Best Small Personal Loans in 2024 - NerdWallet (2024)

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• Fast funding. Many lenders can fund a small personal loan the day you’re approved or the next day.

• Lump sum. You get the funds from a personal loan all at once after approval. There’s no credit limit or draw period to remember.

• Fixed payments. Personal loans have fixed interest rates that keep your monthly payment the same for the life of the loan.

• No collateral. Most personal loans are unsecured, so collateral (like a house or car) isn’t required to borrow. If you don’t repay the loan, the lender can’t take your possessions, but your credit score will drop.

• Approval based on credit and income. Approval depends on your creditworthiness and finances. Borrowers with thin credit histories, low scores or low incomes are usually offered higher rates, and some may not qualify.

• High rates. Personal loan rates can be high compared to other borrowing options, especially for those with low credit scores and incomes.

• Possible origination fees. Some lenders charge an origination fee of 1% to 10% of the loan amount, which is either taken from the loan amount before you receive the funds or added to the monthly payment. If a lender charges this fee, make sure the final loan amount is enough to cover your expense.

• The U.S. Bank Simple Loan is offered in amounts from $100 to $1,000 and is repaid over three months. The loan’s fee is $6 for every $100 borrowed.

• Bank of America’s Balance Assist provides loans from $100 to $500 and is repaid over three months. The loan carries a flat $5 fee.

• The Wells Fargo Flex Loan is a short-term small loan that’s repaid in four monthly installments, according to the bank. Loans can be $250 with a $12 fee or $500 with a $20 fee.

» MORE:How long does it take to get a personal loan?

1. Review your credit and debts. Before applying, check your credit report for opportunities to address any negative marks or unpaid debts. Also, calculate your debt-to-income ratio, which lenders use to see how much of a borrower’s income goes to other debts.

2. Pre-qualify. Since pre-qualifying usually takes a few minutes and doesn’t affect your credit score, it’s a quick way to compare small loans.

3. Collect necessary documents. A loan application may require information like your Social Security number, W-2s and pay stubs. Gathering this information before you apply can speed up the loan application process.

4. Submit the application. This part may be done in person with local banks and credit unions, but many lenders have online applications. If you’re approved, expect funding within a day to a week. Applying will temporarily shave a few points off your credit score.

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Here are some ways to improve your chances of qualifying:

• Add a co-signer whose credit score or income is higher than yours. A co-signer won't have access to loan funds or information about your payments, but they will be on the hook if you fail to repay.

• Get a joint personal loan with someone whose credit score or income is higher than yours. Co-borrowers share the responsibility for repayment and have equal access to the loan funds and payment information.

• Choose a lender that offers secured personal loans. Most lenders let you use a savings account or vehicle as collateral.

» MORE: Alternatives to payday loans

» MORE: How to spot a personal loan scam

• Form a lending circle with friends and family members you trust, or accept a loan from a family member.

• Pick up a side gig to make extra money. Options range from selling clothes to walking dogs.

• Seek assistance from local nonprofits, charities and religious organizations for help with things like bills, gas, groceries, food or clothes.

• Borrow against your next paycheck with a cash advance app. These loans can be an affordable way to borrow a few hundred dollars, but advances are repaid on your next payday.

• Use a “buy now, pay later” app to split the cost of a large purchase into smaller payments spread out over a few weeks or months.

NerdWallet’s review process evaluates and rates personal loan products from more than 35 technology companies and financial institutions. We collect over 50 data points from each lender and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.