Best Online Lenders of 2020

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Online loans are an alternative for borrowers who prefer the convenience of virtual lending. Just like you can apply for a loan through a traditional financial institution, online loan companies exist to help borrowers looking for an accessible way to borrow. The best online loans boast low fees, low interest rates, great customer support and loans that can do everything from financing a remodel to helping you get out debt. Whether you’re searching for online loans for bad credit or online loans for home improvement, you can find some of the best online loans below, sorted by category.

The 7 best online lenders of 2020

Lender APR Loan Amount Terms Key Benefit
LightStream 3.49%–19.99% $5,000–$100,000 2–12 years Beats any competitor’s rates
Marcus by Goldman Sachs 6.99%–19.99% $3,500–$40,000 3–6 years Personalized loan term options
SoFi 5.99%–16.19% $5,000–$100,000 2–7 years Access to expert financial advice
Payoff 5.99%–24.99% $5,000–$35,000 2–5 years Interactive tools for financial understanding
Upgrade 7.99%–35.97% $1,000–$35,000 3–5 years Free resources for credit health
Avant 9.95%–35.99% $2,000–$35,000 2–5 years Refinancing available after 6 months
LendingClub 10.68%–35.99% $1,000–$40,000 3–5 years Supportive debt consolidation resources

*Rates accurate as of July 14, 2020

The 7 best online lenders of 2020

Best overall

LightStream

Borrowers with strong credit scores and long credit histories can benefit from LightStream’s lack of fees, low rates and high loan amounts.

APR
3.49%–19.99%
Loan Amount
$5K–$100K
Terms
24–84 months
SimpleScore
4.8 / 5.0
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SimpleScore
LightStream
4.8
  • Rates
    5
  • Loan Size
    5
  • Customer Satisfaction
    4
  • Support
    5
  • Fees
    5
LightStream offers borrowers large loan amounts for loan consolidation, home improvements and big-ticket expenses. Interest rates vary based on the purpose of the loan, the terms, amount borrowed and your overall creditworthiness.

One of the best features of this lender is that they will beat a competitor’s interest rate by one-tenth of a percentage point, assuming the terms of the loan are the same. Unfortunately, LightStream doesn't offer pre-qualification, so borrowers can't determine their likelihood of getting approved without a hard pull on their credit.

Full review

Our Two Cents — LightStream offers borrowers with established credit promising personal loan terms. If you have great credit, this is a prudent option that eliminates frittering away money on fees and high interest rates.

Best for no fees, ever

Marcus by Goldman Sachs

For borrowers who are seriously fee-averse, Marcus by Goldman Sachs provides a bevy of perks.

APR
6.99%–19.99%
Loan Amount
$3,500–$40K
Terms
3–6 years
SimpleScore
5 / 5.0
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SimpleScore
Marcus by Goldman Sachs
5
  • Rates
    5
  • Loan Size
    5
  • Customer Satisfaction
    5
  • Support
    5
  • Fees
    5
If you hate fees, you’re in luck. Marcus by Goldman Sachs doesn’t charge any fees — even if you pay your bill late. Plus, Marcus offers payments directly to creditors for debt consolidation loans, and you can opt for a monthly payment amount and loan term that best fits your financial situation. After you’ve chosen your wish list of loan terms, Marcus puts together loan options you can choose from. Plus, you get support while paying down your debt in the form of tools to monitor your credit score and debt amount.

The only real drawback of Marcus is there's no option to include a cosigner, so you’ll need to qualify based on your own creditworthiness.

Full review

Our Two Cents — The lack of fees, flexible payment dates and direct payments to creditors make this an ideal lender for borrowers. Marcus is an excellent choice for paying down your debt and avoiding piling more on top in the form of fees.

Best for member perks

SoFi

Borrowers who want access to exclusive financial literacy events and advice in addition to their loan might find SoFi to be their lender of choice.

APR
5.99%–16.19%
Loan Amount
$5K–$100K
Terms
2–7 years
SimpleScore
4.6 / 5.0
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SimpleScore
SoFi
4.6
  • Rates
    5
  • Loan Size
    5
  • Customer Satisfaction
    3
  • Support
    5
  • Fees
    5
SoFi offers both fixed-rate and variable-rate loans, although the fixed-rate option is more common. This lender won't charge you fees for late payments or for loan origination. If you lose your job as a result of something out of your control, you can apply for unemployment forbearance for three months at a time.

SoFi is unique among lenders because of its members’ only social and networking events, where you can tap into financial and career advice. Drawbacks to using SoFi include the required high minimum credit scores and the lack of direct payments to creditors if you’re paying down debt.

Full review

Our Two Cents — SoFi’s exclusive member benefits can help you learn and network. The biggest benefit are its range of loan options and peace of mind offered by its forbearance policy should you end up unemployed.

Best for debt consolidation

Payoff

Payoff is ideal for borrowers who are serious about paying down debt.

APR
5.99%–24.99%
Loan Amount
$5K–$35K
Terms
2–5 years
SimpleScore
4.5 / 5.0
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SimpleScore
Payoff
4.5
  • Rates
    5
  • Loan Size
    5
  • Customer Satisfaction
    N/A
  • Support
    4
  • Fees
    4
Payoff delivers fixed-rate debt consolidation loans so borrowers can pay off credit card debt. It offers helpful features like personalized recommendations to keep you on the right financial path and interactive tools like quizzes to help establish your financial habits. Based on your input, you’ll get tools and resources to help you achieve your financial goals. If you miss a payment, you won’t have to pay a late fee and you may be able to change your payment date or defer payments, after talking to a representative.

Unfortunately, there are few drawbacks to using Payoff as your online lending company: there’s no co-signer option and it charges a loan origination fee. Also, the company doesn’t offer direct payment to creditors.

Full review

Our Two Cents — If you have overwhelming credit debt, Payoff offers consolidation loans and great customer support. With the abundance of resources and tools available to borrowers, this is a great online loan choice for those who want to axe credit card debt.

Best credit health tools

Upgrade

Upgrade’s range of loan options and credit education resources make this a well-rounded online loan choice.

APR
7.99%–35.97%
Loan Amount
$1K–$35K
Terms
3–5 years
SimpleScore
3.5 / 5.0
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SimpleScore
Upgrade
3.5
  • Rates
    2
  • Loan Size
    5
  • Customer Satisfaction
    N/A
  • Support
    4
  • Fees
    3
Upgrade offers loans for home improvements, large purchases and debt consolidation. Borrowers can pre-qualify with a soft credit pull and don’t need a low debt-to-income ratio to get approved. Plus, Upgrade offers a personal line of credit option if you don’t want a traditional loan.

Upgrade’s most useful features include a suite of tools designed to help borrowers get insight into their credit health like credit monitoring alerts, a credit score simulation based on different financial choices and free financial education resources.

This online lender charges late fees and loan origination fees, so keep that in mind when you’re weighing your options.

Full review

Our Two Cents — For borrowers who want to go beyond getting just a loan, Upgrade provides context and resources to help you become a more fiscally responsible individual.

Best for average credit

Avant

Borrowers with average credit can get financing and may qualify for even better terms after six months of on-time payments with Avant.

APR
9.95%–35.99%
Loan Amount
$2K–$35K
Terms
2–5 years
Avant provides loans for borrowers with lower credit scores. Funds can be put toward emergency expenses, loan consolidation or home improvement projects. This online lender boasts pre-qualification, fee transparency and flexible payment options. Some borrowers can even refinance their loans for higher amounts and lower interest rates after six months of paying on-time.

Avant doesn’t offer direct creditor payments for debt consolidation or any secured loan or co-signed loan options. In addition, there are a few fees you might have to watch out for like an unsuccessful payment fee, a late fee and an administrative fee.

Full review

Our Two Cents — For borrowers with average credit, it can be hard to find a loan with agreeable terms and conditions. Avant gives these borrowers a chance to finance a project or consolidate loans without making it too expensive to carry the debt.

Best peer-to-peer lender

LendingClub

Borrowers who want an alternative lending option may want to use LendingClub to pay off debt.

APR
10.68%–35.99%
Loan Amount
$1K–$40K
Terms
3–5 years
LendingClub operates differently than many of the other online loan providers on this list. With its peer-to-peer lending models, borrowers are matched with investors to fund their loans. You’ll be assigned a grade determining your interest rate based on your credit scores and income.

LendingClub can help you with debt consolidation and pays creditors directly. You can also apply as a joint loan application. You will be charged an origination fee and late fees if you opt for this lender, however.

Full review

Our Two Cents — LendingClub is a smart online lending option for borrowers looking to consolidate debt. With its supportive debt consolidation features simplifying the consolidation process, borrowers can quickly eliminate debt.

How should I choose the right online loan?

To choose from the best personal loans available online, think about the main reason for your loan in the first place. Are you looking for a personal loan to fund a home improvement project? Are you looking to consolidate your credit card debt? Online lenders often specialize in a specific type of loan.

After you know what kind of loan you want or need, evaluate your credit score and history. If your credit score is poor, pause on your loan applications and focus on rebuilding your credit first — otherwise, you’re unlikely to get approved by any lender or you may be stuck with a higher interest rate.

Once you’re ready to apply, gather all documentation required to complete the loan application process. You’ll need an official form of identification, proof of income and other financial paperwork.

Check Your Personal Loan Rates

Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.

[Read: When Is an Emergency Loan a Good Option?]

How to get an online loan with bad credit

If you have poor credit but you need a loan to help you get out of debt or money for an emergency, it’s still possible to obtain a loan. Lenders that offer bad credit loans will still evaluate your credit history but will have less strict underwriting requirements. In some cases, these lenders will also consider other factors outside of your credit scores to determine your approval for a loan, such as your income.

Although you might find a lender willing to approve a loan for you, there are some drawbacks to consider. In many cases, you’ll be saddled with a much higher interest rate, typically above 20%. For borrowers, that means it’s much more expensive to borrow money.

Lenders who work with borrowers with poor to fair credit include LendingClub, Avant and Upgrade. You’ll need to research each lender’s requirements before applying.

One note of caution: watch for red flags and predatory loan schemes like payday loans targeted at borrowers on the hunt for bad credit online loans. While they may offer you enticing upfront sums, the terms and conditions associated with them often take advantage of those in vulnerable financial positions.

Things to keep in mind

Before you decide to get an online loan, consider all the different variables involved.

  • Soft credit checks versus hard credit checks: If a lender offers pre-qualification, you can get a good idea of whether or not you’ll be approved for a loan without a “hard pull” on your credit. A hard pull can result in a temporary decrease in your credit scores. If the lender doesn’t offer prequalification, you’ll go directly to the “hard pull” stage where the lender conducts a hard inquiry.
  • Loan terms: Remember to take the time to parse through the loan terms and conditions, otherwise known as the fine print of your loan. Can you change the payment date? What happens if you lose your job? How long is your loan for? These are all questions you should have an answer to.
  • Payment portals: Does the lender offer a user-friendly payment portal laying out the framework of your loan terms and showing you where and how to pay? The ease and convenience of paying your loan is an important consideration.
  • Autopay discounts: Many lenders offer interest rate discounts if you opt into auto-pay.
  • Fixed-rate versus variable-rate loans: Fixed-rate loans mean your monthly payments and interest rate stays the same over the life of the loan. Variable-rate loans mean your interest rate, and therefore your monthly payments, may fluctuate month to month.
  • Fees: Some lenders don’t charge for late payments or even missed payments, but you need to double-check the terms outlined by your lender.
  • Early payoff penalties: Paying off your loan early is good, right? Well, in some cases, a lender can charge you a penalty fee for “shortchanging” what they’d make on interest for the time period you’d still be paying the loan.
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Too long, didn’t read?

To find the right loan and online loan lender, approach your decision with a patient mindset. First, you’ll want to establish what the loan is for and evaluate your finances to determine if you’re in a financial position to pay a monthly loan bill on top of your other debt obligations. Then, you can shop and compare to determine the best online loan option for your specific situation.

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Methodology

The SimpleScore is our proprietary scoring metric to compare products and services at The Simple Dollar in a transparent, evidence-based way. Our editorial team identifies five quantifiable aspects to compare for every brand, determines the rating criteria for each aspect score, then averages the five aspect scores to produce a single SimpleScore. For online personal loans, we compared interest rates, customer support, loan amounts, customer satisfaction and fees for every major lender. Our ratings are meant to be a directional tool to help you in the process of choosing a personal loan provider. Be sure to continue your research and shop around for the best personal loan that fits your specific needs.

We welcome your feedback on this article and would love to hear about your experience with the personal loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

Michelle Wilson
Michelle Wilson
Contributing Writer

Michelle Wilson is a San Diego-based writer specializing in the topics of personal finance, technology and culture. You can find her writing on sites such as HP Tech Takes and San Diego Magazine. In her spare time, she enjoys finding new cats to follow on Instagram.

Reviewed by

  • Courtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for Interest.com, PersonalLoans.org, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.