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5 best small personal loans

Explore personal loan options under $3,000

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Written by Sandy Baker
Edited by Cassidy McCants

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    Best Egg and Upgrade
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    Small personal loans tend to be for $3,000 or less. They come in handy when you need help with unexpected costs, like a car repair or furnace replacement. You then pay back the money over time in predictable monthly installments. Many lenders make it easy to apply online, give fast lending decisions and fund loans as soon as the same business day.

    We looked at some of the most popular small personal loan lenders to help you find the right one for your needs.

    Compare top lenders for small personal loans

    If you’re looking for a small personal loan, you’ll want to find a reputable lender with flexible loan amounts, fair rates and fees, and the right repayment term length for you. All information is accurate as of the time of publication.

    Methodology: The ConsumerAffairs Research Team chose our top picks for small loans by comparing 18 popular lenders on online reputation, rate transparency and availability of lending services.

    • Online reputation: We compared ratings and reviews on our site and across the internet, including on Trustpilot. We also checked in with the Better Business Bureau to see current alerts and government actions related to marketplace activities.
    • Rates and fees: We looked for transparency and gave preference to lenders with lower APR ranges, lower origination fees and no prepayment penalties.
    • Availability: We confirmed that all of our picks are currently available throughout most of the U.S. We also eliminated lead generators.
    Upstart
    • Loan amounts: $1,000 to $50,000
    • APR range: 5.22% to 35.99%
    • Term lengths: 36 or 60 months
    • Minimum credit score: 300

    With Upstart, you may be able to find lower rates than with other loan companies — rates start as low as 3.09%. Another advantage is that 99% of its personal loans are funded one business day after signing.

    Upstart lets you check your rate online in minutes through a simple process that doesn’t impact your credit score. Most borrowers then get a fast decision without having to provide extra documentation. Upstart offers loans as small as $1,000, with some exceptions based on your location.

    Upstart charges no prepayment penalties. It has one of the lowest credit score minimums of our top picks (300), so it could be ideal for those with bad credit. There is an origination fee ranging from 0% to 8%.

    Upgrade AUTHORIZED PARTNER
    • Loan amounts: $1,000 to $50,000
    • APR range: 6.95% to 35.97%
    • Term lengths: 24 to 84 months
    • Minimum credit score: Varies

    Upgrade advertises its personal loans for use toward credit card refinancing, debt consolidation, home improvement and major purchases. It offers loan amounts starting at $1,000, with annual percentage rates (APRs) starting at 6.95%. Funds are usually available within one business day, and there are no prepayment penalties. Upgrade also offers auto secured loans that use a vehicle as collateral. Susie Smith of Las Vegas, a repeat customer, said the customer service is "helpful, knowledgeable and professional."

    It’s easy to apply online. It takes only a few minutes to input basic information to see your rate, with no effect on your credit score. You can then see and review multiple loan options. Keep in mind that Upgrade charges an origination fee from 1.85% to 8%, and its lowest rates require automatic payments.

    Best Egg AUTHORIZED PARTNER
    • Loan amounts: $2,000 to $50,000
    • APR range: 5.99%
    • Term lengths: 36 or 60 months
    • Minimum credit score: 640

    Best Egg personal loans can be used for just about anything. The minimum borrowing amount of $2,000 is higher than at our other top picks, and the minimum credit score is higher, at 640. It can take up to three business days to get money deposited in your bank account. Andrew Brown of Scottsdale, Arizona is a big fan: "The folks at Best Egg went above and beyond to help me," he said in his review.

    You can check your rate on a three- or five-year Best Egg loan in just minutes without a drop in your credit score. Best Egg charges an origination fee from 0.99% to 5.99%. There is no prepayment penalty if you decide to pay off your loan early.

    PenFed Credit Cards
    • Loan amounts: $600 to $50,000
    • APR range: 4.99% to 17.99%
    • Term lengths: Up to 60 months
    • Minimum credit score: Varies

    PenFed is the only credit union on our list of top picks. It also has a minimum loan amount of $600, which is the lowest minimum loan personal loan amount of our top picks. You don’t need to be a member to apply, but if you choose to take out a loan, you must become a PenFed member. Membership is open to everyone and requires just a $5 initial deposit. Kelly Davis, a happy customer from Woodbridge, Virginia, wrote that the company "has a history of customer service." 

    With PenFed, you can check your rate without hurting your credit score and select from multiple preapproved offers. After verification, it takes one to two business days to receive your funds. One advantage of getting a personal loan from PenFed is there is no origination fee. Check out the personal loan calculator online to get an estimate of your monthly payment.

    Fiona
    • Loan amounts: Contact for info
    • APR range: Starting at 2.49%
    • Term lengths: Contact for info
    • Minimum credit score: Varies

    Fiona takes less than 60 seconds to connect borrowers with offers from a network of personal loan lenders. You provide basic information such as how you plan to use the funds, the amount you need and the general range of your credit score. Fiona shows you offers for which you’re pre-qualified and preapproved. There is no charge for this service and no effect on your credit score.

    Personal loans through Fiona’s lenders have fixed monthly payments and no prepayment penalty. Some lenders charge an origination fee from 1% o 6%, according to the company. Funds are available as soon as the next business day.

    What to know about small personal loans

    It’s important to know what your options are before you begin applying for personal loans. Each lender is a bit different, so it’s worth carefully considering a few before you make a decision. Here are some factors to keep in mind as you compare lenders:

    • Read reviews: Look online to read about lenders that appeal to you. Learn from reviewers how the application, approval, agreement, funding and payment processes work at each lender and if customers are satisfied and recommend it to others.
    • Compare rates: Interest rates and annual percentage rates (APRs) are two of the most important factors in the cost of different loan offers. The APR tells you the total cost of the loan with interest and fees and is the best point of comparison. Ask to see a full list of the fees associated with a personal loan; one of the main fees to look at with each lender is the origination fee, which can range from 0% to around 8%.
    • Terms: Some lenders have more options for term lengths; these generally range from 12 to 84 months. Longer term lengths keep your monthly payment lower but increase the total amount of interest you pay.
    • Funding: If getting cash quickly is important to you, then you want to choose a lender that provides funds the same day or the following day.

    Where to get a small loan

    You can get a small loan from a traditional bank, a credit union or an online lender. It’s a good idea to explore all types of lenders as you start, as each type has advantages and disadvantages. There might be special offers from the local bank you use, for example. Credit unions often have the lowest interest rates, while online lenders make it easy to apply from home or on your phone and get quick cash.

    How to get a small personal loan

    Many lenders give a glimpse of potential loan terms, like how much you can borrow and the APR, without a hard credit check. This allows you to compare multiple offers with no negative effect on your credit score.

    To apply for a small personal loan, you should have these items ready:

    • Government-issued ID, such as a driver’s license or passport
    • Social Security number
    • Employment information (name of your employer and length of time with the company)
    • Income information, including proof of income (e.g., W-2s, tax returns, pay stubs
    • A list of assets and debts

    During the application process, the lender may ask for additional information or documents to help with its lending decision. Once you choose the offer you want and decide to move forward with a specific lender, the lender will likely perform a hard credit inquiry to verify your credit history.

    Small loans vs. credit cards

    Whether it makes more sense to use a small loan or credit card may depend on the type of purchase you’re making. If you have a one-time, large expense like a home improvement project or an auto repair, a small loan can be a good idea. Credit cards or personal lines of credit are usually better for smaller, more common expenses that you are prepared to pay off quickly.

    Small personal loan advantagesCredit card advantages
    Often have a lower interest rateNo interest if you pay balance in full each month
    Easier to budget for; predictable paymentsSpecial offers, like 0% APR and balance transfers
    Can be easier to qualify forRewards and cash back programs
    End date for paying off debtLong-term credit building

    Frequently asked questions

    What’s the difference between a small personal loan and a payday loan?

    A small personal loan usually is paid back in installments in a term lasting over several years. The loan amount is also larger, and the lender requires a credit check. A payday loan is a loan for a smaller amount — $1,000 or less — that the borrower pays back on their next payday. A payday loan also has a higher APR — 400% or more in some cases, depending on the state.

    What is a good interest rate on a small personal loan?

    Interest rates range widely on small personal loans, depending on the lender and the applicant. The lowest rate on small personal loans at the time of publishing is around 3%, while the highest is about 36%.

    Can I use a personal loan for anything?

    In general, yes, you use a personal loan for any legal purposes (with some exceptions). It depends on the specific loan or lender. For example, lenders may have specific loans for debt consolidation or purchasing a vehicle. You might be asked when applying how you plan to use the funds.

    What banks offer small personal loans?

    Online lenders are a good starting point for finding small personal loans. It’s also good to check local credit unions, smaller local banks and national banks.

    What is the smallest personal loan you can get?

    Lenders typically have a minimum borrowing amount; often, this is $1,000 or more. Some lenders offer personal loans of less than $1,000. The minimum amount should be readily available on the lender’s website; you can also call the lender and ask.

    Is a small personal loan a good idea?

    A small personal loan can be a good idea if you need money for a one-time expense and can afford the monthly payments back to the lender. You might be considering a small personal loan to consolidate debt from multiple creditors, pay for a move, buy an appliance, get a car repaired or deal with an emergency expense.

    Bottom line: Where should I get a small personal loan?

    To choose the right lender for you, start by assessing your qualifications, including your credit score, income and debts. Then gather information from different lenders to get a sense of where you’re likely to get approved. You can check your rates with banks, credit unions and online lenders without any hard credit inquiry to find the best offers.

    Ultimately, you should choose the personal loan company that offers the amount you need at the lowest borrowing cost — along with easy-to-understand terms and helpful customer service.

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