Best Short-Term Personal Loans With No Prepayment Penalty

Best Short-Term Personal Loans With No Prepayment Penalty: Many short-term loans financed with high rates of interest may be expensive for some people. Many people consider applying for a personal loan as an alternative since they usually have a lot of flexibility and let you set up monthly installments over a time span. Personal loans are generally paid back in equal monthly installments over an extended period of time, or you may choose to pay off the loan early to put it back into your budget.

Best Short-Term Personal Loans With No Prepayment Penalty

Best Short-Term Personal Loans With No Prepayment Penalty
Best Short-Term Personal Loans With No Prepayment Penalty

What to do when you want a short-term loan

Personal loans tend to be appealing in contrast to other kinds of financing because the terms of the loan are relatively flexible, and the interest tends to be lower than other types of borrowing. The loan term and interest rate are the main factors considered by lenders when assessing whether a loan is suitable for the borrowers. A longer loan term leads to a lower monthly payment and greater loan affordability.

Though you’ll spend less up front, your costs still go up over time. To illustrate, if you get a 3-year, $5,000 loan with a 9 percent interest rate, you will be paying $159 each month and $5,723.95 over the loan’s term. If you accept a 2-year repayment term, then your monthly payment will rise to $228, but you will only be paying $5,482 for the life of the loan.

If you prefer to save on interest, you can choose a personal loan with a reduced term. You can also choose to take out a loan with a longer term to pay a lower monthly payment that doesn’t stretch your budget too thin and pay it off early. Nonetheless, it is crucial that you choose a loan company that permits you to pay it off before the time period expires without having to pay additional fees. (Best Short-Term Personal Loans With No Prepayment Penalty)

Online personal loan lenders with no prepayment penalties

If you are in need of a short-term loan, it may be best to work with lenders that don’t charge borrowers fees for paying off loans early. Otherwise, you’ll have to pay a fee to finalize your short-term loan plan. Luckily, many lenders don’t impose penalties for paying off your loan early.

Lender Loan amount Terms APR range
Happy Money  $5,000 – $40,000  2 to 5 years 5.99% – 24.99%
LightStream  $5,000 – $100,000  2 to 7 years  3.99% – 19.99% (with AutoPay)
 SoFi $5,000 – $100,000 2 to 7 years 6.99% – 22.23% (with AutoPay)
 Upstart  $1,000 – $50,000  3 to 5 years  5.40% – 35.99%

Happy Money

Happy Money puts customers first with its unique approach to lending. Its personal loans are best for customers looking to consolidate high-interest debts in order to save time, and borrowers also get exclusive access to various financial management tools.

While their loan terms are less-rich than you might find with other online loan providers, the minimum credit score requirement is on the lower end, and if you have excellent credit you might be able to qualify for an interest rate that is superior to most other loan providers. There are no prepayment penalties or late payment fees, but an origination fee of up to 5% might apply. (Best Short-Term Personal Loans With No Prepayment Penalty)


LightStream has some of the lowest interest rates for personal loans. To qualify, you need an excellent or good credit rating and lengthy credit history. With a LightStream flexible loan, you will not spend what the loan’s terms are.

LightStream offers you a rate that’s 0.1 percentage points lower if one can find a comparable loan product elsewhere with a lower rate. Also, keep in mind shorter loan terms typically are accompanied by lower interest rates, meaning it will be to your benefit to select a timeframe that is shorter. Same-day funding is available, and prepayment penalties are not applied. (Best Short-Term Personal Loans With No Prepayment Penalty)


In spite of a minimum credit score, you may be able to obtain a personal loan from SoFi if you have a score of at least 680. Other significant advantages of this lender include free entry to financial advisors, coaches, and other virtual events to assist you in your wealth management.

This online lender features a seamless application experience, and you won’t pay application, origination, late payment, or prepayment fees. SoFi also allows joint applications if you’re unable to qualify for a personal loan on your own. (Best Short-Term Personal Loans With No Prepayment Penalty)


If you believe that choosing an upstart company will be lucrative, it’s a great idea to consider the possibility. They may offer competitive interest rates and fast funding. In addition, they look beyond your credit score and assess your education and work history for proof of appropriate finance based on your capacities.

If approved for funding, you won’t pay a prepayment penalty if you pay the loan off early. Still, Upstart charges an origination fee of up to 8 percent, along with late payment and returned payment fees. You’ll also pay a fee if you choose to receive paper statements in the mail. (Best Short-Term Personal Loans With No Prepayment Penalty)

Alternatives to a personal loan for a short-term loan

A shorter-term personal loan isn’t the only option to get the funds you need. Here are some alternatives:

  • Credit card: If you have a credit card with available credit, you can use it to meet your short-term financial needs. Be sure to repay what you spend before the due date rolls around to avoid accruing interest on those purchases. Or you can apply for a credit card that offers zero percent APR on purchases for a limited time and pay it off before the promotional period ends.
  • Car title loan: You can borrow up to 50 percent of your car’s market value (if you own it outright) with a car title loan. Perfect credit isn’t required, but here’s the catch: you can expect to pay a hefty interest rate and your car is used as collateral. So, this loan product can stretch your budget too thin, and you could lose your vehicle if you fall behind on payments.
  • Payday loan: These loan products cater to consumers with poor credit and should only be used as a last resort as they come with hefty APRS, sometimes as high as 600 percent. When you apply, the lender will request your paystub and banking information to ensure you are employed and know where to pull the funds from when it’s time to collect. Most loans do not exceed $500 and are due on your next payday. (Best Short-Term Personal Loans With No Prepayment Penalty)

Bottom line

A personal loan can help you get over a short-term financial hardship or cover an important expense. When researching your options, confirm that the lender does not charge prepayment penalties. Even if the interest rate is high, your payment plan will be more effective, which will let you pay off the balance in full before incurring fees.

Other options besides loans are worth exploring before making a final decision. Thoroughly analyzing the advantages, disadvantages, and other aspects will allow you to make an intelligent and informed decision. (Best Short-Term Personal Loans With No Prepayment Penalty)

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