August 27, 2024

Top Short-Term Loans in 2024

Life is full of surprises. And sometimes those surprises come with a price tag.

When you need extra funds, a short-term loan can bridge the gap and keep you moving forward. These loans provide quick access to cash — with repayment periods of just a few days up to a few months or a year. But while they can help you cover unexpected expenses or make a planned purchase under a tight budget, they aren’t right for everyone.

Here’s a guide to the best short-term loan options and what to watch out for.

What’s a short-term loan?

A short-term loan is a type of loan you borrow and pay back within a short period, typically a few months to a few years. Unlike long-term loans like mortgages and student loans, which are for specific purposes and have longer application processes, short-term loans provide quick access to cash for more immediate needs.

Short-term loan interest rates are often higher than long-term ones. That’s because short-term loans — which often require lower credit scores and have fast turnarounds — are considered riskier for lenders. But if you can pay back the loan quickly, you avoid high interest and bridge that temporary gap in your finances.

You might consider applying for a short-term loan if you:

Need to cover an emergency expense, like a car repair or medical bill
Want to take advantage of a time-sensitive opportunity, such as a limited-time sale or investment
Have to pay bills before your next paycheck arrives

Short-term loans are best used sparingly and responsibly. They’re not a long-term solution for ongoing financial challenges because the interest adds up fast. Before applying for a short-term loan, make sure you have a plan to pay it back on time to avoid getting caught in a cycle of debt.

What about Earned Wage Access?

If you’re waiting on a paycheck and don’t need a formal loan, Earned Wage Access is often a safer, better option. Instead of applying for a loan, you get your earned wages before your paycheck comes in. Apps like EarnIn make it easy to access a portion of your earnings quickly without worrying about interest.

EarnIn lets you take out up to $150 a day as you work or up to $750 per pay period. There are no membership fees, but you can choose to leave an optional tip. To qualify, you just need regular W2’d employment. And unlike a loan, you don’t have to undergo a credit check or pay interest.

The Best Short-Term Loans Providers

If taking out a short-term loan is the right choice for you, these providers offer a variety of solutions to help you manage short-term financial needs:

1. Avant

Avant offers small loans from $2,000 to $35,000 with repayment terms of 12 to 60 months. Interest fees range from 9.95% to 35.99%, and there’s an administrative fee of up to 4.75%. These fees can really add up. But the application process is straightforward, and fast funding is often available by the next business day.

Avant is a good option if you have fair to average credit, need a personal loan with flexible repayment terms quickly, and don’t mind a longer repayment term.

2. Upgrade

Upgrade has fixed-rate personal loans of up to $50,000. The annual percentage rate (APR), repayment terms, and length vary depending on the situation, but it’s easy to apply and see what Upgrade has to offer. You can choose from 24–84-month payback periods.

Upgrade’s APR offerings are high, which means you could end up paying hundreds (or thousands) in interest. But it’s a good option if you have a lower credit score and need a loan quickly.

How to get a short-term loan: 6 tips and requirements

Follow these simple steps to increase your chances of qualifying for a short-term loan and make the application process as smooth as possible:

1. Check your credit score. Lenders use your credit score to assess your creditworthiness and determine your interest rate and APR. Check your score beforehand so you know where you stand. If it’s low, you can work on improving it by paying bills on time, keeping and adding accounts in good standing, and disputing errors on your credit report.

2. Compare lenders. Don’t settle for the first lender that approves your application. If you need emergency cash immediately, it may be hard to wait. But taking the time to shop around and compare offers from several loan providers will help you find the best deal and avoid leaving money on the table. And consider using a safer Earned Wage Access app instead. To help you compare loan options and potential savings, consider using online tools like mortgage loan calculators and auto loan payoff calculators.

3. Gather necessary documents. Before applying, gather all the required documents. These vary by lender but usually include proof of income, bank statements, and identification. Having these ready streamlines the application process and shows lenders you’re prepared and organized.

4. Demonstrate stable income. Lenders want to see that you have a steady source of income to repay the loan. If you’re employed, provide recent pay stubs or W-2 forms. If you’re self-employed, be prepared to share tax returns or bank statements to verify your income. It’s possible to get a loan when unemployed or on unemployment insurance, but it’s more difficult.

5. Pay down existing debt. High levels of existing debt can make it harder to qualify for a new loan. Before applying, work on paying down your current balances to improve your debt-to-income ratio. This shows lenders you have the capacity to take on new debt.

6. Consider a cosigner. If you have trouble qualifying for a short-term loan on your own, consider applying with a cosigner who has a strong credit score and stable income. A cosigner agrees to take responsibility for the loan if you can’t make payments, which can increase your chances of approval and help you secure better rates and terms.

How to choose a short-term loan

Consider these factors to find the best loan option for your needs:

APR

The APR has the biggest impact on a loan’s overall affordability. It represents the total annual cost of borrowing, including the interest rate and certain fees like origination and application fees. A lower APR means you pay less in total for the loan.

Short-term loans often have higher APRs than traditional loans. For example, the average loan APR is 12.22%, according to Bankrate — but the short-term loans listed above average at around 20% APR. Try your best to find a low-APR option, and keep in mind you might have to pay more for a short-term loan’s flexibility and speed.

Additional fees

Be aware of potential fees that aren’t included in the APR, such as late payment fees and prepayment penalties. Late fees can add up quickly if you miss due dates, and prepayment penalties limit your ability to pay off your loan early. Look for short-term lenders with minimal or no additional fees.

Loan term length

Short-term loans have repayment terms ranging from a few months to a year or two — so while these loans seem lower commitment, they’re still a huge responsibility. Consider your ability to repay the loan within the given timeframe. A longer term might mean lower monthly payments but also more interest paid over time.

Loan amount

Carefully consider how much you need to borrow, and choose a lender that offers loans in that range. Borrowing more than necessary comes with higher interest costs and longer repayment terms, so it’s not worth the extra cash. A loan calculator can help you figure out an appropriate loan amount and term length without having to do the math yourself.

Lender reputation

Research the lender’s reputation by reading customer reviews and checking with the Better Business Bureau, which documents major complaints and scams. Look for a lender with a history of transparent communication, fair practices, and positive customer experiences. A bad lender might have pesky small print that costs you more money than expected.

Eligibility requirements

Pay attention to the lender’s minimum credit score, income, employment, and collateral requirements. Choose a lender whose criteria you can comfortably meet to increase your chances of approval and avoid unnecessary credit checks.

Skip the loans and get cash with EarnIn

With so many options out there, it can be tough to find the best one for your situation. But with no mandatory fees, no credit checks, and no interest charges, EarnIn is a great choice — no matter why you need it.

EarnIn’s Cash Out tool lets you access your pay as you work, up to $150/day or up to $750/pay period. That means you can get your money without waiting for payday or for a loan application to go through, with no fear of spiraling debt or impact to your credit.

Download the EarnIn app today and start making every day payday with fast service, advanced security, and 24/7 support.

Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.

1. EarnIn is a financial technology company, not a bank. Banking Services are provided by Evolve Bank & Trust, Member FDIC. Subject to your available earnings, Daily Max and Pay Period Max. Restrictions and/or third party fees may apply. EarnIn services may not be available in all states. For more info visit earnIn.com/TOS

2. EarnIn does not charge membership fees for use of its services. Tips go to EarnIn and do not impact the quality and availability of services, whether you tip or not. Restrictions and/or third party fees may apply, see EarnIn.com/TOS for details.

3. EarnIn does not charge interest on Cash Outs. Restrictions and/or third party fees may apply, see EarnIn.com/TOS for details.

4. EarnIn does not charge mandatory fees for use of its services. EarnIn does not charge interest on Cash Outs. Restrictions and/or third party fees may apply, see EarnIn.com/TOS for details.

5. EarnIn is a financial technology company, not a bank. Banking Services are provided by Evolve Bank & Trust, Member FDIC. Subject to your available earnings, Daily Max and Pay Period Max. Restrictions and/or third party fees may apply. EarnIn services may not be available in all states. For more info visit earnIn.com/TOS