Personal loans aren’t just for large purchases. Small personal loans can help you pay for unplanned expenses without borrowing more money than you need.
When we say small personal loans, we’re generally referring to loans in amounts of $3,000 or less. Some lenders have minimum loan requirements that exceed this threshold, but for this list we’ll consider lenders that offer loans in amounts that start at a few hundred to a few thousand dollars.
We’ve rounded up our list of the best small personal loans to help you find one that might be right for you.
- Best for building credit: Possible Finance
- Best for people who are self-employed: Upgrade
- Best bank personal loan: PNC
- Best online personal loan: Discover
- Best for small cash advances: Earnin
- Best credit union for small loans: Alliant Credit Union
- What is a small personal loan?
- When is a small personal loan a good idea?
- Alternatives to small personal loans
- FAQs about small personal loans
Best for building credit: Possible Finance
Why Possible Finance stands out: Possible Finance is a payday loan alternative app that allows customers to apply for extra cash using the Possible app on their phone. Unlike payday lenders, Possible Finance reports loan payments to two of the three main credit bureaus to help customers build credit.
Pros
- Flexible repayment terms
- Can reschedule payments
- Borrow up to $500
- Doesn’t charge interest (but does charge borrowing fees)
Cons
- Some states may have lower maximum loan amounts
- Need a positive bank balance and proof of income
- Not offered in all states
Read our review of Possible Finance to learn more.
Best for people who are self-employed: Upgrade
Why Upgrade stands out: Getting a personal loan when you’re self-employed is possible, but you need to be able to show the lender you can repay what you borrow. To apply for a personal loan with Upgrade, you may need to provide your two most recent years of tax returns. Upgrade may request additional documentation after reviewing your application.
Pros
- Loans starting at $1,000
- Competitive interest rates
- Prequalification application to check potential rate
Cons
- Charges an origination fee
- Charges late payments and nonsufficient funds fees
Read reviews of Upgrade to learn more.
Best bank for personal loans: PNC
Why PNC stands out: PNC offers loan amounts as low as $1,000 with flexible repayment terms. You can receive a 0.25% rate discount when you sign up for autopay with a PNC checking account.
Pros
- Can apply with a co-applicant
- Flexible repayment terms
- Personal loans start at $1,000
Cons
- Not available in every state
- Small loans have higher rates
- Loan approval can take several days
Read reviews of PNC to learn more.
Best online personal loan: Discover
Why Discover stands out: Discover’s application process can be completed entirely online. You’ll get a loan decision the same day you apply, in most cases, and you’ll receive your loan proceeds as soon as the next business day after accepting the loan terms. Loans from Discover come with access to view your FICO® score for free.
Pros
- Loans starting at $2,500
- No origination fees
- Prequalification application to check potential rate
- Direct payments to creditors available for debt consolidation
Cons
- May charge late fees
- No co-applicants accepted
Read our full review of Discover personal loans.
Best for small cash advances: Earnin
Why Earnin stands out: Earnin is an app that allows you to take out small cash advances against your upcoming paycheck. You’ll need to meet their employment requirements and have a bank account. You can receive your funds without paying a fee in one to three days.
Pros
- No mandatory interest or fees
- Offers early paycheck access
- Free alerts for low balances in your bank account
Cons
- Withdrawal limits
- Will need to pay a fee for fast money transfer
Read our full review of Earnin to learn more.
Best credit union for small loans: Alliant Credit Union
Why Alliant Credit Union stands out: Alliant Credit Union offers competitive starting interest rates along with flexible repayment terms. Loans start at $1,000 and there are rate discounts for automatic payments. They also offer a debt protection benefit plan for certain life circumstances.
Pros
- Loans start at $1,000
- Fast funding possible
- No loan origination fee
Cons
- Must be a member to qualify for a loan
- Higher rates for longer repayment terms
Read reviews of Alliant Credit Union personal loans to learn more.
What is a small personal loan?
A small personal loan can look different for everyone, but generally speaking, it’s a personal loan for $3,000 or less. Individual lenders set minimum loan amounts, so the smallest loan you can get from some lenders may be more than you need. But there are lenders that offer small personal loans, including loans of $1,000 or less. Because loan amounts, rates, terms and fees vary by lender, it’s best to shop around and compare offers from multiple lenders to find one that’s a good fit.
Small personal loans can be great if you’re in a pinch until your next paycheck or if an unexpected expense comes up. But not all lenders offer small personal loans, so you may have to shop around. If you need your money quickly, look for lenders that offer fast funding.
Keep in mind that the most affordable rates are typically available to people with strong credit. Before taking out a small personal loan, make sure you’ll be able to afford your payments every month.
When is a small personal loan a good idea?
It’s not always possible to save up for emergencies, and not every emergency requires a large sum of cash to fix. A small personal loan could be a good way to get extra cash when you need it.
A small personal loan can be helpful for …
- Covering unexpected expenses
- Borrowing only what you need
- Quick funding, depending on the lender
- Filling the gaps until your next paycheck
But one of the most important things to think about when considering a small personal loan is whether you’ll be able to pay it off on time. If you’re not able to pay it off on time or miss payments, you may end up creating more debt and hurting your credit.
Alternatives to small personal loans
A small personal loan isn’t the only way to get extra cash. Here are some other options to consider.
- Payday loans — Payday loans are an option for covering small unplanned expenses, but they’ll likely cost you more than a non-payday type personal loan. The average APR for a payday loan is close to 400%. A payday loan’s high fees and short repayment terms often keep people trapped in a cycle of debt that’s difficult to break. Many people who take out a payday loan renew it so many times they owe more in fees than what they originally borrowed.
- Credit cards — Credit cards are a convenient option to pay for unplanned expenses. But the average credit card interest rate is higher than the average personal loan rate. Comparing the APR on your card to the personal loan rate you might qualify for might help you decide which option is better. You may also consider applying for a card that has a 0% intro APR for purchases. If you can pay off the balance before the promotional period expires, you won’t pay interest. But if you don’t pay off the balance before the promotional period ends, the remaining amount will accrue interest at the card’s regular rate.
- Payday alternative loans — Payday alternative loans are small-dollar, short-term loans available at some federal credit unions. Loan amounts range from $200 to $1,000 with terms of one to six months. Some PALs may have a $20 application fee, but interest rates are capped at 28%.
- Buy-now, pay-later apps. Buy-now, pay-later apps such as Klarna, Afterpay and Bread allow you to make a purchase now and pay for it in installments without taking out a loan. With many buy-now, pay-later apps, you won’t pay interest on your purchases, but repayment timelines are often shorter than a traditional personal loan. Some options may have high interest rates, late fees and other costs, so you’ll need to read the fine print to decide if using one is a good choice. Unless the item you’re buying is a “need-to-have,” it’s probably better for your financial health to postpone your purchase until you have the cash to pay for it.
Taking on more debt should be a last-ditch option, even if you only need to borrow a small amount. Consider alternatives like saving a little bit each month or taking on a side job until you can earn what you need. If it’s an expense that can’t wait, consider selling something to get the cash you need.
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.
Estimate 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 small personal loans
Small personal loans are available from different types of lenders, including banks, credit unions, online lenders and mobile apps. Application requirements and loan amounts available will differ from lender to lender so make sure you shop around to find the best fit for your needs.
To apply, you need to complete an application and provide any supporting documentation the lender requires. Lenders typically review your credit history, income, debt-to-income ratio and other factors to make a lending decision.
*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.