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A short-term loan is typically a loan with a repayment term of one or two years. This type of loan could be helpful if you need to borrow a small amount of cash quickly.
Here’s what you should know about getting a short-term loan:
- 4 short-term personal loans
- Where to find a short-term loan
- How to apply for short-term loans online
- How to qualify for a short-term loan
- How to get a short-term loan with bad credit
- What to know about short-term loans
- Other short-term loan options
4 short-term personal loans
An online lender can be a good option for a short-term personal loan. Here are four Credible partner lenders that offer small personal loans with terms starting at one or two years.
Keep in mind that none of these lenders charge prepayment penalties, meaning you could pay off your loan even earlier at no extra cost.
|Lender||Fixed rates||Loan amounts||Loan terms (years)|
|9.95% - 35.99% APR||$2,000 to $35,000**||2, 3, 4, 5*|
|7.99% - 35.99% APR||$2,000 to $36,500||2, 3, 4, 5, 6|
|18.0% - 35.99% APR||$1,500 to $20,000||2, 3, 4, 5|
|8.49% - 17.99% APR||$600 to $50,000 |
(depending on loan term)
|1, 2, 3, 4, 5|
Best for: Borrowers who want fast funding
Avant offers funding as soon as the next business day, if you’re approved by 4:30 Central time on a weekday. You can prequalify with a soft credit check, and you have the option to change your payment due date. But Avant charges an origination fee to process the loan.
Best for: Borrowers who need larger short-term loans
LendingPoint offers short-term loans of up to $36,500 with prequalification and a soft credit check. But the lender doesn’t offer a cosigner option, and it may charge a loan origination fee depending on the state you live in.
Best for: Borrowers with bad credit
OneMain Financial offers both secured and unsecured loans with no minimum credit score requirement. You can apply for a loan with a cosigner, and you may see funds in your account the same business day you apply, but you may be required to visit a local branch. Since OneMain works with people with bad credit, interest rates on its loans can be high compared to other online lenders, and OneMain also charges an origination fee.
PenFed Credit Union
Best for: Borrowers with good credit
PenFed Credit Union offers personal loans of up to $50,000 to borrowers with good credit. And the lender doesn’t charge any fees, such as origination fees or prepayment penalties.
Where to find a short-term loan
Besides online lenders, you may be able to find a short-term loan at banks and credit unions.
- Banks typically offer personal loans, although the available amounts and repayment terms vary. To apply and qualify for a loan, you might have to be an existing bank customer, though this isn’t always the case.
- Credit unions are member-owned, not-for-profit organizations — as such, they sometimes offer lower interest rates than banks. But you’ll need to be a credit union member to take out a loan from one.
Learn More: Where to Get a Personal Loan
How to apply for short-term loans online
When you’re ready to apply for a short-term loan online, follow these four steps:
- Shop around and compare online lenders. Be sure to consider as many lenders as possible. That way, you can find the right loan for your needs. Remember to check rates and repayment terms, and whether the lender charges any fees.
- Choose the loan option you like best. After comparing lenders, pick the loan option that works best for you.
- Fill out the application. At this point, you’ll need to complete a full application and submit any required documentation, such as tax returns or pay stubs.
- Get your funds. If you’re approved, the lender will have you sign for the loan so they can send you the money — generally through direct deposit. The time to fund for a short-term personal loan generally ranges from one business day up to a week, depending on the lender.
Before you borrow, it’s also a good idea to consider the total cost of a loan over time. You can estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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How to qualify for a short-term loan
While each lender has its own requirements, you’ll typically need a couple of things to qualify for a personal loan with a short term:
- Good credit: A credit score of 700 or higher is typically considered good. Lenders use your credit history to determine your eligibility as well as your loan terms. While some lenders work with borrowers who have poor credit, you’ll generally need good to excellent credit to qualify for the lowest interest rates.
- Verifiable income: Lenders want to see that you can afford a new loan in addition to any other debt you might have.
If you’re ready to take out a short-term loan, remember to consider as many lenders as you can — you might get better terms with one lender versus another. With Credible, you can easily compare your prequalified rates from multiple lenders in two minutes.
How to get a short-term loan with bad credit
Payday or pawn shop loans can be tempting if you have bad credit because they don’t require a credit check.
But a short-term personal loan is almost always a better option. While some personal loan lenders have stringent credit requirements, others offer loans for bad credit that could be easier to qualify for.
Another option for getting a short-term loan with bad credit is applying with a cosigner who has good credit. Not all personal loan lenders offer cosigned personal loans, but some do.
Even if you don’t technically need a cosigner to get approved, having one could help you qualify for a lower interest rate than you’d get on your own.
Here are Credible’s partner lenders that offer fair credit personal loans:
|Lender||Fixed rates||Loan amounts||Min. credit score||Accept cosigners?|
|7.99% - 29.99% APR||$10,000 to $35,000||Not disclosed by lender||Yes|
|9.95% - 35.99% APR||$2,000 to $35,000**||550||No|
|8.99% - 35.99% APR||$2,000 to $50,000||600||No|
|7.99% - 24.99% APR||$2,500 to $35,000||660||No|
|11.72% - 24.67% APR||$5,000 to $40,000||640||No|
|9.57% - 35.99% APR||$1,000 to $40,000||660||Yes|
|7.99% - 35.99% APR||$2,000 to $36,500||660||No|
|7.49% - 25.49% APR with autopay||$5,000 to $100,000||700||Yes|
|18.0% - 35.99% APR||$1,500 to $20,000||None||Yes|
|8.49% - 17.99% APR||$600 to $50,000 |
(depending on loan term)
|6.99% - 35.99% APR||$2,000 to $50,000||640||No|
|8.99% - 25.81% APR10||$5,000 to $100,000||Does not disclose||Yes|
|11.69% - 35.99% APR7||$1,000 to $20,000||560||No|
|8.49% - 35.99% APR||$1,000 to $50,000||600||No|
|6.4% - 35.99% APR4||$1,000 to $50,0005||620||No|
What to know about short-term loans
You can use a short-term loan for many reasons, including a much-needed lifeline when faced with an unexpected emergency — medical bills, emergency vet visits, or car repairs, for example. You can also use a short-term loan to fund home improvements or consolidate high-interest credit card debt.
Be aware of short-term loan lenders
Some short-term loans, like payday loans and pawn shop loans, are less than desirable because of their high rates and fees. Besides high rates, a short-term loan from a predatory lender can also trap you in a debt cycle that’s hard to break.
- Payday lenders offer small loans that you have to repay by your next payday. But payday loans can come with interest rates and fees equating to an annual percentage rate (APR) of 400% or higher, according to the Consumer Financial Protection Bureau. For this reason, you should only consider a payday loan as a last resort.
- Pawn shops also provide small loans for those who can offer an item of value. If you repay the loan, you’ll get your item back — if not, the pawn shop can sell it. Like payday loans, pawn shop loans can come with astronomical interest rates and fees and should be avoided if at all possible.
While payday lenders and pawn shops are legal businesses, be alert for outright lending scams. In 2020, The Federal Trade Commission (FTC) received 2.2 million fraud reports from consumers that amounted to losing more than $3.3 billion to fraud. Some scammers will ask for upfront fees. You may receive an email or phone call asking for personal information, like your Social Security number, address, and income before funding your loan.
Red flags may also include offers requiring you to act fast, or you may be offered guaranteed loan approval or approval with no credit check. If you question whether an offer is too good to be true, contact the FTC.
Shop around and compare your options
The first step to getting the best personal loan with low rates and great terms is to shop around and compare your options. Some borrowers avoid shopping around because they worry about it affecting their credit score — even if it means sacrificing the chance to get the lowest rates possible. While having too many inquiries in a short period of time can affect your credit, many lenders allow you to prequalify for a loan before submitting an official application, and prequalification won’t affect your credit.
When comparing lenders, look at the APR, loan terms, and fees of each loan option before deciding which one will work best for you. Credible makes comparing rates easy — you can compare your prequalified rates from multiple lenders in two minutes.
Other short-term loan options
Short-term loans aren’t your only option for borrowing cash quickly. Here are a couple of alternatives to consider:
- Personal line of credit: Unlike a personal loan, a line of credit gives you continuous access to a credit line that you can repeatedly draw from and pay off. If you’re considering a personal line of credit vs. personal loan, keep in mind that a personal line of credit could give you easier access to cash in the future should you need it.
- Credit card: A credit card is another type of revolving credit. Some credit cards also come with 0% APR introductory offers. If you can afford to repay your balance by the time this period ends, you won’t have to pay any interest — which could make a credit card a better choice than a line of credit. However, if you can’t pay off the card in time, you could be stuck with some hefty interest charges.
If you decide to take out a short-term loan, remember to shop around and consider as many lenders as you can. This way, you can find the right loan for you. Credible makes this easy — you can compare your prequalified rates from multiple lenders in two minutes.
Keep Reading: Loan vs. Credit Card
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 5.20%-35.99% APR with terms from 12 to 144 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 12%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of October 9, 2023, none of the personal loan lenders on our platform require a down payment nor do they charge any prepayment penalties.