Categorized | loans

10 Best Personal Loans

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Whether you need a personal loan for home improvement, a major purchase, or debt consolidation, you need the best personal loan possible. The number one factor that determines whether a personal loan is a good deal is the Annual Percentage Rate (APR).

Loans with low APRs are usually the cheapest. You also need to consider the fees, credit score requirements, income requirements, and the reputation of the lender. We have researched personal loans from all major lenders in the U.S. and discovered the best personal loans in terms of rates, fees, and features.

Personal Loan FAQ

1. What Is a Personal Loan?

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A personal loan is that money you borrow from a financial institution for a purchase, emergency, or debt consolidation. The loan may be paid back over a period of about two to five years. Providers of the best personal loans can give you money to use for just about anything.

2. What Is the Difference between a Secured and Unsecured Personal Loan?

An unsecured personal loan is one in which you are not required to back it up by collateral. A secured loan, on the other hand, will require you to back up the loan with your house, car, or other property. A secured loan normally has lower interest rates than an unsecured loan.

3. What Is the Difference between a Personal Loan and a Credit Card Loan?

The two loan types are similar. Credit card loans normally have higher interest rates, though. The limits on how much money you can borrow for a personal loan are normally higher than those on a credit card. You can also get a personal loan to consolidate multiple high-interest credit card debt.

4. What Factors Affect the Interest Rates of a Personal Loan?

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Your credit score, credit history, and debt debt-to-income ratio are some of the factors. Usually, people with excellent credit receive low rates while some lenders may refuse to give loans to people with credit scores below 600. But you may increase your chances of getting low rates by co-signing with a person with a higher credit score or applying for a secured loan.

5. How Long Will It Take Me to Receive Funds after Applying for a Personal Loan?

This varies and may take as few as a matter of hours or as long as a week. It depends on the lender and his requirements.

How We Reviewed

The following products were reviewed based on the following parameters: interest rates, origination fees, late payment fees, the complexity of the application process, loan terms, and loan processing time.

Overall Interest Rates for the Best Personal Loans

Rates for the best personal loans range from 5-30 percent APR.

What We Reviewed

  • Upgrade
  • Payoff
  • Discover
  • LendingClub
  • Marcus by Goldman Sachs
  • FreedomPlus
  • LightStream
  • SoFi
  • BestEgg
  • LendingPoint

Upgrade

Upgrade

Image via Upgrade

Features

Upgrade provides some of the best personal loans for people with bad credit. The company lends to people with a wide range of income and credit score. The company accepts people with a FICO score as low as 620 with the average lending credit score being 685. Some people who have bad credit are able to get funding under extenuating circumstances.

Pros

  • Soft check for applicant doesn't affect credit score
  • Great for people with poor credit scores
  • Good for debt consolidation

Cons

  • Minimum $800 monthly cash flow requirement precludes people with tight cash flows
  • High origination fees

This company requires lenders to have solid cash flow as applicants are required to have $800 or more left over after paying bills each month; borrowers are allowed to pay off credit cards and consolidate high-interest debts. Loans are dispersed from $1,000 to $50,000 with a typical APR in the 6.99-35.97 percent range.

Repayment terms are 3-5 years and are subject to renegotiation. The company does a soft credit check so you should not worry about the possibility of a loan enquiry affecting your credit score. The company also requires people to have a maximum debt-to-income ratio of 60 percent. Residents of Colorado, Iowa, Connecticut, Vermont, Maryland, and West Virginia need not apply because Upgrade does not operate in those states.

Payoff

Payoff

Image via Payoff

Features

Payoff has built up a reputation for helping people with good to excellent credit to consolidate their debts. The company provides debts up to $35,000 and you can pay back in terms ranging from two to five years. This company requires lenders to have a credit score of at least 660, a debt-to-income ratio of 50 percent or less, and a good credit history. Interest rates range from 8 to 25 percent.

Pros

  • Great for debt consolidation
  • Low-interest rates for borrowers with excellent credit
  • No late payment or returned payment fees

Cons

  • Does not operate in some states
  • Doesn't give debts to people with low credit scores
  • Can only be used for debt consolidation
  • Big origination fee

Borrowers in Mississippi, Minnesota, Nevada, Ohio, West Virginia and Nebraska do not qualify for a loan from this company. Payoff's services are limited and the company only provides funding for debt consolidation. This company has origination fees that range from 2-5 percent and there aren't any fees for late payments, return payments, or check processing. Funding takes 2-5 days.

Discover

Discover

Image via Discover

Features

Discover provides some of the best personal loans in the U.S. The lender targets people with good credit and those who are seeking to consolidate their debts. The company only accepts borrowers with a minimum credit score of 550 . This company stands out because it gives all customers access to their FICO credit score for free.

Pros

  • Very generous loan terms up to 7 years
  • Great for debt consolidation
  • Soft credit check doesn't affect applicants credit score
  • Customers get a free credit score and credit report snapshot

Cons

  • Doesn't serve people with low credit scores

Discover gives out loans from $2,500 to $35,000 and their typical APR rates range from 6.99-24.99 percent. Unlike most lenders on our list of best personal loans, Discover does not charge origination fees. The company, does, however, charge a late payment fee of $39 and releasing funds may take 1-7 days. The company also has a generous repayment schedule with loan terms of three to seven years.

LendingClub

LendingClub

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Features

LendingClub, one of the best personal loan lenders based online. This company is a marketplace that brings together some of the best personal loan lenders in the U.S. Lenders at this marketplace lend money ranging from $1,000 to $40,000 with repayment terms of 3 to 5 years. Typical interest rates are between 6.16 percent and 35.89 percent.

Pros

  • Competitive rates
  • Does a soft credit check

Cons

  • Most people with low credit score are denied
  • Requires people with a long credit history
  • Requires a very low debt-to-income ratio
  • Crippling origination, late payment, and check processing fees

Some companies under the LendingClub marketplace charge origination fees between 1-6 percent of the loan amount. There is a late payment fee of the greater of $15 or 5 percent of the payment amount after a 15-day grace period. There might also be a check processing fee of $7. Funds from this marketplace can take up to a week to be deposited.

The company requires all applicants to have a minimum credit score of 600 and a minimum credit history of 3 years. The marketplace's average debt-to-income ratio requirement is 40 percent or less for single applicants.

Marcus by Goldman Sachs

Features

Marcus is an online credit company owned by Goldman Sachs that serves people with good credit scores. The company provides funds for personal loans and debt consolidation. Their debt terms are between 36 and 72 months and the company provides loans from $3,500 to $50,000 at interest rates between 6.99-24.99 percent APR.

Pros

  • Good for people wanting big amounts
  • Good for debt consolidation
  • Competitive interest rates
  • No origination fees
  • Generous skip-a-payment policy
  • Great customer support

Cons

  • Has no physical branch

You'll receive funds in 1-4 days of completing the application. We like the fact that the company is flexible with loan payments and allows the user to select their preferred payment schedule. The company does not charge origination, late payments, and other fees and allows borrowers to skip a loan payment.

FreedomPlus

FreedomPlus

Image via FreedomPlus

Features

FreedomPlus is an online lender that provides loans of up to $40,000. The company provides loans for debt consolidation, home improvements, and major purchases. The company's debts have rates of 7.93 percent to 29.99 percent. FreedomPlus has one of the harshest fee policies of any U.S. lender and charges an origination fee that can be as high as 5.0 percent and late payment fee are equal to the greater of $15 or 5 percent. Unsuccessful payments also attract a $15 fee.

Pros

  • Allows cosigning
  • Allows debt consolidation
  • Soft credit check when you make an inquiry

Cons

  • Origination and late payment fees
  • Low debt-to-income ratio requirements

The company requires lenders to have a minimum credit score of 649 and encourages cosigning. Loans are processed in as few as 48 hours and you can pay the debts in 2-5 years. The company also requires a maximum debt-to-income ratio of 40 percent.

LightStream

LightStream

Image via LightStream

Features

LightStream stands out in providing some of the best personal loans in terms of big loan amounts and low interest rates. You can get loans from $5,000 to $100,000 at interest rates ranging from 3.34-16.99 percent if you pay using auto pay. This company also doesn't charge any fees. LightStream does, however, require its borrowers, to have a credit score of 660 or above and a good record of making payments on time. The company allows joint applicants.

Pros

  • The lowest interest rates on our list
  • No fees
  • The biggest loan amount limit on our list
  • Allows co-signing
  • Long loan repayment terms
  • Good for home improvements.
  • Debts can be used for almost anything

Cons

  • Does a hard credit check for some applicants
  • Not good for people with low credit scores or bad credit histories

Once you complete the application, funds can be availed the same day. The company also has generous payment terms of two to 7 years and up to 12 years for home improvements! The company has a rate beat program where it claims that it can beat any competitor rates. We believe loans from LightStream are among the very best personal loans in the U.S. at the moment.

SoFi

SoFi

Image via SoFi

Features

SoFi has built up a reputation as one of the best personal loan providers in the U.S. The company has good interest rates, low fees, and a number of perks. Personal loans from this company can be used for virtually anything. Applicants must have a good credit score of over 680 to be eligible for a loan and the minimum annual income requirement is $45,000.

This company does not charge late payment fees and can change the payment schedule if you lose your job. The company also does not charge origination, late payment, and overdraft fees. Loan terms range from 2 to 6 years. The company provides loans ranging from $5,000 to $100,000 at fixed rates of 6.99-15.49 percent with autopay. There is also an option for variable rates of 6.26-14.59 percent APR with autopay. Funding takes about 7 days.

Pros

  • Can give big loan amounts
  • Generous loan terms of up to 6 years
  • No origination or late payment fees

Cons

  • 7-day waiting period before funding
  • Low-income individuals not eligible
  • High credit score requirements

Best Egg

Best Egg

Image via Best Egg

Features

Best Egg gives out loans for people to use for just about anything. The company requires applicants to have a credit score of at least 640. The company gives out loans from $2,000-$35,000 at rates ranging from 5.99-29.99 percent The company has an origination fee that may be up to 5.99 percent of the loan amount.

Pros

  • Competitive interest rates

Cons

  • Origination and late payment fees
  • The company only favors high-income borrowers

There is also late fee of $15 and a return fee of $15. Loan terms range from 3 to 5 years and funds are provided in as little as one business day. The company does a soft credit check and the typical debt-to-income ratio of borrowers of this company is less than 35 percent.

LendingPoint

LendingPoint

Image via LendingPoint

Features

LendingPoint is the borrower of choice for people with bad and average credit who want to consolidate their loans. The company requires you to have a score of 600 but can waive this requirement when they consider your job history and debt-to-income ratio. The company also provides very flexible payments with a choice of bi-weekly, every 28 days, or monthly payments.

Pros

  • One of the few lenders that cater to people with bad and fair credit
  • Gives loans to low-income individuals
  • Flexible payment schedule
  • Fast funding

Cons

  • Has some of the highest interest rates we have seen

The company gives loans of $2,000 to $25,000 at APR rates of 15.49-35.99 percent. There is an origination fee which may be as high as 6.0 percent of the loan amount. A $30 late payment fee after a 15-day grace period applies, The company may give funds as early as the next day. The company's modest requirement of $20,000 as the annual income for applicants means that it is the borrower of choice for low-income individuals.

The Verdict

We believe that LightStream is the best lender on our list overall. Not only does the lender have the lowest interest rates on our list (as low as 3.34 percent with autopay), but the company also has some of the biggest loan limit ($100,000) on our list of the best personal loans. We also like the fact that LightStream does not charge origination or late payment fees and it allows co-signing.

The only downside is that LightStream only provides loans over $5,000 and requires applicants to have good credit. Low-income individuals and people with bad credit should consider applying with LendingPoint while people who are consolidating can apply at Marcus or SoFi.

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