Adam McCann, Financial Writer
Good lenders for small personal loans that are not payday loans include Avant, LendingClub and Upstart. They all offer far lower APRs than any payday loans – below 36% – and have payback periods of up to 60 months. Payday loans are short-term loans secured by the borrower’s next paycheck. Once the borrower gets their check, they must pay back the full loan amount plus interest. And the APRs are extremely high, often as much as 400%.
Payday loans are targeted toward people with bad credit. But it’s wise to avoid them and go for more traditional personal loan providers that consider people with bad credit.
Small personal loans that are not payday loans:
- Avant: Loans as small as $2,000. 600+ credit score required. APR range of 9.95% - 35.99%. Origination fee up to 4.75%.
- LendingClub: Loans as small as $1,000. 600-640+ credit score required. APR range of 6.95% - 35.89%. Origination fee of 1% - 6%.
- Upstart: Loans as small as $1,000. 620+ credit score required. APR range of 4.73% - 35.99%. Origination fee of 0% - 8%.
There are plenty of decent personal loans for people with bad credit, but they may not always offer small amounts. For example, LendingPoint considers people with credit scores as low as 585, but their minimum amount to borrow is $5,000. Their APRs range from 9.99% to 35.99%, and their origination fee is 0% to 6%. Similarly, FreedomPlus has a minimum credit score of 620, APRs of 5.99% - 29.99%, and a minimum loan amount of $7,500.
Another good alternative to a payday loan is a secured personal loan. With a secured personal loan, you’ll have to put up something of value as collateral in order to borrow. But your approval odds will be high, even with bad credit. And the rates are much lower than those of payday loans.
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