It is understood that the Reds has hoped to capture the Malta international on a three-year deal but opted for a loan move in order to complete the signing before the close of the transfer window.
"I was close to signing a permanent deal, but I needed more time to think it through and time was in short supply," said Mifsud.
"Now I can't wait to get playing and help the team move forward."
Mifsud is set to make his debut for Barnsley in Tuesday's Championship clash with Sheffield Wednesday.
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