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• Where can I get a loan during the coronavirus outbreak?

  US Bank, Gesa Credit Union, Key Bank and many others are offering low-cost emergency loans to customers affected by COVID-19. These typically come with low or no interest and the option to defer payments for several months.

  Read our guides to COVID-19 financial assistance and payday loan alternatives to learn about all of the options available to you.

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WATCH: Is now a good time to take out a personal loan?

Watch our short video where we sit down with OneMain Financial to discuss how a personal loan may be able to ease your financial burden during the COVID-19 pandemic. Learn how to decide if a personal loan is right for you.

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What rates can I expect on a personal loan?

Personal loan rates can range from 4% to 36% and the average personal loan APR is around 9.5%, according to a 2019 Experian study.

The rate you get depends on the following factors:

• Credit score. You need near-perfect credit to qualify for the lowest advertised rate.
• Income. Lenders will likely check if you have enough regular cash flow to easily afford monthly repayments.
• Debts. The lowest rates go to borrowers with a debt-to-income ratio (DTI) below 20%. Use our calculator to find out what your DTI is.
• Collateral. Securing your loan makes it less risky to the lender and gets you lower rates.
• Loan amount and term. Some lenders — especially credit unions — offer different rates depending on how much you want to borrow and how long you need to repay.

Your loan cost depends on the loan term and your rate. You can figure out the monthly cost of a loan by using our payment calculator.

How to apply for a personal loan

1. Determine the amount

Crunch some numbers to figure out how much you need to borrow and how much you can afford to pay back each month. Also, compare different types of loans to find the one that suits your needs best.

What type of loan should I get?

2. Shop around

Look for lenders that offer the type of loan you need and eligibility requirements you can meet. Then compare factors like rates, fees and terms.

The best personal loans of 2020

3. Prequalify

After you narrow down your choices, fill out a quick preapplication with a few different lenders to learn which rates and terms you might get. This usually doesn’t affect your credit.

How to get preapproved for a personal loan

4. Finish the application

After you decide on a lender, follow the steps to complete the full application and submit documents like pay stubs to verify your income.

Read our full guide on how to apply for a personal loan

Where can I get a personal loan?

You have a variety of personal loan providers to pick from. However, you’ll typically more loan options if you have stronger credit. Depending on the type of provider you choose, you can apply for a personal loan in person, online or over the phone.

• Direct online lenders.
  Online lenders have more flexible lending criteria and offer a straightforward application process. If approved, your loan amount can be deposited into your bank account as soon as the next business day — but it may take up to a week.
• Brokers and connection services:
  Brokers and connection services work slightly differently but have the same goal: to pair you with a lender that will approve you. Brokers have you fill out a preliminary application and often charge a fee for their service. Connection services are automated and don’t make lending decisions themselves.
• Banks.
  Getting a loan from a bank might be the tradition choice, but it’s not the fastest. Banks tend to have stricter approval criteria and longer turnaround time. The benefit of borrowing with your bank is that some banks offer discounts to people who have an existing account.
• Credit unions.
  If familiarity is important to you, consider taking out a personal loan at a credit union. Credit unions tend to evaluate your financial history with the institution, adding a layer of flexibility to approval. Similar to banks, credit unions tend to have longer approval and turnaround times than online lenders.
• Peer-to-peer lenders.
  Relatively new to the financial market, peer-to-peer lenders operate as marketplaces that bring borrowers and investors together. A peer-to-peer loan is funded by a pool of individual investors online. Although the process of applying is a lot like that of a traditional loan, the turnaround time is often much longer.

5 best places to get a personal loan

What are the requirements for a personal loan?

There’s a personal loan for almost any type of borrower. But you have to meet the following criteria to qualify with most lenders:

• Good credit. The credit score cutoff is often around 670 — and usually higher if you want a low rate.
• Steady income. You typically need to bring in at least $24,000 a year.
• Employment. Some lenders will only work with borrowers who are employed full time.
• Low debt-to-income (DTI) ratio. Most lenders require your monthly expenses to be no more than 43% of your monthly income, though the lower the better.
• US citizen or resident. If you don’t have a green card or citizenship, your options are limited to the few lenders that work with nonresidents.
• Age of majority. In most states, you must be 18 to borrow. It’s 19 in Alabama and Nebraska, and 21 in Mississippi.

Frequently asked questions about personal loans

• How do personal loans affect my credit score?

  Personal loans can improve your credit by adding to your history of on-time repayment and diversifying the types of credit in your name.
  When you apply, it can temporarily hurt your credit, however, since lenders run a hard credit check which dings your score. And if you miss a repayment or default, it can damage your credit.

• How much can I borrow with a personal loan?

  You can typically borrow between $2,000 and $50,000. Some lenders offer loans as low as $1,000 and up to $100,000.

• How long can I take out a personal loan for?

  Most lenders offer loans from one to seven years.

• Can I get a personal loan with bad credit?

  Yes, although your options will be limited. If you need money quickly, you might consider a bad-credit lender, a credit builder loan or another alternative lender that looks beyond your credit score.
  Otherwise, you might want to look at credit unions or local banks, which often have lower credit requirements and relatively low interest rates.

• Can I take out a personal loan to invest?

  You can, but it might not end well. Investing itself is incredibly risky and taking out a personal loan increases that risk even more.
  Some experienced investors take out personal loans after they’ve gotten the hang of weighing the risks, but it takes a while to get to their level. And even they don’t always win.

• What is a prime borrower?

  Prime borrowers typically have credit scores above 720, have no delinquencies on their credit report and have a minimum six-year credit history.

• Can I get a loan with no origination fee?

  Yes, many lenders offer loans with no origination fee — and several offer loans with no fees at all.
  Compare no-fee personal loans and find the best option for your needs.

• How do I get an unsecured loan?

  Unsecured loans, or otherwise known as signature loans, are loans that don’t require any collateral. They are based on your creditworthiness. Keeping your credit rating at good or excellent will get you a better rate. Usually you need to have proof of income, be a resident of the US and have a Social Security number to apply for an unsecured loan.

• What happens if I use my loan for a different purpose than I applied for?

  Often, nothing will happen — unless the lender finds out. But if you violate the contract of your loan, your loan goes into default.
  Your lender could also take legal action if they find out that you’ve used the money for something other than what you agreed to. This would be on the grounds that you falsified information on your application.

• Can I buy a house with a personal loan?

  No. To purchase a home you’ll need a mortgage. Mortgages work differently than personal loans and are a bit complicated. To learn more about how home loans work, read our guide to mortgages.