4 Best Short-Term Loans for Emergency Needs | Credit Karma (2024)

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Short-term loans can be a lifeline in an emergency, whether you’re facing a medical crisis or need to make a car repair.

We’ve rounded up our five picks for best short-term loans, highlighting what makes each stand out. While there’s no universally accepted definition of a short-term loan, we’ve defined it here as a loan with terms of 12 months or less.

It’s important to keep in mind that some of these lenders may offer short-term loans with relatively high interest rates — but the annual percentage rates, or APRs, are still lower than the typical payday loan.

• How we picked these loans
• Best for people with little credit history: Upstart
• Best for people with no credit score: Oportun
• Best for early access to your paycheck: Earnin
• Best for retail purchases: Affirm
• Best for multiple loan terms: Personify
• What you should know about short-term loans

How we picked these loans

To compile this list, we reviewed more than a dozen lenders, narrowing them down to those that offer personal loans with repayment terms of 12 months or less. We then compared interest rates, fees, application processes and other details about each lender.

Best for people with little credit history: Upstart

Why Upstart stands out: Getting a loan may be difficult if you haven’t built strong credit yet or don’t have much credit history. Upstart may be a solution since the lender takes factors like education and employment into consideration. And you may be able to build your credit with on-time payments since Upstart reports to the three major consumer credit bureaus (Equifax, Experian and Transunion).

• Prequalification application — During the prequalification process, Upstart runs a soft credit inquiry, which won’t affect your credit scores. This can help you see what terms you may qualify for, though remember this may change after you formally apply.
• Fees —Upstart charges a number of fees that can add to the cost of your personal loan. Its origination fee ranges from 0% to 8% of loan amounts, which is deducted from your total amount borrowed. There’s also a late-payment fee, returned-payment fee and a fee for requesting paper copies of your records.
• Repayment terms —Upstart offers three- and five-year repayment terms, with no prepayment penalty.
• Eligibility —Upstart considers your education and employment along with your credit scores and reports to help decide if you’re likely to repay your loan.

Read reviews of Upstart personal loans to learn more.

Best for people with no credit score: Oportun

Why Oportun stands out:Oportun will consider your application even if you don’t have any credit history — which is rare to find among lenders. Oportun also considers factors such as education or employment while evaluating your application. This, along with the ability to use a co-applicant, makes it a good choice for anyone looking to build credit from scratch.

• Prequalification application —Oportun runs a soft credit inquiry, which won’t affect your credit scores. As always, keep in mind that the terms you see may change after you formally apply.
• Co-applicants may be allowed —If you want to apply with another person, Oportun may approve a co-applicant. Applying with a co-applicant may help you qualify for the loan or receive better terms.
• Application requirements —In order to apply, you must have a valid photo ID, provide proof of income, officially verify your address and submit personal references. You don’t need a credit score to qualify.
• Loan amounts and terms —Oportun offers personal loans ranging from $300 to $10,000. (The lender may offer different terms on Credit Karma.)

Read reviews of Oportun personal loans to learn more.

Best for early access to your paycheck: Earnin

Why Earnin stands out: Earnin is an app that may be a useful alternative to a payday loan because it promises no fees and interest. (You can “tip” an optional amount.) To begin, members of Earnin can only take out $100 per pay period, but that limit may increase over time.

You’ll repay your advance by allowing Earnin to withdraw the money owed from your bank account on payday.

• How to qualify — Not everyone will qualify to use Earnin, even if you’re employed. In order to be eligible, you must send more than 50% of your paycheck to direct deposit in your checking account, have a consistent pay schedule (such as weekly, bi-weekly or monthly), and have a consistent working location or participate in a digital timekeeping system to track your working hours.
• Balance Shield features — Earnin also offers “Balance Shield Alerts” to notify you if your checking account dips below a specified amount and “Balance Shield Cash Outs,” which advance money if your account balance drops below $100.

Read our full review of Earnin to learn more.

Best for retail purchases: Affirm

Why Affirm stands out: If you need to borrow money for a retail purchase, Affirm may be a good alternative to a credit card. The company partners with thousands of online retailers and stores — from furniture stores to auto parts retailers — to offer personal loans for purchases. Rates start as low as 0% APR, though you may pay much more in interest depending on the merchant and your credit.

Affirm typically offers repayment terms of three, six or 12 months. But for small purchases, you may only get one to three months and for large purchases, you may receive up to 48 months.

• Down payment may be required — If you’re approved, that doesn’t guarantee you’ll be approved for the full amount you request. In some instances, Affirm may require a down payment.
• No-fee promise — Affirm says it doesn’t charge any late fees, annual fees, prepayment fees, or fees to open or close your account.
• Prequalification available — Affirm will only perform a soft inquiry at first if you want to check your potential eligibility. But if you formally apply, it’ll do a hard credit inquiry, which can pull your credit scores down a bit. Once you have a loan and start paying it back, Affirm will report your payment history to the credit bureaus. Paying on time may help you gradually strengthen your credit.

Read reviews of Affirm loans to learn more.

Best for multiple loan terms: Personify

Why Personify stands out: Personify is an online lender that offers a variety of personal loan amounts and terms, depending on where you live. In Arizona, for example, the company offers loan amounts ranging from $500 to $15,000 and loan terms between twelve months and 48 months. (Keep in mind that the lender may offer different terms on Credit Karma.)

Check where you live to see what may be available. Personify also offers bi-weekly, semimonthly and monthly payment schedule options to help you set a repayment plan that works well for you.

• Origination fee — Depending on where you live, Personify may charge an origination fee that it will add to the amount you’re approved to borrow. That means you’ll also be paying interest on this fee.
• Other fees — Personify doesn’t charge application fees or prepayment penalty fees for paying off your personal loan earlier than scheduled. But late fees and insufficient funds fees may apply.
• Not available in all states — Personify offers personal loans in only 26 states, so you’ll want to check that it operates where you live before you apply.
• Application process and requirements — To qualify for a loan, you must complete an online application, have a valid checking account and a source of income. If your application is approved, Personify says you may get your funds as soon as the next business day.

Read reviews of Personify personal loans to learn more.

What you should know about short-term loans

If you’re considering a short-term loan, you’ll want to look at all of your options — and the details of all terms — before you commit. Here are a few important things to know to help get you started.

Avoid payday loans

If you need cash fast and have bad credit, you may be tempted by payday loans, which can be very costly. These short-term loans typically are for $500 or less and require repayment on your next payday. Their fees and interest rates can equate to an APR of around 400% — this is much higher than other types of financing, such as a credit card.

A better option may be a payday alternative loan — a kind of short-term loan offered by some federal credit unions. Credit unions won’t charge an application fee of more than $20 for a PAL, and interest rates are capped at 28%.

Next steps

Shopping around for a short-term personal loan can help save you money and stress down the line. Compare multiple loans before making a final decision. Using an existing credit card may be a better option if it has a lower APR than the short-term loan you’re considering. A personal loan could be a good option to consider if you need to consolidate debt or pay for large expenses.

In each case, make sure you’re borrowing only what you absolutely need and — ideally — what you’re confident you can pay back quickly. If you choose to take out a short-term loan, review your contract carefully to check for potential fees and penalties, such as origination fees, late fees and prepayment fees.