Best Personal Loans for 2019
by Saundra Latham Updated on 08.09.19
Whether you want to consolidate your credit card debt, pay off a big expense, or simply borrow money to use at your discretion, it can make financial sense to take out a personal loan – and the process is relatively simple.
Most personal loans are unsecured, meaning you don’t have to put down collateral to qualify. If you have a good credit score, you could receive your funds in as little as one or two days. The best personal loans usually come with fixed interest rates and fixed monthly payments that make it simple to budget around your monthly expenses.
Depending on your credit score, you may qualify for competitive interest rates on your personal loan that are lower than what you’d get with a credit card. In fact, it might make sense (and save you a lot of money in interest) to use a personal loan to consolidate your high-interest credit card debt. Many of the best personal loan companies let you borrow $10,000, $50,000, or even $100,000 if you qualify.
You don’t need perfect credit to get a decent personal loan. Even those with average to bad credit have options, and we’ll explore everything from the best personal loans for people with excellent credit to the best bad credit loans. This list of the best personal loans compares a dozen of the leading lenders to see how they stack up.
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Best Personal Loan Picks for 2019
If you’re in a hurry to find the best personal loan for you, these are our top picks — choose one that matches your current credit standing:
- Best personal loans overall: LendingClub, LightStream, and Marcus
- Best personal loans for excellent credit: SoFi, Wells Fargo, and Prosper
- Best personal loans for average credit: Avant, Upgrade, and Upstart
- Best personal loans for bad credit: OneMain, NetCredit, and OppLoans
In recent years, the personal loan space has grown and improved at a rapid pace. Online lenders have reached a point where they can challenge credit card companies and traditional banks. As a result, you can expect a more streamlined lending process — with greater transparency on lending criteria and interest rates — than in years past.
If you’re in the market for an unsecured personal loan, you have plenty of options, especially if you have good credit. But even if you have bad credit, there are plenty of reputable companies offering bad credit loans as well (though the terms won’t be quite as attractive).
Read on to learn about the best personal loan online options in greater detail, including strategies you can use while shopping to make sure you find a loan that’s right for you.
Meanwhile, if you’re looking for in-depth analysis of another type of loan, the following reviews can help:
- Best Debt Consolidation Loans
- Best Loans for Bad Credit
- Best Auto Loans
- Best Small Business Loans
- Best Student Loans
When Should You Use a Personal Loan?
A personal loan isn’t always the right answer in a financial crisis, but there are plenty of situations where securing a loan is the financially sensible course of action to take.
One of the best reasons to take out a personal loan is to consolidate high-interest debt. If you have multiple credit cards with big balances at high interest rates, it can save you both money and hassle to use a personal loan to pay off all those balances at once and consolidate them into a single monthly payment at a lower rate. (A balance transfer credit card is a good option for this as well.)
But that’s hardly the only valid reason to take out a personal loan. If you borrow responsibly — meaning, you don’t overextend yourself with a loan you can’t afford to pay off, and you make all your payments on time — a personal loan can help you finance a home remodel, a wedding, moving expenses, funeral costs, medical bills, a used car, or even a new business, among other big-ticket items.
If there’s a financial goal you want to achieve, and you have the desire and means to pay back the loan, a good personal loan can help you get there.
Note, however, that while it’s easy to think that the best personal loans are unsecured, especially since you don’t have to put up collateral, they might not always get you the best rates. For example, a home equity loan might have better terms since it’s less risky for the lender. So always do your research, shop around, and explore all your options.
Finding the best personal loans in a crowded marketplace takes time, so we’ve done the hard work for you. Explore the best personal loan picks for 2019 below.
Best Personal Loans at a Glance
The companies below are among the biggest names in personal lending and, we think, the best options for a personal loan. Some will only lend to borrowers with great credit, while others are more flexible about their lending criteria; keep reading for more details on each one.
| The Simple Dollar’s Top Picks | Max. Loan | |
| 1 | LendingClub | $40,000 |
| 2 | LightStream | $100,000 |
| 3 | Marcus | $40,000 |
| 4 | SoFi | $100,000 |
| 5 | Wells Fargo | $100,000 |
| 6 | Prosper | $40,000 |
| 7 | Avant | $35,000 |
| 8 | Upgrade | $50,000 |
| 9 | Upstart | $50,000 |
| 10 | OneMain | $20,000 |
| 11 | NetCredit | $10,000 |
| 12 | OppLoans | $4,000 |
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.
Best Personal Loans Overall
Scan through our lenders that offer the best personal loans online overall if you’re not sure where to start. You’ll get an idea of average APRs, loan terms, and max loan amounts that you could qualify for.
LendingClub
Key takeaways:
- APR: 6.95% to 35.89%
- Loan terms: 30 to 60 months
- Max loan: $40,000
Why it’s a solid bet:
- Competitive interest rates, wide availability, and transparency.
- Applying for a loan generates a soft inquiry, which won’t impact your credit score.
LendingClub is one of the biggest peer-to-peer lenders. They offer some of the best personal loans up to $40,000, and are comparatively lenient when it comes to lending based on credit scores. In fact, you may only need a minimum score of 600. Rates range from 6.95% to 35.89% APR, with the best rates reserved for those with excellent credit.
LendingClub charges a one-time loan origination fee of 1% to 6%, and charges a $7 processing fee for each monthly payment made by check (set up auto-pay or pay online to dodge this charge). Repayment terms are for three or five years. If you can secure a low APR and can justify the origination and processing fees, a personal loan from LendingClub can help you reach your financial goals.
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.
LightStream
Key takeaways:
- APR: 3.99% to 16.99% (with AutoPay)
- Loan terms: 24 to 144 months, depending on loan purpose
- Max loan: $100,000
Why it’s a solid bet:
- Flexible terms with high borrowing limits.
- Ideal for borrowers who want a hefty amount and a longer repayment period.
LightStream offers excellent rates, ranging from 3.99% to 16.99%* (as of May 3, 2019) for non-home and auto-related personal loans. There are no prepayment or origination fees to worry about, either.
Though they offer some of the best personal loans out there, the main downside with a LightStream loan is the high threshold required to qualify. You can potentially have your money in as little as a day, but your credit score will have to be very good (a minimum of 660), and you’ll also need to prove “stable and sufficient” income and assets as well as a solid savings history, among other requirements. This makes this lender a better option for those looking to tackle an expensive endeavor, like a home remodel or business startup, rather than consolidate longstanding debt.
*Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. If your application is approved, your credit profile will determine whether your loan will be unsecured or secured. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment Example: Monthly payment for a $10,000 loan at 9.84% APR with a term of three years would result in 36 monthly payments of $321.92.
Marcus by Goldman Sachs
Key takeaways:
- APR: 5.99% to 28.99%
- Loans terms: 36 to 72 months
- Max loan: $40,000
Why it’s a solid bet:
- No origination fee, late charges, or hidden costs.
- Ability to move your due date up to three times over the loan’s lifetime.
Marcus by Goldman Sachs is one of the best personal loans available for borrowers looking to have their funds available in just a few days without paying any additional fees. The company’s financial pedigree makes Marcus a popular choice that’s backed up by convenience and low APRs. If you qualify, your APR could be as low as 5.99%. If you have relatively good credit but are battling credit card debt with an APR in the teens or even twenties, this type of loan can save you a substantial amount of interest.
Unfortunately, not everyone will qualify for a Marcus loan. The lender reports that most of their customers have credit scores over 660. Also, if you’re looking for a loan you can pay off quickly, the shortest term offered by Marcus is 36 months. With competitors offering loan lives that are at least a year shorter, you could end up paying more in interest with this lender.
Rate Disclosure – For New York residents, rates range from 5.99% to 24.99% APR.
Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans). The available loan term may vary based on your creditworthiness (for example, 72-month loan terms will not be available to all applicants). Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your income must support your ability to repay your loan. Your monthly payment amount will vary based on your loan amount, APR and loan term. For example, a $402 monthly payment is based on a $15,000 loan with a 12.99% APR and 48 monthly payments.
Best Personal Loans for Excellent Credit
If you have great credit, good news: You may qualify for personal loans with impressively low interest rates. However, keep in mind that lenders who offer these low rates will also want to see other markers of financial health, such as steady employment and a low debt-to-income ratio.
SoFi
Key takeaways:
- Fixed APR: 5.99% to 16.99% APR (with AutoPay)
- Loan terms: 24 to 84 months
- Max loan: $100,000
Why it’s a solid bet:
- SoFi offers some of the lowest rates around.
- Option to suspend loan payments through unemployment protection program.
- They get great reviews.
SoFi has made a name for itself as a valuable resource when it comes to student loan refinancing. But they also offer extremely competitive personal loans, ranging from $5,000 to a whopping $100,000. They have some of the best personal loan rates, with fixed-rate loans ranging from 5.99% – 16.99% APR (if you set up automatic payments). You also won’t pay any loan origination fees, and repayment terms are flexible, ranging from two to six years.
You’ll need to meet a high threshold to qualify, with a favorable debt-to-income ratio, dependable employment, and a high credit score. SoFi holds consumer lending licenses in 22 states and Washington, D.C.
Disclaimer: Fixed rates from 5.99% APR to 16.99% APR (with AutoPay). Variable rates from 5.74% APR to 14.70% APR (with AutoPay). SoFi rate ranges are current as of March 18, 2019 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.74% APR assumes current 1-month LIBOR rate of 2.49% plus 4.28% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636.
Wells Fargo
Key takeaways:
- APR: 7.24% to 20.24% (with automatic payments)
- Loan terms: 12 to 60 months
- Max loan: $100,000
Why it’s a solid bet:
- Huge branch network (6,000+ locations nationwide) for face-to-face business.
- Flexible personal line of credit.
- Option to secure your loan with a savings account or CD.
If you’re wondering which traditional bank is best for personal loans, Wells Fargo could be a good choice. They advertise APRs of 7.24% to 20.24% with automatic payments linked to a Wells Fargo account, and loans from $3,000 to $100,000.
Repayment terms can range from 12 to 60 months and there are no prepayment or origination fees. The main downside here is convenience: You can’t apply online unless you’re an existing Wells Fargo customer, so you’ll need to be near one of their branches. Wells Fargo also doesn’t fare as well as many competitors in customer service ratings, and they aren’t as transparent about lending criteria as many online competitors.
Repay a Personal Loan in terms of 12-60 months. Interest rates range from 7.49% to 24.49% Annual Percentage Rate (APR). No origination fee or prepayment penalty. Representative example of loan repayment terms: For $11,000.00 borrowed over 36 months at 12.99% Annual Percentage Rate (APR), the monthly payment is $370.58. This example is an estimate only and assumes all payments are made on time.
1.Before you apply, we encourage you to carefully consider whether consolidating your existing debt is the right choice for you. Consolidating multiple debts means you’ll have a single monthly payment, but it may not reduce or pay your debt off sooner. The payment reduction may come from a lower interest rate, a longer loan term, or a combination of both. By extending the loan term you may pay more in interest over the life of the loan. By understanding how consolidating your debt benefits you, you’ll be in a better position to decide if it is the right option for you.
2.New credit accounts are subject to application, credit qualification, and income verification.
Deposit products offered by Wells Fargo Bank, N.A. Member FDIC.
Prosper
Key takeaways:
- APR: 6.95% to 35.99%
- Loan terms: 36 to 60 months
- Max loan: $40,000
Why it’s a solid bet:
- Prosper rivals LendingClub as a leading name in peer-to-peer lending.
- Impressively transparent with wider availability to borrowers.
Prosper is slightly more liberal with its lending criteria than major competitors. It requires a minimum credit score of 640, but will also look at several other factors to give you a shot at a better interest rate. Loan terms are three years and five years. You can borrow from $2,000 to $40,000 at APRs ranging from 6.95% to 35.99% for first-time borrowers.
Prosper has some of the best personal loan rates, but you could be waiting seven business days for your loan to be funded. If you need money faster than that, there are better options.
For example, a three-year $10,000 personal loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 personal loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR. You would receive $9,500 and make 60 scheduled monthly payments of $204.64. Origination fees vary between 2.41%-5%. Personal loan APRs through Prosper range from 6.95% (AA) to 35.99% (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for personal loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility for personal loans is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All personal loans made by WebBank, member FDIC.
Prosper and WebBank take your privacy seriously. Please see Prosper’s Privacy Policy and WebBank’s Privacy Policyfor more details.
Notes offered by Prospectus. Notes investors receive are dependent for payment on unsecured loans made to individual borrowers. Not FDIC-insured; investments may lose value; no Prosper or bank guarantee. Prosper does not verify all information provided by borrowers in listings. Investors should review the prospectus before investing.
Best Unsecured Loans for Average Credit
Avant
Key takeaways:
- APR: 9.95% to 35.99%
- Loan terms: 24 to 60 months
- Max loan: $35,000
Why it’s a solid bet:
- Those with low credit scores can still qualify.
- No prepayment fee and low origination fee compared to other lenders.
Through Avant, you could borrow from $2,000 to $35,000* with rates ranging from 9.95% to 35.99%, depending on your credit history, income, and other factors. Avant is a great personal loan for debt consolidation, as long as you qualify for the lower end of their APR range. The company reports that you’ll need a credit score of at least 580, but the majority of their customers fall between 600 and 700.
There is an administration fee of up to 4.75%** to consider, along with a late fee and unsuccessful payment fee. But if you avoid paying late and instead pay off your loan early, you don’t have to worry about a prepayment fee.
* 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.
**Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33.
Avant branded credit products are issued by WebBank, member FDIC.
Upgrade
Key takeaways:
- APR: 7.99% to 35.89%
- Loan terms: 36 to 60 months
- Max loan: $50,000
Why it’s a solid bet:
- No prepayment penalties if you’re hoping to pay your loan off faster than 36 months.
- Receive access to your credit score summary and receive customized recommendations up loan acceptance.
Upgrade offers a simple application process that doesn’t perform a hard inquiry on credit reports. To qualify, you’ll need a minimum credit score of 620.
While Upgrade does make it possible to secure a personal loan with less than perfect credit, there are a few numbers you’ll want to be aware of. First, you should expect to pay an origination fee between 1.5% and 6% of your loan amount. This is much higher than some of their competing lenders. You might also find yourself with an astounding interest rate of 35.89%.
But if you can secure a fixed rate near the low end of their APR range, Upgrade could be the ideal personal lender for you. They offer loans up to $50,000 that can hit your account just a few days after being approved.
* Loans made through Upgrade feature APRs of 7.99%-35.89%. All loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay. For example, if you receive a $10,000 loan with a 36 month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your bank account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early.
Upstart
Key takeaways:
- APR: 8.16% to 27.99%
- Loan terms: 36 or 60 months
- Max loan: $50,000
Why it’s a solid bet:
- Borrowers can set up bi-weekly repayments that fit better with their budget.
- Company considers non-traditional sources of creditworthiness.
If you know you’re a responsible borrower but don’t have the credit score to prove it, Upstart is an ideal lender to start with. Their underwriting process differs from traditional lenders in that they consider eligibility factors beyond your credit score, like education and work experience. If you’re able to secure a loan with characteristics rather than a credit score with Upstart, just make sure you look out for their higher interest rates.
You’ll have less flexibility when it comes to loan terms with Upstart. You can choose between either a three-year loan or a five-year loan. While you’ll have more time to pay off your loan if you choose a five-year term, you’ll also pay more interest. Finally, make sure you consider their origination fee, which can be as high as 8%. This comes out of your loan, so make sure you borrow enough to cover the fee.
* The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart Platform will have an APR of 19% and 36 monthly payments of $35 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
** Estimated savings are calculated based on the credit profiles of all loans originated by Upstart-powered lenders using the Upstart Platform as of April 1, 2019 in which the funds were used for credit card refinancing. Estimated savings are calculated by deriving current credit card APR using minimum monthly payment and 1% of the principal balance. The estimated credit card APR is then compared to the accepted loan to determine median savings per borrower. To evaluate savings on a loan you are considering, it is important to compare your actual APR from your existing debt to the APR offered on the Upstart Platform.
More than 261,000 loans have been originated on the Upstart platform as of April 1, 2019.
Images are not actual customers, but their stories are real.
† If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and in accordance with federal law.
‡ While most of our borrowers opt for automated recurring payment for ease of use, we also accept payments by check or one time electronic payments. Borrowers have the flexibility to choose the repayment method that works best for them.
9 out of 10 Upstart users surveyed internally reported that they would recommend Upstart.
†† When you check your rate, we check your credit report. This initial (soft) inquiry will not affect your credit score. If you accept your rate and proceed with your application, we do another (hard) credit inquiry that will impact your credit score. If you take out a loan, repayment information will be reported to the credit bureaus.
§ Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5,100. The minimum loan amount in GA is $3,100.
Best Loans for Bad Credit
If your credit score is south of 600, you’ll have fewer options and generally be required to pay higher interest rates. But there are still reputable lenders who will offer you a personal loan.
OneMain
Key takeaways:
- APR: 18.00% to 35.99%
- Loan terms: 24, 36, 48 or 60 Months
- Max loan: $20,000
Why it’s a solid bet:
- OneMain offers both secured and unsecured loans.
- Received an A+ rating from the Better Business Bureau.
With over 1,600 branches nationwide, OneMain Financial has a broader reach than many of the internet-only lenders on this list. They also get solid reviews and have a long track record of lending to people who need bad credit loans. Perhaps to be expected, their website experience and the information they provide online isn’t as robust as their competitors.
They have a higher max loan amount compared to other lenders who cater to borrowers with poor credit. You’ll also find that while their APRs are on the high side, they’re still much lower than other lenders in this section. We recommend starting with a OneMain application if you’re trying to secure a loan with bad credit.
NetCredit
Key takeaways:
- APR: 34% to 155%
- Loan terms: up to 60 months
- Max loan: $10,000
Why it’s a solid bet:
- Designed for those with lower credit scores.
- No application fee and loan can be paid off early without penalties.
NetCredit offers borrowers the opportunity to secure a loan of up to $10,000, even with bad credit. There are no hidden costs or fees associated with their loans and they can be paid off early.
However, it’s important to note that NetCredit has high APR rates, common with personal loans for people with bad credit. Making sure you can afford the monthly payments and that such a loan makes financial sense for your situation is critical before signing a loan contract.
OppLoans
Key takeaways:
- APR: 99% to 199%
- Loan terms: up to 36 months
- Max loan: $4,000
Why it’s a solid bet:
- Good alternative for those in a vicious payday loan cycle
- No credit check required.
We don’t recommend OppLoans for the majority of consumers looking to secure a personal loan. In fact, they’re really only ideal for one type of borrower, as they’re far from having the best personal loan rates.
But if you’re stuck in a vicious payday loan cycle, Opploans could be the smartest way to escape. While their APR rates are obscenely high, rates of payday loans are even higher and have shorter payback windows. A loan from Opploans could allow you to pay off your payday loans for good and allow you time to slowly pay off the personal loan as you get back on track.
The only way this will work is if you’re able to guarantee yourself that you won’t take another payday loan. Being stuck with more than one loan with high interest rates is a sure way to find yourself in a financial disaster.
Applicants must be 18 years of age to apply. Not all applications are approved. Applications processed and approved before 7:30 p.m. ET are typically funded the next business day. In some cases, we may not be able to verify your application information and may ask you to provide certain documents. Some customers applying for a loans may be required to submit additional documentation due to state law and qualification criteria. Please note: This is an expensive form of credit. This service is not intended to provide a solution for longer-term credit or other financial needs. Loans made or arranged by Opportunity Financial are designed to help you meet your short-term borrowing needs. Other forms of credit may be less expensive and more suitable for your financial needs including, but not limited to: borrowing from a friend or relative, home equity line of credit, existing savings, credit card cash advance. This website contains numerous testimonials from past clients. Testimonials provide the perspective of individuals who are enthusiastic about their experience, and therefore are not representative of everyone’s experience. Individual results will vary. Testimonials may be edited for clarity or brevity. No one has been paid to provide a testimonial. Please do not make any credit decisions or any financial decisions based solely what is said in the testimonial.
Do I Need Good Credit to Get a Personal Loan?
If you want the best interest rates, then yes, you need a good credit score. But it is absolutely possible to find a willing lender even with poor credit. You’ll likely just end up paying higher interest rates in order to lessen that lender’s risk. So, only take out a bad credit loan if you’re confident you can pay back the money quickly.
One good option for those with bad credit is OppLoans. You can also give OneMain a try, which works with those who have a credit score lower than 600. If you want to see all of your options, check out our full breakdown of personal loans for people with bad credit.
If you’re not interested in working with a company who provides personal loans for people with bad credit, you can try going directly to your bank or a credit union for a personal loan.
When trying to secure a personal loan with bad credit, keep this one tip in mind: If it sounds too good to be true, it probably is. For example, a company willing to hand over a large amount of money without even checking your credit score is likely a payday lender. You could find yourself with an APR in the triple digits that leaves you in a debt trap you can’t escape.
To summarize, it is ideal to have good credit when securing a personal loan. But if you explore all your options and know what to look out for, it is possible to get a personal loan with bad credit that won’t leave you drowning in high APRs and fees.
How to Secure the Best Personal Loan Rates
When it comes to securing a personal loan, there’s one number that will determine if you can secure the best personal loan rates – your credit score. A difference of just a few points can drastically affect your monthly loan payment and the total amount of interest you’ll pay.
Having a personal loan with a high rate can erase its benefits. For example, if you’ve taken out a personal loan to consolidate your credit card debt, you may not be seeing much savings if you don’t have the lowest and best personal loan rates.
Let’s say two people both take out $10,000 to pay off credit card debt. One has a great credit score while the other has a fair credit score. Because of the differences in creditworthiness, the first borrower secures an APR of 7.99% while the second signs a loan contract with an APR of 12%. They both make their monthly payments until the loans mature after 24 months. The first borrower pays a total of $10,853.46 while the second pays $11,297.63. As you can see, securing the best personal loan rates should be top priority when shopping around for a lender.
Curious to see how your credit score will affect your personal loan? This chart helps show the average personal loan rate by credit score.
| Credit Rating | Credit Score Range | Average Personal Loan APR |
|---|---|---|
| Excellent | 720-850 | 9.8% |
| Good | 690-719 | 15.0% |
| Fair/Average | 630-689 | 21.3% |
| Poor | 300-629 | 28.2% |
Credit scores are determined by your payment history, length of credit history, total amounts owed, and types of credit used. Credit scores can drop quickly and can take significant time to raise.
If you’re only a few points away from a lower personal loan rate or the best personal loan rates, we recommend doing what you can to get your score into the next tier before securing a loan. In some financial situations, waiting might not be an option. But if you do have the luxury of time, the following tips can help boost your credit score quickly.
- If you haven’t already, get your hands on a free credit report. You’re entitled to one each calendar year. Scan over it to look for any discrepancies or inaccurate information.
- Improve your credit utilization rate by either paying down your balance or increasing your credit limit
- Split your payments up throughout the month. Your balance is only reported once per month, so making several payments can help make sure the credit score bureaus are seeing the lowest numbers possible.
Personal Loans vs. Credit Cards
Multiple studies show that millennials increasingly prefer personal loans over credit cards. While credit cards have strengths and perks that personal loans don’t, such as price protection and the ability to earn rewards points, they’re not the best choice for every type of purchase.
You might be wondering whether to use a personal loan or a credit card to finance an upcoming expense. Here’s how the two compare:
| Personal Loan | Credit Card | |
|---|---|---|
| Loan types: | Unsecured, secured | Unsecured, secured |
| Debt classification: | Installment | Revolving |
| Interest rates: | Fixed | Variable |
One key difference is that the credit bureaus consider personal loans to be installment debt — meaning you pay a consistent amount each month, as with a car loan or mortgage. Unlike revolving credit card balances, installment debt doesn’t count against your utilization ratio, meaning a big personal loan balance won’t weigh on your credit score the way a maxed-out credit card would.
- Read more: Installment Loans vs. Revolving Credit: Why the Type of Account Matters to Your Credit Score
In short, personal loans are best for financing larger purchases or longer-term expenses, while credit cards are better for smaller, everyday purchases you can pay off pronto.
How We Picked the Best Personal Loans
You’ll want a competitive rate from your unsecured loan, but you’ll also want the flexibility to pick a term that works for you, low or no extra fees, and a lender with whom you’re comfortable doing business. Here are some of the key factors to consider when picking the best personal loans:
- Low APRs: The lender’s advertised interest rates are in line with or better than those advertised by the competition.
- Low or no fees: Some lenders don’t charge fees other than interest; others may charge origination fees, late payment fees, or prepayment fees. If there are fees involved, make sure they’re not significantly higher than those of competitors.
- Higher loan limits: Though you want to be careful not to borrow more than you can afford, the best lenders won’t cap their loans at low amounts, letting you borrow what you need.
- Flexible terms: Some lenders only allow you to pick from a couple of loan terms, such as three or five years. The best lenders offer some flexibility here, allowing shorter or longer terms to accommodate a wider range of needs.
- Serves most of the country: While most major banks have national reach (or close to it), online lenders may only be able to do business in a limited number of states. Bonus points went to lenders with a wider reach.
- Transparent, informative website: The best lenders are transparent about their APRs, loan limits, terms, fees, and other crucial information. It should be clear where to get these details, and you shouldn’t have to give your personal information in order to see it.
- Reputation: We considered each lender’s longevity, online reviews, and status with the Better Business Bureau. BBB accreditation is a plus, not a necessity, especially for newer companies. We gave individual reviews less weight, as many negative reviews are from prospective borrowers unhappy about being denied.
Four Big Tips for Finding the Best Personal Loans
#1: Compare Several Offers
Never sign on the dotted line with the first place you look for a personal loan. Each lender will have a slightly different formula when considering your application, which means your interest rate will vary — perhaps significantly — from one lender to the next.
One convenient way to search for the best personal loans online is by using the loan search tool below, which can help match you with the best personal loan for your needs.
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.
If your credit is great and you’re able to pay off a loan quickly, you might want to consider treating a credit card with a 0% introductory APR as a personal loan of sorts. Of course, you’ll need to make sure the credit limit is high enough for your needs.
You’ll also need to have the discipline not to add to your balance, and to pay it off before your low interest rate expires, typically in 12 to 18 months. If you think you can swing this, be sure to check out our post on the Best Balance Transfer Credit Cards for some great 0% introductory APR credit cards.
#2: Watch Out for Fees
Make sure you know whether there are fees associated with your personal loan other than the interest you’ll pay. One of the most common charges is an origination fee: typically a percentage of the amount you’re borrowing, which can vary from under 1% to as much as 6% or even 8%. Also note whether there are fees for late payments ($15 or 5% of your outstanding balance is typical). Other fees may include charges for unsuccessful payments or payments made by check.
Also be on the lookout for prepayment fees. These are fees lenders charge if you pay off your entire loan early (which means the lender won’t be getting the full amount of interest it would have if you’d made payments as scheduled for the full loan term). Most lenders we researched won’t hit you with a prepayment penalty for unsecured personal loans, but it’s definitely worth double-checking.
#3: Choose the Right Term
You’ll want to see how flexible your lender is on loan terms. Some online lenders may only let you choose between three- and five-year terms, for instance. Term is important because it affects how much you ultimately pay over the life of the loan. A longer term can help keep your monthly payments manageable, but it means you’ll be paying more in the end. On the flip side, a shorter term will mean higher payments, but you’ll shell out less in interest overall.
For a more concrete example, let’s say I take out a $10,000 unsecured personal loan at 12% interest. According to this Bankrate calculator, I would pay $11,957 over a three-year term, but $13,347 over a five-year term. If I can afford the higher monthly payment ($332 a month for three years instead of $222 a month for five years), the shorter term means significant savings.
#4: Watch Out for Scams
There’s no shortage of unscrupulous lenders looking to scam potential borrowers. Here are a few tips that will help you avoid scams and make sure you’re dealing with a legitimate company:
- Don’t pay upfront fees. Remember that you should never pay anything simply to apply for a loan. If a potential lender demands payment to evaluate your credit and other financial information, run the other way.
- You should contact them — not the other way around. If a lender is badgering you, whether through phone calls, mailings, or online, consider that a big red flag. Legitimate lenders simply don’t need to be this aggressive to attract borrowers.
- Guarantees are bogus. No legitimate lender can promise that they’ll approve your loan application before evaluating your finances. Even payday lenders need proof of income before they’ll make a loan.
- Verify, verify, verify. Make sure you double-check the lender’s physical address, which should be readily available. Also consider looking them up with the Better Business Bureau or your state banking regulators.
- You should feel in control. Take your business elsewhere if a lender threatens you in any way, tries to dissuade you from considering competitors’ offers, or tries to get you to borrow more than you owe.
Find the Best Personal Loan Company and Build a Better Future
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 the best personal loan companies available to accept your application online right now.
First, a reminder: Don’t limit your search to either brick-and-mortar or online lenders when you’re searching for the best unsecured personal loans. Online lenders are convenient, but banks and credit unions may offer competitive APRs and more personal service if your credit is good.
On the flip side, you may be able to find an online lender who can you the best personal loans if you fit their preferred borrowing profile. Remember to consider potential terms and fees before you sign up for a loan, too — little fees and extra interest can add up in a big way.
All in all, finding the best personal loans and getting the money you need can go a long way toward helping you achieve your financial dreams. Whether your goal is to finally fix your roof, to get out from under the thumb of onerous credit card debt, or to take any other positive step on the road to financial freedom, a cash infusion from a personal loan can help you build a better future.
