How to Find the Best Short-Term Loan Options in 2024

Best Short-Term Loan

A short-term loan will give you the necessary cash when you need it the most. If you’re faced with unexpected expenses or an emergency and need cash quickly, there are more options than ever before to get the money when you need it. You came here because you may need a short-term loan, but consider for a moment what you need. Is it quick cash? 

If so, while a short-term loan might be what you are looking for, there are other workarounds to get access to fast cash without a loan. If your paycheck isn’t coming for a week, and you need help now, you may need a cash advance. Early wage access (EWA) like MoneyLion InstacashSM can be a good solution. You can get access to up to $500 of the funds you need without interest or repayment fees. 

What is a short-term loan?

Short-term loans are taken for a limited period of time. While there’s no universally accepted definition of a short-term loan, many lenders classify loans with terms of 12 months or less in this category. These loans typically require little or no collateral, so they’re unsecured loans. Two-week or 10-month loans can qualify as “short-term” loans.

To apply for a short-term loan, lenders often require proof of employment, a bank account, and a driver’s license or other government-issued ID. Some may ask for details on total income and total debt. You will usually have to pay for the convenience of a short-term loan with higher interest rates. Sometimes, lenders may charge up to 400% APR on a short-term loan.  

Here’s a summary of common characteristics of short-term loans, of course, you may find exceptions:

  • You can typically apply for and receive them quickly.
  • You’ll need to submit an application, but this is often done online.
  • You’ll receive a loan offer with the amount, annual percentage rate (APR) and repayment schedule.
  • If you accept the offer, many lenders can get the money to you within 24 hours. 

How to find the best short-term loans

If you’re not sure what type of short-term loan you should get, here is an overview of some of the best options. 

1. Short-term personal loans

Short-term personal loans allow you to use the funds for whatever purpose you need – from medical expenses to car repairs or renovations. One of the best ways to find personal short-term loans for your qualifications is to compare different offers. You can compare lenders online to get an idea of interest rates and repayment terms. 

2. Short-term loan for bad credit

If you’ve got bad credit, all is not lost! Some lenders don’t approve borrowers with poor or no credit. For the lender, a low credit score or no credit score represents an increased risk the loan will not be repaid in full on time, which may make it harder for them to approve the loan application . 

However, there are short-term loans for borrowers with bad credit. Reviewing many options can help you get a loan for your needs with favorable terms. And repaying the loan on time can add positive history to your credit file. MoneyLion WOW membership gives you access to a Credit Builder Loan to help you build or repair your credit. This is why we’re beyond excited to announce MoneyLion WOW, our new membership that gives you the very best of MoneyLion WOW’s exclusive features, including cashback1, VIP deals and discounts2, and giveaways3

3. Consider alternative financing solutions like credit cards

Credit cards aren’t loans; they’re a form of revolving credit. While loans are issued for a specified amount as a single lump sum and have set repayment terms, you can make charges on credit cards as needed, and generally speaking, repay the charges as you go

With revolving credit like credit cards, you’re not obligated to pay more than the minimum payment due. Of course, for this convenience credit cards come with high APRs, usually between 20% and 30%+. However, if you need to make ends meet, a credit card could be a substitute for a short-term loan. If you’re looking to make retail purchases or other charges that you could put on the card, a credit card can help you access the funds you need. 

Like other options, comparing credit cards’ interest rates is essential. If you decide to apply for a new credit card, look for a 0% APR offer. If approved, you’ll be able to spread the purchase over the introductory period without accruing interest. 

A 0% APR credit card can effectively act as a short-term cash loan, as long as you pay the monthly minimum amount on time, and pay off the full amount before the 0% APR period ends. 

5 Tips for getting a short-term loan

Here are five tips to get the best short-term loan solution for your needs. 

1. Understand your financial situation

Assess your financial needs before seeking a short-term loan. Consider your total income and expenses. Do you need more funds long term, or for one short-term emergency? Based on your needs, small short-term loans can be one solution, but credit cards, cash advances, and borrowing from friends are other options. Evaluate your budget and identify the exact amount required so you can avoid taking a loan for more than you need. 

2. Compare, compare, compare

Research can help you save significantly on interest rates and fees. When looking for short-term loan options, compare interest rates, fees, repayment terms, and the lender’s reputation. You can read online reviews and check the Better Business Bureau website for any complaints against the lender. 

Comparing loan options can help you find the best current offers to fit your needs. MoneyLion makes it easy to compare personal loans, credit cards, auto refinancing solutions, and student loan refinancing solutions from our trusted partners in one place. MoneyLion’s convenient  solution means that you can get the information you need to compare in minutes. 

3. Explore alternative options

Consider the cost of the short-term loan, and explore alternative financial solutions before opting for one. Weigh whether you can use a potential alternative such as dipping into personal savings, borrowing funds from a friend or family, or putting the expense on a credit card. 

You can easily calculate the total interest and fees on various options based on the loan amount. For example, on a six-month, $2,000 loan with an APR of 11%, you’ll pay $121.16 for six months. That assumes there are no other fees, which may not be the case. 

On a credit card with a 30% APR, to charge and pay back the same $2,000 could cost around $50 in the first month alone, with additional interest each month until you’ve repaid the full amount. Many credit card companies calculate interest daily based on the current balance, so your precise amount will vary based on how much you’ve repaid. 

If you don’t want to do the math, there are many online calculators to compare alternatives. 

4. Avoid potentially predatory lending options

Unfortunately, short-term loans have earned a bad reputation due to certain types of predatory lending practices. You can avoid these by checking the lenders’ reputation, total interest and fees. Here are three types of loans to avoid.

Payday loans

Payday loans are short-term, high-interest loans with a typical maximum repayment period of 14 days. These loans are designed to help borrowers make ends meet before the next paycheck arrives and don’t require a credit check. Usually, you’ll only need to show a pay stub to prove you have a job. 

Beware of interest rates written as 15% when in reality the APR is 400%. This is because the lender will charge 15% over just 14 days, making payday loans more expensive than most other loans. If you cannot repay the loan on time, the fees and interest are stacked and rolled into another payday loan. Unfortunately for some borrowers, this can trap them in a cycle of debt. Avoid payday loans to avoid this risk.

Title loans

A car title loan is another type of short-term lending. In this case, you can use your vehicle as collateral, as long as you own it outright. You could borrow up to 25% to 50% of the car’s market value. However, title loans also come with a short repayment window—usually 15 to 30 days—and can come with APRs of 300%. Like payday loans, if you’re late on payments, the interest charges can pile up, and the loan will cost you even more.

Pawn shop loans

Pawn shop loans are a type of small, short-term loan. There are pawn shops in most towns and cities, which makes them a convenient option, but the fees and collateral could make most borrowers pause. 

According to the National Pawnbrokers Association, the average amount of a pawnshop loan is $150. Then, you’ll usually have up to 30 to 60 days to repay the loan plus fees. This can lead to loans with APRs of 152% or more, except in cities with laws to limit pawn shop interest like many cities in Massachusetts. If you have to roll over the loan, the cost of borrowing increases. 

5. Stay on top of payments

If you make all payments on time, a short-term loan can actually help your credit score. Otherwise, you risk a late payment, which can impact your credit score for up to seven years. Staying on top of payments for your finances is a good habit, but one that’s easy to let slip when life gets busy. 

To avoid missing a payment, you can set up automatic payments or withdrawals. You can still check on payments or consider making additional payments, but you have a backup in place to protect your credit score. 

Should you get a short-term loan?

Short-term loans are a convenient way to get cash and can seem like a way to cover a problem temporarily, but loans don’t come without risks. Compare lenders and fees to find the best option for your needs and to save more of your hard-earned cash. Consider emergency loans or other ideas to get a $1,000 loan fast

As with any loan, missing payments can negatively impact your credit score and cost you more in penalties and interest. Carefully research all your options and decide whether a short-term loan is the best choice for your situation, or whether products like early wage access or a 0% APR credit card could get you through.  


What is a short-term loan and how does it work?

While there’s no universally agreed-upon definition, short-term loans are usually any loan with a term of 12 months or less. Short-term loans can come in the form of personal loans, early wage access, or other financing options. 

What are the common purposes for taking out a short-term loan?

People take short-term loans for a variety of reasons, including a medical emergency, car repairs, home repairs, or simply to make ends meet. In some cases, borrowers also use short-term loans to finance a car, refinance student loans, or consolidate credit card debt with a lower interest rate. 

How do short-term loans differ from traditional long-term loans?

The main difference between a short-term loan and a long-term loan is the duration. Both short and long-term loans can have varying terms, interest rates, and fees based on lender criteria and borrower qualifications.

Can I apply for a short-term loan online?

Yes, many lenders allow you to apply for short-term loans online. 

Are there any alternatives to short-term loans that I should consider?

There are many alternatives to a short-term loan that you can consider. A few good options include a cash advance, credit cards, and borrowing from family. While these are not short-term loans, they can give you access to needed cash. 

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