7 Best Small Personal Loans of 2022: Rates, Fees, & Terms

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If you need a small loan, it may feel hard to find one. However, the best small personal loans don’t come from your local bank. They come from online lenders and investors that offer attractive rates and terms. We’ve uncovered the best small personal loans for you below.

  • RECOMMENDED
  • LOAN AMOUNT
  • MIN. CREDIT SCORE

Top Small Personal Loans Starting at $1,000

Best Overall Small Loans starting at $1,000
Upgrade $1,000 Small Loans
APPLY NOW
On Upgrade's Secure Website
Upgrade
  • Est. APR
    5.94% - 35.47%
  • Min. Credit Score
    560
  • Learn More
  • Loan Details

Upgrade is best for borrowers with good credit but will sometimes work with borrowers with less than perfect credit. They approve, and fund loans fast, usually in as little as one day, and loans start as low as $1,000, although you can borrow as much as $50,000 depending on how you intend to use the funds.

>> More: Upgrade Personal Loans Review

Best Small Loans with Flexible Requirements
Upstart Small Loans
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On Upstart's Secure Website
Upstart
  • Est. APR
    3.22% - 35.99%
  • Min. Credit Score
    None
  • Learn More
  • Loan Details

Upstart gives anyone a fresh start that needs it, even if you don’t have a long credit history. They aren’t credit score focused; although they’d prefer at least a 600-credit score, they will often work around it. Upstart funds loans fast and allow loan amounts as low as $1,000 if you only need a small personal loan.

>> More: Upstart Personal Loans Review

Best for Small Loans Starting at $1,000
LendingClub Small Loans
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On LendingClub's Secure Website
LendingClub
  • Est. APR
    7.04% - 35.89%
  • Min. Credit Score
    600
  • Learn More
  • Loan Details

LendingClub is a peer-to-peer lender, so you may have better luck getting approved if you have risky qualifying factors. While the funding takes a while because they have to secure the money from interested investors, they allow joint applicants or co-signers, which most banks don’t allow on small personal loans. Your loan terms are limited, and you’ll more than likely pay an origination fee, but it can be a great option for someone that can’t get approved anywhere else.

>> More: LendingClub Personal Loans Review

Best for $2,000 Small Personal Loans
Best Egg Small Loans
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On Best Egg's Secure Website
Best Egg
  • Est. APR
    5.99% - 35.99%
  • Min. Credit Score
    640
  • Learn More
  • Loan Details

Best Egg is great for borrowers with good credit and who need only a small loan amount. Their loans start at $2,000, which is slightly higher than other lenders, but they have more attractive terms, including low APRs if you have good credit. You get only five years to pay your loan off, but if you’re only borrowing a small loan amount, it shouldn’t be an issue.

>> More: Best Egg Personal Loans Review

Best Small Loans with Fast Funding Times
LendingPoint Small Loans
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On LendingPoint's Secure Website
LendingPoint
  • Est. APR
    9.99% - 35.99%
  • Min. Credit Score
    580
  • Learn More
  • Loan Details

LendingPoint is an online lender offering small personal loans. You don’t need perfect credit, and you can get your funds in as little as one day. LendingPoint looks at the big picture when qualifying you for a loan – they don’t just focus on your credit score. They consider your employment history, income, and even your credit history if they see an improvement, even if you don’t have great credit yet.

>> More: LendingPoint Personal Loans Review

Best Bad Credit Small Loans
OneMain Financial Small Loans
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On OneMain Financial's Secure Website
OneMain Financial
  • Est. APR
    18% - 35.99%
  • Min. Credit Score
    None
  • Learn More
  • Loan Details

OneMain Financial is a good option for people with poor credit who can’t get approved anywhere else. They only offer loans up to $20,000, and their APRs are high compared to other lenders, but people with bad credit have a better option of approval here. You can only borrow funds for 2 – 5 years, which minimizes the total interest you pay on the loan.

>> More: OneMain Financial Personal Loans Review

Best Bad Credit Small Loans
Universal Credit Small Loans
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On Universal Credit's Secure Website
Universal Credit
  • Est. APR
    8.93% - 35.43%
  • Min. Credit Score
    560
  • Learn More
  • Loan Details

Universal Credit is great for borrowers with bad credit. Universal Credit can be a good option if other lenders have turned you down. You only need fair credit, and you can even lower your APR by 0.5% if you set up autopay. They fund loans within a day, offering two repayment terms – 3 or 5 years.

What Is a Small Loan?

A small loan is a personal loan, usually between $1,000 – $2,500, but it varies by lender. These loans are harder for lenders to make a profit because they are for such a small amount so that you may find the APRs higher than larger ones.

It seems backward, but banks are in it for profit, and if they only lent small loans, they would have a hard time staying afloat. This doesn’t mean you can’t find an attractive small loan, though. All of the lenders we shared above are great small loan lenders, providing you with competitive APRs and low origination fees.

How Do Small Personal Loans Work?

Small loans are easy to get. Sometimes you can even complete the entire process online without talking to anyone, and you may even have your funds the next day.

It starts with getting pre-qualified for a personal loan. We suggest you get quotes from at least three lenders. This helps ensure you get the best rate and terms on your loan. You can compare your options, looking at the APR, origination fee, and the loan’s total cost.

It doesn’t hurt your credit to get pre-approved by several lenders since most lenders don’t do a hard credit pull until you choose your loan. For example, if you applied with Lender A, B, and C and eventually chose to go with Lender C, only Lender C would do a hard credit pull on your credit.

Once you choose your lender, complete the application and provide any required documentation. You can typically scan and upload the documents quickly. Once approved, the lender will disburse your funds. If you do the process early enough in the day, you may even get the funds the same day, but it can vary by lender.

>> More: How to Get a Personal Loan

Where Can You Get Small Personal Loans?

You can get small personal loans at just about any bank today. Your local big branch banks offer them, as do credit unions and online banks. You can also find them with peer-to-peer lenders, which are private investors willing to invest in your loan.

The key is to shop around and find the best loan for you. Look at the terms and the loan’s total cost. It doesn’t matter where you get the loan, but rather what your bottom line is when you get the loan.

How to Get a Small Personal Loan

It’s easy to get a small personal loan when you follow these simple steps.

#1. Review Your Credit

Your credit is the first thing lenders look at when applying for a loan. Before you apply, pull your free credit report and take care of any negative information.

Common negative information to look for includes:

  • Late payments – Any payment made over 30 days late counts against your credit score. Look for any late payments, bring them current, and keep making your payments on time to increase your credit score and improve your credit history.
  • Overextended credit – If you have a balance of over 30% of your credit line, it can hurt your credit score. Calculate your credit utilization rate and if it’s over 30%, which is $300 for every $1,000 in the credit line, pay your balance down.
  • Incorrect information – Sometimes credit bureaus or creditors make mistakes when reporting your information. Check that all information is correct, and if it isn’t, dispute it with the credit bureau to correct it.
  • Too much revolving debt – You could be seen as high risk if you have all revolving debt and no installment debt. Try to have a good mixture of credit when you apply for a small personal loan.
  • Too many inquiries – Only apply for new credit when you need it, not just because you were sent a pre-qualification notice. Too many inquiries on your credit report can make you look desperate and at high risk.

#2. Make Sure You Can Afford the Small Loan

When you get quotes from lenders, pay attention to the payment, not just the interest rate. Too many people focus on getting the lowest APR but then forget to look at the payment to make sure they can afford it.

Even though small personal loans are unsecured, you could ruin your credit and even have collection companies after you for the payment if you default on them.

#3. Compare Small Personal Loan Lenders

No two small personal loan lenders are created equal. They each have different requirements, charge different fees, and have different APRs. Get quotes from as many as you can and compare your options. You never know where you’ll find the right loan.

>> More: See the Best Personal Loan Rates

#4. Pre-Qualify for a Small Loan

Getting prequalified for a small loan doesn’t hurt your credit, and it can help you make a decision. You don’t go through the entire application process. It’s a quick informal process so you can check your rate and see which loan is right for you.

#5. Submit the Application

Choose the loan with the best rate and terms for your situation and submit your application. This is when the lender will do a hard credit check and require you to provide your qualifying documentation so they can approve your loan.

#6. Receive Funding and Make Payments on Time

Once you finalize the loan, the lender will close it and disburse the funds to you. Some lenders may pay your creditors directly if you’re trying to consolidate your debt. Others pay the money directly to you, and it’s up to you to pay your creditors.

What’s most important, however, is that you make your payments on time. Don’t miss a payment if you can help it and if you can’t help it, be in touch with your lender. Don’t just ignore it. Let them know you’re having trouble. They may have a program to help you.

>> More: Best Debt Consolidation Loans

Predatory Small Loans to Avoid

There are many loan options out there that promise to help you out of a financial bind. Typically, it’s best to stick with your bank, a credit union, or a reputable online lender. Here are some small predatory loans you should avoid.

Payday Loans

Payday loans are supposed to be a temporary fix between paydays. You borrow the money today and pay it back with your next paycheck. The problem is the interest rates are excessively high, and most people can’t afford to pay the loan back right away, which results in more fees and higher interest. It’s a never-ending cycle that makes your debt situation worse rather than better.

Cash Advances

A cash advance comes from your credit card. It may sound like a good idea until you look at the interest rate and realize how much it will cost. Cash advance interest rates are much higher than your purchase interest rate and are usually unaffordable.

Pawn Shop Loans

Pawnshop loans don’t even sound like a good idea. They have high-interest rates, making them hard to repay, which can keep you in the debt loop for an extended time. If you don’t extend the loan and just blow it off, you lose the collateral you put down to get the loan. Even though they don’t check your credit because of the collateral you put down, they are never good news and should be avoided at all costs.

Summary: Best Small Personal Loans

  • Upgrade: Best Overall Small Loans starting at $1,000
  • Upstart: Best Small Loans with Flexible Requirements
  • LendingClub: Best for Small Loans Starting at $1,000
  • Best Egg: Best for $2,000 Small Personal Loans
  • LendingPoint: Best Small Loans with Fast Funding Times
  • OneMain Financial: Best Bad Credit Small Loans
  • Universal Credit: Best Bad Credit Small Loans

Bottom Line: Best Small Personal Loans

Before looking at small personal loans, make sure you know what you can afford. When you evaluate your options, look at the big picture – how much will the loan cost you over its lifetime? Don’t get caught up on just the APR or just the fees – put them together and see how much that $1,000 – $2,500 loan will cost in 3 to 5 years when you pay it off.

Methodology

To select the best small personal loans, we reviewed over 25+ lenders. Our evaluation includes reviewing the lender’s online experience, credit score requirements, income requirements, transparency, rates, fees, funding times, and security. Check out our personal rating methodology and editorial guidelines for more information about our review process.

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Kim Pinnelli
Kim Pinnelli

Kim Pinnelli is a Senior Writer, Editor, & Product Analyst with a Bachelor’s Degree in Finance from the University of Illinois at Chicago. She has been a professional financial writer for over 15 years, and has appeared in a myriad of industry leading financial media outlets. Leveraging her personal experience, Kim is committed to helping people take charge of their personal finances and make simple financial decisions.