Short-term loans can be a lifeline in an emergency, whether you’re facing a medical crisis or need to make a car repair.
We’ve rounded up our picks for the best short-term loans, highlighting what makes each stand out. While there’s no universally accepted definition of a short-term loan, we’ve defined it here as a loan with terms of 12 months or less.
It’s important to keep in mind that some of these lenders may offer short-term loans with relatively high interest rates — but the annual percentage rates, or APRs, are still lower than the typical payday loan.
- Good for people with no credit score: Oportun
- Good for early access to your paycheck: Earnin
- Good for retail purchases: Affirm
- Good for multiple loan terms: Personify
- Good for fast funding: Possible Finance
- Good for people with weaker credit: Rise
- Good for medical expenses: United Credit
- What is a short-term loan?
- When is a short-term loan a good idea?
- Alternatives to short-term loans
- Our methodology: How we pick the best personal loans
- Calculate personal loan costs
- FAQs about short-term loans
Good for people with no credit score: Oportun
Why an Oportun personal loan stands out: Oportun will consider your application even if you don’t have any credit history. This, along with the ability to use a co-applicant, makes it a good choice for someone looking to build credit from scratch.
Pros
- May qualify for a loan with limited credit history
- Can check potential terms through prequalification without a credit hit
- Possible quick loan funding
Cons
- Relatively high maximum interest rates
- Administrative fees of up to 10% of principle amount
Read reviews of Oportun personal loans to learn more.
Good for early access to your paycheck: Earnin
Why Earnin stands out: Earnin is a payday advance app that can be a useful alternative to a payday loan because it promises no mandatory fees and interest. (You can “tip” an optional amount.)
Pros
- No mandatory fees or interest
- Alerts offered to help monitor your bank account for low balances
- Offers free credit monitoring
Cons
- Must have a linked bank account
- Paycheck advance max limits of $150 daily or $750 per pay period
- Fee charged for faster access to your funds
Read our full review of Earnin to learn more.
Good for retail purchases: Affirm
Why an Affirm personal loan stands out: If you need to borrow money for a retail purchase, Affirm may be a good alternative to a credit card. The company partners with thousands of online retailers and stores — from furniture stores to auto parts retailers — to offer personal loans for purchases. Rates start as low as 0% APR, though you may pay much more in interest depending on the merchant and your credit.
Pros
- Some retailers offer 0% APR
- No late, prepayment or annual fees
- Fixed payments available
Cons
- No refunds for interest paid on returned items
- Interest rates may be higher than credit card rates, depending on your credit
- Down payment may be required
Read reviews of Affirm loans to learn more.
Good for multiple loan terms: Personify
Why a Personify personal loan stands out: Personify is an online lender that offers a variety of personal loan amounts and terms, depending on where you live. In Arizona, for example, the company offers loan amounts ranging from $500 to $15,000 and loan terms between 12 months and 48 months.
That flexibility may help you more easily find a monthly loan amount that works with your budget.
Pros
- Considers people with lower credit scores
- Fast funding possible
Cons
- Extremely high interest rates
- Not available in all states
- Potential origination fee, depending on your state
Good for fast funding: Possible Finance
Why a Possible Finance personal loan stands out: With same-day funding available, the company says you “typically” are able to get your funds within minutes of approval. But Possible Finance does note it could take up to five days.
Pros
- Only small loan amounts of up to $500 available
- Opportunity to build your credit with payments reported to credit bureaus
- No penalty or late fees
Cons
- High APRs
- Not available in most states
- Short repayment terms
Read reviews of Possible Finance personal loans to learn more.
Good for people with weaker credit: Rise
Why a Rise personal loan stands out: If you need money fast and have trouble getting approved by other lenders because of your credit, Rise personal loans could be an option. But the cost of borrowing is very high. Your APR will vary based on your state, income and credit, but rates can climb into the triple digits depending on your location.
Pros
- Considers people with poor to fair credit scores
- Can help you build your credit
- Potentially fast funding
Cons
- High interest rates
- Not available in all states
Read reviews of Rise personal loans to learn more.
Good for medical expenses: United Medical Credit
Why a United Medical Credit personal loan stands out: United Medical Credit is a financing network that can connect you with lenders for your medical bills. You can apply for loans ranging from $500 to $25,000 on its website.
Pros
- Considers a range of credit scores
- Lets you apply with multiple lenders at once
- Potential for fast approval
Cons
- You won’t have an idea of your potential rate until you apply
- Not a direct lender
Read our full review of United Medical Credit to learn more.
What is a short-term loan?
Short-term loans are small personal loans designed for quick access to cash, typically requiring repayment within a short time frame, often a year or less.
These loans, which usually range from a few hundred to a few thousand dollars, can be secured or unsecured, meaning you don’t need to provide collateral. Your eligibility for a short-term loan — which includes installment loans, cash advances, car title loans and payday loans — generally depends on your credit history and credit scores when you apply.
Getting prequalified for a loan can give you a preview of whether you might be approved and at what potential rate and terms, without affecting your credit score. It helps you understand if you’re a strong loan applicant and what you can do to improve your chances of approval. Prequalification also allows you to compare offers from multiple lenders to find the best deal, potentially saving you money.
But be careful. Since short-term loans can come with high interest rates and fees, they should be used only as a last resort. These types of loans include …
- Payday loans — Payday loans, which are usually $500 or less, come with steep fees that can translate to annual percentage rates (APRs) of about 400%. That’s much higher than the average personal loan, which has APRs around 12% for a 24-month term, according to the Federal Reserve.
- Title loans — Title loans, which often range from $100 to $5,500, usually carry APRs in the triple digits. You’ll typically have to repay your loan within 15 to 30 days. And if you don’t, your car could be repossessed.
When is a short-term loan a good idea?
Short-term loans are particularly useful when you urgently need to cover an unexpected expense. You might be able to get a short-term loan the same day you apply for it.
Quick loans for emergency cash can be helpful for …
- Covering unexpected medical expenses
- Managing urgent home or car repairs
- Covering ongoing expenses until your next paycheck arrives
Although a short-term loan can help in a pinch, make sure you can repay it on time to avoid the high interest rates and fees that could make your financial problems worse.
Alternatives to short-term loans
There are plenty of reasons you might need quick access to cash, and fortunately, there are alternatives to the potentially high cost of short-term loans.
- Negotiate with the creditor: If you need help paying medical bills, you might be able to arrange a payment plan with your healthcare provider, negotiate the owed amount or qualify for a financial assistance program. If you’ve fallen behind on payments for your credit card, you may be able to negotiate debt with your credit card company, too.
- 0% into APR credit card: If you need some financial flexibility, 0% intro APR credit cards could be a good option. If you make payments on time, during the cards’ promotional period, you won’t be charged interest on purchases, balance transfers, or both, from anywhere from six months to nearly two years, depending on the card. But once the promotional period ends, any remaining balance will be subject to the card’s standard APR.
- Payday Alternative Loans (PALs): A payday alternative loan is a short-term small loan offered by some federal credit unions. These typically come with much lower fees and APRs compared to traditional payday loans. But you may have to be a credit union member for at least a month before you can apply for a PAL.
Our methodology: How we pick the best personal loans
Credit Karma’s editors evaluate the best personal loans by reviewing key features of dozens of popular lenders. Those features fall into three important categories:
- Affordability: We start by checking if a lender’s rates are competitive: are they higher than average or are they lower than many competitors? From there, we analyze if fees — particularly an origination fee — may make your loan more unaffordable. Last, we’ll check if the lender offers rate discounts for items such as automatic payments that may reduce your rate.
- Customer-friendly features: Taking out a personal loan is a big financial commitment, so we prioritize lenders that make things easier for you. For instance, do they offer a wide range of loan amounts for people with different borrowing needs? Do they offer at least several loan terms to give you more flexibility with your monthly payment? And, crucially, can they fund your loan quickly? A lender will also get bonus points for offering direct payments for debt consolidation or other customer-friendly features.
- Transparency: We believe personal loan terms should be easy to find and decipher. Prequalification, which lets you check what rate you may qualify for without a hard credit inquiry, is particularly important. We also check to see if a lender has been recently penalized by regulators.
Calculate personal loan costs
To better understand the total cost of any personal loans you’re considering, use an online calculator like Credit Karma’s simple loan calculator. A loan calculator can help you estimate your monthly payment and how much you’d pay in interest versus principal over the length of the loan.
FAQs about short-term loans
If you need to get a $500 loan quickly, you have several options, including payday loans, cash advance apps, title loans, pawn shop loans and cash advances. While these can provide quick access to funds, it’s crucial to consider the terms and potential costs of each type of loan.
A short-term loan is intended to offer fast access to funds that need to be repaid within a relatively brief period, typically within a year or less. This type of loan, which can be used for such unexpected expenses as car repairs or medical bills, includes payday loans, cash advance apps, title loans, pawn shop loans and cash advances.
Short-term loans can have both positive and negative effects on your credit score, depending on how you manage them. You’ll have the chance to show lenders you can make timely payments. As an installment loan, it may also enhance your credit mix. Over time, a personal loan could lengthen your credit history.
The amount you can borrow through a short-term loan varies, but it usually ranges from a few hundred to a few thousand dollars. Since each lender has its own policies and approval criteria, a borrower might be eligible for different loan amounts based on where they apply.
*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.