Getting a personal loan to cover an emergency, finance a steep expense or just to keep a big bill from being overdue could be a saving grace. But lenders set minimums on the loans they offer, and some of these can be in the high four figures. If you only need $1,000 or so, you might be forced to borrow considerably more than you really require. And extra debt is never a good idea, especially when you're paying interest on it.
Instead of taking out more financing than you need, try to find a more flexible lender. To jump-start your search, we've scouted around and come up with the best such specialists in small personal loans. Here are our picks for the top five; while they all have different strengths, they'll all loan you amounts in the low four figures—and sometimes even less.
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The highest APR that any credit union can charge on most loans is currently capped at 18% per the National Credit Union Administration
Upgrade: Best Online Lender
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Upgrade has a pleasant range of options—it offers loans starting as low as $1,000 and as high as $50,000—and they're available to those with credit scores in the merely good range. The online lender moves fast: After you’re approved you can see funds in your account in as little as one day.
Prequalification available: You can get a sense of rates/terms without actually applying and dinging your credit score
Payment flexibility: You can change your payment date
Considerable charges: Origination fee (1.5% to 6%); $10 fee for late or failed payment
Higher APRs: Maximum 35.89% is high compared to other lenders
Other important information:
- Loan ranges: $1,000 to $50,000
- APR range: 6.98% to 35.89%
- Recommended credit requirements: Low 600s score
Upstart: Best for Fair Credit
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If your credit is only fair—a score under 660 or so—many reputable lenders won't look at you, leaving you to the not-so-tender mercies and sky-high rates of payday lenders. To the rescue: online fintech firm Upstart, which offers small-dollar loans with reasonable APRs for those who don’t have good or excellent credit.
Quick prequalification: Eligibility determined in only 5 minutes
Good for borrowers with little or sketchy credit history
More requirements: You can’t have any bankruptcies or public records on your credit score; accounts currently in collections, delinquencies, or amounts past due will also disqualify you
Origination fee: Upwards of 8%
Other important information:
- Loan ranges: $1,000 to $50,000
- APR range: 6.53% to 35.99%
- Credit requirements: 580 to 620 score
Alliant Credit Union: Best for Hardship Protection
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Alliant, a credit union available nationwide (via the internet) specializes in short-term loans at extremely competitive rates. But perhaps its strongest claim to fame is its repayment terms: Should some sort of emergency or unexpected event (layoff, disability) impair your ability to pay bills, you can suspend monthly payments—or even the entire loan balance—without penalty or extra interest. This optional Debt Protection program, as Alliant dubs it, does incur a small monthly fee if you join it.
No origination fee or prepayment penalty
Low APRs: Rates max out at 10.49%, vs. other lenders' ceilings of almost 36%
Fast process: same-day approval in many cases
Membership in credit union required (but joining is easy)
Debt protection costs extra: monthly fee based on size of loan balance
No long-term loans: 5-year maximum length
Other important information:
- Loan ranges: $1,000 to $50,000
- APR range: 6.49% to 10.49%
- Credit requirements: Not specified
PenFed Credit Union: Best for Fast Funding
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PenFed is one of the largest credit unions in the United States. Its services include mortgages and checking accounts, among many others. But it also offers personal loans at reasonable rates. Once you get approved for your loan, you could see funds in your account as soon as the next day.
Super-low minimums: As little as $500
No origination fee
Wide range of repayment terms: From six months to five years
Credit union membership required
Comparatively low loan amount ceiling ($25,000 max)
Other important information:
- Loan ranges: $500 to $25,000
- APR range: 6.49% and up
- Credit requirements: Not specified; mid-600s minimum score recommended
Navy Federal Credit Union: Best for Lowest Borrowing Amounts
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This whole list is devoted to sources for small loans. But Navy Federal Credit Union offers really small loans—as low as $250. Usually, a usurious payday loan provider is your only source for such minimal sums (see "Payday Loan" section, below). Navy Federal not only offers them, but it also does so on reasonable terms and at competitive interest rates.
Varied repayment terms: Take as little as six months or as long as five years
Co-applicants allowed: If your credit score or financials are weak, a co-borrower can help you secure a loan at a lower rate
No prequalifying option: Application triggers a hard credit inquiry, which can hurt your credit score
Credit union membership required
Other important information:
- Loan ranges: $250 to $50,000
- APR range: 8.19% to 18%
- Credit requirements: None specified
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 between $1,000 and $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.
Online Lenders
Because they have little overhead, online lenders—like Upgrade and Upstart on our list above—can afford to offer small sums that other lenders might sniff at. Most online lenders also have a pre-qualification option: that is, 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 commonly done for personal loan applicants at many banks and credit unions.
Credit Unions
Your best bet for very low-dollar loans is going to a credit union, a non-profit type of financial cooperative that provides traditional banking services. While you might need to join to qualify for a personal loan—credit unions are member-owned organizations—this is relatively easy and cheap to do; and once you're a member, you’ll be able to borrow what you need with a low APR.
Banks
Finding a loan source among the brick-and-mortar banks could be a challenge. Some of the best-known, like Bank of America, don't offer personal loans at all. Others set the bar somewhat high: for example, Wells Fargo's personal loans start at $3,000. You’re more likely to find a small personal loan available from a local or small regional bank over a big-name, national lender. It also helps if you already are a client of that bank.
What Are Alternatives to Small Personal Loans?
It’s a good idea to compare your options before deciding on a small personal loan.
Small Loans vs. 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 are 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 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 and 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, 24 months—about the time you'd take to pay back a personal loan—that could be a better deal too.
Generally, though if you want to save on interest or don’t have a credit card, look into a small personal loan.
Small Loans vs. 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 who 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,
The Bottom Line
When you’re considering taking out a loan, you may not need to borrow a lot of money to cover a big expense. Instead, you may just need a little extra cash to stay (or get) current on your bills or cover a new bill so your credit score doesn’t drop. Various lenders cater to such small needs, but their terms vary, so shop around and be sure to consider which aspects work best for you—or against you.
Methodology
Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of personal loan lenders for all borrowing needs. We collected over twenty five data points across more than fifty lenders including interest rates, fees, loan amounts and repayment terms to ensure that our content helps users make the right borrowing decision for their needs.