At a Glance

A personal loan can help anybody finance crucial expenses, but there are several ways to acquire this type of loan. Learning the best way to get a small personal loan can allow a borrower to gain access to funds for various purposes.

In this article, you’ll learn:

What is a small personal loan?

Small personal loans are small sums of money, typically less than $5,000, that have fixed interest rates and a shorter repayment period than a standard personal loan. This loan type is most ideal for borrowers who don’t need large sums of money and want to save on interest by applying for a loan with a smaller tenor.

Repayment periods on small personal loans will range from two to five years on average, with lower interest rates than most loans. This rate is dependent on a variety of factors, though, including your credit score and history.

Learn more: Small Personal Loans

What can small personal loans be used for?

Due to the smaller lump sum that comes with this type of personal loan, a small personal loan is best for when you’re in a pinch and need quick access to a tiny sum of cash. Car repairs, smaller medical expenses, vacations, debt consolidation, and more are all examples of common uses for a small personal loan.

It’s best to opt for a standard personal loan for larger expenses such as a wedding, as using a small personal loan may require borrowing multiple loans.

Pros and cons of small personal loan

As with all loan types, there are a few pros and cons to a small personal loan that must be considered before applying:

Pros

  • Quick access to cash
  • Lower repayment period
  • Typically, no collateral required
  • Lower interest rates

Cons

  • Higher eligibility requirements
  • Your overall debt level will increase
  • Higher payment than other alternatives such as credit cards

Be aware that a poor credit score may result in an unfavorable interest rate that costs you more money to borrow the funds. Consider all the above factors before seeking out a personal loan.

Where can you get a small personal loan?

Fortunately for borrowers, there are several ways to find the best place for small personal loans. With three primary lenders offering personal loans, there is no shortage of options when acquiring these funds.

1. Banks

As one of the most traditional ways for acquiring a loan, standard banks offer many different types. On average, banks offer small personal loan amounts of up to $2,000, potentially more. For borrowers who already have a relationship with the bank, it’s possible that the interest rate you are offered will be more favorable or that the terms of the loan will be improved.

2. Credit unions

When looking at the easiest way to get a small personal loan, credit unions are another helpful source. In most cases, credit unions will offer loan amounts even smaller than what banks offer, potentially as low as $500. The primary drawback to borrowing from a credit union is that they may require you to become a member prior to borrowing. This can come with membership fees depending on the credit union you are considering borrowing from.

Learn more: How Credit Union Personal Loans Work?

3. Online lenders

Finally, online lenders are the newest type of resource for small personal loans. While you may not consider the internet the best resource for personal loans, many reputable lenders are online. With competitive interest rates and fair loan terms, online lending can give you a small personal loan in a pinch.

Find & compare best small personal loans in 2023

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6.99% - 35.99%

Est. APR Range

$2,000 - $50,000

Loan Amount

2-5 years

Loan Term
Get Offer on our partner's site

Good For: Quick approval rates, flexible payment options.

Good For: Quick approval rates, flexible payment options.

7.96% - 35.97%

Est. APR Range

$1,000 - $50,000

Loan Amount

2-7 years

Loan Term
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Good For: Low loan amount

Good For: Low loan amount

7.99% - 35.99%

Est. APR Range

$2,000 - $36,500

Loan Amount

2-6 years

Loan Term
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Good For: Fast funding

Good For: Fast funding

8.3% - 36%

Est. APR Range

$1,000 - $40,000

Loan Amount

2-5 years

Loan Term
Get Offer on our partner's site

Good For: Co-applicants, fast funds.

Good For: Co-applicants, fast funds.

8.99% - 35.99%

Est. APR Range

$2,000 - $50,000

Loan Amount

3-5 years

Loan Term
Get Offer on our partner's site

Good For: Getting funds quickly

Good For: Getting funds quickly

9.95% - 35.95%

Est. APR Range

$2,000 - $35,000

Loan Amount

1-5 years

Loan Term
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Good For: Getting funds quickly

Good For: Getting funds quickly

11.69% - 35.93%

Est. APR Range

$1,000 - $50,000

Loan Amount

3-5 years

Loan Term
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Good For: Low income criteria, fast funds

Good For: Low income criteria, fast funds

21.99% - 35.9%

Est. APR Range

$500 - $12,000

Loan Amount

2-5 years

Loan Term
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Good For: Flexible payment options, fast funds.

Good For: Flexible payment options, fast funds.

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What is the best way to get a small personal loan fast?

One of the main uses for personal loans is to gain access to funds when you’re in a pinch. As such, finding the best way to get a small personal loan fast should be a top priority. Use the following steps to quicken the process to loan approval:

  1. Determine the exact amount you need to borrow
  2. Research different lenders and compare preliminary loan offers
  3. Submit for prequalification if applicable
  4. Gather all documents required for the application
  5. Submit all your information and apply

The best way to get a small personal loan fast is to identify the lender you wish to use and go into the process knowing exactly what you need.

Can you get small personal loans for bad credit?

For borrowers with bad credit, small personal loans may be available due to the lower sum of money being lent. However, the interest rate that is offered will likely be less favorable than for a borrower with a higher credit score. If your credit score is currently under what it should be, consider taking the time to focus on raising your credit score before applying for a loan.

Small business loan vs small personal loan

Small personal loan companies may offer two types of loans that seem similar: business loans vs. personal loans. In general, business loans offer more extended repayment periods and a lower interest rate, whereas personal loans are short-term. However, to apply for a business loan, you must have an established business.

FAQs

In general, small personal loans will cost a borrower less money than a standard personal loan. This is due to a smaller interest rate combined with a shorter repayment period. On top of this, small personal loans only offer small lump sums of money, meaning the amount you repay will be lower than with a standard personal loan.

The easiest way to get a personal loan is to start by identifying the exact amount you need to borrow. From there, you can decide what type of personal loan you need along with the best type of lender for your needs. Gather all necessary documentation prior to applying to quicken the overall process.

Small loans will only hurt your credit if you fail to make payments on the loan or if you aren’t on time with your payments. So long as you meet your financial obligation on time and in full with the small personal loan, your credit will stay in good standing.