What counts as a small personal loan
There is no official cutoff. In everyday use, a small personal loan is an unsecured loan of a few hundred to a few thousand dollars that you repay in fixed payments over months, not in one lump on your next payday. Through ProLoanSprint you can request $100 to $5,000.
The three things that make a loan a personal loan
Lenders use the label loosely, so look for the features instead of the name.
- It is unsecured. You do not hand over a car title or another asset. The lender relies on your income and credit history.
- It is repaid in installments. You make a set number of payments, usually the same amount each time, until the balance is gone.
- The cost is fixed up front. The agreement shows the amount financed, the finance charge, the annual percentage rate and the total of payments before you sign.
A loan that is due in full in two to four weeks is a different product, usually called a payday loan or a single payment loan, even when a website calls it a personal loan.
How small is small
It depends on who you ask. Many banks set a minimum for personal loans, and that minimum can be higher than the gap you are trying to cover. Credit unions and online lenders are more likely to lend a few hundred dollars. State law also plays a part, because some states cap the size of certain loans or the fees a lender may charge on them.
A useful way to think about size is by the job the money has to do:
| The gap | What usually fits | Watch for |
|---|---|---|
| One bill before payday | The smallest amount a lender will offer | A short term with a high fee for the time borrowed |
| A repair or a deposit | A loan repaid over several months | The total of payments, not only the monthly figure |
| Several costs at once | A larger installment loan | Whether the payment still fits when another surprise arrives |
Small personal loan or payday loan
The two get confused because both can be for a few hundred dollars. The difference is the repayment. A payday loan is typically due in one payment on your next payday. A small personal loan spreads repayment over a longer schedule. A longer schedule lowers each payment, but you pay interest for more months, so compare the total you would repay under each offer.
Neither product is cheap for a borrower with thin or damaged credit. Read the annual percentage rate and the total of payments on any offer, and ask the lender to explain any fee you do not recognise.
Who offers small personal loans
- Credit unions. Often the lowest cost for members. Some federal credit unions offer payday alternative loans with capped rates. You usually need to join first.
- Banks. Good rates for existing customers with solid credit, though minimum loan sizes can be an obstacle.
- Online lenders. Wide range of amounts and credit profiles, with costs that vary a great deal from one lender to the next.
- Request services such as ProLoanSprint. We are not a lender. We pass one request to lenders in our network, and any offer comes from a lender, with that lender’s terms.
How to choose an amount
- Write down the exact cost you need to cover. Use the bill or the quote, not a round guess.
- Subtract what you can cover from your next paycheck without missing rent or utilities.
- Ask for the remainder. A smaller loan costs less and is easier to clear.
- Before you accept, check that every payment date falls after a payday.
Short answers
Is a small personal loan a good idea?
It can be when the cost is necessary, the payment fits your budget and cheaper options such as a payment plan with the biller are not available. It is a poor fit for everyday spending.
Can I get one with bad credit?
You can ask. Lenders consider all credit types, though nobody can promise an offer, and a lower score often means a higher cost.
Does asking affect my credit score?
Checking your options through ProLoanSprint does not affect your score. A lender you choose to go ahead with may run its own credit check.
Start a request for $100 to $5,000 Next: loans and card debt