The loops unravel ... you would need to use bias tape and even then it might not work.

Have you looked online for smaller towels?

I have not looked online for smaller towels. There would be no way for me to feel how soft they were which is as important as the size.

Thanks for the tip about unraveling.

A couple of other ways to try. You could just turn a small, double hem and topstitch with a matching thread, but you'd have to test whether your could fit this thickness under your needle or not.
If it's too thick, you could zigzag all around, then run a stay stitch to the inside of that for extra enforcement. Then trim close to the zigzag.
The binding is probably the best way to go, tho.

Thanks for the ideas!

I will look online and try the bias tape if I have to make my own.

Ginny

I have a lot of hand towels/washcloths that are just zig-zagged. Esthetically, they are not much to look at, but they get me dry. They have held up for years.

I"l try the zig zag first Eva, thanks!