Best Small Personal Loans Under $5,000 in August 2024

Interest Rate: No interest; indexed by Consumer Price Index (CPI)

In August 2024, several lenders offer competitive small personal loans that can help cover various expenses. Here’s a detailed look at some of the best options available:

Interest Rate: No interest; indexed by Consumer Price Index (CPI)

Lender	Loan Amount	APR Range	Loan Term	Fees	Features
Upstart	$1,000 – $50,000	6.8% – 35.99%	3 – 5 years	No fees	Uses AI for credit assessment; fast online application.
Marcus by Goldman Sachs	$3,500 – $40,000	6.99% – 19.99%	3 – 6 years	No fees	Flexible repayment terms; easy online process.
LightStream	$5,000 – $100,000	5.99% – 19.99%	2 – 7 years	No fees	Wide range of loan terms; competitive rates.
Credit Union Loans	Varies by credit union	Typically lower	Varies	Varies	Personalized service; often lower rates.
SoFi	$5,000 – $100,000	7.99% – 23.43%	2 – 7 years	No fees	Unemployment protection; additional financial resources.

1. Upstart

Loan Amount: $1,000 – $50,000
APR Range: 6.8% – 35.99%
Loan Term: 3 – 5 years
Fees: No fees
Features: Upstart uses artificial intelligence to evaluate creditworthiness, which can lead to potentially lower rates for individuals with strong financial profiles. Their application process is quick and conducted online, making it convenient for borrowers.

2. Marcus by Goldman Sachs

Loan Amount: $3,500 – $40,000
APR Range: 6.99% – 19.99%
Loan Term: 3 – 6 years
Fees: No fees
Features: Marcus by Goldman Sachs offers flexible repayment terms and no fees, making it an attractive option for those who prefer straightforward loan terms. The application process is user-friendly and can be completed online.

3. LightStream

Loan Amount: $5,000 – $100,000
APR Range: 5.99% – 19.99%
Loan Term: 2 – 7 years
Fees: No fees
Features: LightStream is known for offering a wide range of loan terms and competitive rates. They do not charge fees, which can make the borrowing experience more economical. Their fast funding process is another advantage.

4. Credit Union Loans

Loan Amount: Varies by credit union
APR Range: Typically lower
Loan Term: Varies
Fees: Varies
Features: Credit unions often offer lower rates and more personalized service compared to traditional banks. Membership is typically required, and loan terms can vary depending on the credit union’s policies.

5. SoFi

Loan Amount: $5,000 – $100,000
APR Range: 7.99% – 23.43%
Loan Term: 2 – 7 years
Fees: No fees
Features: SoFi provides additional benefits such as unemployment protection and access to financial planning resources. This makes it a well-rounded option for borrowers who might need extra support.

How to Secure a Small Personal Loan

Securing a small personal loan involves several key steps. Here’s a comprehensive guide to help you navigate the process:

1. Check Your Credit Score

Your credit score is a crucial factor in determining the interest rates and terms you’ll be offered. Generally, higher credit scores qualify for lower rates. Obtain a copy of your credit report and check your score before applying. Many financial institutions provide free credit score access, or you can use credit monitoring services.

2. Assess Your Financial Needs

Determine how much you need to borrow and for what purpose. It’s important to have a clear understanding of your financial requirements to ensure you apply for an amount that meets your needs without borrowing more than necessary.

3. Compare Lenders

Shop around to compare different lenders. Look at APRs, fees, loan terms, and repayment options. Online tools and marketplaces can help streamline this process by allowing you to compare multiple lenders at once. Pay attention to any additional fees, such as origination or late fees, as these can impact the overall cost of the loan.

4. Gather Documentation

Prepare the necessary documentation for your loan application. Commonly required documents include:

• Proof of income (pay stubs, tax returns)
• Identification (driver’s license, passport)
• Bank statements
• Proof of address (utility bill, lease agreement)

Having these documents ready will help expedite the application process.

5. Prequalify

Many lenders offer a prequalification process that allows you to see potential rates and terms without impacting your credit score. This step can help you understand what you might qualify for and whether the loan terms are acceptable to you before you formally apply.

6. Submit an Application

Choose the lender that offers the best terms for your needs and complete their loan application. This typically involves filling out an online form with personal and financial information. Be prepared to provide additional documentation if requested.

7. Review and Accept Terms

If you are approved for a loan, carefully review the loan agreement before accepting it. Make sure you understand the interest rate, repayment schedule, and any fees associated with the loan. If you have any questions or concerns, don’t hesitate to ask the lender for clarification.

8. Receive Funds

Once you accept the loan terms, the lender will disburse the funds. Depending on the lender and the method of disbursement, you might receive the money via direct deposit to your bank account or a check.

9. Repay the Loan

Make timely payments according to the loan agreement. Setting up automatic payments or reminders can help you stay on track. If you experience any difficulties with repayment, contact your lender to discuss possible solutions or modifications.