When you need to consolidate debt or finance a large expense, such as a cross-country move or home improvements, a personal loan can be a good option. It’s also a very popular choice: Auto loan balances increased by $22 billion in the third quarter of last year, according to Quarter 3 2022 Household Debt and Credit Report data from The Federal Reserve Bank of New York.
Personal loans are a type of installment loan. You borrow a lump sum of money and repay it with a fixed monthly payment determined by your interest rate.
These loans sometimes offer lower interest rates than a credit card, and you can often apply for a loan and receive the money within days of approval. So, if you think a personal loan might be the right fit for you, compare lenders by their interest rates, fees and terms, to find the best product for your situation
Here’s what to know about the 17 best personal loans on the market right now:
Multiple types of financial institutions offer personal loans, including online lenders, banks and credit unions.
Before getting a personal loan, it’s important to consider options from multiple lenders, and it’s a good idea to get at least three quotes. Credible makes it easy to compare personal loan rates from multiple lenders — without affecting your credit score.
Comparison shopping with a platform like Credible can help you quickly narrow down your options to lenders that work for your needs. The following 18 Credible partner lenders offer personal loans:
If you need a personal loan for debt consolidation, Achieve (formerly FreedomPlus) may be worth considering. The lender may give you a better interest rate if at least 85% of your loan funds go toward paying off existing debt.
Achieve’s big advantage is that it offers the potential for same-day funding. But its loans aren’t available in Nevada, and there are origination fees of up to 6.99%.
With a minimum income requirement of $1,200 per month and a minimum credit score of 550, Avant could be a good fit for borrowers with poor credit.
Although Avant may be a solid choice for those with low credit scores, it does have some drawbacks. For example, Avant loans aren’t available in Colorado, Hawaii, Iowa, Nevada, New York, Vermont or West Virginia. The lender also charges an administrative fee of 4.75%.
If you have good credit, Axos Bank may be an option.
Axos Bank’s best feature is that it allows you to borrow a relatively large amount of money. But keep in mind that it also charges some fees, including origination fees of up to 2%, late payment fees, and insufficient funds fees.
WHAT CREDIT SCORE DO YOU NEED FOR A PERSONAL LOAN?
Since Best Egg considers more factors besides your credit score in its application decisions, you might have an easier time qualifying with them than with some other lenders.
With a minimum credit score requirement of just 600, Best Egg may be a good fit for borrowers with fair credit. Plus, if you qualify, you can use the funds for a wide variety of purposes, including adoption and moving expenses. Still, the lender does charge an origination fee that can range from 0.99% to 8.99%.
If you need a bit more time to repay your loan than most lenders offer, Discover might be a good option for you.
Discover offers relatively fast funding and flexible loan terms. Plus, the lender doesn’t charge any origination fees. Still, you’ll need at least fair to good credit to qualify for one of its loans.
Happy Money, formerly Payoff, could be a good choice if you’re in the market for a debt consolidation loan.
You may be able to qualify for a Happy Money loan with a fair credit score. But bear in mind that these loans aren’t available in Massachusetts or Nevada, and origination fees can reach 5%.
There's no minimum income requirement to borrow through LendingClub, which makes it a good fit for those who may have trouble qualifying with other lenders.
LendingClub shows your loan application to multiple investors, which increases your chances of getting an offer with loan terms that fit your needs. But LendingClub does charge an origination fee — and at 2% to 6% of the loan amount, it’s fairly steep.
With a minimum credit score requirement of just 580, LendingPoint may be a solid option for people with lower credit scores.
Although LendingPoint offers fast funding, it has more-stringent eligibility criteria than some other lenders. For example, the lender requires borrowers to have a minimum annual income of $35,000. Origination fees can be up to 8%. Additionally, its loans aren’t available in Nevada or West Virginia.
HOW TO TAKE OUT A FAIR CREDIT LOAN TODAY
If you need to borrow a large amount of money, you’ll probably want to consider LightStream as a potential lender.
Available in all states except for Rhode Island and Vermont, you’ll need a credit score of at least 660 to qualify for a loan from this lender. But as long as you meet its eligibility requirements, you won’t be subject to any origination fees.
OneMain Financial stands out as a lender for people with poor credit since it has no minimum credit score requirement.
If you visit a branch office, you may be able to get your loan funds on the same day your application is approved. On the other hand, this leniency comes at a price. The lender’s interest rates are higher than other lenders on this list, and you may need to put up collateral to secure the loan.
If you need a smaller loan, you might find what you need with PenFed, which will loan as little as $600 at a time.
You may have to jump through some extra hoops to borrow with PenFed. Namely, you’ll likely need to join the credit union to be eligible for a loan. But there are benefits to doing the extra work. This lender’s APRs are some of the lowest on this list, and it doesn’t charge origination fees.
If you have a lower income and less-than-perfect credit, you may want to consider borrowing from Prosper.
While Prosper does allow borrowers to see their loan options based on their desired monthly payment, this lender does charge origination fees of up to 5%. Additionally, these loans aren’t available in Iowa, North Dakota or West Virginia.
Reach Financial offers unsecured loans and unique benefits for its customers. Borrowers can customize their monthly payment amount and even pause their payments for up to 90 days.
Reach Financial offers several perks, but its maximum loan amount isn’t as high as some of the lenders on this list. And the lender does charge an origination fee of 0% to 8% of the loan amount
If you want more than just loan funds from your lender, SoFi may be worth considering. The lender provides borrowers with access to perks and bonuses, like unemployment protection, career coaching and investment advice.
On the plus side, SoFi lends large amounts of money, up to $100,000. But this lender makes it difficult to determine if you qualify for one of its loans because it doesn’t disclose its income or credit score requirements.
With a minimum credit score of just 560, Universal Credit is a great choice for those with lower credit scores. As an added bonus, the lender also offers a wide range of tools aimed at helping you improve your score, such as free credit monitoring.
In exchange for allowing lower credit scores, Universal Credit’s rates can be higher than other lenders. You’ll also pay an origination fee up to 8.99%. Additionally, it’s worth noting that these loans aren’t available in the District of Columbia, South Carolina or West Virginia.
Upgrade’s minimum credit score is just 560, which makes it another solid option for those with less-than-perfect credit.
You can use an Upgrade personal loan for credit card refinancing, debt consolidation or covering home improvement costs. Still, bear in mind that this lender charges an origination fee (up to 8.99%) for its loans, and these loans aren’t available in West Virginia.
Borrowers with lower incomes may want to consider Upstart. Its minimum income requirement is just $12,000, which is much lower than some other lenders.
Again, these flexible borrowing requirements may come at an additional cost. This lender charges origination (up to 10%), late payment, and returned check fees.
You can check rates from these personal loan lenders by visiting Credible, where checking your prequalified rates doesn’t affect your credit.
The following three lenders aren’t Credible partners, so you won’t be able to easily compare your rates with them on the Credible platform. But they may also be worth considering if you’re looking for a personal loan.
HSBC
It may be difficult to know if you’ll meet HSBC’s qualifications since the lender doesn’t disclose minimum credit score or income requirements. But if you do qualify, HSBC charges no loan fees.
PNC
PNC offers loans without fees, but it doesn’t disclose its minimum credit score and income requirements, which can make it hard to know if you qualify.
Rocket Loans
Available in all states except Iowa, Nevada and West Virginia, Rocket Loans also doesn’t disclose its minimum credit score and income requirements. Although the lender charges an origination fee (up to 7%), it offers a discount if you sign up for automatic payments.
Credible evaluated the best personal loan lenders based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms and fees. Credible’s team of experts gathered information from each lender’s website, customer service department and via email support. Each data point was verified to make sure it was up to date.
WHERE TO TAKE OUT A PERSONAL LOAN ONLINE
After your comparison shopping has helped you identify the right lender for your needs, you’ll have to complete an application to be considered for the loan. Following these steps could help the process go more smoothly:
If you’re ready to apply for a personal loan, head to Credible to quickly and easily compare personal loan rates.
Personal loan interest rates can vary widely. The average interest rate on a 24-month personal loan was 9.41% as of the first quarter of 2022, according to Federal Reserve data. Anything below that number is typically considered to be a "good" rate.
At the end of the day, the rate you’re given will depend on the strength of your financial profile. Your lender will consider factors like your income, your credit score and whether or not the loan is secured by an asset.
If you’re wondering whether a personal loan is the right financial product for you, consider these four common reasons to get one:
Keep reading for answers to some frequently asked questions about personal loans.
As you can see from the list of Credible lenders above, most lenders publicize their minimum credit requirements, which can help you identify one that you’re most likely to qualify with. You'll want to make sure that you meet, if not exceed, any minimum requirements.
But be aware that a personal loan for bad credit often comes with a higher interest rate than you might qualify for with good credit. With that in mind, if you can wait, it may make sense to work to improve your credit score as much as possible before applying for a personal loan.
You can use a personal loan for nearly any type of expense — some common uses for personal loans are consolidating debt or covering large expenses, like home improvements or medical costs. While some lenders put restrictions on what their loans can and can’t be used for, others are more flexible.
That said, you generally can’t use a personal loan to pay for education costs. In that case, student loans may be a more viable alternative.
While loan amounts, terms, and fees can vary from lender to lender, you should generally consider the following:
Comparing rates from multiple lenders can help ensure you receive the best personal loan available to you. Checking rates is easy when you use Credible.
Any time you open a new credit account or pay one off, your credit score can change as a result. The change can be long term or short term, positive or negative.
Some positive effects of a new personal loan include:
But there are some negative effects as well, including:
To keep your credit score healthy once you get a loan, look into some good strategies, but most importantly, make on-time payments and pay down any other existing debt.
