Editor's choice: OppLoans Installment Loans
- Easy online application
- Quick approval
- Fast funding
- Long repayment terms
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our opinions or reviews. Learn how we make money.
One major drawback of short-term loans is the relatively high costs, but not all lenders charge the same fees and rates. While all short-term loans are going to have a higher APR than standard personal loans, some have lower rates than others.
You can typically find low-interest short-term loans with some payday loan providers if it’s legal in your state or local financial institutions that offer payday loan alternatives across the country. :
Once you’ve taken a look at the state regulations, compare lenders and find ones that charges below this maximum. Some states have higher maximums than others and finding a lender that falls below these won’t be too difficult.
Some lenders do not have blanket interest rates for all borrowers, instead classifying borrowers on a tiered system. The classification can be according to a borrower’s credit score, due to a record of repaying previous loans on time, or even based on completing educational courses and earning points (as with LendUp).
If you’re looking for lower, ongoing repayments you may want to consider an installment loan. These loans let you pay back over a longer period rather than in a single sum as with short-term loans. While the APR can still be high, the repayments are spread over terms of between two months and five years.
Some federal credit unions offer payday alternative loans (PALs) as an affordable short-term financing option to all credit types. These are regulated by the National Credit Union Administration, which caps interest rates at 28% — well below the starting rate for most other short-term products.
Many small banks and credit unions are actually Community Development Financial Institutions (CDFIs), which have an aim of improving the economic wellbeing of residents in your area. These tend to offer affordable short-term options to people who live nearby. Reach out to your local bank or credit union to find out if there are any low-interest options for you.
When you’re comparing low interest rate short-term loans, consider following factors:
Looking for a low-interest short-term loan might not translate into an inexpensive loan. That’s because most lenders charge a flat fee instead of interest — especially when it comes to payday and auto title loans that you repay all at once.
Instead, you might want to look for a loan with a lower APR. Your loan’s APR is its total cost — including both interest and fees — expressed as a percentage of your loan amount. Just make sure to compare the APR on loans with the same terms: The less time you have to pay back a loan with a term of less than one year, the higher the APR.
Make sure you go through the terms and conditions before accepting the contract so you have a clear understanding of the fees and charges. If you think you may face problems in repaying the loan, reconsider taking it in the first place.
Are instant short-term loans legit?
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.