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Reach your next goal
with a personal loan

When you’re ready to plan that big wedding, buy a new set of wheels or simplify debt you already have, a personal loan could help you cover the upfront cost. Understanding exactly how personal loans work is key to getting the best rate and repayment terms you’re eligible for.

This guide shows you how to compare top online lenders to narrow down your choices. We take you from consideration to application to approval — including how to get an edge on low rates.

LendingClub Personal Loan

LendingClub

Borrow up to $40,000 for a variety of purposes, with rates from 6.16%–35.89% .

  • Recommended Credit Score: 660 or higher
  • Minimum Loan Amount: $1,000
  • Maximum Loan Amount: $40,000
  • Loan Term: 3 to 5 years
  • Simple online application process
  • No prepayment penalties
  • Cosigners welcome

    Compare personal loans

    Use this table to compare the interest rates, loan amounts and eligibility requirements of top online lenders.

    Rates last updated August 17th, 2018

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    Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
    Name Product Product Description Min. Credit Score Max. Loan Amount APR
    LendingClub Personal Loan
    A peer-to-peer lender offering fair rates based on your credit score.
    660
    $40,000
    6.16%–35.89% (fixed)
    SoFi Personal Loan Fixed Rate (with Autopay)
    No fees. Multiple member perks such as community events and career coaching.
    680
    $100,000
    7.075%–15.365% (fixed)
    Even Financial Personal Loans
    Get connected to competitive loan offers instantly from top online consumer lenders.
    580
    $100,000
    4.99%–35.99% (fixed)
    NetCredit Personal Loan
    Check eligibility in minutes and get a personalized quote without affecting your credit score.
    550
    $10,000
    34%–155% (Varies by state) (fixed)
    Best Egg Personal Loans
    A prime lender with multiple repayment methods.
    640 FICO®
    $35,000
    5.99%–29.99% (fixed)
    Credible Personal Loans
    Get personalized rates in minutes and then choose a loan offer from several top online lenders.
    Good to excellent credit
    $50,000
    4.99%–36% (fixed)
    Monevo Personal Loans
    Quickly compare multiple online lenders with competitive rates depending on your credit score.
    580
    $100,000
    3.09%–35.99% (fixed)
    FreedomPlus Personal Loans
    Consolidate debt and more with these low-interest loans. Cosigners welcome.
    640
    $35,000
    4.99%–29.99% (fixed)
    OppLoans Installment Loans
    Installment loans with competitive rates from a top-rated direct lender.
    Bad credit accepted
    $5,000
    99%–199% (fixed)
    OneMain Financial Personal and Auto Loans
    An established online and in-store lender with quick turnaround times. Poor credit is OK.
    Varies
    $30,000
    16.05%–35.99%* (fixed)

    Compare up to 4 providers

    How top online personal loan providers stack up

    Max Loan Amount APRs as low as… Best for…
    Prosper $40,000 6.95% Finding a low-cost loan.
    LendingClub $40,000 6.16% Finding multiple types of financing.
    SoFi $100,000 7.075% Refinancing, especially student loans.
    Upstart $50,000 8.85% Getting a loan with limited or poor credit.

    What’s a personal loan?

    A personal loan is money you borrow from a bank, online lender or credit union that you pay back with interest in monthly installments. Your lender determines your loan amount, interest rate, loan term and fees based on factors like your credit score, financial history, income and debts.

    What can I use a personal loan for?

    You can use a personal loan to cover a variety of purposes or even consolidate your debt. Check out our guides below to see how you can use them 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

    Prosper provider logo Lendingclub provider logo usfpl-sofi-logo-personal-loans
    Lending Point provider logo Payoff provider logo upgrade personal loans
    Upstart provider logo Money Lion provider logo personal loans
    OneMain Financial provider logo Best Egg provider logo Wells Fargo provider logo
    Avant provider logo Even financial logo FreedomPlus Personal Loans

    What types of personal loans are there?

    • Unsecured personal loans. Your traditional personal loan is an unsecured loan, where you receive a lump sum of money that you repay over a fixed period. You aren’t required to put collateral on the line to qualify and loan companies tend to see these loans as risky — they’re left with nothing if you can’t pay it back.
    • Secured personal loans. A term loan that you back with collateral such as your home, car, a savings account or valuable jewelry. Lenders typically see a secured loan option as less of a risk, so they often come with lower interest rates than unsecured loans.
    • Fixed-rate term loans. A term loan that comes with a set interest rate that never changes throughout the life of the loan. Fixed-rates have predictable monthly payments.
    • Variable-rate term loans. A term loan that comes with an interest rate that is subject to change while you’re repaying your loan. Monthly payments can be more difficult to predict but it could potentially go lower than fixed rates.
    • Personal lines of credit. Get access to a revolving amount of funds — similar to a credit card but with a higher limit and typically lower expenses. This flexible option comes with great for funding continuous projects that might come with unexpected expenses. These can also be secured or unsecured.
    • Car loans. Loan companies offer car loans to buy a new or used vehicle or refinance your current auto loan.
    • Student loans. 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.

    Personal loans can help you out when you have an expense coming up but don’t have enough money on hand to cover the original cost. They’re generally better for larger one-time expenses, since they come in a lump sum and most lenders have a minimum loan amount of $2,000, though it can vary from lender to lender.

    Personal loans also require some planning, since the application process takes some time — typically at least a couple business days. They can also be difficult to qualify for if you’re unemployed or don’t have a steady source of income — you’ll need to prove you’re able to pay it off to get approved. Employment requirements vary by lender.

    You could have a hard time getting approved if you have a history of making late payments or have never taken on debt before. Generally, you need excellent credit to get approved for the lowest interest rates, though those with fair and average credit scores can often find a personal loan.

    Can't I just use my credit card?

    You could, but it might cost a lot more if you need to cover a large one-time expense. That’s because personal loans typically have lower interest rates than credit cards. In fact, people often take out personal loans to help them pay off their credit card debt at a more competitive rate.

    If you need cash right away or only want to make a small purchase, however, a using credit card can be a better choice. That’s because personal loans can sometimes take weeks to go through. You can also use credit cards for a wider variety of expenses than a personal loan, including education costs.
    Find out when a personal loan or a credit card makes more sense

    I want a personal loan — where should I look?

    When it comes to personal loans, you have a variety of lenders to pick from. However, you’ll typically more loan options if you have stronger credit. You can apply for a loan online, over the phone or in person with one of the following types of lenders.

    Direct online lenders

    These lenders offer straightforward application processes so you can conveniently borrow money online. If approved, your loan amount is deposited into your bank account as soon as the same day or the next business day.

    Online lenders often have more flexible lending criteria and terms than bank loans. Some are even willing to work with potential borrowers that have a credit score as low as 530. Compare direct lenders above.

    Brokers and connection 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.

    Connection services are slightly more automated than brokers but work the same way. They can help borrowers find more flexible terms or flexible payment options if they don’t have excellent credit. But you might not be able get approved the same day you apply.

    Banks and credit unions

    If familiarity is important to you, you can consider getting a loan through a credit union or bank you already have a strong financial history with.

    Banks and credit unions are more traditional lenders, though they don’t have fast approval and often have stricter eligibility requirements than other loan companies.

    The application process may be expedited if you have an existing account with the institution. Credit unions tend to have more flexible lending criteria than banks. Generally, banks are less willing to approve fair- or bad-credit borrowers than most other types of lender.

    Peer-to-peer lenders

    Relatively new to the financial market, peer-to-peer lenders operate as marketplaces that bring investors and borrowers together. They facilitate the loan process between individuals rather than offering the loans themselves.

    The process of obtaining a peer-to-peer loan is a lot like getting a loan through a direct online lender. It’s a completely digital experience. The turnaround time is often much longer, however.

    Getting a personal loan from a bank

    Getting a personal loan from a bank might be the traditional choice, but it’s not always the best option. If your bank offers them, it might not be a bad idea to look into your borrowing options — they sometimes offer discounts to people that already have an account. However, bank loans typically have stricter approval criteria, have a longer turnover time and are sometimes even more expensive than other options.

    Banks also have a reputation of being more reliable, but that’s not always the case — customer service at banks is sometimes actually worse than non-traditional lendersWhat you need to know about personal bank loans

    How much do personal loans cost?

    Three main factors contribute your loan’s cost: Interest rates, fees and your loan term.

    • Interest rate. This is what the lender charges you to borrow money and is usually a percentage of the loan amount.
    • Fees. There are a few fees that can add to the cost of your loan. For example, 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.
    • Term. Your loan term is how long you have to pay off a loan. It affects how much you pay in interest as well as your monthly installments. For example a one-year term gives you higher repayments but a lower total cost than a five-year loan with the same rate. Most loans come three- to seven-year terms.

    Your annual percentage rate (APR) is an expression of your interest rate and fees as a percentage. Your APR can give you an idea of how much your loan is going to cost each year you take to pay back your loan. The APR doesn’t include late fees, nonsufficient funds fees (NSF) or prepayment penalties.

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    Personal loan rates by credit score

    Personal loan APRs can range from 5% to 36%, which is the legal limit for personal loan APRs in most states. Rates vary by lender and can potentially go lower or higher. Traditional bank loans tend to offer lower rates than online loan companies.

    In fact, most people don’t obtain the lowest advertised rate on a personal loan, even if they have excellent credit. The average personal loan rate is often much higher, though it varies by credit score. Here’s what rate you might expect based on your credit score.

    Credit type Score range You might get an APR around…
    Excellent 800 or higher 10%
    Very good 740–799 12%
    Good 670–739 15%
    Fair 580–669 28%
    Poor 579 and under Not likely to get approved

    So who gets the highest rate? People with long and impeccable credit histories, high salaries and almost no debt. Sometimes even those people can’t qualify for the lowest rates unless they apply to borrow over a certain limit.

    Rates can also vary based on factors like income, your debt-to-income ratio and even your state. And even the best unsecured personal loan might have a higher rate than a loan backed by collateral.

    Find out more about getting a low-interest loan

    Don’t have good credit? You might want to consider applying with a creditworthy cosigner to get more favorable rates and terms.

    How can personal loans affect my credit score?

    Personal loans can either have a positive or negative affect on your credit. If you make all of your payments on time and according to schedule, taking out a personal loan can help you build your credit.

    In fact, some lenders offer small-dollar, short-term loans with low interest rates that are specifically designed to help borrowers build credit.

    Personal loans can damage your credit if you fall behind on your repayments. Whether or not you’re able to make your installment payments on time is the most heavily weighted factor credit bureaus consider when calculating your score.

    5 tips for getting the best rate on a loan

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

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    What makes a personal loan competitive?

    There are a few key features you’ll want to consider when comparing loans. To find the best deal, ask yourself these questions:

    • Do I qualify for this loan? Don’t waste time researching a loan if you don’t meet the approval criteria.
    • Can I borrow the amount I need? Will you be able to take out the exact amount you need and afford to pay it back in a reasonable amount of time? Typically, good and excellent credit scores have higher borrowing limits.
    • Does it have a competitive interest rate? Look at the rate itself, but also consider whether it’s fixed or variable — variable interest rates are subject to change.
    • What are the fees? Most loan companies charge application, origination, prepayment, late or NSF fees.
    • How long will I have to pay it back? Aim for a loan term that gives you monthly repayments you can afford without being too long. Otherwise, you could wind up paying a lot in interest in the long run.
    • Can I use it to pay for what I need? You can use a personal loan for almost any purpose, but some lenders have spending restrictions. For example, many don’t allow you to use the funds to pay for education costs or investments.
    • Will I need collateral? Secured personal loans require you to put up something you own as collateral — a car, a home or even a bank account. Unsecured personal loans do not.
    • Is it safe to apply? If there’s an online application, check to make sure your internet connection is private and secure. Read the privacy policy to learn how it share your personal information and what you can opt out of.

    What lenders look for in a personal loan applicant

    Lenders take on risk when they lend large amounts of money to borrowers. That’s why they require applicants to meet certain eligibility criteria. Here are some common qualifications that the best loan companies 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.
    • Low debt-to-income ratio. You can calculate your DTI by dividing your monthly debt payments by your monthly income. Lenders can rely on this number as much as your credit score and normally don’t accept anyone with a DTI above 43%. A good DTI is anything below 36%, though as we mention before, under 20% is ideal.
    • Employment. Most lenders require you to be steadily employed. Some lenders have minimum income requirements as well that can include wages, alimony, pensions or any other form of funds coming in on a regular basis.
    • 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 but 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 one 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.

    Personal loan application checklist

    The application process differs between lenders, but they’ll generally ask for the following:

    • Proof of your identity, like a government-issued ID, US passport or military ID
    • Your Social Security number and date of birth
    • Pay stubs, tax returns and other income details
    • Banking details for disbursing your funds and elective automatic repayments
    • Utility bill in your name or other proof of residence

    How to apply for a personal loan step by step

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    Latest personal loan reviews

    Paying off a personal loan

    So you’ve been approved and the money is in your bank account. You’re done, right? Not quite. Now you have to pay it back according to the payment plan in your contract.

    5 easy ways to prepay your loan

    1. Make half of your monthly payment amount every two weeks. That is, not twice a month. It’ll feel like you’re paying roughly the same amount but you can save on interest and shave a few months off of your loan term.
    2. Round up your repayments. Rounding up your payments to the nearest $50 is ideal, but even the nearest $20 could help you repay your loan months — or even years early.
    3. Make one large payment during your loan term. Making one large payment toward your loan’s principle can help you save a lot on interest during the course of your loan.
    4. Don’t skip payments. Not only will you likely have to pay a late fee, your interest will continue to accumulate at a faster rate.
    5. Refinance. If your credit score has improved over the course of your loan term — or you experienced other positive changes in your financial situation — you might be able to qualify for another loan with more favorable terms. With personal loan refinancing, you use the new loan repay your original loan. Lower interest almost always means savings when the term length stays the same — or gets shorter.

    Read about repaying your loan early

    Managing payments with a debt consolidation loan

    Already have a lot of debt? You may want to streamline your bills with a debt consolidation loan. This financial tool is designed to gather multiple debts into one place, often under one fixed rate.

    Look for a debt consolidation loan with a lower interest rate than what you’re already paying — that way you can also save on interest. You can consolidate credit card debt, personal loans and other types of credit.

    How can debt consolidation help me save and manage my finances?

    Growing a business with a small business loan

    When you’re looking to expand your business, have seasonal sales or funding gaps while waiting for payment, a business loan can help strengthen your financial financial future.

    Business loans work a lot like personal loans but often come in a wider range of loan amounts and have different requirements to qualify. They’re also typically designed to — like two similar to personal loans, but are tailored to specific business needs.

    Your business loan options include traditional term loans, lines of credit, invoice financing and more. You can secure a business loan with your personal or business assets.

    Can’t qualify for a business loan? A personal loan could be a solution for entrepreneurs and startups looking for business funding. It might not be right for your business if your personal credit is the reason your business loan applications keep getting rejected.

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    Personal loans glossary

    Definitions

    A to C

    Accrued interest. Interest that’s accumulated on a loan since it was issued but has not been paid yet.

    Adjustable rate. Also, variable rate. An interest rate that’s subject to change.

    Amortization. A loan that has regular, scheduled repayments that go toward paying both the loan’s interest and principal.

    Annual percentage rate (APR). An expression of a loan’s interest rates and fees as a percentage.

    Appreciation. An increase in an asset’s value (such as a car or home).

    Asset. Anything that someone owns that has money value, including cash, a home, owed debt, a trademark or patent.

    Automated clearing house (ACH) payment. An electronic payment made through the ACH network from one bank account to another. ACH is used for direct deposit from your employer or when a lender transfers funds directly into your account.

    Autopay. A service that allows you or a loan provider to automatically withdraw money from your account on a regular (usually monthly) basis.

    Borrower. The person taking out a loan from a bank, credit union or other lender.

    Broker. A third party that acts as an intermediary between lenders and potential borrowers for a fee.

    5 Cs of credit. An easy way to remember what lenders look at when determining your creditworthiness. The five Cs are: Character, capacity, conditions, capital and collateral.

    Capitalized interest. Interest that’s added to your loan’s principal instead of being treated separately.

    Closing. Also, settlement. The final step in taking out a loan, when the loan agreement is signed and the funds are dispersed.

    Cosigner. Someone who also signs your loans and holds responsibility to repay it if you default.

    Compound interest. Interest that is periodically added to a loan based on your accumulated interest and principal.

    Consumer reporting agency. Also, credit bureau. An agency that gathers information from your creditors to compile your credit report and credit score.

    Creditworthiness. How a lender values your likeliness to be able to repay a loan. Your credit score is typically used as the best expression of your creditworthiness, though your income, debts, age, employment status also play a large role.

    D to O

    Debt-to-income ratio. Your gross monthly income divided by your gross monthly debt payments.

    Default. A failure to repay debts, which can result in the seizure of collateral or lawsuits.

    Deferred payment. An arrangement in which a borrower doesn’t have to start making payments on a loan until a certain agreed-upon time (common with student loans).

    Depreciation. A decrease in an asset’s value (such as a car or a home).

    Down payment. An initial payment you make upfront when purchasing an expensive item. A loan is used to cover the rest of its cost.

    Equity. The difference between the value of an asset (like a car or home) and the balance of a loan used to pay for that asset.

    Escrow account. A third-party account that holds money before two parties go through with a transaction. Common with debt settlement companies.

    FICO score. Your credit score assigned by one of the three credit bureaus: Experian, Equifax and TransUnion. When a lender sets credit score requirements, they’re most likely talking about your FICO score.

    Grace period. The amount of time a borrower has to make a payment before the lender charges a late fee.

    Guaranteed loan. A loan where a third party agrees to assume at least part of the debt if the borrower defaults.

    Interest. The amount a lender charges for letting someone borrow its assets, typically expressed as a percentage.
    Loan agreement. The contract that a borrower signs agreeing to the lender’s terms and conditions.

    Minimum and maximum loan amount. The largest and smallest amount of money a lender is willing to let someone borrow.

    Negative amortization. When the loan payment doesn’t cover the accrued principal for that period, which is added to a loan balance.

    Origination fee. A fee you pay to cover the cost of processing your loan, usually between 1% and 5% of the amount you borrow taken out of your funds before you receive them.

    P to Z

    Prepayment. Paying more than your monthly payment on a loan,

    Prime rate. The interest rate that lenders give to their most creditworthy customers, generally based on the Federal Reserve or Wall Street Journal’s prime rate.

    Principal. Your loan balance, not including interest.

    Promissory note. The document you sign before you take out a loan legally binding you to the terms and conditions of repayment: Your loan documents.

    Purchase option. The option to buy a leased car or home, typically for a balloon payment.

    Refinance. Taking out another loan with more favorable terms to pay off a debt.
    Revolving debt. Open-ended access to a certain amount of funds that you pay off as your borrow, (like a credit card).

    Secured loan. A loan that is backed by collateral.

    Simple interest. Interest that’s calculated based on your loan’s balance, not balance and accumulated interest.

    Strong credit. Having a long history of repaying debts on time with a high credit score — good credit or higher. Typically necessary to get approved for a loan with a competitive rate.

    Subprime. Credit for borrowers with bad or poor credit, typically with higher interest rates.

    Term. The amount of time a borrower has to repay a loan.

    Title. A document that proves ownership of an asset (like a car or home).

    Unsecured loan. A loan that is not backed by collateral.

    Upside-down loan. When you owe more money on an asset that it’s actually worth.


    Frequently asked questions about personal loans

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    4 Responses

    1. Default Gravatar
      KortneyOctober 17, 2017

      Can I use my car title as collateral. For a short term loan

      • Default Gravatar
        GruOctober 17, 2017

        Hello Kortney,

        Thank you for your interest in applying for a short term loan.

        Yes, you may use your car title as collateral.
        You may read more on the types of collateral used for loans here.

        Hope this helps.

        Cheers,
        Gru

    2. Default Gravatar
      DeannaFebruary 14, 2017

      Is there any possible way of getting a personal loan if you are expecting payment from back pay from SSI and can prove the amount going to you from SSI

      • finder Customer Care
        AdrienneFebruary 15, 2017Staff

        Hi Deanna,

        It may be dependent on each individual lender and their requirements. Your best bet is to compare your options and find a lender you’d like to apply with, and then give them a call to make sure this is possible.

        Best,

        Adrienne

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