Best Installment Loans for 2019

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An installment loan is just what it sounds like: a loan paid back in installments. You borrow a specific amount of money that is to be repaid over a set amount of time through a series of fixed monthly payments. While the best installment loans typically come with a fixed interest rate, that rate can vary depending on the creditworthiness and financial history of the loan applicant.

Some online installment loans are offered through companies that work with more than one lender. Other online loans with monthly payments are offered through direct lenders — or lenders who provide funding and service their loan products themselves.

Here’s a look at some high-quality lenders that cater to a range of borrowers, offering installment loans without the exorbitant APRs and unscrupulous tactics used by some short-term, small-dollar lenders. LendingClub is our first choice for online lenders and OneMain is our choice among traditional “brick-and-mortar” lenders if you prefer looking your lender in the eye! Use our loan search tool below or read on for information on additional lenders that we recommend.

Compare Loan Companies and Apply Online

Use the loan comparison tool below to view multiple loan options with no obligation.
Simply enter the purpose of the loan, the amount you need, your estimated credit score, and the state you reside in to instantly view loan companies available to accept your application online right now.

Later in this article, we’ll outline why these lenders stand out from the rest when it comes to installment loans. We’ll also examine what installment loans are in more detail, why they aren’t simply for borrowers with bad credit, how to avoid shady installment loans and lenders, and how to shop for the best installment loans.

The Simple Dollar’s Top Picks

Best Online Installment Loans

Best Installment Loans with Physical Office Locations

Best Online Installment Loans: LendingClub

LendingClub is is a peer-to-peer lender that allows individual investors to fund loans for those who apply. Since big banks are removed from the equation, LendingClub is able to offer installment loans for bad credit as well as loans for individuals with high credit scores and a strong credit profile.

Loans via LendingClub top out at $40,000 and APRs range from 6.95% to 35.89% APR. However, the best APRs are only available for applicants with excellent credit — or those with FICO scores of 720 or higher.

One of the big benefits of LendingClub is the fact that they don’t charge any application fees, brokerage fees, or prepayment fees. They do, however, charge an origination fee that may be as high as 5% of your loan amount.

While many people turn to LendingClub in order to cover a large, surprise expense, these loans are extremely popular for consumers who want to consolidate debt at a lower interest rate. Fortunately, LendingClub allows you to apply online in minutes, select a loan offer, and receive your funds in your bank account in a few business days.

Disclaimer: All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage and history. The APR ranges from 6.95% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. *The origination fee ranges from 1% to 6%; the average origination fee is 5.2% (as of 12/5/18 YTD).* There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.

Runner-up: PersonalLoans.com

PersonalLoans.com offers several types of loans, including traditional bank loans, peer-to-peer loans, and loans from direct lenders who service their own installment loans. Available in all 50 states, PersonalLoans.com distributes loans in amounts $35,000 with APRs ranging from from 5.99% to 35.99%.

Peer-to-peer loans taken out through PersonalLoans.com are available for consumers with a credit score of 600 or higher. You also need a minimum income of at least $2,000 per month, and your income must be verifiable. For installment loans through PersonalLoans.com, the minimum credit score is 580 and the minimum income is $2,000 per month. For bank loans through this website, you must have a minimum credit score of 580 and a verifiable income of at least $3,000 per month.

While it’s an authoritative and informative resource, PersonalLoans.com is only a referral site and not a direct lender. This makes it hard to vet PersonalLoans.com since you don’t know which individual lender you might work with in the end. We suggest using PersonalLoans.com to compare rates and terms from participating lenders. Once you are extended a loan offer, you can read loan reviews and investigate to ensure you’re working with a quality lender.

Runner-up: Avant

If your credit score isn’t as great as you hoped it would be, you may still be able to qualify for an installment loan for bad credit through Avant provided your score is at least 580. This direct lender offers personal loans up to $35,000 with APRs that range from 9.95% to 35.99%. However, your interest rate will likely be on the higher end if you apply with poor credit or a thin credit profile.

Avant claims to have extended loans to more than 600,000 consumers in the United States so far. The company also provides access to loans in 46 states and the District of Columbia, making it a potential option for most people in the U.S.

While Avant is a newer lender on the scene, they’ve earned solid reviews so far, and claim that 9 out of 10 customers would recommend them to friends. The best part about installment loans from direct lender Avant is the fact that you can see if you qualify with only a soft inquiry on your credit report.

* The actual loan amount, term, and APR amount of loan that a customer qualifies for may vary based on credit determination and state law. Minimum loan amounts vary by state.

Avant branded credit products are issued by WebBank, member FDIC.

Runner-up: Prosper

You’ll need solid credit to get a loan with peer-to-peer lender Prosper, but qualifying can net you a competitive APR that starts at 5.99%. You’ll also be able to borrow up to $35,000, a generous amount for personal installment loans. Prosper also offers fixed loan terms of three or five years, which means you can choose the repayment term and monthly payment that works best for your budget.

Prosper shines with a transparent, easy-to-use website that doesn’t bury any important information in fine print, and it makes loans in all but three states. Prosper loans also come without any prepayment penalties, and you can check your rate online without affecting your credit score.

If you need your money right away, Prosper may not be your best option. These loans can take a few weeks to fund, which could be a problem if you’re in a rush. However, Prosper claims that most of their loans are funded within five business days. You’ll also pay an origination fee between .50% and 4.95% to take out a loan with Prosper.

Best Installment Loans With Offices: OneMain

Whether your credit score limits your options or you simply want to shake someone’s hand before you plead your case, OneMain might be a good fit. This well-established lender makes mostly unsecured loans, but may also make secured loans that are backed by the borrower with collateral. More than 1,800 branches across the country make OneMain a convenient brick-and-mortar option for many borrowers, but you can also apply online.

OneMain has become a fairly popular option since they work with borrowers with less than perfect credit and have a solid A+ rating with the BBB. The fact that OneMain has brick and mortar branches also means they can provide personalized experience you can’t always get with an online lender.

OneMain personal loans are available in amounts between $1,500 and $30,000 with APRs that range from 16.05% to 35.99%. You can choose a repayment timeline between 24 months and 60 months, along with a monthly payment that fits best with your budget and income.

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Runner-up: Wells Fargo

Wells Fargo is a solid option for borrowers with good or excellent credit who want a combination of personal service and competitive loan terms. With 6,200 branches, Wells Fargo is one of the largest banks in the nation, and its website offers polished account management tools. APRs range from 7.24% to 24.24% for loans from $3,000 up to $100,000 with no collateral required.

You’ll need to head to a branch and apply in person unless you’re already a Wells Fargo customer, however. Most personal installment loans are unsecured, but you may be able to get a secured loan if you have a Wells Fargo CD or savings account that you can use as collateral.

The best part about loans from Wells Fargo is that they come with no prepayment penality and no orignation fee. They also offer relationship discounts for Wells Fargo customers who set up automatic monthly payments.

How Do Installment Loans Work?

An installment loan is simply a loan that a borrower receives in a single lump sum, then pays back for a certain period of time at certain intervals (typically monthly) and at a fixed interest rate. Your payments, also known as “installments,” won’t fluctuate and will be made up of both the loan principal and interest. Installment loans are also commonly called personal loans. Most general installment loans (in contrast to a car loan or a mortgage, for example) can be used for any purpose.

Installment loans may be secured or unsecured. A secured installment loan requires you to use collateral such as your house or car to guarantee that the lender will be paid back. If you fall behind on your payments, that means your lender can seize the asset you’ve designated as collateral.

For this reason, secured loans are much less risky for lenders. They may allow borrowers who don’t have great credit to obtain a lower interest rate than they would otherwise get without using collateral. Of course, this also means they’re riskier for you, since you may lose a valuable asset if you can’t make your payments.

In contrast, an unsecured personal loan requires no collateral. If you default on an unsecured loan, you won’t lose an asset — but you will still do serious damage to your credit. Unsecured loans are riskier for lenders since they won’t have much recourse to obtain payment if you fall behind. That means you may pay a higher interest rate, especially if your credit isn’t up to snuff — this helps the lender manage the risk of making you the loan.

Aren’t Installment Loans for People With Bad Credit?

While it’s commonly believed that installment loans are for consumers with bad credit, this just isn’t the case. It’s just that subprime lenders have aggressively marketed installment loans as a lower-risk alternative to often-predatory payday lending.

Unfortunately, vulnerable bad-credit borrowers have found out the hard way that APRs on installment loans — just like payday loans — can still reach into the triple digits. Other unscrupulous tactics include strong-arming borrowers into purchasing credit insurance or convincing them to renew the loan every few months, which ultimately means borrowers pay more in interest and risk becoming dependent on the loan.

How Do I Avoid Predatory Lenders When I’m Looking for an Installment Loan?

Searching for “installment loan” online will return mostly short-term, low-dollar lenders who pitch installment loans as the safer, more responsible cousin of payday loans. Unfortunately, they are much the same in practice. Here are some tips that will help you avoid these riskier kinds of installment loans:

  • Search for personal loans, not installment loans. Personal loans are installment loans, but the terminology hasn’t been hijacked by predatory lenders. You may find that simply reframing your search leads to more reputable results. To learn more about unsecured personal loans, check out our post on the Best Personal Loans.
  • Avoid lenders who push loan renewals. Constant loan renewals are a cash cow for unscrupulous lenders, who know that you’re paying mostly interest or other fees at first. The more frequently you renew your loan, the more money goes in their pocket — and the more dependent on the loan you become. Remember, reputable lenders do not want to drag you deeper into debt. They want you to borrow only what you can comfortably afford to repay.
  • Just say no to insurance add-ons. If your lender pushes insurance such as credit life insurance or credit disability insurance, firmly decline. These policies don’t protect you — they just ensure the lender will get their money if you die or become disabled. They’re also expensive, and can boost your APR well beyond what state regulations may allow. However, lenders don’t have to include the cost of these policies in APR calculations, making your loan look far cheaper than it actually is.
  • Steer clear of advance fees and guarantees. A lender may promise that you’ll be approved for a loan without checking your credit or other financial information — that should be a huge red flag. They may also require an upfront fee — another red flag. Reputable lenders will not charge you to apply for a loan, and they certainly won’t guarantee that you’ll qualify without looking at your credit score, income, and other financial obligations.
  • Don’t work with high-pressure lenders. If you feel pressured in any way to borrow more money than you need, avoid shopping around, or sign loan documents before you feel ready, walk away. Some predatory lenders may even threaten to sue if you fall behind on payments unless you renew a loan.
  • Do your homework and approach a lender on your own, not the other way around. Unscrupulous companies are more likely to suss out customers with calls, emails, postcards, and other advertisements. Legitimate lenders usually don’t need to go to these lengths.

Four Tips to Get the Best Installment Loan

Now that you know how to avoid predatory lenders, here are some additional tips that can help you get the best deal on an installment loan from reputable sources.

#1: Shop Around

Installment loans are available from banks, credit unions, online lenders, and short-term, no-credit-check lenders who may also offer payday loans or auto title loans. I’ve already discussed why the latter companies are bad news, but that still leaves you with plenty of places to shop.

It’s wise to see what installment loans your existing bank may offer before you consider other options. They may give you a low interest rate or favorable repayment terms in order to keep your business. Assuming you’ve built a history of responsible money management, they may also ease lending criteria if you need a bit of help. Credit unions are also worth a look if you’re unsure you’ll qualify at most big banks — they are able to examine requests on more of a case-by-case basis.

Applying for a loan with online lenders is undeniably convenient and typically quicker than your other options, too. A site like PersonalLoans.com can help you compare options and match you with lenders in its network, reducing the chances that you’ll be turned down. You can also use our loan search tool below to find even more options.

Compare Loan Companies and Apply Online

Use our loan comparison tool to view multiple loan options with no obligation.
Simply enter the purpose of the loan, the amount you need, your estimated credit score, and the state you reside in to instantly view loan companies available to accept your application online right now.

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#2: Consider Whether a Credit Card Makes More Sense

In some cases, you might be better off charging a big expense on a balance transfer credit card instead of using an installment loan. This is more likely to be the case if you have solid credit and a low APR introductory offer on your card — maybe even 0% for a certain number of months. Of course, you need to be able to pay off the card before the interest rate resets.

If you need more time to pay off your expense or more money than your credit limit will allow you to borrow, an installment loan is likely a better option. Though you may have to pay an origination fee, it will be easier to budget for a fixed monthly loan payment. Responsible use of installment loans can also boost your credit score, whereas charging and keeping large amounts on your credit cards can do the opposite.

#3: Compare Fees

As we mentioned above, it’s common for lenders to charge an origination fee for an installment loan. This could be anywhere from 1% to about 6% of the total loan amount. The stated APR of your loan should take this fee into account, but it never hurts to double-check.

You’ll also want to know whether your lender charges late fees, unsuccessful payment fees, or fees for paying by check. Avoid any lender that charges you a prepayment fee for paying off your loan early. Some lenders charge these fees because they make more money in interest if you need your entire term to pay back your loan. If your lender does charge a prepayment fee, ask for it to be waived — and get it in writing.

#4: Borrow for the Shortest Term Possible

What kind of choice you’ll have on repayment terms vary by lender — some may require a certain term or only let you choose between two terms, while others will let you pick any term within a certain range (for example, one to five years). Spreading your loan over a longer term means your monthly payments will be lower, but it also means you’ll pay more for the loan — sometimes significantly more — because you’ll pay more in interest.

According to this Bankrate loan calculator, if I paid back an $8,000 installment loan at a 12% interest rate in two years, I would pay $9,038 over the life of the loan. If I needed three years to pay it back, I would pay $9,566, and if I needed four years, I would pay $10,112. However, the shorter term will mean my monthly payments will be higher ($377 a month for two years instead of $266 for three years or $211 for four). Of course, you need to be able to afford the higher payments, but if you can, you’ll keep your overall costs down.

Best Installment Loan Companies: Summed Up

7 Top Installment Loan Companies Type
1 LendingClub Online Company
2 PersonalLoans.com Online Company
3 Avant Online Company
4 Prosper Online Company
5 OneMain Online Company with Physical Office Locations
6 Wells Fargo Online Company with Physical Office Locations

How We Picked the Best Installment Loans

My search for the best installment loans required companies to offer competitive APRs (note that I gave more latitude to lenders targeting borrowers without ideal credit). Beyond that, I searched for lenders who are available in a majority of the country that offered somewhat flexible loan terms and larger-dollar loans of at least $10,000.

Transparency was also a major consideration. I looked for companies that clearly disclosed APRs and fees, which had to be reasonable compared to those charged by competitors. I also liked to see clear FAQ sections that addressed prospective borrowers’ common concerns. Bonus points went to lenders that offered educational resources such as loan calculators.

While I considered each lender’s longevity and reputation, they were among the least important factors I weighed. Online reviews are of limited help when evaluating loan companies, as many negative reviews are from customers who are unhappy they were turned down. Accreditation and good standing with the BBB was a bonus, but not a necessity.

Finding the Best Installment Loans

When you’re searching for an installment loan, it’s important to find an established lender that will do a thorough credit check after you apply. No-credit-check finance companies may be tempting, especially if your credit isn’t great, but the installment loans you’ll receive may have very high APRs and other pitfalls that could suck you into a cycle of debt.

A reputable lender won’t want you to borrow more or nag you to renew your loan. If you don’t know where to start, consider whether any of the companies we profiled above are a good fit or use our loan search tool below to compare multiple lenders easily online.

Compare Loan Companies and Apply Online

Use our loan comparison tool to view multiple loan options with no obligation.
Simply enter the purpose of the loan, the amount you need, your estimated credit score, and the state you reside in to instantly view loan companies available to accept your application online right now.

Compare Loan Offers