4 Best Short Term Loans for Emergency Financial Needs

 Short-term loans can be a lifeline in an emergency, whether you're having a medical crisis or need a car repair.

We've rounded up our four picks for the best short-term loans, highlighting what sets each one apart. Although there is no universally accepted definition of a short-term loan, we have defined it here as a loan of 12 months or less.

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

Read More: 8 places you can borrow money from

Best for people with little or no credit history: Oportun

Why Oportun is unique: Getting a loan can be difficult if you haven't built strong credit yet or you don't have a credit history. The Oportun program may be a solution because it does not require credit scores. And you may be able to build your credit with on-time payments since Oportun reports to credit bureaus nationwide (although Oportun does not specify which bureaus you report to).

• Pre-qualification application - During the pre-qualification process, Oportun performs a simple credit inquiry, which will not affect your credit score. This can help you see what conditions you may qualify for, although remember that this may change after you have formally applied.
• Co-applicants may be allowed - If you wish to apply with someone else, Oportun may approve a co-applicant. Applying with a co-applicant may help you qualify for the loan or get better terms.
• Application Requirements - In order to apply, you must have a valid photo ID, provide proof of income, formally verify your address and submit personal references. You do not need a credit score to qualify.
• Loan Amounts and Terms - Oportun offers personal loans ranging from $300 to $10,000. (Lender may offer different terms on Credit Karma.)

Best for early access to your paycheck: Earnin

Why Earnin Stand Out: Earnin is an app that might be a useful alternative to a payday loan because it doesn't promise fees and interest. (You can "tip" an optional amount.) To start, Earnin members can only get $100 per pay period, but this limit may increase over time.

You'll pay off your deposit by allowing Earnin to withdraw the money owed from your bank account on the day of payment.

• How to Qualify Not everyone will qualify to use Earnin, even if you are an employee. To be eligible, you must send more than 50% of your paycheck to direct deposit into your checking account, have a fixed payment schedule (such as weekly, biweekly, or monthly), and have a fixed job location or participate in a digital time-tracking system your working hours.
• Balance Shield Features Earnin also offers "Balance Shield Alerts" to let you know if your checking account drops below a specified amount and "Balance Shield Expenses," which delivers funds if your account balance drops below $100.

Best for Retail Purchases: Confirmed

Why Averm stands out: If you need to borrow money for a retail purchase, Averm may be a good alternative to a credit card. The company collaborates with thousands of retailers and online stores - from furniture stores to auto parts retailers - to offer personal loans for purchases. Prices start at 0% APR, although you may pay much more interest depending on the merchant and your credit.

Affirm usually offers payment 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.

• Advance payment may be required - If you are approved, this does not guarantee that you will be approved for the full amount you are requesting. In some cases, Affirm may require a down payment.
• No Fee Promise - Affirm says it does not charge any late fees, annual fees, upfront fees, or fees to open or close your account.
• Pre-qualification is available - Affirm will make a simple inquiry initially only if you want to check your potential eligibility. But if you apply formally, a difficult credit inquiry will take place, which can lower your credit score a bit. Once you get the loan and start paying it off, Affirm will submit a payment history report to the credit bureaus. Paying on time may help you gradually strengthen your balance.

Best for Multiple Loan Terms: Allocation

Why Personify Stand 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 from $500 to $15,000 and loan terms between twelve and 48 months. (Keep in mind that the lender may offer different terms on Credit Karma.)

Check where you live to see what might be available. Personify also offers 2 1/2 weeks and monthly payment schedule options to help you set a payment plan that works for you.

• Creation Fee - Depending on where you live, Personify may charge a creation fee that you will add to the amount you are approved to borrow. This means that you will also pay interest on this fee.
• Other Fees - Personify does not charge an application fee or a prepayment penalty fee to pay off your personal loan earlier than the due date. But late fees and insufficient funds fees may apply.
• Not available in all states - Personify only offers personal loans in 26 states, so you'll need to verify that they work where you live before applying.
• 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 money back as soon as the next business day.

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 details of all terms — before committing. Here are some important things to know to help you get started.

Avoid Payday Loans

If you need cash quickly and have bad credit, you may be tempted by payday loans, which can be very expensive. These short-term loans are usually in the amount of $500 or less and require repayment on the next payday. Their fees and interest rates can equate to an annual interest rate of around 400% - that's much higher than other types of financing, such as a credit card.

A better option might be an alternative payday loan - a type of short-term loan offered by some federal credit unions. Credit unions will not charge an application fee of more than $20 for PAL, and interest rates are capped at 28%.

Compare your options

Shopping for a short-term personal loan can help you save money and stress. Compare multiple loans before making a final decision. Using an existing credit card may be a better option if its APR is lower than the short-term loan you are considering. A personal loan can be a good option to consider if you need to consolidate debts or pay large expenses.

In each case, make sure that you only borrow exactly what you need - and ideally - what you are 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 construction fees, late fees, and prepayment fees.

How did we choose these loans?

To compile this list, we reviewed a dozen lenders, and narrowed them down to those who 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.