Kiah TreeceLoans Writer
Kiah Treece is a small business owner and personal finance expert with experience in loans, business and personal finance, insurance and real estate. Her focus is on demystifying debt to help individuals and business owners take control of their fina...
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Kiah TreeceLoans Writer
Kiah Treece is a small business owner and personal finance expert with experience in loans, business and personal finance, insurance and real estate. Her focus is on demystifying debt to help individuals and business owners take control of their fina...
See Full Bio
Written By
Kiah Treece
Kiah TreeceLoans Writer
Kiah Treece is a small business owner and personal finance expert with experience in loans, business and personal finance, insurance and real estate. Her focus is on demystifying debt to help individuals and business owners take control of their fina...
See Full Bio
Kiah TreeceLoans Writer
Kiah Treece is a small business owner and personal finance expert with experience in loans, business and personal finance, insurance and real estate. Her focus is on demystifying debt to help individuals and business owners take control of their fina...
See Full Bio
Loans Writer
Jordan TarverLead Editor, Mortgages & Loans
Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top perf...
See Full Bio
Jordan TarverLead Editor, Mortgages & Loans
Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top perf...
See Full Bio
Edited By
Jordan Tarver
Jordan TarverLead Editor, Mortgages & Loans
Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top perf...
See Full Bio
Jordan TarverLead Editor, Mortgages & Loans
Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top perf...
See Full Bio
Lead Editor, Mortgages & Loans
Joel LarsgaardLoans and Saving Expert
Financial and loans expert Joel Larsgaard loves nerding out on the topic of personal finance with the mission of helping others improve their financial standing.
He has been in the money media space for almost 20 years. He produced "...
See Full Bio
Joel LarsgaardLoans and Saving Expert
Financial and loans expert Joel Larsgaard loves nerding out on the topic of personal finance with the mission of helping others improve their financial standing.
He has been in the money media space for almost 20 years. He produced "...
See Full Bio
Joel Larsgaard
Joel LarsgaardLoans and Saving Expert
Financial and loans expert Joel Larsgaard loves nerding out on the topic of personal finance with the mission of helping others improve their financial standing.
He has been in the money media space for almost 20 years. He produced "...
See Full Bio
Joel LarsgaardLoans and Saving Expert
Financial and loans expert Joel Larsgaard loves nerding out on the topic of personal finance with the mission of helping others improve their financial standing.
He has been in the money media space for almost 20 years. He produced "...
See Full Bio
Expert Reviewed
& 2 others
Updated: Sep 10, 2024, 8:29am
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Personal loans are a type of financing borrowers can get from traditional banks, credit unions or online lenders, in which they receive a lump-sum payment they can use for just about any legal personal expense. Loan amounts typically range from $1,000 to $50,000, with few lenders offering loan amounts up to $100,000.
Read More
Find the Best Personal Loan
- Best Debt Consolidation Loans
- Best Personal Loans for Fair Credit
- Easiest Personal Loans to Get
- Emergency Loans
- Loans for Bad Credit
Why you can trust Forbes Advisor
Best Personal Loans of September 2024
Best Personal Loan for Good to Excellent Credit
SoFi®
5.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Minimum Credit Score
650
APR range
8.99% to 29.99%
with autopay
Loan amounts
$5,000 to $100,000
Via Credible.com’s Website
650
8.99% to 29.99%
with autopay
$5,000 to $100,000
Editor’s Take
SoFi is an online lender that offers a range of products, including large personal loans that you can use for various purposes.
Why We Like It
SoFi’s personal loans come with higher maximum amounts and longer terms than loans from other lenders.
What We Don’t Like
SoFi requires a minimum credit score of 650 and an annual income of at least $45,000, making it out of reach for some borrowers.
Who It’s Best For
If you need a large loan amount and a long loan term, a SoFi personal loan is a great option if you can meet the borrower requirements.
Pros & Cons
- Prequalification without a hard inquiry
- Same-day approval possible
- Can pay off third-party creditors directly
- High credit score requirement
- Co-signers not permitted
Details
Eligibility
- Minimum credit score required. 650
- Minimum annual income. $45,000
- Co-borrowers. Permitted
- Co-signers. Not permitted
Expert’s Take
What I find impressive about SoFi is its innovative approach to lending, with a focus on providing borrowers with personalized loan options tailored to their unique financial situations.
As a small business owner, I benefited from SoFi’s competitive rates and borrower-friendly terms, which include no origination fees or prepayment penalties. Also, SoFi’s member benefits, such as career coaching and financial planning resources, add value beyond just the loan itself, making it an attractive choice for entrepreneurs looking to grow their businesses while managing their finances responsibly.
— Michael Ashley, finance expert, Richiest.com
Best Personal Loan for Bad Credit
Upgrade
4.8
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Minimum Credit Score
580
APR range
9.99% to 35.99%
Loan amounts
$1,000 to $50,000
Via Credible.com’s Website
580
9.99% to 35.99%
$1,000 to $50,000
Editor’s Take
Upgrade is an online lender that offers personal loans along with savings and checking accounts.
Why We Like It
Upgrade offers borrowers small loan amounts with accessible borrower requirements, including a minimum credit score requirement of 580 and no income requirement.
What We Don’t Like
Although Upgrade advertises rates as low as 9.99%, some borrowers could be offered the maximum rate of 35.99%, which is high compared to other lenders.
Who It’s Best For
Upgrade personal loans are best for borrowers with bad credit histories or who may have inconsistent income.
Pros & Cons
- Flexible eligibility requirements
- Can pay off creditors directly
- High loan amounts available
- High APR range
- Fees for late payments and insufficient funds
- Charges origination fees from 1.85% and 9.99%
Details
Eligibility:
- Minimum credit score. 580
- Minimum income. None
- Co-applicants. Permitted
Expert’s Take
Upgrade’s personal loans come with a unique feature—mandatory automatic payments. While this is an effective default prevention measure, it might not suit everyone, especially those with irregular income streams.
— Jonathan Feniak, general counsel and head of finance, LLC Attorney
Best Personal Loan for Low Interest Rates
LightStream
4.6
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Minimum Credit Score
660
APR range
6.99% to 25.49%
with autopay
Loan amounts
$5,000 to $100,000
Via Credible.com’s Website
660
6.99% to 25.49%
with autopay
$5,000 to $100,000
Editor’s Take
LightStream is a personal loan lender that offers loans with low interest rates that you can use for a range of purposes.
Why We Like It
LightStream offers loans with interest rates as low as 6.99%, which is one of the lowest minimum interest rates among personal loan lenders. The lender also has a rate-beat program and a 0.50% rate discount for borrowers who enroll in autopay.
What We Don’t Like
Although many personal loan lenders allow borrowers to prequalify with a soft credit inquiry, LightStream doesn’t. To see if you qualify, you’ll need to submit an application and undergo a hard credit check, which temporarily impacts your credit score.
Who It’s Best For
LightStream personal loans are best for borrowers who qualify for the lowest advertised interest rates.
Pros & Cons
- Long loan terms available
- Low interest rates
- Fast approval and funding
- No prequalification option
- High minimum loan amount
- Low average customer rating on Trustpilot
Details
Eligibility:
- Minimum credit score. 660
- Minimum income. Does not disclose
- Co-borrowers. Permitted
Expert’s Take
Lightstream, a division of Trust Bank, is known for its range of loan options and competitive rates. The downside can be its strict eligibility criteria, making it difficult for those with less-than-stellar credit history to gain approval.
— Jonathan Feniak, general counsel and head of finance, LLC Attorney
Best Personal Loan for Debt Consolidation
LendingClub
4.1
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Minimum Credit Score
600
APR range
8.98% to 35.99%
Loan amounts
$1,000 to $40,000
Compare Rates
Via Credible.com’s Website
600
8.98% to 35.99%
$1,000 to $40,000
Editor’s Take
LendingClub offers personal loans among other products, including checking and savings accounts and business loans. Its personal loans can be used for various purposes, including consolidating debt.
Why We Like It
LendingClub lets borrowers consolidate from $1,000 to $40,000 in debt and offers direct payoff to creditors. With APRs starting at 8.98% to 35.99%, borrowers consolidating high-interest debt who qualify for the lowest rates can save money on interest payments.
What We Don’t Like
LendingClub charges origination fees of 3% to 8%, which are typically taken out of the total loan amount.
Who It’s Best For
LendingClub’s personal loans are best for borrowers looking to consolidate high-interest debt who want to have creditors paid off directly.
Pros & Cons
- Directly pay off creditors with debt consolidation loans
- Offers loans as small as $1,000 to $40,000
- No minimum credit or income requirements
- Charges origination fees
- Terms available for two to five years
Details
Eligibility:
- Minimum credit score. None
- Minimum annual income. None
- Co-borrowers. Permitted
Expert’s Take
LendingClub’s application process is easy and relatively quick. The ability to pay creditors directly is especially helpful for those who have accumulated credit card debt from multiple issuers. This is important as many who accumulated debt might be tempted to use a large deposit for something other than paying off their existing lenders.
— Herman Thompson, Jr., advisory board member
Best Personal Loan for Credit Union Financing
PenFed
4.1
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Minimum Credit Score
Does not disclose
APR range
As low as 8.99%
Loan amounts
$600 to $50,000
Learn More
Via MoneyLion’s Website
Does not disclose
As low as 8.99%
$600 to $50,000
Editor’s Take
PenFed is a credit union originally founded for veterans and military members but has since opened its membership to anyone.
Why We Like It
For borrowers looking for a personal loan from a credit union, PenFed stands out for its national presence, low interest rates and flexible membership requirements.
What We Don’t Like
Although PenFed is available in all 50 states, it only operates branches in 14.
Who It’s Best For
PenFed personal loans are best for borrowers who are looking to borrow from a credit union at low interest rates.
Pros & Cons
- No origination or prepayment fees
- Prequalification with a soft credit check
- Allows for co-borrowers
- Doesn’t operate branches in all states
- Requires membership
- Charges late payment fee of $29
Details
Eligibility
- Minimum credit score. Does not disclose
- Minimum income. Does not disclose
- Co-borrowers. Permitted
Expert’s Take
PenFed is best for those who have been a member of the credit union for a while. Anyone can join the credit union and membership actually seems to factor into loan availability. Loan rates are often lower with PenFed than with many direct lenders. This is an excellent option for those with high credit scores.
— Herman Thompson, Jr., advisory board member
Best Personal Loan for Credit Card Debt Consolidation
Happy Money
4.1
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Minimum Credit Score
640
APR range
11.72% to 17.99%
Loan amounts
$5,000 to $40,000
Via Credible.com’s Website
640
11.72% to 17.99%
$5,000 to $40,000
Editor’s Take
Happy Money is a lender designed to consolidate high-interest credit card debt into lower-interest personal loans with predictable repayment schedules.
Why We Like It
Happy Money offers credit card debt consolidation loans from $5,000 to $40,000 and sends payments directly to creditors. The lender also advertises a low maximum interest rate—lower than most credit card APRs—making it a good option to consolidate credit card debt.
What We Don’t Like
Happy Money charges an origination fee of up to 5.5% and may be unable to consolidate bills that aren’t credit card debt.
Who It’s Best For
Happy Money’s personal loans are best for borrowers looking to consolidate their credit card debt.
Pros & Cons
- Pays creditors directly
- Offers low rates
- No late fees, returned check fees or prepayment penalty fees
- Has origination fees
- Primarily consolidates credit card debt
- Doesn’t allow co-signers or co-borrowers
Details
Eligibility
- Minimum credit score. 640
- Minimum income. None
- Co-signers. Not permitted
- Co-borrowers. Not permitted
Expert’s Take
The best feature of Happy Money is its willingness to pay other creditors directly. At the point, you are consolidating credit with Happy Money, every day of interest matters. Happy Money is a solid option for someone with a good credit history but significantly over-levered. I have seen them work with a client who was laid off during the repayment period.
— Herman Thompson, Jr., advisory board member
Best Personal Loan for Traditional Banking
U.S. Bank
4.1
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Minimum Credit Score
Does not disclose
APR range
8.74% to 24.99%
with autopay
Loan amounts
$1,000 to 50,000 for existing U.S. Bank customers and up to $25,000 for new customers
Depends on the area you live in
Via MoneyLion’s Website
Does not disclose
8.74% to 24.99%
with autopay
$1,000 to 50,000 for existing U.S. Bank customers and up to $25,000 for new customers
Depends on the area you live in
Editor’s Take
U.S. Bank is a traditional bank that operates branches in 26 states and is available to borrowers nationwide.
Why We Like It
For borrowers looking for a loan from a traditional bank, U.S. Bank’s personal loans stand out for having competitive interest rates and a range of loan amounts.
What We Don’t Like
U.S. Bank’s $50,000 maximum loan amount is available only to current customers.
Who It’s Best For
U.S. Bank personal loans are best for existing customers who live in one of the lender’s 26 states with branches.
Pros & Cons
- Operates physical branches
- 0.50% autopay discount
- Quick funding
- Need a credit score of at least 800 to qualify for the lowest advertised rates
- Smaller loan amounts available to non-U.S. Bank checking customers
- Branch locations in only 26 states
Details
Eligibility
- Minimum credit score. Does not disclose
- Minimum income. Does not disclose
- Co-signers. Permitted
- Co-borrowers. Permitted
Expert’s Take
U.S. Bank’s loans are a reliable option for small business owners seeking financing solutions. What makes U.S Bank special is its flexible loan terms and competitive interest rates, making it a favorable choice for entrepreneurs looking to fund their business ventures. Also, U.S. Bank’s simple application process and responsive customer service make it a very convenient option for small business owners to access the funds they need promptly.
— Michael Ashley, finance expert, Richiest.com
Best Personal Loan for No Credit
Upstart
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Minimum Credit Score
300
APR range
7.80% to 35.99%
Loan amounts
$1,000 to $50,000
Via Credible.com’s Website
300
7.80% to 35.99%
$1,000 to $50,000
Editor’s Take
Upstart is an AI-based lending platform that evaluates loan applications using non-conventional variables, such as college education.
Why We Like It
Upstart makes personal loans available to many borrowers, including those without established credit histories. Borrowers with a credit score must have a score of at least 300, but borrowers without a credit score may also be approved if they meet other criteria.
What We Don’t Like
Upstart’s maximum advertised interest rate is higher than other lenders, and it charges an origination fee of up to 12%.
Who It’s Best For
Upstart’s personal loans are best for borrowers without established credit histories.
Pros & Cons
- Accessible to borrowers with no credit history
- Prequalification with a soft credit check
- Ability to choose a custom payment date
- Charges an origination fee up to 12% of the loan amount
- No co-signer option
- Only offers three- or five-years terms
Details
Eligibility:
- Minimum credit score. 300
- Minimum income. No minimum but must have a source of income
- Co-signers. Not permitted
- Co-borrowers. Not permitted
Expert’s Take
Upstart has no minimum credit score to apply for a loan, which makes them a popular choice for borrowers of all categories. Those with lower credit scores or uneven credit history may receive offers with [high APRs]. Loan amounts range from $1,000 to $50,000 and loan term lengths available are three- or five-years.
Upstart offers flexibility with payment dates and funding can be as soon as one business day. However, some requirements are employment, steady income, a personal bank account, email address and a Social Security number. Some fees may apply, including an origination fee, late fees or statement fees.
— Stephen Kates, CFP®, Annuity.org
Best Personal Loan for Below Average Credit
LendingPoint
3.9
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Minimum Credit Score
600
APR range
7.99% to 35.99%
with autopay
Loan amounts
$1,000 to $36,500
Via MoneyLion’s Website
600
7.99% to 35.99%
with autopay
$1,000 to $36,500
Editor’s Take
LendingPoint is an online lender that offers small personal loans to borrowers with damaged credit histories.
Why We Like It
With a minimum credit score requirement of 600 , LendingPoint makes loans available to borrowers with fair credit at potentially low interest rates.
What We Don’t Like
LendingPoint charges an origination fee of up to 10% and interest rates from 7.99% to 35.99% .
Who It’s Best For
LendingPoint’s personal loans are best for borrowers who have fair credit and can’t qualify for loans elsewhere, or borrowers who can qualify for the lowest advertised interest rates.
Pros & Cons
- Quick funding
- Low credit score requirements
- No prepayment penalty
- Origination fee up to 10%
- Co-signers or joint loans not permitted
- Not available in Nevada and West Virginia
Details
Eligibility:
- Minimum credit score. 600
- Minimum annual income. $35,000
- Co-signers. Not permitted
Expert’s Take
LendingPoint can be a good option for those who may not have a high credit score. They focus more on the potential borrower’s job history and income when determining loan eligibility and rates.
— Jonathan Feniak, general counsel and head of finance, LLC Attorney
*Some APRs and loan amounts are available only for certain loan purposes.
The above personal loan rates and details are accurate as of August 30, 2024. Some APRs and loan amounts are available for certain loan purposes.
Compare the Best Personal Loans of September 2024
How To Compare Best Personal Loans
Consider these tips when comparing personal loans:
Where possible, prequalify
Consider the purpose of your loan
Keep an eye out for additional fees
Evaluate the lender’s customer support options
Ask an expert
What should prospective borrowers consider when choosing a personal loan?
Joel Larsgaard
Advisory Board Member
Tom Thunstrom
Advisory Board Member
Taylor Medine
Mortgages & Loans Writer
The first thing to consider is whether or not you need one in the first place.
Personal loans are often used to fuel consumption or consolidate debt, but that comes at a cost. Instead of taking out a personal loan to go on vacation, consider saving up longer to pay for it in cash! And while a personal loan might make sense on the debt consolidation front, it could also prolong or exacerbate the problem, keeping you in debt for a longer period of time.
A focused plan of attack to pay off your debt is often better than moving that debt around, opting for different debt vehicles. But if you’re able to use a personal loan as a tool to help you eradicate high-interest debt quickly, it can make financial sense.
Just make sure you shop around and do business with a reputable lender. Read the fine print so you know what fees and penalties to expect, too.
Joel Larsgaard
Advisory Board Member
If you are thinking about a personal loan, consider these factors:
- Is there another way to borrow funds? For instance, if you own a home, can you utilize a home equity loan or line of credit? If you have a 401k plan, will your provider allow you to borrow against the plan for a short-term need? Both of these likely will provide a lower interest rate than an unsecured personal loan.
- How is your credit? If you have fair to poor credit, utilize a nonprofit credit counseling service to help you address past credit issues and develop a plan to improve your credit score. Ask your local bank or credit union if you’re unsure who to contact. You can also utilize these steps to improve your credit before you apply for any loan.
- Can you incorporate the payment into your monthly budget? Regardless of the personal loan option you choose, you will have an expense to repay over time. Can you make that payment?
Tom Thunstrom
Advisory Board Member
My rule for loan shopping is similar to shopping for a car, couch, mattress or any other big-ticket item: Never take the first offer without haggling or looking elsewhere.
Doing a bit of lender sleuthing online and negotiating offers is the best way to uncover deals, discounts and rate-beat programs that could save you money.
Before agreeing to a loan, it’s also crucial to make sure you can handle loan payments—with money to spare. Sure, personal loans can be a shortcut to zero out your credit card balance and pay for a big expense (hello, dental work, bathroom renos, cross-country moves and more).
But agreeing to payments of, say, $500 or $1,000, over a one- to five-year period is a huge commitment, and falling behind can put you in a very sticky situation. Only borrow what you need and pay attention to how interest affects monthly and long-term payments before signing.
Taylor Medine
Mortgages & Loans Writer
Complete Guide to Personal Loans
- Current Average Personal Loan Interest Rates
- Reasons To Get a Personal Loan
- Pros and Cons of Personal Loans
- Best Place To Get a Personal Loan
- How To Get a Personal Loan
- Recap: Best Personal Loan Companies of September 2024
- Methodology
- Frequently Asked Questions (FAQs)
Current Average Personal Loan Interest Rates
Average Personal Loan Interest Rates By Credit Score
Here are the average interest rates for personal loans based onVantageScorerisk tiers, according to Credible. Please note that interest rates are determined and set by lenders.
While lenders determine and set rates, as an applicant, you can increase your chances of receiving a low-interest personal loan.
Consumers with higher credit scores generally will qualify for lower interest rates. To increase your credit scores, make sure you make your payments on time and try to keep your balances low. Missed payments and high [credit] utilization rates, or balance-to-limit ratios, on your credit cards are the two most heavily weighed factors in determining your credit scores. If possible, I recommend checking your credit report and scores three to six months before you apply for a personal loan.This will give you time to take steps to improve your credit standing if necessary.
-Rod Griffin, senior director of consumer education and advocacy at Experian
Best Personal Loans by Credit Score
- Best Personal Loans for Excellent Credit
- Best Personal Loans for Good Credit
- Best Personal Loans for Fair Credit
- Best Bad Credit Personal Loans
Reasons To Get a Personal Loan
You can use personal loans for just about any type of personal expense. Most commonly, though, personal loans are good for:
- Emergency expenses. If you need money right away for unexpected expenses like medical bills, funeral costs, car repairs or something else that needs immediate attention, you can use an emergency personal loan.
- Debt consolidation. Personal loans are a great way to consolidate high-interest debt to help save money on interest and streamline your payments.
- Home improvements and repairs. If you have an upcoming home project, you can take out a home improvement personal loan to help finance the costs. You can also use personal loans for unexpected home repairs or maintenance expenses.
- Auto financing. While auto loans are the most common way to finance a vehicle, personal loans also can help you get the job done. Personal loans have fewer restrictions on the types of cars you can purchase, but they typically charge higher interest rates than traditional auto loans.
- Moving costs. Thecost of movingcan add up quickly. If you don’t have cash on hand, a loan for moving can help you finance the costs.
Pro Tip
It’s always a good idea to prequalify for several loans before choosing one. Many lenders let you prequalify without a hard credit inquiry so you can check and compare rates. However, if you accept a loan offer, the full application process typically includes a hard credit check that may impact your score. Hard inquiries typically stay on your credit report for up to two years.
Pros and Cons of Personal Loans
| PROS | CONS |
|---|---|
Interest rates and monthly payments remain fixed throughout the life of the loan | You have to repay the full amount of your loan, even if you end up not needing it all |
Fewer qualification requirements than other financing methods, such as lower minimum credit score requirements | Borrowers pay interest on the full loan amount |
You can use personal loans for a variety of reasons | Possible origination fees between 1% and 8% of the loan amount |
Best Place To Get a Personal Loan
You can get personal loans from three types of institutions:
- Online lenders. These are often technology-based non-bank companies that offer a small range of lending products, including personal loans. Online lenders typically offer low interest rates, loans that are available nationally and can provide funds within 24 to 48 hours.
- Banks. Many local and national banks offer personal loans in addition to other financial products, such as checking and savings accounts. If you have an existing relationship with a bank, you may want to consider opening your personal loan through that bank.
- Credit unions. These are local to your community and tend to offer applications both online and in person. Credit unions require membership, so be sure to check if you’re eligible.
The best place to get a personal loan is where you can access the most favorable terms and loan limits that fit your needs.
Related: Where To Get A Personal Loan
How To Get a Personal Loan
While the process varies by lender, follow these general steps toapply for a personal loan:
- Check your credit score.Start by checking your credit score for free through your credit card issuer or another website that offers free scores. This will give you an understanding of your creditworthiness and your qualification chances. Aim for a score of at least 610; however, a score of at least 720 will yield the most favorable terms.
- If necessary, take steps to improve your credit score.If your score falls below 610 or you want to boost your score to receive the best terms possible, take time toimprove your credit scorebefore applying, such as lowering your credit usage or paying off unpaid debts.
- Determine how much you need to borrow.Once you check your credit score, calculate how much money you want to borrow. Remember, though, you’ll receive your money as a lump sum, and you’ll have to pay interest on the entire amount—so only borrow what you need.
- Shop around for the best terms and interest rates.Many lenders will let youprequalifyprior to submitting your application, which lets you see the terms you would receive with just asoft credit inquiry. Prequalifying lets you shop around for thebest rateswithout hurting your credit score.
- Submit a formal application and await a lending decision.After you find a lender that offers you the best terms for your situation, submit your application online or in person. Depending on the lender, this process can take a few hours to a few days.
Related:5 Personal Loan Requirements To Know Before Applying
Pro Tip
Using personal loans can be a convenient way to consolidate and pay off high-interest credit card debt. Interest rates on personal loans are usually fixed, which means the interest rate and payment stay the same for the entire loan term. You can also take comfort in knowing your debt will be paid off by a predetermined date as long as you make each payment as scheduled.
Recap: Best Personal Loan Companies of September 2024
- SoFi: Best Personal Loan for Good to Excellent Credit
- Upgrade: Best Personal Loan for Bad Credit
- LightStream: Best Personal Loan for Low Interest Rates
- LendingClub: Best Personal Loan for Debt Consolidation
- PenFed: Best Personal Loan for Credit Union Financing
- Happy Money: Best Personal Loan for Credit Card Debt Consolidation
- U.S. Bank: Best Personal Loan for Traditional Banking
- Upstart: Best Personal Loan for No Credit
- LendingPoint: Best Personal Loan for Below Average Credit
Methodology
We reviewed 31 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:
- Loan costs.35%
- Loan details.20%
- Eligibility and accessibility.20%
- Customer experience.15%
- Application process.10%
Within each major category, we also considered several characteristics, including available loan amounts, repayment terms, APR ranges and applicable fees. We also looked at minimum credit score requirements, whether each lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out ourPersonal Loans Rating Methodology.
What is a personal loan?
A personal loan is a type of lump-sum financing borrowers can get from a traditional bank, credit union or online lender, which they can use for a variety of expenses. Common uses include medical bills, auto repairs,home improvement projectsand debt consolidation. Personal loans typically have repayment terms between two and seven years and offer interest rates as low as 3% for high-qualified borrowers.
Read More:How Do Personal Loans Work?
What is a good interest rate on a personal loan?
A good interest rate on a personal loan is one that’s lower than the national average for borrowers with excellent credit. However, the interest rate you receive depends on several factors, and lenders frequently charge other fees that can make a loan more expensive. To minimize costs, maintain a good to excellent credit score (at least 670).
How are APRs determined for personal loans?
Anannual percentage rate—or APR—is the total annual cost of a loan, over the life of the loan. Stated another way, it’s the total cost of credit based on the interest rate, fees and length of the repayment term. Some lenders include origination fees in the advertised APRs, while others take them out of the loan amount at funding. The APR of a personal loan, therefore, will vary depending on your creditworthiness, the size of the loan, how long you have to repay the loan and the lender.
What fees should I look out for when choosing a personal loan?
Common fees associated with personal loans include origination fees, late payment fees and returned check fees. Some lenders also charge aprepayment penaltyto borrowers who opt to pay off their loans early. Keep in mind, however, that many lenders offer a no-fee structure that can reduce costs over the life of your loan—so it’s important to always shop around for the most favorable loan terms.
What loan term length should you choose?
Much like your loan amount,personal loan term lengthsplay a key role in determining both your monthly payment and interest charges. Loans with shorter terms come with larger monthly payments but less interest overall. Longer term loans, however, offer smaller monthly payments at the cost of more interest paid over the life of your loan.
For example, if you borrow $3,000 over one year with 11% interest, you’d owe $265 per month and $182 in interest overall—a total of $3,182. Now let’s say you extend that same loan over three years. You’d owe $98 per month but $536 in total interest—or $3,536 for the full loan amount and interest. This makes it clear that you can save money by opting for shorter loan terms, but that’s only possible if you’re able to afford the higher monthly payment.
How many personal loans can you have at once?
You may have more than one personal loan with one specific lender or multiple loans with different lenders. However, some lenders may set a limit to how many loans you can have open through them, such as two loans. Plus, opening multiple loans can make you appear as a riskier borrower and lower your qualification chances.
How long does it take to get a personal loan?
Typically, it doesn’t take long to get a personal loan. Some lenders offer online applications with automated approvals and same-day funding. Most lenders, however, take a few business days to a week to process your application and disburse your funds.
If the lender needs to verify any information with you, it can take longer. Once you apply for a loan, look for any communication from your lender so you can respond promptly.
What is the easiest personal loan to get?
The easiest personal loan to get is one with low, or no, credit score and income requirements. Although these loans can be enticing, they often come with high interest rates and fees, which make them expensive to borrow and difficult to repay. Before accepting one of these loans, be sure to understand any fees that come with the loan and the repayment terms.
What's the largest personal loan you can get?
The loan amount you can get depends on your creditworthiness and what a specific lender offers. Larger loan amounts are usually reserved for highly qualified applicants because those transactions are riskier for lenders. Because you’ll owe interest on the entire loan amount, it’s crucial to only borrow the amount you need and nothing more.
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