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4 Short-Term Loan Options

Small personal loans with one- or two-year terms can be a lifesaver and save you money in the long run.

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By Lindsay VanSomeren

Written by

Lindsay VanSomeren

Writer

Lindsay VanSomeren specializes in credit and loans. Her work has appeared on Credit Karma, Forbes Advisor, LendingTree, and more.

Edited by Meredith Mangan

Written by

Meredith Mangan

Senior Editor

Meredith Mangan is Credible's Senior Editor for Personal Loans. Since 2011, she’s helped steer content creation in the areas of mortgages and loans, insurance, credit cards, and investing for major finance verticals, including Investopedia, Money Crashers, and The Balance.

Updated February 14, 2024

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances.

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A short-term loan is any loan that is paid off within a few months to two years. This type of loan could be helpful if you need to borrow a small amount of cash quickly. But be careful. Some short-term loans have incredibly high fees and very short repayment terms.

Learn which loan types have modest fees and reasonable repayment terms, and which to avoid.

4 short-term personal loans

You can apply for a short-term personal loan within minutes and get the money as soon as the same day, in some cases. These partner lenders offer fast funding and repayment terms that start at one or two years. That said, none of these lenders charge prepayment penalties, meaning you could pay off the loan even sooner at no extra cost.

Best Credit Union for Personal Loans

PenFed

4.6

Credible Rating

on Credible’s website

Est. APR

8.49 - 17.99%

Loan Amount

$600 to $50000

Min. Credit Score

760

Pros and cons

More details

personal loans for fair credit

Upgrade

4.5

Credible Rating

on Credible’s website

Est. APR

8.49 - 35.99%

Loan Amount

$1000 to $50000

Min. Credit Score

600

Pros and cons

More details

low origination fees for bad credit

Avant

3.9

Credible Rating

on Credible’s website

Est. APR

9.95 - 35.99%

Loan Amount

$2000 to $35000

Min. Credit Score

550

Pros and cons

More details

Short-term loans and same day funding

Zable

3.2

Credible Rating

on Credible’s website

Est. APR

-

Loan Amount

$1000 to $35000

Min. Credit Score

600

Pros and cons

More details

Where to find a short-term loan

Besides online lenders, you can find short-term personal loans at banks and credit unions. You can also find no-credit-check short-term loans from payday lenders and via cash advance apps and title loan lenders. But these options often have astronomical fees in relation to the amount borrowed and very short repayment terms — such as one to two weeks — which can make repayment difficult and lead to a cycle of expensive debt.

Compare Personal Loans

Learn More: Where to Get a Personal Loan

How to apply for a short-term loan

When you’re ready to apply for a short-term loan online, follow these steps:

  1. Check your credit: Your credit score — along with your income and current debt — indicate what types of loans and rates you’re eligible for. If you have a low score, you should eliminate lenders that don’t offer personal loans for fair credit or bad credit.
  2. Compare lenders: Find lenders that offer the repayment term you want and the dollar amount you need, when you need it. If same- or next-day funding is important, choose lenders that can fund within that time frame. Also consider whether lenders charge any fees, such as an origination fee. An origination fee is usually deducted upfront from the amount you borrow.
  3. Prequalify: Once you’ve found lenders that suit your criteria, prequalify with them to compare annual percentage rates (APRs) and loan terms. Prequalification won’t hurt your credit, but gives an estimate of what you might qualify for (based on your score and other information you provide). Note that prequalification is not an offer of credit, and once you formally apply for the loan, your credit score may temporarily drop a few points.
  4. Apply for the loan you like best: After comparing lenders, pick the loan option that works best for you and complete a full application. You’ll need to submit required documentation, such as tax returns and pay stubs.
  5. Review the loan agreement: If you’re approved, the lender will send a loan agreement for you to review and sign. Only sign if the terms are as expected — pay particular attention to the APR, fees, monthly payment amount, and when payments are due.
  6. Get your funds: Once you sign for the loan, the lender can send you the money — generally through direct deposit. The time to fund a short-term personal loan can vary from as soon as the same day to up to a week, depending on the lender.

Before you borrow, consider the total cost of a loan over time. You can estimate how much you’ll pay for a loan using a personal loan calculator.

Learn More: APR vs. Interest Rate on a Personal Loan

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 FICO score of 670 or higher is typically considered good. Lenders use your credit history to determine your eligibility, APR, and loan terms, such as whether to charge an origination fee and how much. While some lenders work with borrowers who have poor credit, you’ll generally need good to excellent credit to qualify for the lowest rates.
  • Verifiable income: Lenders want to see that you can afford a new loan in addition to any other debt you might have. A history of steady and sufficient income can help support that.
  • Low debt-to-income ratio (DTI): Lenders also want to see that you aren’t carrying too much debt and can handle monthly payments on a loan. They do this by comparing your current monthly debt payments to your gross monthly income. Ideally, your DTI should be under 36% to qualify for a personal loan.

Compare Personal Loans

No-credit-check short-term loans

Short-term loans that don’t require a credit check include payday loans, title loans, pawn shop loans, and loans via cash advance apps. Payday loans and cash advance apps require a source of income, while title and pawn shop loans require collateral. All of these can be easier to get than a personal loan, but they’re also high-risk and can be very expensive.

How to get a short-term loan with bad credit

If you’re struggling to get a personal loan on your own due to credit history or income issues, you have options:

  • Consider lenders that offer bad-credit loans: Rates on loans for bad credit are typically high, but still much lower than cash advance and payday loan APRs, as well as less risky.
  • Get a secured loan: Some lenders offer loans secured by collateral, such as a savings account or the fixtures in your home. This can make it easier to qualify and reduce your rate.
  • Apply with a cosigner: Applying with a cosigner who has good credit can help you get approved or lower your rate. Not all personal loan lenders offer cosigned personal loans, but some do.
Lender
Secured loans
Cosigners
Yes
No
Yes
Yes
Yes
No
No
Yes
No
Yes
Navy Federal
No
Yes

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What to know about short-term loans

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 loans: 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 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 shop loans: Pawn shops also provide small loans for those who can offer an item of value. If you repay the loan within a certain time frame, 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 possible.
  • Cash advance apps: Cash advance apps offer a way to get small amounts of money quickly — to be repaid from your next paycheck, like payday loans. It’s even possible to find cash advance apps with no fees. But if you want the money expedited into your account, you’ll probably need to pay a fee to do so, which can make cash advance apps as expensive as payday loans in some cases.

While payday lenders and pawn shops are legal businesses, be alert for outright lending scams. In 2022, The Federal Trade Commission (FTC) received 2.4 million fraud reports from consumers that amounted to more than $8.8 billion lost 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, guaranteed loan approval, or approval with no credit check. If you question whether an offer is too good to be true, contact the FTC.

Compare Personal Loans

Short-term loan alternatives

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 access to a credit line that you can repeatedly draw from and pay off. If you’re considering a personal line of credit or a 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 that is often an easy, quick, and suitable choice for short-term loan needs — especially if you qualify for a 0% APR promotional offer and can pay the amount back within that period.
     

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Meet the expert:
Lindsay VanSomeren

Lindsay VanSomeren specializes in credit and loans. Her work has appeared on Credit Karma, Forbes Advisor, LendingTree, and more.