Personal Loan Companies: 10 Most Recommended Companies and Rates.
Personal Loan Companies: The best personal loan helps you reach a financial goal, whether it’s paying off debt or funding a large expense. The loan with the lowest annual percentage rate is the least expensive — and usually the best choice. But other features, including no fees, soft credit checks and whether lenders directly pay creditors if you’re consolidating debt, set some loans apart.
Sometimes you need a little extra cash. Where do you turn? Some people use credit cards, but high-interest rates and a temptation to spend more and grow your balance means credit cards may not be the best choice. If this situation sounds familiar, you may want to consider a personal loan.
What You Need to Know
If you are in the market for a personal loan, make sure you only borrow what you need and have the ability to pay back any funds you borrow. Also plan to pay off the loan early, if you can afford to, as that will save you money over the life of the loan.
Your next big choice is going to be where to get your personal loan. But before you do that, let’s take a glance at what criteria you need to consider to get the best personal loan possible. First, check the interest rate — it’s how much you pay to borrow and interest rates vary with your credit score and market interest rate conditions. A lower rate is better.
Next is fees: Some lenders charge origination and other fees. Always do your best to avoid fees when possible. If you can find a loan with no origination fee, that’s your best personal loan option. One other thing to consider is the prepayment penalty: Some loans charge a fee if you pay the loan back early. This is a bad thing! You should never sign up for a personal loan with a prepayment penalty.
Need some help finding out who you can turn to so you don’t end up down the river? We’re here for you. We rounded up the most trusted and reputable personal loan companies, so you can count on getting the best rate and deal possible.
In this Article;
We’ve broken down our picks into four categories:
- Best personal loans for good credit: Laurel Road, LightStream, Marcus, and SoFi.
- Best personal loans for bad credit: Avant, OneMain Financial, Upgrade, and Upstart.
- The Best personal loans for debt consolidation: Discover, Laurel Road, Marcus, and Payoff.
- Best personal loans for home improvement: Earnest, LightStream, Marcus, and SoFi.
- Frequently asked questions
The personal loan companies in the tables below compete for your business through Credible. You can request rates from all of these partner lenders by filling out just one form (instead of one form for each) and without affecting your credit score.
Best personal loans for good credit
Borrowers with good to excellent credit scores (690 and above) may have their pick of personal loan companies. Those on our list of best lenders have low rates and typically no fees. SoFi offers high loan amounts, up to $100,000, while Marcus has flexible loan terms, letting borrowers choose their monthly payment amounts and loan terms.
Best personal loans for bad credit
Borrowers with troubled credit histories are more likely to qualify with lenders that accept bad to average credit (300-689). The best lenders consider factors beyond your credit score and offer flexibility if you miss a payment or need help building credit.
Best personal loans for debt consolidation
Getting a personal loan is one way to consolidate credit card debt, and some lenders augment your payoff efforts by directly paying your creditors with the money you borrow. Our list also includes lenders whose starting rates are lower than typical credit card rates.
Best personal loans for home improvement
A personal loan is an option for financing home improvements if you don’t have a lot of equity in your home or don’t want to max out your credit cards. We chose lenders with low rates and loan amounts large enough to cover most home improvement projects.
Most online lenders let you check your rate without affecting your credit, so it doesn’t hurt to pre-qualify for a loan with multiple lenders. Click the button below to see estimated rates from lenders on NerdWallet.
Frequently Asked Questions
♦ How much will I qualify for on a personal loan?
The personal loan amount you qualify for will be based on the loan amount you apply for, as well as factors that affect your ability to repay the amount.
Your debt-to-income ratio, credit score, credit history, and sometimes your annual income, will be considered before the lender approves you for a personal loan. If you consistently pay off your credit cards and loans and have a good credit utilization ratio (how much you owe across all credit lines divided by your total credit limit), you could qualify for higher loan amounts at lower rates.
If you’re applying for a personal loan, and you have bad credit, your chances of being approved are lower. But if you have excellent credit, you’ll likely be approved for a lower interest rate loan. And, for some lenders, the loan purpose you identify (e.g., consolidation loans, car financing, home improvements, etc.) will impact the amount you qualify for as well as the rates.
♦ What is the average interest rate on a personal loan?
In 2018, the average APR range (annual percentage rate) for a 24-month personal loan was 10.12% to 10.31%, according to the Federal Reserve. However, the interest rate you receive on a personal loan is dependent on a number of factors:
- Your credit score
- Length of the loan
- Loan purpose
- Amount of the loan
- Your debt-to-income ratio
- The lender you’re getting the loan from
Unlike federal student loans, which come with pre-established set interest rates, there’s no set interest rate on personal loans. This is why it’s important to shop around, as different lenders will offer you different fixed rates and variable rates.
♦ How do I find the best personal loan for me?
Before you begin searching for the best lender for personal loans, consider these tips:
- Always shop around: Compare options from multiple online lenders before you make a final decision to ensure that you choose the best rates and options for your financial situation.
- Keep fees in mind: Some lenders charge origination fees, prepayment fees, or late fees for late payments. The kind of fees you want to avoid are prepayment penalties for paying off your loan early.
- Consider the loan term: The longer your loan term, the lower your monthly loan payments will be since you’ll have more time to pay off your debt. If you take out a short-term loan, your monthly payments will be higher, but you’ll typically pay less money in interest and pay your loans off faster.
- Watch out for scams: Always verify that you’re dealing with an official lender. Never pay any money or divulge sensitive information to anyone online unless you’re sure they’re legitimate.
Make sure you also consider your reasons for taking out a personal loan, and whether you actually need one. In many cases, people use personal loans to consolidate high-interest credit card debt or to pay for personal expenses.
♦ How can I get a low-interest personal loan?
Typically, the higher your credit score and the better your credit history, the lower rates will be on the unsecured loans you qualify for.
But it’s always a good idea to compare loan rates and terms from multiple lenders before coming to a decision. Credible is the perfect resource for comparing rates from a variety of lenders to ensure you find competitive rates that you qualify for.
♦ How can I improve my credit score?
If your personal loan rates are higher than you expected, there are some things you can do to help improve your credit score quickly:
- Monitor your credit report and correct errors: Different credit bureaus rely on different credit scoring models and produce different credit reports. You can keep track of these issues by obtaining a free copy of your credit report from each credit bureau every 12 months.
- Avoid late payments: It’s important that you always try to make payments on time. If you do happen to miss a payment, speak directly with your lender and explain the situation.
- Keep your credit utilization low: Another factor that can affect your fico score is your credit utilization — how much of your available credit you are using. It’s recommended that you keep your credit utilization below 30%, according to Experian.
- Monitor your credit card use: If you have a number of different credit cards, take a look at your limits and make sure you’re not maxing out any of your cards to keep building your creditworthiness.
Full List of Personal Loan Companies and Lenders
The lenders below aren’t available through the Credible platform but have some good alternatives for those looking for other personal loan options.
- Discover: Discover loans can be best for debt consolidation. They have loan offers up to $35,000 and flexible repayment plans — from 3 to 7 years.
- Earnest: Earnest loans can be best for home improvement purposes. You can borrow up to $50,000, but the maximum loan term is only 3 years.
- Peerform: Peerform loans can be best if you have poor or average credit. You can borrow a maximum of $25,000 and choose loan terms from 3 to 5 years.
- Rocket Loans: Rocket Loans can be best for debt consolidation or home improvement. You can take out up to $35,000 and choose terms from 3 to 5 years.
- SoFi: SoFi loans can be best if you have good credit. You can borrow anywhere from $5,000 to $100,000 and choose repayment terms from 5 to 7 years.
- Wells Fargo: Wells Fargo loans can be best for debt consolidation or home improvement. You can borrow all the way up to $100,000 (with terms from 1 to 5 years), but to apply for an online loan you must be an existing Wells Fargo customer.