Are you thinking about taking out a personal loan? If so, it could be a good financial move! The only drawback is that you’re going to have to compete with other candidates demanding for the same loans online. Be sure to checkout our list of personal loan lenders today.
If it’s your first time applying for a personal loan, you may not know exactly where to start or may think it’s too confusing & time consuming. With this guide, you’ll grasp the necessary information that you need to know about personal loans.
Compare student loan refinancing & personal loans promotions from Credible and SoFi. Furthermore, compare multiple loan products by using Supermoney.
What Are Personal Loans?
A personal loan is known as an “unsecured debt.” It’s a fixed-rate, fixed-term loan that isn’t backed by collateral, such as a house or vehicle. A collateral is given as security for repayment of a loan in the event of default.
This is riskier for the lender which reflects in higher rates than secured loans. Generally, personal loans can be used for anything, including debt consolidation, home improvement, business expenses, wedding expenses, car purchases, and even travel.
A personal loan is a loan that is issued based on the borrower’s credit score. The ideal borrower is one whom has high credit ratings.
Personal loans are usually set over short periods, such as one to five years, while payments are auto-deducted from a checking account (decreasing the chances of default or missed payment). With the best personal loans found online, the interest rate will be fixed (meaning the interest rate will not fluctuate during the fixed rate period of the loan) which usually come from reputable lenders.
Benefits of a Personal Loan
A personal loan can help you pay off your high-interest credit card debt, which allows you to pay your remaining debt balance with a lower interest rate. For example, you can use personal loans for expenses that you would typically put on a credit card, such as vacation expenses to pay lower interest over time. This also ties into another reason why a personal loan is a smarter alternative to credit card debt.
Personal loans can even help your credit score. They are much more flexible and can be used for a variety of personal and business needs. Many studies have shown that those with a personal loan (also known as installment loans) see an improvement in their credit score with a new loan. If you are using a loan to pay off your credit card debt (especially if your credit usage rate is high), chances are that your score could increase considerably.
Overall, unsecured personal loans offer more flexibility in the terms and could be used for a wide array of business or personal reasons. You’re able to consolidate your existing debt which could lower your monthly payment and the interest rate – all while improving your credit score!
Cons of a Personal Loan
While personal loans could potentially save you or help you out of tough situation, this could potentially create a more difficult situation if there is more debt being added. Be sure that you are paying off your debt consistently and not spending more of money that you do not have. Keep in mind that not everyone will be offered the best rates, so be sure to read the fine print before signing.
Factors to Consider
Here are a few things to keep in mind when picking out an optimal unsecured loan:
- Annual percentage rate – APR is interest accumulated annually. Different interest rates and loan amounts will impact the APR of your loan.
- Loan limits – Know how much you need and if the lender allows you to borrow that amount. Don’t bite off more than you can chew.
- Loan terms – Depending on how long you need your loan for, some lenders only have a couple term options. Others have shorter or longer terms, so check which ones accommodate your needs.
- Credit inquiry – When applying for a loan, the lender will check your credit. A soft pull will only be visible to you and won’t hurt your credit score. However, a hard pull will show up on your credit report. This will stay on your report for two years and may negatively affect your credit for one year.
- Repayment options – Most lenders offer a few different repayment options like auto-pay, online payment, or sending a check by mail. Make sure the lender offers a repayment option that suits you.
- Area of service – Many online lenders do not serve nationwide. Check to make sure they offer loans in your state.
- Fees – Lenders may charge origination, prepayment, late payment, insufficient funds, and check processing fees. Find out each lender’s fee schedule to see which one meets your schedule.
- Additional perks – Check to see if a lender offers access to a user-friendly mobile app or exclusive events. You may enjoy using these perks. This could be the difference between lenders with the same competitive features.
How to Qualify For The Best Rates
When you apply, lenders typically check the following before giving you the best rates they offer:
- High credit score – To get the best rate, you must have good or excellent credit. This is the first thing checked to qualify for a loan.
- Strong credit history – If you’ve had a long history of paying off different types of debt responsibly, lenders like to see that. This is also partly reflected in your credit score.
- High income – You’ll need to have an income much higher than the lender’s minimum requirement to get the most competitive rate.
- Low debt-to-income ratio (DTI) – DTI is the ratio of your monthly debt payments to your monthly income. The lower DTI, the better.
Featured Lenders
| Lender | Loan Amount | Loan Term Lengths | APR Range | Origination Fee | Minimum Credit | Review |
|---|---|---|---|---|---|---|
| LightStream | $5,000 – $100,000 | 2 - 7 years* | See website for current rates | None | 660 | Review |
| SoFi | $5,000 – $100,000 ($10k min. for CA) | 2 - 7 years | See website for current rates | None | 680 | Review |
| Prosper | $2,000 – $40,000 | 3 or 5 years | 7.95% - 35.99% | 2.4% - 5% | 640 | Review |
| Lending Tree | $1,000 – $35,000 | 1 - 5 years | Varies | Varies | Varies | Review |
| Lending Club | $1,000 – $40,000 | 3 - 5 years | 10.68% to 35.89% | 1% - 6% | 600 | Review |
| Upstart | $5,000 – $30,000 | 3 or 5 years | 7.00% – 35.99% | 0% - 8% | 620 | Review |
| Payoff | $5,000 – $35,000 | 2 – 5 years | 5.99% - 24.99% | 0% – 5% | 640 | Review |
| PersonalLoans.com | $1,000 – $35,000 | 3 - 6 years | Varies | Varies | 580 | Review |
| Best Egg | $2,000 – $35,000 | 3 or 5 years | 5.99% – 29.99% | 0.99% – 5.99% | 640 | Review |
| Peerform | $4,000 – $25,000 | 3 or 5 years | 5.99% – 29.99% | 1% – 5% | 600 | Review |
| PenFed | $500 – $25,000 | 6 months – 5 years | 6.49% - 17.99% | None | None | Review |
| Wells Fargo | $3,000 – $100,000 | 1 - 5 years | 5.49% – 24.49% | None | 600 | Review |
| Avant | $2,000 – $35,000 | 2 - 5 years | 9.95% - 35.99% | 0% – 4.75% | 580 | Review |
| OneMain | $1,500 – $20,000 | 2 - 5 years | 18.00% – 35.99% | Varies | None | Review |
Fixed Interest Rates
There are two types of interests: fixed and variable. Variable rates can fluctuate, whereas fixed rates cannot fluctuate hence the term “fixed.” You want to take out a loan with a fixed rate. If you take out a loan with a variable rate, you could actually end up paying far more money compared to a loan with a fixed rate.
Backed By Federal Deposit Insurance Corporation
When dealing with large sums of money, you want to be insured. This is where the FDIC comes in. The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the federal government responsible for insuring deposits made by individuals and companies in banks and other institutions insuring deposits up to $250,000.
The purpose of the FDIC is to insure savings accounts against bank failures and to promote/preserve public confidence in the U.S. financial system by identifying, monitoring, and addressing risks to the deposit insurance funds.
Out of the many lenders, just a few are not insured by the FDIC.
Hard Pull vs. Soft Pull
- What Is A Hard Inquiry (Hard Pull)?
- A hard pull is an inquiry that occurs when a lender checks your credit report to make a lending decision. Hard pulls can slightly lower your credit score and will typically stay on your report for two years.
- What Is A Soft Inquiry (Soft Pull)?
- A soft pull is an inquiry that occurs when a person or company checks your credit report as a background check. It’s like when you check your credit score or when you get approved for a loan from a mortgage lender. Soft pulls may occur without your permission but does not affect your credit score in any way.
Something to keep in mind is that when creditors see multiple hard inquiries on your report, creditors become more wary about issuing credit. Numerous hard pulls gives the impression that the consumer is desperate for credit or was previously unable to obtain the credit he/she requested from other creditors. A lot of inquiries could pose you as a higher-risk borrower, so try to keep it at a minimum. It pays to do prior research.
Borrowing on Good Credit
Maintaining good credit makes borrowing a lot easier. Good credit grants more opportunities for you to borrow and gives you far better rates. It is important to start building your credit as soon as you can so you can qualify for all types of loans.
A good credit score ranging from 690 – 720 can find themselves the more favorable interest rates on most personal loans. Those with excellent credit scores (scores above 720), have it even better. Those with excellent credit scores are far more than likely to find offers that have a 0% intro interest rates (better option than personal loans if debt can be paid off quickly).
In addition, those with excellent credit scores can receive VERY low rates, very low or no fees, and very high loan amounts.
Borrowing on Bad Credit
Even if you have bad credit, you can still obtain a personal loan! Your options are more limited than those who have a better credit score because lenders will see you as a “higher-risk borrower.” If you do get approved, your rates are going to be higher of course.
Simply start of with banks that offer the most favorable rates. If you have the mindset that you’re going to receive a bad rate, and you ask for loans at higher-risk lenders, you well receive one guaranteed. But to be on the safer side, start at banks with the most favorable rates and ask if they offer loans to individuals with your level FICO score.
Best Personal Loan Lenders
With excellent credit, you are more than likely to qualify for a personal loan from a bank, credit union or an online lender. At a bank or a credit union, you will receive a hard credit check (hard pull), whereas with online lenders, they will let you see the rates offered with a soft credit check (soft pull).
Even with the more favorable rates and features with an excellent credit score, it is important to do your research as some lenders have better features than others.
SoFi: With Unemployment Protection
| Max Amount | Loan Terms | APR | Origination Fee |
| $100,000 | 2-7 Years | Fixed Rates: 5.99% APR to 18.24% APR (with AutoPay). |
None |
SoFi typically lends to people with good credit with high incomes. There are no origination fees. SoFi builds a community around its borrowers, setting up networking events/happy hours, offering unemployment protection, free financial counseling, and more. Although there are no income or DTI requirements, you may need a credit score of 680 or more.
The Good: Generally low interest rates, high loan limit of $100,000, soft credit check, no fees, community events, and unemployment protection.
The Bad: High standards for borrowers, slow funding time
Prosper: With Clarity Money Compatibility
| Max Amount | Loan Terms | APR | Origination Fee |
| $40,000 | 3 or 5 Year Terms | 7.95% – 35.99% | 2.4% – 5% |
Prosper is also a great choice for those with good credit. Lender allows borrowers access to their credit scores and provides a personal finance management app to keep track of their spending habits. Although there is no income requirement, you will need a credit score of 640+ and at least two years of credit with a max DTI of 50%.
The Good: Low interest rate for creditworthy borrowers, soft credit check, no penalty for prepayment, compatible with the Clarity Money app.
The Bad: High interest for those with bad credit, only two fixed term lengths, origination, check processing, late payment and insufficient fund fees.
LendingTree: Where Lenders Compete For You
| Max Amount | Loan Terms | APR | Origination Fee |
| $35,000 | 1-5 Years | 5.32% – 36% | Varies |
Lending Tree lets you receive multiple loan offers with one simple application. Instead of doing all the grunt work, you can sit back and make lenders compete for you. Although there aren’t any eligibility requirements, their partners have their own standards in regards to income, credit score, and DTI thresholds.
The Good: Low interest rate for creditworthy borrowers, soft credit check, mobile app with financial tools, and loan monitoring.
The Bad: High interest rates for those with bad credit, fees vary from lender to lender, and too much contact from lenders trying to woo you.
LendingClub: With Cosigner Option
| Max Amount | Loan Terms | APR | Origination Fee |
| $40,000 | 3-5 Years | 10.68% – 35.89% | 1% – 6% |
Lending Club lets you apply with a cosigner, so you have a better chance of getting approved for better rates. This lender has more flexible loan terms with a slightly wider loan amount window. In order to qualify, you’ll need more than 3 years of credit history and a DTI of less than 40% or 35% depending on if you have a join applicant. You’ll also need a credit score of at least 600
The Good: Low interest rates for good credit borrowers, soft credit check, and no prepayment penalty.
LightStream: Rate Beat Program
| Max Amount | Loan Terms | APR | Origination Fee |
| $100,000 | 2-7 Years* | Visit website for current rates | None |
*Example payment: $10,000 loan at 5.89% APR with a term of 3 years would result in 36 monthly payments of $303.72.
LightStream amends interest rates to suit the purpose for you taking out a loan and it offers low rates normally reserved for secured loans. There is also no origination fee charge. LightStream loan is a good choice if you have numerous years of good credit history. In fact, they’re so confident that they’ll beat any APR presented by other lenders by nearly .10 percent. To qualify, you’ll need at least a 660 credit score.
The Good: Low interest rates, loan limit of $100,000, no origination fee or any other fees, Rate Beat Program, $100 loan experience guarantee, and tree donation for every funded loan.
Other Excellent Lenders
PersonalLoans.com: Where It’s Okay To Have Bad Credit
| Max Amount | Loan Terms | APR | Origination Fee |
| $35,000 | 3-6 Years | 5.99% – 35.99% | 1% – 5% |
PersonalLoans.com offers low interest rates for good credit borrowers, relatively quick funding, and no prepayment penalty. They specialize in quick and efficient connections with lower credit borrowers by using their networks of lender and lending partners. However, for those with bad credit, it has high interest rates, origination, late payment and insufficient funds fees. Three types of personal loans that you can find available to you are peer-to-peer, personal installment and bank personal loans.
Keep in mind that in order to qualify for a personal loan, you need at least a credit score of 580 and combined income of at least $2,000 on a monthly bases. While there is no DTI requirement, they want to see that you’ve overcome past debt and are now making on time payments.
The Good: Low interest for creditworthy borrowers, quick funding, and no repayment penalty.
The Bad: High interest rates for those with bad credit, origination, late payments, and not enough fund fees.
Upstart: With A “Smarter” Credit Model
| Max Amount | Loan Terms | APR | Origination Fee |
| $30,000 | 3 or 5 Years | 7.00% – 35.99% | 0% – 8% |
Upstart requires no minimum credit history requirement and it also lends to those who don’t have enough of a credit history to generate a FICO score, provided their educational and financial histories are strong. Upstart is a tech-focused company, so it offers some perks to those who borrow money to learn code. You must have a credit score of 620+ with gross annual income of at least $12,000 and DTI of 45%.
The Good: Loan limit of $30,000, soft credit check, no prepayment penalty, no check processing fee, unique approval process, and ability to borrow twice.
The Bad: High interest rates, only two fixed term lengths,origination, late payment, and insufficient funds fees.
Payoff: Where Science Meets Finance
| Max Amount | Loan Terms | APR | Origination Fee |
| $35,000 | 2-5 Years | 5.99% – 24.99% | 0% – 5% |
Payoff requires a minimum credit score of 640, at least two years of credit history with two open lines of credit. It specializes in helping borrowers pay off their high-interest credit card debt by combining them into one monthly payment at a fixed rate and term. If you’re interested, you’ll need at least a credit score of 640, two years of credit history with two open credit lines, and a maximum DTI of 50%
The Good: Low interest rates for creditworthy borrowers, initial soft credit check, no penalty fees, personal service from Payoff Member Advocates, career support, and “empowerment science” assessments to better understand yourself and your financial habits.
The Bad: Only valid for debt consolidation, high interest rates for bad credit borrowers, slow funding time, origination fee, and only available in less than half of the United States.
Best Egg: Where You Can Borrow Twice
| Max Amount | Loan Terms | APR | Origination Fee |
| $35,000 | 3 or 5 Years | 5.99% – 29.99% | 0.99% – 5.99% |
Best Egg lets borrowers take out two loans at the same time, if eligible. You must have a minimum credit score of 640 with an average of 7 years credit history. You’ll need an average income of $80,000 and a DTI of less than 35%.
The Good: Low interest rates for good credit borrowers, soft credit check, no prepayment penalty, multiple payment options, mobile app, and ability to borrow twice.
The Bad: High interest rates for bad credit borrowers, only two fixed term lengths, origination, check processing, late payment, and insufficient funds fees.
Earnest: With Merit-Based Approval
| Max Amount | Loan Terms | APR | Origination Fee |
| $75,000 | 3-5 Years | See website for more details | None |
Earnest charges no fees of any kind. Borrowers typically have credit scores above 650 with a high income and are responsible with their finances. This lender also lets you adjust due dates and loan terms whenever you like.
Peerform: With Debt Consolidation Perks
| Max Amount | Loan Terms | APR | Origination Fee |
| $25,000 | 3 or 5 Years | 5.99% – 29.99% | 1% – 5% |
Peerform allows borrowers with less than perfect credit hassle-free loans at competitive rates. You must have a minimum credit score of 600 and at least one year of credit history. This lender is great for debt consolidation with slightly lower rates and higher loan amounts for this specific loan purpose. You’ll also need an annual gross income of at least $10,000 and a max DTI of 40%.
The Good: Low interest rates for good credit borrowers, soft credit check, no prepayment penalty, and debt consolidation perks.
The Bad: High interest rates for bad credit borrowers, slow funding time, only two fixed term lengths, origination, check processing, late payment, and insufficient funds fees.
PenFed: With Debt Protection
| Max Amount | Loan Terms | APR | Origination Fee |
| $25,000 | 6 Months – 5 Years | 6.49% – 17.99% | None |
PenFed requires you to join in order to apply for a loan. Anyone is qualified for membership by signing up with Voices for America’s Troops ($14 in dues) or the National Military Family Association ($15 in dues). This military-focused credit union offers ow interest rates, no origination fee or prepayment penalty, flexible loan repayment, live customer service 24/7, and debt protection option. Although there are no requirements, they check and evaluate your financial situation.
The Good: Low interest rates, no origination fee or prepayment penalty, flexible loan repayment, live customer service 24/7, and debt protection option.
The Bad: Available only to PenFed customers, hard credit check, and late payment, and insufficient funds fees.
Wells Fargo: Where Relationship Matters
| Max Amount | Loan Terms | APR | Origination Fee |
| $100,000 | 1-5 Years | 5.49% – 24.49% | None |
Wells Fargo is great for borrowers with good to excellent credit. Approval is based on length of credit history, debts, and relationship with Wells Fargo.
The Good: Low interest rates for good credit borrowers, loan limit of $100,000, cosigners welcomed, fast funding time, no origination, prepayment or check processing fees, and small rate discounts for Wells Fargo customers relationship.
The Bad: High interest rates for bad credit borrowers, hard credit check, and late payment, and insufficient funds fees.
Avant: On Forbes’ Radar
| Max Amount | Loan Terms | APR | Origination Fee |
| $35,000 | 2-5 Years | 9.95% – 35.99% | 0% – 4.75% |
Avant was named the sixth most promising company in the U.S. in 2015 in Forbes Magazine. This isn’t a surprise as this lender service has originated $4 billion in loans to over 600,000 borrowers in just 3 years. In order to qualify, you’ll need a credit score of at least 580 and gross annual income of $20,000+.
The Good: Soft credit check, quick funding time, no prepayment penalty, mobile app, and live customer service seven days a week.
The Bad: High interest rates, origination, late payment, and insufficient funds fees.
OneMain: Where Bad Credit Is Okay
| Max Amount | Loan Terms | APR | Origination Fee |
| $20,000 | 2-5 Years | 18.00% – 35.99% | Varies |
OneMain offers customized loan solutions operating out of over 1,700 branches in 44 states. It specializes in providing personal loans of up to $20,000 to people with bad credit. Cosigners and collateral welcomed. There are no set credit score, income, or DTI requirements to qualify for a personal loan.
The Good: Cosigners and collateral welcomed, soft credit check, quick funding time, flexible payment options, no prepayment penalty, seven-day commitment guarantee, and OneMain Rewards program.
The Bad: High interest rates, must meet in person to complete the application, origination, late payment, insufficient funds and payment processing fees, full coverage insurance required for collateral.
 |
 |
Bottom Line
If you’re looking for a personal loan, consider the companies that we have listed! Above is a compiled table of all of the best personal loan lenders. Keep in mind to do some research on these lenders and the other lenders before you do decide to settle. Try applying with several lenders and compare! You’ll have a better grasp on the rates and beneficial features in the process. Who knows, just a little research could save you a lot in the long run! Your rate(s) will fluctuate based on your credit score.
Do you want to invest your money and see it grow? Need somewhere to park your money? Learn more about where you can stash your money with the best bank rates!
