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Personal loan ratings methodology
What goes into the star ratings you see in our reviews.
Our star ratings give a snapshot of how a lender compares with other personal loan providers. They factor in a lender’s range of APRs, fees, loan amounts, how long it takes to receive your funds and if you can apply online. If a lender has lots of online reviews or additional perks, those also factor into its score.
The star rating is a simple starting point. But this can’t tell you if a lender is the right choice for you. That’s where our reviews come in.
We rate loans using a system of 1 to 5 stars:
★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor
What factors go into our star ratings
We consider nine factors when calculating the star rating of each provider:
How we rate minimum loan amounts
★★★★★ — Under $2,000
★★★★★ — $2,000 to $5,000
★★★★★ — $5,001 to $7,500
★★★★★ — $7,501 to $9,999
★★★★★ — $10,000+
Typically, personal loans start around $1,000 or $2,000 and rarely top $10,000. We consider any starting amount under $2,000 to be the most competitive and worthy of 5 stars. Anything over $10,000 is restrictively high for most borrowers and only earns 1 star.
How we rate maximum loan amounts
★★★★★ — $75,000+
★★★★★ — $50,000 to $74,999
★★★★★ — $35,000 to $49,999
★★★★★ — $20,000 to $34,999
★★★★★ — $19,999 and under
Most lenders cap out at around $50,000. We gave the highest rating to any lender that offers loans above this range, starting at $75,000. The lowest rating goes to lenders that offer loans under $20,000, since that meets fewer needs.
How we rate turnaround time
★★★★★ — Same day
★★★★★ — 1 to 2 business days
★★★★★ — 3 to 5 business days
★★★★★ — Over 5 business days
Turnaround time is how long it takes to get a loan from the moment you start an application to the moment the money appears in your bank account.
The most common turnaround time for a personal loan provider with an online application is one or two business days. Lenders that beat that with same-day financing earn a perfect score. Those that lag behind didn’t do as well.
How we rate minimum APRs
★★★★★ — Below 5%
★★★★★ — 5% to 6.99%
★★★★★ — 7% to 10.99%
★★★★★ — 11% to 20.99%
★★★★★ — Over 21%
The most competitive starting APRs clock in somewhere around 3%, but we consider anything under 5% to be exceptionally low. Any lender with an APR starting above 21% is considered to be a bad deal — your credit card might have a better rate.
How we rate maximum APRs
★★★★★ — Below 18%
★★★★★ — 18.01% to 25%
★★★★★ — 25.01% to 30%
★★★★★ — Over 30%
Chances are you’re not going to get the lowest rate a lender offers, which is why we consider the entire range. Personal loan providers rarely offer APRs above 36%, which is where most lenders top off. Because 35.99% APR caps are so common, we didn’t give anyone a 1-star rating for hitting this ceiling.
Any lender with an APR cap below 18% means all customers get a better deal than most credit cards — earning it the full 5 stars.
How we rate fees
★★★★★ — No fees at all
★★★★★ — No origination fees, but late and NSF fees
★★★★★ — Origination, late and NSF fees
★★★★★ — Prepayment penalties, origination, late and NSF fees
Lenders that charge no fees at all — including late and nonsufficient funds (NSF) fees — earn 5 stars. We weigh any origination, processing or application fee the same, since lenders typically charge the same amount if they charge one of these fees at all.
Penalties for paying off your loan early are highly uncommon with personal loans and earn a provider the lowest rating.
How we rate customer reviews
★★★★★ — Excellent customer service
★★★★★ — Good customer service
★★★★★ — Average customer service
★★★★★ — Subpar customer service
★★★★★ — Poor customer service
This rating is optional, since not all lenders have enough online reviews to give a meaningful picture of the customer experience. It only applies if a lender has over 100 reviews on Trustpilot or the Better Business Bureau (BBB). We use the customer review rating from whichever site has the highest number of reviews.
How we rate the online application
★★★★★ — Has an online application
★★★★★ — Doesn’t have an online application
If a lender has an online application, it earns 5 stars. If you can’t apply online or have to visit a branch to finish your application, it earns 1 star.
How we rate perks
★★★★★ — Offers at least two types of perks
We judge perks as a bonus factor. If a lender checks off two of these three categories, it earns an extra 5 stars. Otherwise, it doesn’t factor in to the rating.
- Leniency for financial hardship
- Option to skip a payment
- Ability to change your repayment due date
- Entrepreneur programs
- Career guidance and counseling
- Financial education and advice
- Ability to pay online
- Option to set up autopay
- Mobile app available
What we don’t consider
Our star ratings can tell you how a lender stands up to the competition. But what it can’t tell you is if it’s right for your specific needs. In addition to our star rating, you might also want to look at the following factors before you fill out an application:
- State availability. Some lenders don’t operate in all 50 states, meaning they might not be available to you.
- Terms and monthly cost. Your term is how long you have to pay off a loan and is a major factor in your monthly cost. Use our monthly payment calculator to find out if a lender offers terms that fit your budget.
- Credit requirements. Some lenders might be better for applicants with different types of credit scores. Most require good credit at a minimum, but some might specialize in loans for fair- or bad-credit borrowers.
- Other eligibility requirements. Lenders typically have minimum income requirements, debt-to-income ratio caps and other requirements that can affect how easy it is to qualify for a loan.
- Specialties. Some lenders might specialize in a specific type of personal loan and offer services to make the borrowing process easier. For example, those specializing in debt consolidation might directly pay off your creditors for you.
- Loyalty discounts. If you’re considering a bank, ask if it’s worth opening an account to qualify for an additional rate discount. That might offer you a better deal — and a more seamless application process than lenders with a higher star rating.
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