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The Best Short-Term Personal Loans
Sometimes you need a little extra cash for a shorter period of time. In these unique situations, it can be overly-expensive and downright silly to use a loan or borrowing option designed for the long term. Luckily, short term loan options exist and can help you meet your financial needs fast. Additionally, short term lending protects you from the need to pay back a loan over several years or pay way more interest and fees than you need to.
Check out some of the best short term loans currently available as rated and reviewed by our team through the SimpleScore process, which compares APRs, customer satisfaction, support, loan amounts and fees.
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The best short-term loans of 2020
- USAA: Best for Small Loans
- American Express:Best for Larger Loans
- PNC Bank: Best for Favorable Options
- RISE Credit: Best for Bad Credit
- U.S. Bank: Best for Lowest Rates
Best short-term loans at a glance
| Lender | APR | Terms | Loan Amount | SimpleScore |
| USAA | 9.49%–17.65% | 12–36 months | $2,500–$5,000 | 4/5 |
| American Express | 5.91%–19.98% | 12–36 months | $3,500–$25,000 | 4.25/5 |
| PNC Bank | Varies by zipcode | 6–60 months | $1,000–$35,000 | 4/5 |
| RISE Credit | 50.00%–299.00% | 4–26 months | $300–$5,000 | 2.5/5 |
| U.S. Bank | Starting at 5.24% | 12–60 months | $1,000–$25,000 | 3.6/5 |
Rates accurate as of November, 2020 and exclude autopay discounts.
Best for military and families – USAA
The options for how much you can borrow short-term through USAA are a bit tight, but can help march you in the right direction.
Known for helping military members and their families for decades, USAA is an attractive option for people looking for short-term loans. The shortest term you can get on a loan is a one-year term for amounts between $2,500 and $5,000. Comparatively, this is a tighter option window, which means that if you’re looking for a really small personal loan or a medium-to-large-sized loan, it won’t be a good fit.
A few other nice perks of the loans are that applying only takes a few minutes online, and, in most cases, you’ll see your available rate within a matter of seconds. Funds are made available within 24 hours during the business week. Read our full USAA personal loans review for more information.
Best for larger loans: – American Express
No need for plastic with American Express, revolving credit is out the door with its personal loan products.
Not only does American Express offer credit card services, but the company also offers a full slate of banking products, including short-term personal loans. Like USAA, the minimum length you can borrow for is 12 months, and you can apply in minutes and get a decision in seconds.
What’s really nice about the short-term lending options from American Express is that there are no origination fees and no prepayment penalties. These are two things often overlooked that can play a vital role in how well your borrowing experience goes. You’ll have the availability to choose between $3,500 and $25,000 for your loan, and there’s no impact to your credit score to apply. For more information, read our full American Express personal loans review.
Best for favorable options – PNC
If your state is one that PNC Bank services, you can get a great short-term loan as short as six months with agreeable amounts — 10/10 when it comes to flexibility.
When you’re looking for great options when it comes to a shorter-term loan, you’re going to love what PNC Bank has to offer. First, loans are available as short as six months, which is ideal for very short-term needs. Second, there’s no need for collateral, no prepayment penalty, no application fees and no origination fees.
And to top it all off, you can get a loan as low as $1,000 or as high as $35,000. This makes PNC Bank one of the most flexible options when it comes to meeting small, medium or large financial needs. All you need for the application is some personal info and the amount you want to finance. To learn more about PNC’s personal loans, read our full review.
Best for bad credit – RISE Credit
The money from RISE Credit is expensive, but you can have a chance to raise your credit by paying it back on time.
Let’s be frank and upfront here — the money from RISE Credit is going to be expensive. How expensive depends on what state you’re borrowing in, how much you want to borrow and your current financial health. But with APR rates going as high as 299%, it’s expensive.
That all being said, there are reasons to like RISE Credit. One, the higher rates are because the company is willing to work with people with bad credit. Two, there are no fees at all associated with getting your loan. You will pay a higher interest rate in most situations, but you aren’t going to pay fees on top of that. Read our full RISE Credit personal loans review for more information.
Best for lowest rates – U.S. Bank
If you’re a U.S. Bank customer, the short-term loan options are very flexible and come with some of the best rates for short-term loans.
For people looking for great rates from a household name, U.S. Bank certainly should find itself on your list of options. With rates as low as 6.99%, it certainly takes the cake for some of the best rates for short-term lending. Loans are available between $1,000 and $25,000, giving you a ton of flexibility when it comes to meeting your short-term financial needs.
Here are a few other things you’re going to like about U.S. Bank. There are no origination fees, term lengths are available from 12 months to five years and you can get quick access to your money through a branch location or online. You will need to be a U.S. Bank customer, though, to qualify.
What is a short-term loan?
Loans for short terms are quite similar to any other loan out there, except the products are specifically designed to be repaid much faster. Generally, any loan with repayment terms of 12 months or less is considered a short-term loan. Much like other personal loans, you can get these short-term lending options through a bank, credit union, online lender or any other financial institution in the lending business.
[ Next: Is a Personal Loan My Best Option? ]
How short-term loans work
Short-term loans work much the same as any other type of loan out there. The lender gives you a sum of money upfront. In return for quick access to the money you need, you agree to pay that money back plus interest costs and fees. Generally, these payments are spread out as monthly payments, but the payments can sometimes be weekly or bi-weekly in the case of very short-term loans.
Additional upfront fees
Sometimes you may have to pay slightly higher fees upfront on shorter-term loans. This is because without prepayment penalties, the lenders might not stand to make much if people only borrow the money for a very short period of time. As lenders do have some fixed costs, you may see this reflected in the upfront fee structure.
Pros and cons of a short-term loan
The pros of a short-term loan option are plentiful. Most importantly, the loan is designed for a shorter term. This means you’re not going to pay interest for longer than you ideally need to. Additionally, shorter-term loans are available for smaller amounts of money, which is nice for people who are looking to meet a quick and smaller financial need.
The drawbacks to loans for shorter terms are that you generally see smaller maximum loan amounts, and you may see higher upfront fees to help cover the lender’s fixed costs. In addition, you may see some shorter-term loans that don’t allow prepayment, which is another way that the lenders may work to protect their profits.
Emergency short-term loans
Sometimes life throws curveballs you just don’t see coming. And sometimes, these curveballs can leave you with a need for a short-term emergency loan. Examples of these situations might be unexpected medical bills, damage to your property not covered by insurance, a car breaking down not under warranty or even a major appliance finally giving out. All of these situations are not ideal, but they can’t be ignored because of the major implications they can have.
It’s imperative in these time-sensitive situations that you remain calm and don’t do anything too hastily without thinking it through. It can be tempting to jump at the first offer you have for a loan, but you need to make sure it’s the right choice. Making the wrong choice could help you now, but it could set you up for a lot of troubles in the future.
How a short-term loan affects your credit score
Short-term loans will have an effect on your credit score, which is important, especially if you have other major financial purchases coming up in the future. First, anytime you take on more debt, it can lower your credit score. The more debt you have outstanding, the riskier you look to lenders.
But here’s the good news. As you start to make on-time payments on your loan, that starts to demonstrate good borrowing behavior. The more on-time payments you make, the higher your score will rise. Shorter-term loans help to add to the mix of your loans and give you an opportunity to showcase good borrowing habits to the reporting bureaus.
Short-term lending for bad credit
If you have bad credit, your less-than-stellar credit score may create some problems when trying to borrow money. First, here’s the good news. If you have bad credit, you can still take advantage of short-term lending. Many lenders specialize in giving people second chances and are willing to offer you a loan.
[ Read: The 5 Best Ways to Borrow Money in an Emergency ]
On the other side, though, the money is going to be more expensive. Because the cost of borrowing is a reflection of risk versus reward, the lender is going to need to get more reward for the added risk it is taking. This usually means higher interest rates and more fees. Additionally, you may have to shop around quite a bit to find the right lender that’s willing to work with you.
The best news? If you are able to get a loan, it’s an opportunity to start building your credit back up. The next time you need to borrow money, you’ll have access to better rates and more favorable repayment terms.
How to choose the best short-term loan for you
- Determine your needs. Before you can start shopping for the best short-term loan for you, you have to know what you need and how much you need. This is also a great time to determine whether the purpose of the loan is for a want or a need.
- Shop the factors that matter. Make sure you don’t just look at one factor, like how much you can get or what the interest rate is when choosing. You want to take a holistic approach and look at the whole picture before deciding. This includes looking at interest rates, eligibility requirements, repayment terms, prepayment penalties, fees and anything else that might make one option better for you than the other.
- Check your rates. For each lender on your shortlist, check your rate. This is usually a soft credit check and won’t affect your credit. Then, you can compare the rates and terms that each lender offers.
- Compare your options and make a decision. Once you know what you want and what to look at, it’s time to compare options. Find the lenders willing to work with. From there, see which offers you the best opportunity. When you find it, go ahead and fill out the final application and get your approval.
[ Next: How Personal Loans Work ]
Personal loan FAQs
Yes, you can get a personal loan with a credit score as low as 550. However, you may have to shop quite a bit to find a lender willing to work with you. What you may want to consider is a secured loan that allows you to put up collateral to gain approval. Before doing this, though, make sure you fully understand the implications that come with a secured loan. If you default, you lose your collateral for good.
Personal loans are not bad. Everyone has a time in their life when they need a little additional financial help to get through a particular situation. Where personal loans could be bad is when they are used improperly. If you take out a personal loan for something like a luxury vacation or without a plan to pay it back, it can be a bad situation.
When it comes to getting a personal loan, the best place to get one is the place that gives you the best terms. Places you should start looking include banks, credit unions, online lenders and any other financial institutions advertising shorter-term lending options. Depending on what you’re looking for, the best place to get a personal loan will differ.
Too long, didn’t read?
Short-term loan options are available between 4 months and 12 months with favorable repayment terms and attractive interest rates. While short-term loans may seem like less of a big deal than longer-term loans, you still need to treat them with the same attention to detail to have a positive experience and to protect your financial future.
We welcome your feedback on this article and would love to hear about your experience with the personal loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.
The impact of COVID-19 on your personal loans
The coronavirus pandemic has forced lenders and borrowers alike to reconsider how to use personal loans. As government assistance programs like the CARES Act expire, more Americans may turn to personal loans as a way to cover short-term expenses. The good news is that many banks, credit unions and online lenders are offering coronavirus hardship loans, which come with lower interest rates and favorable terms. Though not everyone qualifies for this type of loan, it’s designed for those who’ve suffered a loss or reduction of income.
Lenders are also waiving fees and deferring payments to help borrowers make ends meet during the COVID-19 pandemic. For example, HSBC Bank is deferring personal loan payments and waiving late fees for 120 days from the time you enroll in HSBC’s hardship program.
Keep Reading
Methodology
The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.
For every review, our editorial team:
- Identifies five measurable aspects to compare across each brand
- Determines the rating criteria for each aspect score
- Averages the five aspect scores to produce a single SimpleScore
Here’s a breakdown of the five aspect scores and their rating criteria for our review of the best personal loans of 2020.
Why do some brands have different SimpleScores on different pages?
To ensure the SimpleScore is as helpful and accurate as possible, we developed unique criteria for every category we compare at The Simple Dollar. Since most brands offer a variety of financial solutions, their products and services will score differently depending on what we’re scoring on a given page.
However, it’s also possible for the same product from the same brand to have multiple SimpleScores. For instance, if we compare NetCredit’s personal loans according to our criteria for the best personal loans, it scores a 2.3 out of 5. But when we compare NetCredit according to the criteria for the best bad credit personal loans, it scores considerably higher, since the criteria for the latter review are more lenient (lenders who serve borrowers with bad credit will always offer higher rates, so we needed to adjust our category methodology to account for different industry standards).
Questions about our methodology?
Email Hayley Armstrong at hayley@thesimpledollar.com.
Rates
We looked at the maximum APR for each lender — the lower their maximum rate, the higher their score.
Loan Size
We awarded higher scores to lenders with more generous loan sizes.
Customer Satisfaction
We leveraged the J.D. Power 2019 Personal Loan Satisfaction Study℠ to see how customers rated their experience with each lender. (If a lender wasn’t included in J.D. Power’s study, we skipped this aspect and averaged the four remaining aspect scores.)
Support
We awarded higher scores to lenders with the most channels for customer support.
Fees
We looked at the three most common fees — origination, late payment, and pre-payment — and penalized lenders for each fee charged.
Reviewed by
Courtney Mihocik
Loans EditorCourtney Mihocik is an editor at The Simple Dollar who specializes in personal loans, student loans, auto loans, and debt consolidation loans. She is a former writer and contributing editor to Interest.com, PersonalLoans.org, and elsewhere.
