Credit unions and online lenders often offer competitive rates on small personal loans. Some credit unions provide payday alternative loans (PALs) with rates capped at 28%. Avoid payday lenders, which can charge annual rates exceeding 400%.

It depends on the situation. If the alternative is a payday loan or overdraft fees, a small personal loan at a reasonable rate can be a smarter choice. However, if you can save up or borrow from family, you'll avoid interest charges entirely.

At 15% interest with monthly payments, a $1,000 loan can be paid off in 12 months with payments around $90 per month. Paying extra each month or choosing bi-weekly payments can help you eliminate the debt even faster and reduce total interest paid.