Estimated monthly payments for a $1,000 loan
Monthly payments on a personal loan are determined by your loan amount, APR and repayment term. Annual percentage rates tend to range between 6% and 36%, and repayment terms typically range from two to seven years. Here are monthly payments for a three-year, $1,000 loan using estimated APRs for each credit score rating:
Borrower credit rating | Estimated APR | Monthly payment |
|---|
Excellent (scores from 720 to 850). | 11.81%. | $33.12. |
Good (scores from 690 to 719). | 14.48%. | $34.41. |
Fair (630 to 689). | 17.93%. | $36.12. |
Bad (300 to 629). | 21.65%. | $38.01. |
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified through NerdWallet from January 1, 2024, through December 31, 2024. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below 500 — are unlikely to qualify. Information in this table applies only to lenders with maximum APRs below 36%.
Your loan’s APR might vary from the average. Use a personal loan calculator to estimate monthly payments at different rates and repayment terms. Check your budget to ensure you can afford the additional recurring expense. How to get a small loan
Review your credit report and debts. Before applying, check your credit report for opportunities to address any negative marks or unpaid debts. Also, calculate your debt-to-income ratio, which lenders use to see how much of a borrower’s income goes to other debts. A DTI ratio of 36% or lower shows lenders you can likely handle a new loan. Some lenders will accept higher ratios. Pre-qualify with multiple lenders. Pre-qualifying for a personal loan lets you see your estimated annual percentage rate and loan terms. Since pre-qualifying usually takes a few minutes and doesn’t affect your credit score, it’s a quick way to compare loans and determine which is the best for you. Collect necessary documents. A formal loan application may require information like your Social Security number, W-2s and pay stubs. Gathering this information before you apply can speed up the loan application process.
Submit an application. This part may be done in person with local banks and credit unions, but many lenders have online applications. If you’re approved, expect funding within a day to a week. Applying will temporarily shave a few points off your credit score.
How to qualify for a small loan with bad credit
If you have bad credit (scores from 300 to the high 500s), you may still qualify for a small loan from a credit union or reputable online lender, but your rate could be on the high end of the lender’s range.
Add a co-signer whose credit score or income is higher than yours. A co-signer won't have access to loan funds or information about your payments, but they will be responsible for payments if you fail to repay. Get a joint personal loan with someone whose credit score or income is higher than yours. Co-borrowers share the responsibility for repayment and have equal access to the loan funds and payment information. Choose a lender that offers secured personal loans. A secured loan is usually easier to qualify for and often has a lower rate compared to an unsecured loan. You can typically use a savings account or vehicle as collateral.
How to compare loan offers
Here are the most important features to compare between small loans.
APR: Annual percentage rate provides an apples-to-apples cost comparison for all loan types. The least expensive loan has the lowest APR.
Fees: Some lenders charge an origination fee, which can range from 1% to 10% of the loan amount. This fee is often subtracted from the loan before you receive the funds, so make sure you’re borrowing enough to meet your needs. Monthly payments: Review your budget to see how much you can afford to repay on a loan. A personal loan calculator can show you what rate and repayment term you’d need to get an ideal monthly payment.
Repayment terms: Many small loans are repaid over a year or more, but some can have shorter repayment terms. A longer repayment term may mean lower monthly payments but you’ll pay more in interest. Look for a term that keeps payments affordable but helps you clear the debt quickly.
Funding time: Personal loan approval and funding can take a day or up to a week, depending on the lender and how smoothly the application process goes. If you need the funds urgently, look for a lender that offers quick loans. Know the signs of predatory lending
A small loan from a predatory lender can damage your finances and trap you in a cycle of debt. Watch for these red flags when shopping for a small personal loan. High interest rates: Reputable lenders cap APRs at 36%, the highest rate most consumer advocates say an affordable loan can have. Some high-interest lenders charge triple-digit interest rates or high fees that make the loan difficult to repay. Extra short repayment terms: Payday loans are so named because you repay them on your next payday — usually in two weeks or less. These loans require a balloon payment (all or most of the loan repaid at once) and may not give you enough time to pull the funds together. No credit checks: A lender that approves you without checking your credit isn't trying to ensure that you can repay the loan and may even be betting that you can’t, which could lead you to borrow more money to pay off the first loan. Ways to get $1,000 or less without a traditional loan
Some of the nation’s largest banks offer small-dollar loans to their existing customers. These loans typically have shorter repayment terms than traditional personal loans. Here are a few examples:
The U.S. Bank Simple Loan is offered in amounts from $100 to $1,000 and is repaid over three months. The loan’s fee is $6 for every $100 borrowed. The Wells Fargo Flex Loan is a short-term small loan that’s repaid in four monthly installments, according to the bank. Loans can be $250 with a $12 fee or $500 with a $20 fee.
Some federal credit unions also offer payday alternative loans, or PALs. These are small loans up to $2,000 with rates capped at 28% and repayment terms from one to 12 months. You must be a credit union member to apply. Before applying for a loan, consider cheaper alternatives to get the money you need. Even if you urgently need cash, it can be useful to compare financing methods to find the best deal. Consider these options:
Borrow against your next paycheck with a cash advance app. These apps can be an affordable way to borrow a few hundred dollars, but advances are repaid on your next payday. Use a “buy now, pay later” app to split the cost of a large purchase into smaller payments spread out over a few weeks or months. Pick up a side gig to make extra money. For example, you could earn money delivering food or walking dogs.
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