Personal loans help you consolidate your credit card debt or pay off a big expense without over-burdening you with interest. They are usually awarded for a short period of time in amounts ranging from $1,000 and $100,000. 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 loans usually come with fixed interest rates and fixed monthly payments that make it simple to budget in your monthly expenses.
Since the advent of online banking and fin-tech, loans are offered by different types of lenders, including traditional banks and online-only lenders. Choosing the best lender and getting the best loan rates can save you thousands of dollars. You don’t need perfect credit to get a personal loan. Even those with average to bad credit have options, and we’ll explore everything from the best options for people with excellent credit to the best bad credit loans.
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Best Personal Loan Picks for 2019
- Best Peer-to-Peer Lending: LendingClub
- P2P Runner-Up: Prosper
- Best Traditional Bank Lending: LightStream
- Traditional Runner-Up: Marcus
- Best Loans for Excellent Credit: SoFi
- Best Loans for Average Credit: Avant
- Average Credit Runners-Up: Upgrade, Upstart
- Best Loans for Bad Credit: OneMain
- Bad Credit Runners-Up: NetCredit and OppLoans
|LENDER||APR||LOAN TERM||MIN. LOAN||MAX. LOAN|
|Avant||9.95% – 35.99%||2 to 5 years||$2,000||$35,000|
|Prosper||6.95% – 35.99%||3 to 5 years||$2,000||$40,000|
|OneMain||18.00% – 35.99%||2 to 5 years||$1,500||$20,000|
|LightStream||3.99% – 16.79%||2 to 7 years*||$5,000||$100,000|
|Upstart||5.69% – 35.99%||3 to 5 years||$1,000||$50,000|
|Marcus||6.99% – 28.99%||36 to 72 months||$3,500||$40,000|
|SoFi||5.99% – 17.88%||2 to 7 years||$5,000||$100,000|
|LendingClub||6.95% – 35.89%||3 to 5 years||$1,000||$40,000|
|OppLoans||99% – 199%||9 to 36 months||$500||$4,000|
|Upgrade||6.98% – 35.89%||3 to 5 years||$1,000||$50,000|
|NetCredit||34% – 155%||6 to 60 months||$1,000||$10,000|
LightStream Disclaimer: *Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66.
LendingClub loans are “peer-to-peer” loans that let you borrow money from a person or from a group of people instead of through a traditional bank. Borrowers are assigned a grade based on income and credit score. Your grade determines your interest rate. It offers a co-sign option to borrowers with a credit score of 600 and above (the co-signer can have a credit score as low as 540).
LendingClub also has a hardship plan in case you have trouble making payments. Borrowers can make interest-only payments for up to three months until you get back on your feet.
There is an origination fee of between 1% and 6% tacked onto your LendingClub loan, and they offer no rate discount for auto-payments. But, in 2019, LendingClub introduced a balance transfer loan for help when consolidating debt, and will send payments to up to 12 creditors to help pay off balances.
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 $5,700 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 is a division of SunTrust Bank that offers personal loans that can be used for most anything, from buying a vehicle to paying for medical bills. Interest rates on your LightStream loan will vary depending on the purpose of the loan. Applicants must have a credit score of 660 or above, but loan amounts are available up to $100,000.
LightStream does a hard credit pull on all applicants if you apply on its website. But, it also guarantees your satisfaction by offering you $100 back if you have had your loan for less than 30 days and are unhappy with the results.
LightStream claims to beat any competitors interest rate by 0.10%. However, you show you have been approved by the competition for a fixed-rate loan for the same amount, payment method and purpose.
Disclaimer: 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. Please find our Rate Beat disclosures here.
Marcus is the lending division of investment bank, Goldman Sachs, which offers loan flexibility, no sign-up fees, no prepayment fees ever. It also charges no origination fee or late fees if you miss a payment, and even offers online tools to help you track your credit score and pay down debt with your loan. Although you can take out a loan from Marcus for any reason, Marcus personal loans are available in amounts up to $40,000, and useful for things like consolidating debts, taking a vacation, weddings or for home improvements.
To qualify, you must have a credit score of at least 660, be over 18 years old, and have a valid U.S. bank account. If you pay 12 or more consecutive monthly payments, you can defer one payment as long as all payments have been made in full, on time. Your loan will be extended one month, but you don’t pay interest on the deferral month.
Rate Disclosure – For New York residents, rates range from 6.99% 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.
SoFi has high credit standards and members-only networking events, which means you can attend social events online or around the country for career and financial advice. Borrower’s minimum credit score must be at least 680, with an annual income of no less than $45,000. This company offers flexible payment options and won’t charge late fees for missed payments or overdrafts.
SoFi also offers both variable- and fixed-rate loans. Interest rates on fixed-rate loans tend to be higher, and variable-loan rates can go up over the life of your loan, to a maximum of 14.70%. Sofi also gives you the peace of mind of knowing that if you should lose your job, you can apply for forbearance for three months to 12 months.
Borrowers should know that qualifying for a SoFi loan is based more on how much of your income is left after expenses than your creditworthiness. It can also take up to seven days after applying to get your loan.
Disclaimer: Fixed rates from 5.99% APR to 17.88% APR (with AutoPay). Variable rates from 6.49% APR to 14.70% APR (with AutoPay). SoFi rate ranges are current as of November 13, 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 6.49% APR assumes current 1-month LIBOR rate of 1.81% plus 4.93% 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.
Prosper is another peer-to-peer lender for unsecured personal loans that you can use for nearly any purpose, from debt consolidation to funding your next vacation. To qualify, you must pass Prosper’s proprietary risk-rating system, which takes into account things like credit history, income and credit score.
Applicants must have a minimum credit score of 640, two years of credit history, but there is no minimum annual income requirement. Prosper does not pay creditors directly if you’re consolidating debt, and you can’t adjust your payment schedule, as well as charging origination fees ranging from 2.4% to 5%, late fees and insufficient funds fees. However, Prosper offers fast funding and only does a soft credit check.
Avant loans are an excellent choice for borrowers with a less-than-great credit score because it’s a competitive low-credit lender that offers unsecured personal loans. The average credit score to qualify at Avant is between 600 and 700, which is just below the national average. But, if you qualify, you can often receive a loan by the next business day.
Avant’s beginning APR of 9.95% is reasonable, but if you have bad credit, you will likely only qualify for a much higher APR which can be as much as 35.99%. Avant loans are best for someone with a modest gross income of at least $20,000 a year and a minimum credit score of 580. Avant does charge an administration fee of 4.75%, late fees, and returned check fee, but if you need flexibility with payments, emergency expenses, consolidating debt, making home improvements or repairing your credit, Avant is a good bet for a loan.
* 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 loans support a wide range of incomes and credit scores. They are one of the few online lenders that consider cash flow (a monthly minimum of $800) over credit score. You must have a credit score of at least 620 to qualify. Upgrade also considers co-signers who meet minimum credit score requirements.
Upgrade charges an origination fee of between 1.5% and 6%, late fees for missed payments, no option for direct payment to creditors for debt consolidation and no secured loan option. However, Upgrade does offer hardship plans if you lose your job. Should this happen, you may qualify for a temporary reduction in your monthly payment or a loan modification for the term of your loan. Upgrade also does a soft credit pull, which will not affect your credit score. However, if you accept the loan, they will do a hard pull.
Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. 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 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. Personal loans issued by WebBank, Member FDIC.
Upstart loans are great for younger applicants and those with little or no credit history, but high earning potential. Upstart loans can be used for many purposes, such as college tuition, home improvements, medical expenses and debt consolidation. They provide quick funding, often within one day, but loans for education require a three-day waiting period before approval.
Borrowers must have a minimum credit score of 620 and a minimum annual income of $12,000. There is a small origination fee, and late fees of 5% of the past due amount or $15, whichever is greater. Also, Upstart’s rates, with a maximum of 35.99%, are higher than some competitors. If you’re a new borrower with no recent bankruptcies or delinquent loans who needs fast funding, Upstart may be a great choice.
* 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 303,000 loans have been originated on the Upstart platform as of July 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.
Unlike bad credit loans or payday loans, which may disregard your credit history
but require full repayment when you receive your next paycheck, OneMain Financial allows you to make installment payments over time. For bad credit borrowers, OneMain is an option, but it comes with high starting rates of 18.00% and may charge an origination fee. Borrowers can get fast funding and free credit score access, and they also offer a co-sign option. OneMain does charge a fee for late payments and a return check fee.
Loans from OneMain can be used for debt consolidation, home improvements, auto refinance, wedding financing and more. You can also apply for a secured loan with a car title or other collateral. That option may get you a lower interest rate for the term of your loan. If you have bad credit and are shopping for a loan with fast approval, OneMain might be a great option.
NetCredit offers personal loans from Enova International that have much higher interest rates than many lenders, starting at 34% and soaring to 155% APR. Borrower’s APR will depend on their credit score, with a minimum score of 500. To qualify, you must also meet their minimum annual income requirement of $20,000 or higher.
Since only 14 states offer NetCredit loans, you’ll have to check prior to applying to see if they are available where you live. NetCredit does charge an origination fee of 5% of the loan amount and may charge a late payment fee, it does not charge a prepayment fee. NetCredit does offer fast funding, typically within three days of approval, and your loan can be used for anything from home improvements to debt consolidation, medical expenses and more. Because of its high APR range, NetCredit should be used in dire circumstances for fast funding by borrowers with low credit scores. Furthermore, loans from NetCredit should be paid off as soon as possible to avoid high interest stacking up on what you owe.
Like NetCredit, OppLoans interest rates on personal loans are substantially higher than many lenders, with numbers ranging from 59% to 199%. However, its website advertises that 199% APR is still better than the average 400% APR that accompanies traditional payday loans. Credit scores and credit history play a big part in what rate you’ll be charged. Loan amounts range from $500 to $5,000, and borrowers can use loans for home improvement projects, unexpected expenses, weddings and more.
With loan terms ranging from 9 to 24 months, borrowers can also opt for longer terms to take on larger amounts while keeping payments affordable. OppLoans does charge an origination fee of between 0% and 3%, and a late payment fee of $10. Applicants must have a credit score of at least 350 to qualify, and a minimum income of $18,000 or higher.
OppLoans also doesn’t charge a prepayment fee, which means if you choose to pay off your loan early, you won’t be charged. What’s more, if your loan is approved, you can expect funds to be in your account within three days.
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.
When Should You Use a Personal Loan?
A loan isn’t always the answer in a financial crisis, but there are situations where using a loan is a sensible course of action. One of the better reasons to take out a 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 pay off all those balances at once and consolidate them into a single monthly payment at a lower rate. A balance transfer credit card may serve a similar purpose.
If you borrow responsibly, meaning you don’t over-extend yourself, and you make all your payments on time, you can finance a home renovation, a wedding, moving costs, funeral expenses, medical bills, a used car, or even a new business venture.
Do You Need Good Credit to Get a Loan?
If you want the best interest rates, then yes, you need a good credit score, but it is possible to find a willing lender even with poor credit. You will likely end up paying higher interest rates in order to lessen the lender’s risk. In that case, only take out a bad credit loan if you’re confident you can pay back the money quickly. 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 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 interest rate in the triple digits that leaves you in a debt trap you can’t escape. Taking out a personal loan with a high interest rate negates the benefit of even having the loan in the first place.
If you’re only a few credit score points away from a lower rate tier, we recommend doing what you can to raise your score into the next tier before securing a loan, though in some situations, waiting might not be an option. If you do have the luxury of time, the following tips can help boost your credit score quickly.
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4 Tips for Finding the Best Loan
1: Compare several offers.
Never sign on the dotted line with the first place you look. Each lender will have a slightly different formula when considering your application, which means your interest rate will vary from one lender to the next.
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, which can range from 1%-8% of your loan total. Also
3: Choose the right loan term.
Ask how flexible your lender is on loan terms. Some online lenders may only let you choose between three and five-year terms. 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 lower and more 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 pay out less in interest overall.
4: Beware of loan 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. Don’t pay to apply for the loan. 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.
The Bottom Line
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.