Adam McCann, Financial Writer
You can get a small personal loan by applying with a bank, credit union or online lender and waiting 1 - 10 business days for approval and funding. There’s not much of a difference between getting a small personal loan and getting a large personal loan, other than the fact that you’re borrowing less money and should be able to pay it off more quickly. You should also have an easier time getting approved for a small loan since applicants generally need better credit, more income and less existing debt to borrow larger sums of money. You could potentially get a small personal loan from friends and family, too, which probably isn’t an option with larger loan amounts.
Most lenders offer both large and small personal loans. However, there are some lenders that only offer very small, short-term loans. These are targeted toward people with bad credit and usually have very predatory interest rates. So it’s important to make sure you don’t apply with any lender that has a maximum APR of more than 36%, the usual maximum for personal loans.
Before you apply for a small personal loan, however, there are a few other important steps to consider as well.
How to get a small personal loan:
- Check your credit score and reports. You’ll need a credit score of between 585 and 700 to qualify for a personal loan, and most require around 660. You can check your credit score and report for free on WalletHub. Go over your credit reports to make sure there’s no incorrect or fraudulent information. If there is, be sure to file a dispute to get it removed.
- Pre-qualify. You can use WalletHub’s free pre-qualification tool to see which lenders are likely to approve you for a personal loan. You’ll also be able to get an idea of what rates you might qualify for.
- Compare your options in detail. Of the loans for which you’ve pre-qualified, select ones with small enough loan amounts to cater to your needs. From there, you can focus on traits like APRs and fees.
- Apply online. Many lenders offer alternative options to apply, such as by phone or in person. But online, you’re likely to receive the speediest decision.
- Wait for a decision. You could find out in minutes, but it’ll often take a few business days.
- Receive your funds. It typically takes at least another business day after you’re approved to get a deposit to your bank account. If the lender mailed a check, it’ll naturally take longer.
After using the funds from your small personal loan to pay your expenses, you can start focusing on paying the loan back. Make sure to never miss a payment, and pay more than the minimum if possible in order to cut down on interest.
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