What goes into our editorial rating for personal loan providers.
When weighing whether to take on a personal loan, it’s not always easy to find like information to compare. Many lenders aren’t up front about interest, fees and terms. And hunting for important information — like whether you’re allowed to apply with a cosigner — can take some digging.
Our personal loan rating system is designed to help you compare a lender’s overall performance, and not just the numbers. When rating a personal loan, our researchers consider APRs, loan amounts and terms as well as customer reviews, the application process and other factors that play into a decision.
It’s meant to provide you with a simple starting point. But what’s good for other borrowers might not be the best option for your needs. Read our comprehensive provider reviews before applying for a personal loan.
Our ratings
We rate personal loans using a system of one to five stars.
★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor
How we rate interest rates and fees
We look at a loan’s interest rate and fees — commonly expressed as the annual percentage rate (APR) — considering both the highest and lowest APRs. Higher ratings tend to go to lenders that cap their APR at lower than 36%, the maximum legal APR on a personal loan in most states.
In addition to APR, we also consider the fees a lender charges. Charging fees for origination, late payments, nonsufficient funds or prepayments can hurt a lender’s rating. Further hurting its score is failing to offer a grace period before charging late or nonsufficient funds fees.
How we rate customer reviews
We base our customer review rating on a lender’s Trustpilot and Better Business Bureau (BBB) pages.
With Trustpilot, we consider the lender’s overall score and the percentage of users who give the lender an “Excellent” rating.
With the BBB, we consider it’s BBB rating, whether it’s accredited by the organization, its percentage of positive reviews and the number of customer complaints. Government actions filed against a lender can negatively affect its rating.
We also look at the number of users who’ve reviewed the lender. For instance, a 9 out of 10 Trustpilot score based on 20 reviews isn’t weighed as heavily as the same rating based on 11,000. If a provider doesn’t have a Trustpilot or BBB page, that can also hurt its score.
How we rate the range of loan amounts
We consider how wide a range each provider offers. It’s typical for a lender to offer loan amounts between $2,000 and $50,000. High ratings go to lenders that offer ranges below $2,000, loans above $50,000 or both.
How we rate loan processing
By loan processing, we mean all the steps a borrower takes to apply and receive their funds. We consider whether you can complete the entire application online, how simple the form is, if it requires a phone call or meeting with a loan specialist and whether you’re required to pick up your funds in person.
Lenders that don’t offer loans in all 50 states get a lower score than those that do.
We also consider turnaround, scoring lenders that offer next-day funding higher than lenders that take multiple days for disbursement. Our lowest ratings go to lenders that take more than a week.
We also rate loan connection services lower than direct lenders, because not processing the loan themselves often adds another step to the application process.
How we rate borrower experience
We look at benefits or perks that might improve a borrower’s overall experience when applying for and repaying the loan. For example, we consider whether a lender offers preapproval, which doesn’t affect your credit score.
We like perks that include career coaching, unemployment protection and the ability to qualify for a lower rate as you pay off the loan. Accepting cosigners, allowing you to apply your loan to college expenses and other uncommon features can further boost a lender’s score.
