, whichever is greater 0 days $1,000 - $50,000 60 months Check Rates
Hide, not for me
Rocket Loans
4.0
Best for Quick Funding 8.42% - 29.99% 1.00% - 7.00% $15.00 0 days $2,000 - $45,000 60 months Check Rates
Hide, not for me
OneMain Financial
3.7
Best for Secured Loans 18.00% - 35.99% $25 or 1.00% of loan amount $5.00 or 1.50% of loan amount - $30.00 or 15.00% of loan amount 1 day $1,500 - $20,000 60 months Check Rates
Hide, not for me
Upgrade
4.3
Best for Fair Credit 7.96% - 35.97% 1.85%–8.99% $10.00 1 day $1,000 - $50,000 84 months Check Rates
Hide, not for me
Navy Federal Credit Union
4.0
Best for Military Members 7.49% - 18.00% 0.00% $29.00 0 days $250 - $50,000 180 months Check Rates
Hide, not for me
*APR ranges for some companies include a discount for automatic payments or existing bank customers.

Final Verdict

Personal loans offer a quick way to access cash, but many lenders charge exorbitant rates and fees. It’s important to understand how different loan options can help or hinder you in the long run. Many lenders allow you to borrow under $5,000, and actually charge lower rates when you borrow for a shorter time period. And many offer no origination fees, assuming you have a decent credit score. This can make small loans quite affordable in some cases.

PenFed offers the best variety of loan options, low rates, and lack of fees to help you get cash and not overpay for it. You can get funding by the next business day, and there are no origination or even late fees assessed. PenFed’s overall flexibility and cost make it our top pick. The others on this list are great for specific use cases, such as having a low credit score or needing to access the funds on the same day if possible. 

These companies can help you get a small personal loan—just make sure to understand all of the rates and fees before applying.

Guide to Choosing the Best Small Personal Loans

Best Place to Get a Small Personal Loan

The best place to get a personal loan will depend on your needs. If you’re looking to borrow $500 or less, a credit union may be your best option for low rates, but many credit unions have membership requirements. Online lenders often have higher minimum borrowing amounts or charge higher rates for small loans, but they can be a good option if you’re looking for a fast and easy process. If you prefer to apply in person and have a good relationship with your bank, you could apply for a small personal loan there as well. 

Should You Apply for a Small Personal Loan?

That depends on your individual financial need. If you just need a little cash to tide you over until your next paycheck, you can take advantage of the grace period offered on a credit card, or even apply for a 0% introductory APR credit card. These options can be less expensive than a loan. On the other hand, if you have poor credit and can’t qualify for a credit card, a personal loan from a bad credit lender like OppLoans would be a much better option than a payday loan.

If you don’t want to open a new card or you need more time to pay back the debt, a small personal loan might make sense for you. Personal loans have lower APRs than credit cards on average. You can even use a personal loan to consolidate credit card debt if you’re having difficulty paying down your cards. This will work best if you have good or excellent credit. 

Pros and Cons of Small Personal Loans

Pros
  • Lower interest rates than credit cards

  • Better terms than payday loans

  • Can be used for almost any purpose

Cons
  • No grace period

  • Rates are generally better with higher borrowing amounts

  • Higher monthly payments than credit cards

Comparing Small Personal Loan Lenders

When comparing small personal loan rates among lenders, you’ll want to pay attention to the following:

  • APR: Your APR represents the total cost of taking out a small personal loan, including any origination fees. Aim for the lowest you can qualify for based on your creditworthiness and your desired monthly payment. 
  • Loan amounts: You don’t want to borrow more than you need. Look for a personal lender offering the right amount for your purposes. 
  • Terms: Choose a lender that offers a term that will result in a monthly payment you can afford.
  • Fees: Aim for the fewest/lowest fees possible, and avoid all lenders that charge prepayment penalties.
  • Ease of application process: If you prefer an easy online application process, be sure the lender you choose is right for you.
  • Lender reputation: Pay attention to customer reviews on third-party review websites like Trustpilot. 
  • Speed of funding: If your cash need is an emergency, narrow down your choices to lenders that can provide same or next-day funding. 
  • Customer support: Ensure the personal lender you choose has customer service hours that are convenient for you. 

How to Get a Small Personal Loan

  1. Pre-qualify: The first step is to provide information such as your Social Security number, contact info, intended borrowing amount, and loan purpose. Many lenders will allow you to check your pre-qualification status without a hard credit pull. 
  2. Choose a loan offer: You may be shown a few different term options with different associated APRs. Note that small personal loan rates at this stage are only an estimate. Select the option with the monthly payment you can comfortably afford. 
  3. Provide additional documentation: From here, you’ll likely create an account on the lender’s online portal if you haven’t already. You’ll need to provide more details such as proof of income and employment. The lender will review this information and give you a decision. 
  4. Accept your loan offer: Check to make sure you’re happy with your rate and read the fine print before signing your loan documents. 
  5. Receive your funds: Wait for the money to be deposited in your bank account. This typically takes a few days but can happen as soon as the same day. 
  6. Manage your account online: Many lenders will allow you to set up automatic payments from your online account, and some will even let you change your due date. 
  7. Repay your loan: Expect to begin making fixed monthly payments starting about one month after you receive your funds. 

What Is a Small Personal Loan?

A small personal loan is typically a fixed-rate installment loan provided to you in a lump sum, to be repaid with interest in fixed monthly payments over a term of one or more years. Most small personal loans are unsecured, but some can be secured by your savings or another asset. 

Where Can You Get Small Personal Loans?

You'd think that borrowing a small amount of money would be easier than borrowing a big sum, wouldn't you? But that's not how financial institutions think. Servicing a small personal loan—roughly defined as from $1,000 to $5,000—can be just as expensive as servicing a big one, and many banks just don't want to bother, especially in these days of low interest rates and razor-thin profit margins. Other options include online lenders, credit unions, and credit cards.

How Do You Get Small Personal Loans From Online Lenders?

Because they have little overhead, online lenders can afford to offer small sums that other lenders might sniff at. Most online lenders also have a pre-qualification option: You can plug in some basic financials to see if you’re eligible for financing, without actually having to apply (which involves the lender pulling your credit history, which can ding your credit score). This isn’t always done for personal loan applicants at many banks and credit unions.

What's the Difference Between Small Loans and Credit Cards?

The ubiquity of credit cards may be one reason for the dearth of small personal loan providers. There are very few places that don't take credit cards nowadays. When you put something on your plastic, you’re basically financing the purchase—it's actually not that different from borrowing money from any other source. You repay the lender (the card issuer) when your monthly statement arrives, either in full or in part. If it's in part, you pay interest, of course.

Unlike banks, credit card issuers love to lend you money—either by you charging your purchase or by you taking out a cash advance. They'll even raise your credit limit to let you do so more often if you've got a good record. The catch, of course, is the interest they charge; credit card interest rates tend to be higher than those on personal loans, especially for cash advances.

But it depends on the card issuer and personal loan lender in question. You need to do the math to see which option costs less overall. Some special circumstances might apply, too. If you have a rewards credit card and can cover your expense while earning points or cash back, you should. Or if a card is offering a special zero-APR promotion on balance transfers for, say, 21 months—about the time you'd take to pay back a personal loan—that could be a better deal too.

Generally, if you want to save on interest or don’t have a credit card, look into a small personal loan.

What Is the Difference Between Small Loans and Payday Loans?

Payday loans are a type of short-term borrowing, in which an independent small-credit merchant gives you an immediate loan against your next paycheck—kind of an advance on your wages. If they don't need all that much money (these loans are often capped at around $500), many borrowers look at payday loans as ideal because the lenders don’t typically check credit scores or history, and the money is instantaneous.

While the loan principal is small, APRs on payday loans are upwards of 400%.

No, we didn't leave out a decimal point. They're 400%. To add insult to injury, there are often various little fees as well. You can easily end up paying much more on a payday loan than you originally borrowed. If you can get a small personal loan from a credit union, especially one of those that offer three-digit loans, you’ll save a lot more money in interest compared to payday loans. Plus, you'll have months, even years to repay, in contrast to having to cough up by your next payday.

Methodology

Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of personal loan lenders. To rate providers, we collected hundreds of data points across more than 40 lenders, including interest rates, fees, loan amounts, and repayment terms, to ensure that our reviews help users make informed decisions for their borrowing needs.

Best Small Personal Loans

Nikola Ilic / Getty Images

Article Sources
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  1. Federal Reserve. "Consumer Credit."

  2. Consumer Financial Protection Bureau. "My payday lender said my loan would cost 15 percent but my loan documents say the annual percentage rate (APR) is almost 400 percent. What is an APR on a payday loan and how should I use it?"