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Personal Loans

How to Find the Best Short-Term Loans Online

Updated Jun 23, 2023   |   7-min read

Most Americans don’t have enough savings to deal with a minor financial emergency. About 45% of Americans have no emergency savings, while 24% have less than $1,000 saved, according to a 2019 survey by GOBankingRates.

Saving can be difficult. While everyone should try to build emergency savings, disaster can strike at the worst time, leaving you with a bill you can’t cover. Some people turn to short-term loans, which allow you to borrow money for a short period to help pay small expenses.

The danger of short-term loans is that some lenders use predatory lending tactics that can trap you in a cycle of debt. Checking the fine print when looking for a short-term loan is essential. This guide will help you find the best short-term personal loans from our partners and avoid predatory lenders.

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What is a short-term loan?

There isn’t a universal standard for what constitutes a short-term loan. Each lender has its idea of what qualifies as short-term. Short-term loans generally have low borrowing amounts, with repayment terms measured in weeks or months rather than years.

Many personal lenders won’t let you borrow less than a few thousand dollars at a time. But a short-term lender might let you borrow just a few hundred dollars if that’s all you need to cover your bill.

Where to find the best short-term loans

Many lenders specialize in short-term loans. Here are our picks for the best short-term loans from our partners.

Online short-term loans

If you need to borrow a small amount, a short-term personal loan is probably your best bet. They’re usually unsecured, which means that you won’t have to put your car or home on the line if you can’t pay your monthly bill.

One of the best places to get a short-term loan is online. Many online lenders specialize in quick approvals and low rates and fees. The application process tends to be easier—you can do so from home. Just fill out the application and upload the required documents.

Here are a couple of online lending options.

  LightStreamUpgrade
Loan amounts $5,000$100,000$1,000$35,000
Term lengths 24 – 144 months**36 or 60 months
APRs 3.49%19.99%* with autopay7.99%35.97%
Origination Fee0%2.9% – 8%
Credit score660+620+
Visit lenderView RatesView Rates

Other types of short-term loans

If you have trouble qualifying for a traditional, short-term personal loan, consider another available loan type. Typically, they’re not the best option compared to personal loans and pose additional risks, so you should think carefully before turning to one of these options.

Car title loans

Car title loans are usually offered by local lenders and are popular because they can be a source of fast cash without a credit check. Of course, there’s a catch. To take out a car title loan, you must use your car as collateral. The lender can repossess your vehicle if you fail to make monthly payments.

Car title loans are especially risky because if you need to borrow money to cover a small, unexpected bill, you might also have problems paying your loan off if you’re hit with another unexpected expense or reduction in income.

This could prevent you from getting to work and reducing your income even further, which is why we recommend you consider an unsecured personal loan first.

To even qualify for a car title loan, you need to own your car or have equity in it, meaning that the car’s value exceeds the remaining balance of your car loan.

Payday loans

Payday lenders specialize in cash advances on your next paycheck to help borrowers cover expenses until their next payday. These lenders are known for charging higher interest rates and exorbitant fees, even for short-term loans.

Many states have passed laws banning payday lending or capping interest rates. A reputable lender might charge between 5% and 36% interest. Meanwhile, payday loans might have APRs exceeding 400%, including fees.

Many payday loan borrowers wind up in cycles of debt to lenders, using new loans to pay off their old ones and going deeper into debt. Financial experts recommend avoiding payday loans, so see whether you can qualify for a short-term personal loan instead.

Short-term loan interest rate: What to look for

When you borrow money, one of the most important things to look at is the interest rate. The higher the interest rate on a loan, the higher the monthly payment and cost over the life of the loan. If you have bad credit, you’ll tend to get a higher interest rate. Good credit usually gets you a lower rate.

However, you should also consider fees, as a lender with low rates and high fees could cost more. Compare APRs rather than interest rates when choosing between multiple lenders.

All else equal, your goal should be to get the loan with a lower APR. The exact rate you’ll pay depends on your choice of lender, the size and term of the loan you need, and your credit score.

For a personal loan, reputable lenders charge rates between 5% (if you have excellent credit) and 36% (if your credit is poor), though there’s variation in those ranges.

Pros & cons of short-term loans

Pros

  • Quick funding

  • Low minimums

  • Often less stringent credit requirements

Cons

  • Many predatory lenders operate in the space

  • High interest rates

  • High fees

How to get a short-term loan

Most lenders allow you to apply for a loan online, so the first step toward getting a short-term loan is visiting a lender’s website. Look at the list of loan options and find the one that appeals to you.

You can then get a rate quote by providing some basic personal information, such as your name, address, Social Security number, how much you plan to borrow, and why you need it.

Compare loan prequalified offers from multiple lenders to find the best combination of interest rates, term options, and borrowing amounts, then choose your loan provider. Once you’ve chosen a lender, you can submit a full loan application.

You’ll need to provide additional financial information and documentation, which usually includes:

  • Proof of your annual income (W-2s, pay stubs)
  • Your monthly housing payments (lease, mortgage agreement)
  • Proof of other assets
  • The loan term that you want
  • Bank account information

Lenders will also check your credit report and score and use all of this information to make a lending decision. Once you’re approved, just wait for the cash to arrive in your account.

>> Read More: How do personal loans work?

Recap of online short-term loans

  LightStreamUpgrade
Loan amounts $5,000$100,000$1,000$35,000
Term lengths 24 – 144 months**36 or 60 months
APRs 3.49%19.99%* with AutoPay7.99%35.97%
Origination Fee0%2.9% – 8%
Credit score660+620+
Visit lenderView RatesView Rates

*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

**Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of three years would result in 36 monthly payments of $303.99.