Edited by Samuel MountjoyHow to Get a Small Loan
Quick Answer
You can get a small loan from various financial institutions, including online lenders, banks, credit unions, payday lenders and nonprofits. There are options available even if you don’t have good credit. But the rates and terms can vary significantly, so make sure you look for the best option before taking out a loan.
You can get a small loan from various financial institutions, including online lenders, banks, credit unions, payday lenders and nonprofits. There are options available even if you don't have good credit. But the rates and terms can vary significantly, so make sure you look for the best option and consider alternatives before taking out a loan.
What Can I Use a Small Loan For?
There's no formal definition for small loans, and "small" might mean anything from a few hundred to a few thousand dollars. You may take out a small loan to cover expenses related to:
- Unexpected emergencies
- Needs such as rent and food
- Medical or veterinary bills
- Vehicle or home repairs
- Travel
You'll need to review the loan offer's terms and conditions to see if there are any restrictions on how you can use the money. For example, some lenders say you can't use the loan for higher education, investments or business expenses.
Compare personal loan rates
Find APRs from 4.99% to 35.99% and flexible terms of 12 to 120 months. Loan amounts range from $1,000 up to $250,000, with funding available from 1 day up to 3 days.
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View all of our Best Personal Loans for 2026 to see what you’re likely to qualify for, and the rates and terms you might get.
Where Can I Get a Small Loan?
The options for getting small loans have expanded over the years, and you might be able to get a small loan from:
- Online lenders: Many online-only lenders specialize in unsecured personal loans that you can use for almost anything, and some have low minimum loan requirements. Often, it's easy to see if you can prequalify for a loan without any impact on your credit. If you do, it may only take a few business days to complete the application and get the funds transferred to your bank.
- Banks and credit unions: Some of the largest financial institutions now offer relatively low-cost loans of $1,000 or less. Smaller community banks and credit unions may also have loan programs that allow you to borrow as little as $250. And some credit unions offer payday alternative loans for up to $2,000.
- Fintech apps and accounts: Some fintech platforms allow you to quickly take out a small loan, often around $25 to $500, and to access the money directly from your account. Depending on the app and program, it might be a personal loan or a paycheck advance.
- Peer-to-peer (P2P) lenders: P2P online lending platforms match borrowers with investors willing to lend funds. The experience is often similar to borrowing money directly from an online lender.
- Friends and family: Borrowing money from friends and family might strain relationships, but it can be a good option if someone close to you has the means and the willingness to lend you some cash. Make sure you hash out an agreement that outlines how and when you'll repay the loan.
- Pawn and title loans: If you have something of value or own a vehicle, you may be able to get a pawn loan or an auto title loan. But proceed with caution, as these loans tend to charge a high interest rate, and you can lose your vehicle or property if you can't repay the loan.
- Payday loans: Payday loans may be an option for very small loans ($500 or less), but high fees make them a costly choice. Only consider these loans as a last resort if you don't have access to credit elsewhere.
- High-rate installment loans or lines of credit: Some online and branch-based lenders offer installment loans or lines of credit with high interest rates (60% to over 250%) or fees. While these are sometimes cheaper than payday loans, they should also be a last resort because they're relatively expensive and can be difficult to repay.
Read more: How to Get Emergency Money
How Can You Qualify for a Small Loan?
Eligibility for a small loan can depend on where you're applying and how much you want to borrow. However, lenders usually consider the following factors:
- Credit: Your credit history and score could impact your eligibility and loan offers from many lenders. A higher credit score or a creditworthy cosigner can help you qualify for loans with better terms, but there are also options if you have bad credit or no credit.
- Income: You may need to verify your income when applying for a loan, and even loans that don't require a credit check could require you to have a regular income. Your income may also determine how much you can borrow.
- Collateral: Many small-dollar loans are unsecured, but you'll need collateral (a valuable item or vehicle) if you want to get a pawn or title loan. The lender can take the collateral to help settle the debt if you don't repay the loan.
- Existing relationship: Of course, your relationship with a friend or family member will impact whether they lend you money. The same is true of some banks, credit unions and fintechs.
Pros and Cons of Small Loans
There's a lot to consider before taking out any loan, and a few pros and cons specific to small-dollar loans.
Pros
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Fast funding: Many in-person and online lenders offer same-day or very quick funding for small loans.
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Doesn't require good credit: Many small-loan programs don't require you to have a good credit history or score. Some don't even require a credit check.
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Potentially builds credit: Lenders might report your small loan to the credit bureaus. If it does, repaying the loan on time can help you build credit and qualify for a less expensive loan in the future.
Cons
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High fees or interest rates: Many small loans have high fees or interest rates, making them very expensive relative to longer-term, larger loans.
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May require a previous relationship: Some lenders only offer small loans to existing members or customers.
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Short repayment terms: You generally have to repay the loan quickly, which can be difficult if you're already struggling to afford your bills.
Learn about larger loans: Pros and Cons of Personal Loans
Should I Get a Small Loan?
A small loan could be a good option if you need money for necessary household expenses or an unexpected emergency. However, the loans are primarily beneficial for people with no credit or poor credit.
If you have good credit, you might qualify for a larger personal loan with a low interest rate, no upfront fees and no prepayment penalties. You could then immediately repay part of the loan to avoid paying interest on the money you don't need, and then repay the remaining amount over time.
You'll have fewer options for loans when you have poor credit, but you can still look into alternatives to getting a loan. For example, some lenders and credit card issuers offer hardship programs that can lower your payments and free up money for other expenses.
Learn about other options: What to Do When Your Emergency Fund Runs Out
How to Apply for a Small Loan
If you want to get a small loan, the application process can vary depending on the lender and the type of loan. But there are a few steps that you can take to prepare and find a good offer.
1. Get Ready to Apply
Quickly going over your situation and goals could narrow down the many options and help you focus on the best fits:
- Review your finances. Start by figuring out how much you want to borrow, when you need the money and how much you can afford to repay from each paycheck.
- Check your credit. Your credit can impact your options, so it's good to know where you stand. You can check your FICO® ScoreΘ for free from Experian and get insights on what's helping or hurting your score.
- Consider the timing. You'll have fewer options if you need the money right away, but that might be the reality when you're dealing with an emergency. You might want to start with your current financial institutions and see what they offer, and then branch out to lenders that offer same-day or fast funding.
Your options may be limited if you have a low credit score. Payday, pawn, title and high-rate installment loans or lines of credit are commonly used options. However, small loans from banks, credit unions and fintechs may offer better terms.
2. Compare Loan Fees, Rates and Terms
You'll find that even if you're focused on a particular type of small loan, you'll still need to figure out which lender will be best. Try to get several offers and compare the following:
- Fees: Small loans may have an origination or administrative fee, either a flat fee or a percentage of the amount you borrow. The fee could be taken out of your loan amount, which you'll want to consider when you make your loan request. An upfront application fee is uncommon unless you're applying for a payday alternative loan. It might be a sign of a personal loan scam, especially if the lender also promises that you'll get approved.
- Loan limits: Some lenders may be unwilling to issue a loan as small as the one you're seeking, which can cause you to overborrow. While you can often repay part or all of the loan early without paying a penalty, borrowing a larger loan than you need can result in paying an unnecessarily large origination fee.
- Annual percentage rates: The loan's annual percentage rate (APR) can help you understand how much you'll pay for the loan on an annualized basis based on its fees and interest rates. Some loans, such as payday loans, don't have an APR because they charge fees instead of interest. To make a comparison, you can search for an APR calculator to convert the fee to an equivalent APR.
- Secured and unsecured options: Small loans may be secured or unsecured. Secured loans can be easier to qualify for, but you'll need to pledge collateral that the lender can take if you don't repay the loan. Unsecured loans may be less risky, but it could be harder to get approved and you may need to pay more fees and interest.
- Repayment terms: You may have several weeks to several years to repay your loan. Longer repayment terms can be more manageable as you'll have lower payments, but you might wind up paying more interest overall.
3. Apply for the Loan
Many applications will ask you to share some basic information about yourself, including your name, address, date of birth, Social Security number, employment status and overall income. You may also need to verify your information and income by linking to other accounts or sharing copies of official documents.
Once you get approved for a loan, you can still decide whether to accept or decline a loan offer. If you accept the offer, you may be given a check, cash or have the money transferred to your account in a matter of days.
Alternatives to Small Personal Loans
Instead of applying for a new loan, you could look into an alternative means to borrow money, lower your bills or get help with expenses. Many of these don't offer immediate relief, but they may be worth considering if you don't need the small loan right away or want to get ahead of potential cash flow issues.
- Help from nonprofits: Look for organizations and programs that could help you find resources. You may be able to get help paying for necessities, such as utilities, rent, medical bills, medications and food.
- Credit counseling: Nonprofit credit counseling organizations can connect you with a trained counselor who can help review your finances and explain your options. If you're struggling with unsecured debt, such as credit card bills, the counselor can try negotiating with your creditors to get you on a more affordable payment plan.
- Credit card with a 0% intro APR offer: Some credit cards give new cardholders a promotional 0% APR on purchases. You could use the offer to cover your expenses and then pay off the debt during the interest-free period.
- Cash advance: You can use your credit card to withdraw cash, which can be helpful if you can't use the card to pay a bill. However, cash advances often have extra fees and start to accrue interest immediately.
In the end, any method that can increase your income or decrease your expenses might help free up the money you would otherwise need to borrow.
Read more: Ways to Lower Your Bills
Frequently Asked Questions
Improve Your Credit to Have More Options
Finding the cash to cover a small expense can be difficult, especially if you're already under a lot of stress and you don't have good credit. Although improving your credit can take time, it's also an important way to unlock more options in the future. To get started, check your FICO® Score from Experian, see where you stand and find out what you can do to increase your score. You can also use your Experian account to review different credit card and loan offers based on your credit profile.
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About the author
Louis DeNicola
Louis DeNicola is freelance personal finance and credit writer who works with Fortune 500 financial services firms, FinTech startups, and non-profits to teach people about money and credit. His clients include BlueVine, Discover, LendingTree, Money Management International, U.S News and Wirecutter.
Read more from Louis