How top online personal loan lenders stack up

What types of loans are available?

• Personal loan. Some lenders offer general purpose loans for you to use as you see fit. These loans are typically unsecured, meaning you don’t have to put up collateral as security for the loan.
• Business loan. You can borrow funds to grow your small business or get advances on your unpaid invoices. Many lenders require that you’ve been in business for at least a year and have certain gross sales or annual revenue numbers. There are lenders who offer startup loans for business owners with less history.

• Car loan. Lenders offer car loans for the purchase of a new or used vehicle. You can borrow funds to refinance a previous auto loan as well.
• Student loan. There are multiple borrowing options to pay for school, including public and private student loans. Lenders also offer student loan refinancing to help you get a better rate on what you’ve previously borrowed.

5 essential tips to get the best rate on a loan

Managing payments with a debt consolidation loan

It can be hard enough to manage debt without having to keep track of multiple creditors. One way to streamline your bills is with a debt consolidation loan.

This financial tool is designed to gather multiple debts — all unsecured debt, like credit cards, payday loans and hospital bills — into one place, often under one fixed rate. With rates that start at around 7%, these personal loans could save you significant interest in the long run. If you’re currently paying 12% APR on $10,000 in credit card debt, that’s $500 toward more quickly paying down your debt.

You’ll also gain peace of mind knowing that you’ve gone from paying multiple bills to just one: your personal loan lender. Of course, you’ll need to find a loan with a lower interest rate than the debt you’re looking to consolidate. And you’ll want to avoid incurring additional debt — especially on cards you’re attempting to pay off — until you’re back in the clear.

How can I grow my business with a small business loan?

It may sound counterintuitive, but sometimes taking on debt can actually strengthen your financial future. This is especially true when you’re looking to start up a new business, expand a current one or even fill in funding gaps while waiting for payment. A business loan could provide access to the funds you need to make your next step.

Business loan options vary by lender but could include:

• Traditional term business loans. National Business Capital, OnDeck and other online lenders offer more flexible loans to cover just about any business need.
• Asset-based secured loans. Lenders like Biz2Credit can provide loans against your inventory or equipment to offer you funding you may not have otherwise been eligible for.
• Peer-to-peer business loans. You can get funding from individual investors on online marketplaces like Bitbond and Able Lending to leverage the support of a network of people.

As with any loan, you’ll want to carefully compare the fees, terms and eligibility of the business loan you’re interested in.

I want a personal loan — where should I look?

• Direct lenders. These lenders offer straightforward application processes so you can conveniently borrow money online. If approved, your loan amount will be deposited into your bank account. Compare direct lenders above.
• Lender matching services. Brokers can pair you with a lender that suits your needs. After you fill out a preliminary application with the broker, you’ll be matched with a lender who offers the loan type you’re looking for in the amount you need. The lender must still make a decision on your application before you receive your funds.
• Banks and credit unions. If familiarity is important to you, you can consider getting a loan through the credit union or bank you already have a banking relationship with. The application process may be expedited if you have an existing account with the institution. Keep in mind that banks and credit unions tend to have stricter eligibility criteria than other lenders.
• Peer-to-peer lenders. Relatively new to the financial market, peer-to-peer lenders operate as marketplaces that bring investors and borrowers together. They essentially facilitate the loan process between individuals rather than offering the loans themselves.

How to compare personal loans

Here are some common features to compare when considering lenders:

• Your eligibility. This should be the most important factor to consider. What’s the minimum criteria set by the lender – credit score, age, income, employment – and do you meet it?
• The rate. Various factors affect your APR: your credit score, the amount you want to borrow, the loan term, the type of loan and the financial institution.
• The costs. Look beyond the interest rate to the fees of the loan such as origination and prepayment fees.
• Loan purpose. Does the lender offer the loan for what you need? Most lenders offer specific loans for a variety of needs, such as home improvement or debt consolidation.

Compare personal loans now

What can I use a personal loan for?

You can use a personal loan for a variety of purposes. A more fitting question is: What can’t you use a persona loan for? Check out our guides below to see how you can use a personal loan to reach your next goal, take care of financial obligations or fund your next big purchase.

I want to…

Just some of the top personal loan providers we compare

How much do personal loans cost?

The cost of your loan is influenced by fees and interest rates:

• Interest rate. This is what the lender charges you to borrow money and is usually a percentage of the loan amount. Learn more about low interest rate loans.
• Fees. There are a few fees that can add to the cost of your loan. It’s common to see origination fees up to 5% of the loan amount. Watch out for prepayment penalties if you plan to pay your loan off early. Lenders may also charge for late or missed payments and unsuccessful or failed payments.
• Annual percentage rate (APR). This will give you an idea of the true cost of the loan expressed as an annual rate. It encompasses the interest charged on the balance of the loan, as well as any fees you might have to pay. Typical personal loan APR’s can range from 5% to 20% APR, but can be higher for those with bad credit.

How can I get a lower rate on my personal loan?

Watch the 2-minute video above or read the tips below.

• Compare your options. If you have a long banking history with a current bank or credit union, one option is to consider that financial institution for your personal loan. Online lenders offer a wide variety of loan types that may fit your needs better than what your bank offers.
• Find out your credit score and review your credit report. You’ll generally need a score in the “good” range – 680 and above – to secure a decent rate on a personal loan. Your credit score and credit report are two different things. The latter is a detailed record of your credit history. Learn how to get a copy of your credit report and be sure to check for errors. Correcting incorrect listings, such as unpaid accounts that were actually paid, can help improve your credit score and help you get a better APR on a loan.
• Check rates, but don’t apply yet. Loan applications may appear as inquiries on your credit report. Be sure to review the eligibility criteria to see if you may qualify. When comparing your options, you can also ask if the lender can give you a pre-approval before submitting your actual loan application. Asking questions before you fill out an application can help narrow down your options.
• Pay down your debt. Having a lower debt-to-income (DTI) ratio can improve the rates and repayment terms you’re ultimately offered. Aim to keep your DTI under 20%.
• Only apply for the loan amount you need. The amount you apply for has a direct influence on the rate you’re offered, so only ask for as much as you need.

Am I eligible for a personal loan?

Personal loans can be a convenient and affordable way to reach your financial goals and make large purchases. Because lenders are taking on a risk when they lend large amounts of money to borrowers, they require applicants to meet certain eligibility criteria in order to be approved. Here are some common criteria lenders tend to look for:

• Good to excellent credit. Most lenders rely on credit scores when choosing borrowers to approve and even calculating specific loan terms. If you have poor or no credit, check out our guide on bad credit loans to see your options.
• Employment. Most lenders will require you to be steadily employed. Some lenders have minimum income requirements as well.
• US citizen or permanent resident. If you’re a US citizen or permanent resident, you’re able to apply for personal loans. Temporary residents are only eligible to apply with certain lenders and may need to build up a credit history. They may also need a US citizen to cosign the loan. You may be able to get a personal loan as a non-US resident if you have full-time employment and a US Social Security number.
• 18 or older. Since the age of majority varies by state, the minimum age for lenders varies as well and is usually between 18 and 21.

How to apply for a personal loan step by step

Step 1: Determine how much needs borrowed

The first thing you’ll need to do once you decide to apply for a loan is determine exactly how much money you’ll need. Borrowing too little or too much could leave you either unable to cover your costs or with extra money you’ll be repaying with interest.

Step 2: Choose a loan type

There are quite a few loan types available. Are you looking for a secured or unsecured loan? Do you want a fixed or variable interest rate? These are just a couple of questions to consider when choosing your loan type.

Step 3: Shop around

The first lender you come across may not have the best deal. Shop around and make sure to compare things like APR, fees, turnaround time, and term of the loan. You can check out our comparison table to compare these features. Be sure to read the requirements as well to make sure you qualify.

Step 4: Apply

Applying for a personal loan is typically a quick and straightforward process that goes something like this:

• Personal details. Gather the necessary information such as proof of identity (passport, driver’s license, or ID), proof of address (utility bills or lease), and proof of income (W-2s, pay stubs or bank statements).
• Loan application. This is where you request a certain loan amount, specify what you want the loan for and choose your terms. Many banks and lenders have applications online, so you avoid the hassle of having to go to a branch and fill out paperwork.
• Loan agreement. If you’re approved, sign the loan documentation and agree to all the terms. With most lenders you’ll have a certain amount of time to rescind the agreement, should you change your mind.

View our page on how to apply for a personal loan to see pictures of the process.

Step 5: Receive the funds

Many lenders require that you have a checking account to receive your money via direct deposit, but that’s not always the only option. Some lenders may be able to send you a check in the mail.

Step 6: Spend the money

If you take out a loan for something specific, such as a new car purchase or debt consolidation, the lender may send the funds directly to the company you owe. If you take out a personal loan with no restrictions on what you can purchase, you are free to spend the funds on whatever you’d like.

Step 7: Make payments on time.

It’s important to make your payments on time so you don’t end up paying extra in fees. Be sure to verify how you will be required to make payments. Can you pay by phone with a credit card or account number? Is there an automatic payment option?

Compare personal loans now

Frequently asked questions about personal loans