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Lake Michigan Credit Union topped our list of the best small personal loan lenders because of its minuscule minimum loan amount of just $250. We looked at 70 lenders and compared interest rates, fees, loan amounts, repayment terms, and more to find the best personal loan lenders for small loans.
Best Small Personal Loans for 2024
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- Best Overall for Small Loan Amounts: Lake Michigan Credit Union
- Also Great for Small Loans: Patelco Credit Union
- Best for Lowest Rates: PenFed Credit Union
- Best for Low Minimum Credit: Upstart
- Best for Secured Loans: Upgrade
- Best Big Bank: U.S. Bank
- Best for Military Members: Navy Federal Credit Union
| Company | APR | Credit Score est. | Loan Amount | More Details | |
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Best Overall for Small Loan Amounts : Lake Michigan Credit Union
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- APR Range: 9.99% - 18.00%
- Loan Amount: $250 - $25,000
- Loan Terms: 24 months - 60 months
Lake Michigan Credit Union takes the top spot in our collection of small loan lenders because it offers personal loans as small as $250.
Borrowing with LMCU can keep your costs down because it offers competitive APRs and doesn't charge origination fees. The minimum required credit score of 620 makes its loans accessible to borrowers with fair credit.
Be aware that its maximum loan limit is low and its terms are not as flexible as other lenders. You can't pre-qualify, which means you have to fill out an application. And you need to be a member before you can borrow. Membership details are listed below.
Small loan amounts
Low minimum credit score of 620 required
No prequalification
Membership required
- You must have a minimum credit score of 620 to qualify for a personal loan with LMCU.
- To become a member, you must live, work, or go to church in Florida or Michigan’s lower peninsula, be a U.S. citizen with an immediate family member who is an LMCU member, or be a US citizen and contribute $5 to the Amyotrophic Lateral Sclerosis Fund.
Also Great for Small Loans : Patelco Credit Union
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- APR Range: 9.30% - 17.90%
- Loan Amount: $300 - $100,000
- Loan Terms: 6 months - 84 months
Patelco is our top credit union lender because it offers more flexibility than any other lender in our database. It offers:
- The widest range of loan amounts—from $300 to $100,000
- Loan terms from six months to seven years
- Competitive APRs between 9.30% and 17.90%
- Discounts to drive your costs down
If an unsecured loan doesn’t work, you can opt for a line of credit, a secured credit builder loan. You can also secure a loan with a savings account or certificate of deposit (CD).
Membership is required to borrow from Patelco. If you don’t meet the geographical or employer requirements, Patelco offers membership via an affinity organization. It is among the oldest credit unions in the country, having been established in 1936.
Wide range of loan amounts and terms
Competitive minimum and maximum interest rates
No origination fee
Alternative loan types available
Credit union membership required
Few customer reviews
- You must become a member of Patelco, which requires a $1 minimum opening deposit in a savings account. If you don’t meet geographical or employer eligibility, you can become a member of the Financial Fitness Association.
- You must have a 640 minimum credit score (or apply with a joint applicant).
- You must have a Social Security number.
Best for Lowest Rates : PenFed Credit Union
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- APR Range: 8.99% - 17.99%
- Loan Amount: $600 - $50,000
- Loan Terms: 12 months - 60 months
PenFed Credit Union may be your best option if you need a small amount at the best rate. You can borrow $600 to $50,000 for one to five years. PenFed's rates are among the lowest in our database.
Established as the War Department Federal Credit Union in 1935, PenFed stands out from the competitors in several ways because:
- It doesn’t charge an origination fee
- It allows you to apply with a co-borrower
- You can have your loan funding as quickly as the next business day
You don't need a membership to apply but it is required to get a loan. If you are approved, PenFed will create a membership savings account for you.
Competitive minimum and maximum interest rates
No origination fee
Allows co-borrowers
Credit union membership required
Requires good credit
Limited repayment terms (12-60 months)
- Unlike other credit unions that restrict membership to certain groups, PenFed’s membership is available to anyone. You can apply for a loan without being a member, too. If you're approved, PenFed will create a $5 membership savings account for you.
Best for Low Minimum Credit : Upstart
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- APR Range: 7.80% - 35.99%
- Loan Amount: $1,000 - $50,000
- Loan Terms: 36 months - 60 months
Upstart offers loans to borrowers of any credit profile—even those with a less-than-ideal credit score. It even accepts proof of enrollment in or graduation from a college or university in lien of a credit score.
Borrowing with Upstart means:
- Loan Amounts: $1,000 to $50,000
- Loan Terms: Three to five years
- APR Range: 7.8% to 35.99%
- Fees: No origination or prepayment fees
In most cases, loans can be funded within one business day.
Upstart uses artificial intelligence (AI) to connect borrowers with lenders. It also approves qualifying borrowers for home equity lines of credit (HELOCs), and automotive retail and refinance loans.
No minimum credit score
Low minimum interest rate
Funding within one business day
Few repayment term options
Origination fee up to 12%
High maximum interest rate
- Have a verifiable name, date of birth, and Social Security number
- Be at least 18 years of age
- Have a credit score or meet certain education requirements
- Have a U.S. mailing address
- Have a valid email address
- Have a verifiable source of income or proof of a job offer
- Have a U.S. bank account
Best for Secured Loans : Upgrade
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- APR Range: 8.49% - 35.99%
- Loan Amount: $1,000 - $50,000
- Loan Terms: 24 months - 84 months
Upgrade is one of the few lenders that offers secured loans so you can use your vehicle as collateral if your credit score disqualifies you for an unsecured loan. Keep in mind your car may be repossessed if you default.
Upgrade has an A+ rating with the Better Business Bureau. Its personal loan profile is highlighted in the chart below.
| Loan Amounts | Loan Terms | APR Range |
| $1,000 to $50,000 | 24 to 84 months | 8.49% to 35.99% |
You may qualify for interest rate discounts based on your loan. Discounted rates apply for setting up autopay, using your loan to consolidate debt, or securing your loan with your car. But Upgrade charges origination fees of 1.85% to 9.99%.
Choice between secured and unsecured loans
Repayment terms up to seven years
Rate discounts available
Origination fee up to 9.99%
High maximum APR
Secured loan requires using car as collateral
- Be a U.S. citizen, permanent resident, or living in the U.S. on a valid visa
- Be at least 18 years of age
- Have a verifiable bank account
- Have a valid email address
Best Big Bank : U.S. Bank
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- APR Range: 8.74% - 24.99%
- Loan Amount: $1,000 - $50,000
- Loan Terms: 12 months - 84 months
Minneapolis-based U.S. Bank is a good option if you want to work with a big bank. You can apply online or at a branch. Branches are only available in 27 states, though.
Loan values range from $1,000 to $25,000, and increase to $50,000 if you're an existing customer. Rates are as low as 8.74% and there are no additional fees, including origination and prepayment fees.
If you aren't a customer, repayment terms are limited to five years or shorter and you'll need a minimum credit score of 720 instead of 660 to apply.
Competitive minimum and maximum interest rates
No origination fee
Repayment terms up to seven years
Smaller loans and shorter terms for new customers
Not available in all states
Good credit required for new customers
- Have a credit score of 660 (or 720 if you’re not a current customer)
- Have a Social Security number
- Provide a home address and employment information
Best for Military Members : Navy Federal Credit Union
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- APR Range: 8.99% - 18.00%
- Loan Amount: $250 - $50,000
- Loan Terms: 6 months - 180 months
If you or a family member is a current or former military member, you are eligible for membership and personal loans through Navy Federal Credit Union. The institution was started by seven Navy Department employees in 1933 and has more than 12 million members.
Navy Federal offers the smallest loan amounts of any lender on our list and does so at competitive interest rates. You can borrow as little as $250 for as little as 8.99% APR. Terms range from 36 to 60 months.
There are no origination fees with NFCU. And you can pay your loan early without any prepayment penalties.
Same-day funding
No origination fees
Competitive minimum and maximum interest rates
Allows co-borrowers
Credit union membership required
No pre-qualification available
Only available to military families
- Must be at least 18 years old
- Must be a current or retired member of the armed forces, family member of a current or retired member, or a Department of Defense worker or contractor
- Must share your identification, address, and Social Security number
- Must have a verifiable bank account or credit card
Compare the Best Small Personal Loans for 2024
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The lenders above offer very small loans, but there are many other loan companies out there. See our selections for the 10 best personal loans, which features lenders and loans for most every need.
The Bottom Line
Lake Michigan Credit Union offers the the smallest minimum loan amount in our collection, but other lenders make a strong case if you need to borrow more than $250. Patelco Credit Union, our top rated credit union lender overall, will fund loans as small as $300, at competitive rates. And if the lowest rates are a priority, PenFed is a good choice.
There's no one right lender for everyone. Whether you have bad credit, need a very small or very large loan, or want a secured loan, there’s a lender on our list that can fit your needs.
If you need a small personal loan, look for one with lower fees so you don’t end up paying much more than you should. Of the 70 lenders we collected data on, 34 had minimum loan amounts of $1,000 or less. However, 7 also charged origination fees. Look for a lender that offers the loan amount you need, and no or a low origination fee and a lower interest rate to save money. -Sana Siddiqui, Research Analyst, Investopedia
What Are Small Personal Loans?
Small personal loans are usually valued at $5,000 or less—some as low as $250. These loans are generally unsecured, which means they don't require collateral. Borrowers can get small personal loans from banks, credit unions, other financial institutions, and online lenders. They can be used for emergencies, vacations, paying bills, or other reasons.
Where Do You Get a Small Personal Loan?
You can get a small personal loan from any type of lender, including traditional banks, credit unions, and online lenders. There’s not necessarily one best place to get a small loan. However, based on our research, credit unions are more likely than other lenders to offer loans of less than $1,000. They also often don’t charge origination fees, which online lenders are more likely to do.
Should You Apply for a Small Personal Loan?
Whether a small personal loan is right for you depends on why you’re considering a loan. A small personal loan might be a good idea if you need cash to make a large purchase or get through a financial rough patch but don’t have access to other credit.
Depending on your situation, you may be better off saving up for your purchase or using alternative financing already at your disposal—a 0% APR credit card, for example. However, if you don’t qualify for a 0% APR offer, you’re likely to get a better interest rate on a personal loan versus a credit card.
Pros & Cons of Small Personal Loans
Small personal loans come with both advantages and disadvantages that are important to consider before applying for one.
Lower interest rates than credit cards
Can be used for almost any purpose
Fast funding often available
Origination fees may apply
No grace period like 0% APR credit cards
Not always eligible for long repayment terms
Alternatives to a Small Personal Loan
Personal loans can be a good option for certain situations, but some alternatives may be better suited to your needs. Here are a few to consider:
- Credit card: If you have a credit card with a 0% introductory rate, that may be a better option. It can help you save money on interest. You’ll pay no interest at all if you repay the balance during the introductory period. Credit cards also don’t have origination fees, while many personal loans do.
- Save up for your purchase: If you’re considering a small personal loan to make a purchase, you may want to second-guess that choice. Instead of using a personal loan, which results in interest (and, often, origination fees), consider postponing your purchase until you can save up to pay for it in full.
- Tap your emergency fund: If you’re using a small personal loan to pay for a financial emergency, consider tapping your rainy day fund instead (if you have one). If you don’t have an emergency fund, start one now so you don’t have to borrow money when you have an emergency.
- Secured loan: Depending on the amount you need to borrow and what you plan to use it for, consider a secured loan like a home equity loan or home equity line of credit. These tools use your home equity as collateral, which can help you land a lower interest rate. However, you also put your home at risk of foreclosure if you can’t repay the loan.
Comparing Small Personal Loans
When you’re comparing small personal loan offers among lenders, here are a few factors to consider:
- Interest rate: The lower your interest rate, the more affordable your loan. While the interest rate isn’t the only factor to consider, it should be a top consideration.
- Fees: Other loan costs come in the form of fees, such as the origination fee that many lenders charge, which can add thousands to your loan costs.
- Loan amounts: Pay attention to each lender’s available loan amounts and choose one that offers the amount you need.
- Repayment terms: Terms can range from as little as six months to as much as seven years. Your repayment term can affect both your interest rate and monthly payment.
- Ease of application process: If you want an easy online application, make sure to choose a lender that offers that.
- Speed of funding: Some lenders provide loan funding as quickly as the same day, while others can take several days. Consider this if you need the money quickly.
- Reputation and customer service: Choose a lender that has a good reputation among customers and provides all the support you need.
How to Avoid Predatory Small Personal Loans
It can be easy to fall victim to predatory loans like payday loans or cash advance loans when you're shopping around—especially if you need money fast or have poor credit.
Payday loans are small, generally $500 or less, and have repayment terms of two to four weeks. They seem attractive because they don’t require a credit check and offer same-day funding. But they are very predatory.
The biggest problem with payday loans is they have APRs as high as 400%. Combined with the short repayment terms, these high APRs make the loans difficult to repay. Borrowers often fall into a cycle where they must borrow another payday loan to repay the last one.
To avoid predatory small loans, pay close attention to the fine print regarding interest rates and fees. Most credible lenders don’t charge interest rates exceeding 36% or so. Additionally, legitimate personal loans have repayment terms lasting years, not weeks.
Finally, be wary of any lender offering guaranteed funding or personal loans with no credit check. If a personal loan doesn’t require a credit check to qualify, there’s a good chance it’s a payday loan.
Payday loans and no-credit-check loans are two easy ways to borrow a small amount of money quickly. Keep in mind, though, that these loans may come with high interest rates and unfavorable borrowing terms so do your research before you sign.
How to Qualify for and Apply for a Small Personal Loan
There are several factors that lenders review before approving loan applications. Some lenders may weigh one factor heavier than another. Here are a few of the most common things that lenders consider from potential borrowers:
- Your age: Lenders cannot discriminate based on age. However, some states require that borrowers meet minimum age requirements before they can enter a legal financial contract with a financial lender.
- Legal residency: Just like age, lenders can't turn you down because of your national origin. They may ask you about your residency status to determine whether you can pay back the loan. Keep in mind that non-residents and non-citizens may still qualify, but it may be tougher to be approved.
- Income: Almost all lenders ask you for your income and employment information. This is to ensure that your source of income is enough to repay the loan. Some companies may have an income threshold before you can borrow.
- Debt-to-income (DTI) ratio: This ratio represents how much of your income goes to pay off your debts every month. As such, it helps lenders see how much of a risk you are if they approve you for a loan.
- Credit history and score: The majority of lenders use your credit history and credit score to qualify you for a loan. Although these factors don't make or break the decision, they may also influence your loan terms, amount, and interest rate.
If you are considering applying for a small personal loan, here’s how to get started:
- Pre-qualify: Most lenders allow you to pre-qualify for personal loans. Pre-qualification doesn’t require a hard credit check (meaning it doesn’t hurt your credit) and can give you an idea of whether you’ll qualify and at what interest rate.
- Shop around for loans: It’s worth shopping around with a few different lenders to find the best loan offer for you. Choose a loan offer with a competitive interest rate and a monthly payment you can afford.
- Complete your application: Once you choose a loan offer, you’ll need to complete the official application and provide additional details, such as proof of income and employment. The lender will review this information and give you a decision.
- Accept your loan offer: Depending on your lender and the information you provide, you could get a loan offer immediately. Make sure you’re happy with the interest rate, and be sure to read the fine print before signing your loan documents.
- Receive your loan funds: Depending on your lender, you could receive your loan funds as quickly as the same business day. Most personal loan lenders offer funding within no more than a few days.
- Repay your loan: Once you receive your loan funding, you move into the repayment stage. You’ll have fixed monthly payments based on your loan amount, interest rate, and repayment term. Consider setting up autopay to ensure you never miss a payment.
Why You Should Trust Us
Investopedia collected and analyzed hundreds of key data points from over 70 companies across three months to identify the most important factors for readers choosing a fair loan lending company.
We used this data to review each company for fees, repayment terms, income requirements, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best loans for those with fair credit since 2020.
Frequently Asked Questions
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Does Taking Out a Small Personal Loan Hurt Your Credit?
Taking out a personal loan can hurt and help your credit. In the short term, a new loan may hurt your credit score by creating a new hard inquiry on your account and reducing the average age of credit on your credit report. It can also hurt your credit if you miss payments.
However, a personal loan can also help your credit score by improving your payment history (assuming you make your payments on time) and diversifying your credit mix. If you’re using a personal loan to consolidate credit card debt, the loan could improve your credit utilization rate.
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What Is the Smallest Amount You Can Borrow With a Personal Loan?
The smallest amount you can borrow with a personal loan depends on the lender. The smallest personal loan available from a lender on our list is $250. If you need to borrow less than that, a personal loan may not be the best option, and you may want to consider other alternatives.
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Can I Get a Small Personal Loan With a Credit Score of 500?
That depends on the lender. Some lenders may approve you for a small loan even with a lower credit score. But keep in mind that there may be additional criteria, including higher interest rates. You may also need a co-signer or co-borrower to get the loan approved.
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How Easy Is It to Get a Small Personal Loan?
The ease with which you can get a small personal loan depends on a few factors. The type of lender you choose may impact whether you're approved for this type of loan. For instance, it may be easier and faster to get a small personal loan through a non-traditional lender compared to a bank. Another determinant is your financial situation. You may easily qualify if you have great credit and a reliable, steady income stream that enables you to repay the loan.
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What Is the Difference Between Small Personal Loans and Payday Loans?
Personal and payday loans are installment loans, meaning you borrow once, and then repay the money on a fixed schedule. However, personal loans have lower interest rates, larger loan amounts, and repayment terms that last years.
Payday loans, on the other hand, have astronomical interest rates, small loan amounts (usually capped at $500), and repayment terms of only weeks.
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Are Payday Loans a Good Idea for Small Amounts?
Payday loans should be approached with caution. They are short-term and generally allow individuals to borrow up to $500. You are expected to repay the loan the next time you get paid by writing a postdated check or filling out an electronic debit form. But these loans come with high costs. Payday lenders can charge fees that equate to as much as 400%.
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What's the Alternative to a Small Personal Loan?
There are other options if you need a small amount of cash quickly and don't want to apply for a small personal loan. You can take a cash advance on your credit card or dip into the overdraft protection on your checking account if you have the service. Keep in mind that there are fees and interest charges associated with these options. A rainy day fund can come in handy if you started one—just make sure to replace the amount when you can in case you need the money again one day. Payday loans are another option, but should be a last resort because of the high fees and interest that come with them. If all else fails, consider reaching out to family and/or friends to lend to help you cover your emergency.
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Companies We Reviewed
We researched and reviewed 70 lenders to find the best seven companies you see above on this list. While we write individual reviews for most companies, we do not always write reviews for companies we would not recommend. Below are the companies we researched along with links to individual company reviews to help you learn more before making a decision:
Achieve, Affinity Federal Credit Union, Alliant Credit Union, American Express, Avant, Axos Bank, Bankers Healthcare Group, Best Egg, Bethpage Federal Credit Union, Blue Federal Credit Union, Boatloan.com, Boeing Employees' Credit Union, CapexMD, Citibank, Connexus Credit Union, Discover, Dividend Finance, ENT Credit Union, Fig Loans, First Tech Federal Credit Union, Future Family, GoodLeap, Greenstate Credit Union, Happy Money, Hiway Credit Union, Lake Michigan Credit Union, Laurel Road, LendingClub, LendingPoint, LendingUSA, Liberty Federal Credit Union, LightStream, Lyon Financial, Mariner, Money Key, Mountain America Credit Union, NASA Federal Credit Union, Navy Federal Credit Union, Netcredit, Old National Bank, OneMain Financial, OppLoans, Patelco Credit Union, PenFed, Personify Financial, PNC Bank, Prosper, Reach Financial, Regions, Reprise, Rocket Loans, Santander, Service Federal Credit Union, SoFi, Southeast Financial, Summit Credit Union, SunPower, TD Bank, Teachers Federal Credit Union, Trident Funding, Truist, U.S. Bank, Universal Credit, Upgrade, Upstart, USAA, Vantage Recreational Finance, Wells Fargo.
How We Pick the Best Small Personal Loans
To evaluate and rank personal loan providers we collected hundreds of data points across 70 lenders, including traditional banks, credit unions, fintechs, and special interest finance companies. We researched and evaluated APRs, loan amounts and terms, fees, customer experience, and much more.
To rank the lenders in our database and to generate star ratings, we weighted the data we collected, based in part on what consumers told us were the most important features of a personal loan and lender in a survey we conducted. We grouped those factors into four broad areas:
- Loan costs (advertised APR, fees, and six other factors): 29.25%
- Loan terms (loan amount, repayment term, and three other factors): 22.25%
- Borrowing requirements (credit score, membership requirement, and six other factors): 28.5%
- Additional features (online application, pre-qualification, and eight other factors): 20%
Learn more about how we evaluated personal loans in our complete methodology.
Guide to Personal Loans
Learn more about personal loans:
- What is a personal loan?
- How do personal loans work?
- When are personal loans a good idea?
- How to get a personal loan
- How to apply for a personal loan
- How to use a personal loan
- Where to get a personal loan
- Personal loans vs credit cards
- Alternatives to personal loans
- Personal loan calculator
- Personal loans methodology
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