A personal loan can help you cover unexpected or upcoming expenses. Ideally, an emergency fund should be your first line of defense to cover unexpected bills, but 35% of Americans don’t have enough money available to cover a $400 emergency, according to a 2021 Federal Reserve report on the economic well-being of U.S. households.
You can find personal loans for nearly any amount, including small $1,000 personal loans. Finding the right personal loan will depend on your needs, current situation, and your credit profile.
Finding lenders offering smaller personal loans can be challenging since banks and lenders generally make more money on large loans. In recent years, though, more financial institutions, including online lenders, banks, and credit unions, have begun to see the value in offering small loans to customers.
It pays to compare lenders, checking rates and fees, before choosing a personal loan. Here are three places to look for a $1,000 loan.
Related: Learn more about getting a personal loan
If you’re considering taking out a personal loan, it’s important to do your homework and shop for the best rates. Interest rates are only one piece of the puzzle, though.
When choosing a lender, there are several other important details to keep in mind. Here are some factors to consider as you search for a $1,000 personal loan.
Thanks to the Truth in Lending Act (TILA), lenders must disclose any fees or charges upfront before someone takes out a loan. The TILA disclosure allows you to calculate your loan’s total cost before accepting an offer.
The total cost of your $1,000 personal loan depends on the interest rate you receive and the repayment term you select.
Here’s an example of what a $1,000 loan would cost with good credit and a 6% interest rate:
| Term (in years) | Monthly payment | Interest charged | Total loan cost |
|---|---|---|---|
| 1 | $86 | $33 | $1,032 |
| 2 | $44 | $64 | $1,063 |
| 3 | $30 | $95 | $1,095 |
| 4 | $19 | $160 | $1,159 |
Choosing a shorter term can increase your monthly payment, but you’ll pay less interest. Choosing a longer loan term lowers your monthly payments but means paying more interest over the life of the loan.
Related: Learn more about getting a personal loan