Best Online Short-Term Loans

There are many situations that can leave you needing money fast—unexpected medical bills or home repairs can easily cost $1,000. You might also need cash to cover expenses if you lose your job. 

In these instances, it might be easy to turn to payday loans and short-term cash advances, but lenders offering them frequently use predatory practices. These loans often trap people in a debt cycle, and payday lenders may use aggressive collection tactics when people fail to pay.

Instead of payday loans, consider one of these short-term loans. We’ll explain how they differ, list the best short-term loans, and explain how to get one.

What is a short-term loan? 

As its name suggests, a short-term loan is a personal loan you repay quickly. In our research, we’ve found the best personal loans with terms as short as six months. However, most lenders’ minimum terms are 12-24 months, so any of these ranges could be considered short-term.

If you need a short-term loan, two options are personal loans and cash advances. Here’s a quick look at each and how they differ:

• Personal loans: You typically borrow personal loans from banks, credit unions, or online lenders, usually for at least $600. May have low annual percentage rates (APRs) but often require good credit. However, paying the loan on time can boost your credit score.
• Cash advance apps: These let you borrow small amounts, often less than $600. Generally, they charge a flat fee, which can be high when expressed as an APR. You repay these more quickly than personal loans, and there can be fewer credit score requirements. However, they won’t boost your credit score.

Short-term loans can be useful for emergencies, but reading the fine print is important. Rates can vary between loan offers, and some lenders have substantial hidden fees.

Although the flat fees for payday loans can seem low, they are often well into the three digits when calculated as an APR. Worse still, most borrowers who take out payday loans renew the loan, meaning they may pay a three-digit APR. These loans are almost always worth avoiding.

While personal loans and cash advances aren’t free, they are usually cheaper than payday loans. If possible, consider one of these options before getting a payday loan. Here is a quick look at the two types of loans and their differences:

Feature	Personal loans	Cash advance apps
Loan amounts	Larger: Often $600+	Smaller: Usually much less
Terms	Longer: Six months to several years	Shorter: Typically repaid from your next paycheck
Interest rates	Could be lower, especially with good credit	Often expressed as fees, which can be high when compared to APRs
Credit checks	Usually required	Not usually required

Best short-term personal loans 

Explore our recommended short-term loan providers, each excelling in its unique niches, from the best for fair credit to those specializing in small loans.

Lender	Loan amounts	Rates (APR)
PNC	$1,000 – $35,000	8.19% – 28.29%
Credible	$600 – $200,000	7.49% – 35.99%
PenFed Credit Union	$600 – $50,000	As low as 8.49%
Avant	$2,000 – $35,000	9.95% – 35.99%
Upgrade	$1,000 – $50,000	8.49% – 35.99%

PNC: Best short-term bank loan under 12 months

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LendEDU rating: 4.6 out of 5

• Offers short-term loans with 6-month terms
• Get personalized help in a branch if needed
• High customer service ratings

PNC Bank is the only traditional personal loan lender we found offering personal loans with terms lasting under 12 months. Its presence in several states ensures that many customers can access in-store services; however, application and loan management are fully online. 

Many customers express high satisfaction with PNC’s service, indicating its standing among short-term loans. You can borrow as little as $1,000 with a PNC personal loan. Another standout feature about PNC is that it doesn’t charge origination fees, which can save borrowers significant money.

Credible: Best marketplace for short-term loans online

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LendEDU rating: 5.0 out of 5

• Wide variety of lender options
• Easy to compare offers and interest rates 
• High user dependability rate

As an online marketplace, Credible is ideal for those choosing among multiple loan offers from lenders with terms as short as 12 months. Its easy-to-use platform allows quick comparison of interest rates and offers. Users value its diverse, trustworthy offerings.

You can borrow as little as $600 with Credible’s lending partners (depending on which partners you match with.)

PenFed: Best for a small short-term loan

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LendEDU rating: 4.9 out of 5

• Small short-term loans for as little as $600
• Competitive interest rates 
• High customer satisfaction record

If you’re seeking a small short-term loan—between $600 and $1,000, for example—PenFed Credit Union might be ideal. The second-largest federal credit union in the U.S., the institution’s low rates and strong customer satisfaction record earn PenFed a top spot in the short-term loan space.

You can apply for a personal loan without being a credit union member, but if approved, you must apply for membership and pay a one-time $5 fee. Credit union eligibility is open to everyone, so acceptance is a breeze.

Avant: Best short-term personal loans for bad credit

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LendEDU rating: 4.6 out of 5

• Caters to individuals with below-average credit
• Manageable repayment terms despite credit history
• High user satisfaction

Avant provides short-term personal loans to those with a minimum credit score of 580 and a minimum annual income of $20,000. It offers terms that users find fair and manageable and holds a high user satisfaction rating. 

You can borrow as little as $1,000 from Avant and choose a loan term as short as 12 months. Avant offers fast funds—as soon as one business day, but it assesses a 9.99% administration fee, something borrowers with good credit can likely avoid with a different lender. 

Upgrade: Best short-term loans for fair credit

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LendEDU rating: 4.9 out of 5

• Top choice for 24-month loans for fair credit profiles
• Competitive interest rates and flexible loan terms
• Strong user ranking and satisfaction 

Upgrade is the top choice for individuals with fair credit seeking short-term loans. It combines competitive interest rates and flexible terms to accommodate most users, so its user ratings and satisfaction tend to be high.

Like Avant, Upgrade offers loans to borrowers with credit scores of 580 and up. Its minimum loan term is 24 months, so if you aren’t looking for the shortest term, we recommend considering Upgrade. Upgrade assesses an origination fee of 1.85% to 9.99%, so you might save money compared to Avant. 

However, consider the total cost of the loan—you might pay less for a 12-month loan with Avant (even with a higher fee) than a 24-month loan with Upgrade.

Cash advance apps for small short-term loans 

Cash advance apps are apps you usually download on a smartphone or tablet. These apps offer small, very short-term loans against your next paycheck. These apps are designed to help you come up with quick cash for emergencies when you can’t wait until your next payday.

Cash advances are not what you might think of as traditional loans. These products are meant to help bridge cash flow gaps but are not long-term solutions. Over-reliance on cash advance apps can lead to overspending and a debt cycle. This is why personal loans are typically a better solution.

Fees or interest?

Cash advance apps don’t typically charge interest like personal loans do. Instead, they usually charge fees, which can come in a few different forms.

• Subscription fees: Some cash advance apps charge monthly fees. They might limit certain features to subscribers.
• Express funding fees: Most cash advance apps will send your money within a few days. However, you can pay an extra fee for “instant” funding, which could take several minutes.
• Tips: Cash advance apps often encourage tips for using the service. However, tips can be significant in some cases.

The fees for cash advance apps seem low, but they can be quite high when expressed as an APR. As a result, it’s best to cash advances only when necessary and pay the advance off right away to avoid a debt cycle.

Generally, personal loans are almost always preferable to cash advances. Their terms are often clearer, and the fees are often less extreme.

How much does a short-term loan cost?

Short-term loans can be a convenient way to borrow money, but the length of the term affects the overall amount you pay. Even with the same interest rate and loan amount, a longer term leads to more interest.

Short-term personal loan costs

Here is an example of how short-term personal loan costs might look:

Amount	Term	APR	Total cost
$500	6 mo.	15%	$522.00
$500	12 mo.	15%	$542.00

As you can see, the 12-month term results in about $20 more paid. While this difference isn’t enormous, it can be with larger loan amounts and longer terms.

Cash advance app costs

The cost of using a cash advance app is often more complicated than personal loan costs. Consider the following example:

Amount	Fees	Total cost	APR
$200	$5 tip + $2 fee	$207	90%+

In this example, the cash advance looks cheaper because you only pay $7 in fees. However, because these are very short-term loans you repay by your next payday, the equivalent APR is 90% or higher, depending on how long it is until your next paycheck.

This fee structure is why short-term personal loans are usually cheaper than cash advance apps, especially with higher loan amounts. Cash advance apps often charge high fees that can quickly outpace the interest on a short-term personal loan.

Before signing up for a personal loan or cash advance, compare rates across lenders carefully. There are often big differences in how much one lender charges in interest and fees compared to another, which can add up.

It pays to shop around and compare lenders if you need cash quickly. Ensure you application is complete for faster processing. While some lenders offer quick funding, watch out for additional fees.  

Chloe Moore

CFP®

How to get a short-term loan

Here’s how to get a short-term loan, whether personal or cash advance.

How to take out a personal loan

Personal loans are among the best options to consider if you need some extra cash. The cost is generally manageable, and the terms are usually clear. Here’s how personal loans work:

1. Check your credit score: You often need a good credit score to get a personal loan. Several credit monitoring services let you check your score, including Chase’s Credit Journey (VantageScore 3.0) and the Discover FICO® Score. You can check your score even if you aren’t a customer.
2. Research lenders: Check offerings from several lenders, such as banks, credit unions, and online lenders. Compare rates, fees, and repayment terms. Identify a few lenders that stand out.
3. Prequalify: This isn’t required, but prequalifying with a few lenders lets you see your approval odds without impacting your credit score. It will also let you see personal loan quotes.
4. Apply: Select the best quote and submit an application. You can do this online or in person using a local lender.
5. Receive your money: If approved, you’ll receive your money within a few business days. Same-day funding is sometimes available but may cost extra.

Remember to read the fine print before you apply for a personal loan. There can sometimes be hidden fees you may not expect. These can make the loan more expensive.

How to borrow money via a cash advance app

Cash advance apps let you borrow money you’ll repay by your next paycheck. Here’s how it usually works:

1. Download the app: First, you’ll download the app and link your bank account and paycheck information.
2. Request an advance: Indicate how much you need to borrow and repay by your next paycheck—typically a few hundred dollars.
3. Receive a decision: The app will analyze your spending patterns and give you an approval decision, often without a credit check.
4. Receive your money: If approved, you will receive your money within a day or two. You can often pay a fee to receive it instantly.
5. Repay the advance: The advance amount plus any fees are automatically deducted from your bank account on your next payday.

Remember that cash advances are often more expensive than personal loans. Only consider these after exploring other options, including a short-term personal loan or borrowing from family or friends. Cash advances can be very costly and aren’t always worth the fees.

Ask the expert

Chloe Moore

CFP®

Your best bet for any unexpected expense is having an adequate emergency fund. If you don’t have savings and need the cash, first look at your spending and see where you can cut expenses to free up funds. Going forward, look for opportunities to reduce expenses and/or increase income so you can start saving for future emergencies. 

FAQ

Where can I get low-interest short-term loans?

You may be eligible for low-interest short-term loans from the abovementioned lenders. Personal loans likely depend on your credit score, debt-to-income ratio, and other factors, but rates are as low as 7.49% in March 2024. A shorter term can help you score a lower rate.

What is a good short-term loan interest rate?

A good short-term loan interest rate generally falls below 36%. Rates vary based on the borrower’s creditworthiness, the loan amount, and the loan term. We recommend prequalifying with several lenders to get an idea of what rates you’re likely to be eligible for. Consider the APR, not just the simple interest rates, to ensure you get a good short-term loan interest rate.

Is a personal loan or cash advance a better option for a temporary loan?

Between a personal loan and a cash advance, a personal loan might be a better option if you need $600 or more. Personal loans can offer easier installment payments and lower interest rates. However, a cash advance app might be more suitable if you need a lower amount or immediate access to funds.

How can I avoid predatory lenders while searching for a short-term loan?

To avoid predatory lenders, verify the lender’s credibility and certifications. Read user reviews, and be wary of excessive fees, abnormally high interest rates, and tactics pressuring you to sign without proper understanding.

What are alternatives to personal loans and cash advance apps?

Alternatives to personal loans and cash advance apps include credit card advances, paycheck advances via human resources, or borrowing from friends and relatives.