Best Personal Loan Companies 2020

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Whether you’re consolidating debt, making a home improvement, or anything in between, apply now to get the best personal loan interest rates and terms available.
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The lending partners that appear on this site are companies from which we receive compensation. The compensation may impact how and where products appear on the site including the order in which they appear. Ranking and order of products on the site are subject to change and the site does not include all lenders in the marketplace. Additional elements that impact our ranking include historical data such as the number of consumer visits to a partner site, loan applications percentage and funded loan percentage, the user device, operating system, location, the day of the week, time of day and self-assessed credit.

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What is a Personal Loan and Should You Get One?

A personal loan is an amount of money loaned to an individual typically without any collateral. Though some lenders do require collateral depending on your credit situation. Though they used to be seen as a solution for people in dire financial straits, today the options and terms are better than ever and more and more everyday people are taking out personal loans. 

A personal loan can be a great idea if you have outstanding credit debt and a less than stellar credit score. If you use the personal loan to pay off the credit card, you can improve your credit score by making on time payments of your personal loan. 

Even if you don’t have credit debt, taking out a personal loan and repaying it is a good way to establish positive credit, which will help you down the road when you apply for a car or house loan. 

If you have multiple outstanding debts - or just one - at a high interest rate that’s taking a real bite out of your paycheck each month, then a personal loan could really help out. Find a lender that can give you a personal loan with a friendlier interest rate, and then use that to pay off the other debts. 

A personal loan can help you pay for home renovations, which can significantly improve the value of your home. This can really pay off if you’re looking to sell the house in the near future, or if you’d like to increase the value of your home in order to borrow against the equity.

Things don’t always go as planned, and sometimes we need a little extra help. A personal loan can help you handle unexpected medical bills, home repairs following a flood or a fire, or a sudden expense like a funeral. When hard times come, having some financial peace of mind can make things a little bit easier, and that’s no small thing.

What to Know Before Applying For a Personal Loan

1. What’s my credit score?

Your credit score is calculated based on your loan repayment history, credit card usage, and other financial markers that can give lenders a rough guide of how responsible you are with money and how much of a default risk you are. Even though all lenders don’t use credit scores to qualify you for a lone, it is still a good thing to keep track of. 

Typically, the higher your credit score the more likely you will be to receive loans. Also, because with high credit you are considered less of a risk, your interest rates will tend to be lower.

That doesn’t mean that less than great credit is a deal-breaker, but it's good to know what the numbers mean:

Credit score ratingCredit score rangeAverage APR for market
Excellent720 - 85010.3% - 12.5%
Good690 - 71913.5% - 15.5%
Fair630 - 68917.8% - 19.9%
Poor629 and below28.5% - 32.0%

*Rates as of December 2019, from https://www.bankrate.com/loans/personal-loans/rates/

Having no debt history is not a good thing when it comes to your credit score. Most of the leading personal loan companies like to see that you’ve had debts in the past and that you’ve made your payments, and can be trusted to do so again.

2. What if I have bad credit?

Many lenders can provide loans even if you have bad credit, though you will face tougher interest rates and less leeway with the loan amount and repayment terms.

Typically anything under 630 is considered a bad credit rating, and even when people in this range do get loans, they tend to have a 28.5% - 32.0%APR on average. If you have collateral to put up, this can help you secure a loan despite a low credit rating.

In addition, many lenders allow cosigned loans. These are loans where someone with better credit co-signs the loan with you. While this is a way for you to get a loan that you’d be shut out from otherwise, there are some caveats. Mainly, the person who cosigned for the loan is on the hook too so if you default on the payment, it could wreck their credit as well as your own.

3. How do interest rates work?

The interest rate is how much the lender charges in interest to a borrower for a loan. It is normally expressed as a percentage of the amount borrowed. If you’re consolidating debt and the interest rate is still lower than your earlier loan, then you’re in good shape. If not, you need to examine if the interest rate makes the loan worthwhile for you.

The interest rate is going to be one of the most important things to look at when considering a personal loan. It adds a significant amount to the overall repayment terms, and even just one percentage point here or there can make a big difference.  You also need to consider the APR which includes fees and charges.  APR is discussed below. 

4. What affects interest rates?

  • Variable vs fixed rate loan - With a variable rate loan, the interest rate can fluctuate as the market changes, and typically has lower interest rates than a fixed loan, which stays at the same rate throughout the repayment of the loan. 
  • The length of the repayment - The longer the repayment term the more interest you will pay over the lifetime of the loan. If you can keep up with a higher monthly payment over a shorter period of time, then you can find loan terms that will save you money on interest. It's crucial though that you first look at your monthly budget and determine how big of a loan you can stay ahead of, so you don’t dip further into debt paying off the new loan.
  • Your credit score - A better credit score may help you get a lower interest rate.  Though some lenders don’t use credit score when considering you for a loan.  Lenders will also look at your past financial history to look for any delinquent loans, foreclosures, bankruptcies, and other red lights that could make you a high-risk borrower before they determine the interest to assign you. Your income - or lack thereof - will always be a central factor in determining your interest rate.


5. What is an APR?

APR is an acronym for annual percentage rate. It combines the charges, fees, and payments to tell you the grand total of what your loan will cost you per year. The lower the APR, the less you are going to pay in the long run.

The APR calculation on personal loans will vary depending on your lender, but it will typically be lower than what you would receive from a payday or short-term loan – usually starting at 10% and capping at 35.99%. It is not ideal to owe any money, but if you require a loan, then a personal loan could certainly be a viable option.

APR rates mentioned include associated fees.

Full repayment for the loans displayed range between 61 days to 180 months.

Representative example: assuming a loan of $10,000 over 60 months at a fixed rate of 3.1% per annum and fees of $60.00. This would result in a representative rate of 3.3% APR, with monthly repayments of $180.80, for a total amount paid of $10,868.00.

6. How much can I get approved for?

There isn’t a clear right or wrong answer to this question - it all depends on your needs, your income and your abilities. If you’re trying to consolidate debt, your loan should be the same or larger than the outstanding loans you’re covering, and if you need to cover an expense like medical bills or home renovations, then it should meet your needs, so you don’t have to go through the hassle or expense of securing another loan.

At the same time, you need to make sure that the payments aren’t too heavy for you to keep up with. After all, there’s no sense taking out a loan to cover another debt, only to find yourself unable to keep up with the payments on the new loan.

7. What loan term should I take?

This is a pretty simple calculation, but what works for you can be anything but simple. If you decide to go for a lender that offers short term loans you will have higher monthly payments but will pay less interest over the life of the loan. If you spread it out over a longer loan term, your monthly payments will be lower, but the overall interest you pay will be higher.

Paying more interest isn’t a bad idea if it means that you can lock down a monthly payment that you know you can make.

The Types of Personal Loans

  • Unsecured vs. secured loans 

The main difference between an unsecured and secured loan is that an unsecured one doesn’t require you to put up any collateral. That’s the good news. The bad news is that because the loan is “unsecured” (no collateral), the lender is taking a bigger risk on you, and typically will assign you a higher interest rate. Lenders will also give you a lower ceiling on the loan, as well as a shorter repayment term. 

These loans typically appeal to borrowers who don’t have assets like a car or a house, but still want some financial assistance. 

A secured loan requires the borrower to put up some form of collateral. While it’s more risky for you in that you have to put up an asset that the bank can seize if you default on the debt, you stand to enjoy an easier interest rate, a higher borrowing ceiling, and a longer repayment period.

  • P2P loans 

Peer-to-Peer lending has become a major industry in recent years, and provides all types of opportunities for borrowers who may have had less options in the past. Often called “social lending” or “crowd lending,” P2P sidesteps the banks and connects borrowers and lenders directly with one another online. It’s a solid option if you have less than great credit or lack assets to put down as collateral. That said, there are some costs, including origination fees which can range from 0.5% to 5% of the loan. Late fees can also be expensive if you don’t make your payments on time. In addition, as unsecured loans, the interest rates tend to be around 15% or so. 

  • Fixed rate vs. variable rate loans 

With a fixed rate loan the interest rate stays constant throughout the life of the loan, which will help you budget every month and stay on top of your payments. With variable rate loans, the interest rate fluctuates in accordance with the market. You may get a lower initial rate than you would with a fixed rate loan, but because the market can be unpredictable, it can be harder to know for certain what your future payments will be. 

  • Lines of credit

These are loans that are given as a line of credit that you can use for any purpose. They are typically unsecured, so the interest rates tend to be high, though not as high as a credit card. Also, these loans give you the freedom to draw from the credit line as needed, so you only owe what you spend. 

  • Signature loans 

These are sometimes called character loans or good faith loans. This is an unsecured loan that only requires you to put down your signature. Because there is no collateral and the lender is taking a risk, these loans come with higher interest. 

  • Cash advances and balance transfers

A cash advance is taken against the credit line on your credit card, and typically comes with fees in addition to the interest on repaying the money. With a credit card balance transfer you move the money you owe on one card to another credit card with a lower interest rate. This typically includes a fee.

  • Installment loans

This is just a term to refer to a loan that is repaid over a set period of time with set payments. A mortgage and a car loan are good examples of installment loans.

Applying for an Online Personal Loan

The best online lenders usually have an easier loan application process than banks: 

  • Stage 1: This generally consists of an online questionnaire where you are asked to provide information including the amount of the loan, the purpose of the loan, and your personal information. You will also probably be asked to provide your income level and housing status. 
  • Stage 2: This involves a soft credit pull, which won’t affect your credit rating like a hard credit pull. Based on the credit score and other details you provided the lender, they will determine how much to loan you and under what terms and interest rate. 
  • Stage 3: Once your application has been pre-approved, you will then complete your application and a hard pull will occur that may impact your credit score. You should have all relevant paperwork on hand and ready to send, including your driver’s license or passport, proof of residence (utility bills, rent contract, etc), and pay stubs from your place of work. 

Types of Lenders

  • Direct lenders

This is a company that directly loans money to borrowers and doesn’t merely facilitate lending between lenders and borrowers. 

  • Marketplaces 

These are companies that don’t lend out money themselves, rather, they facilitate loans between borrowers and lenders, by creating an online marketplace where borrowers can apply to all types of lenders at the same time, typically with one simple application. 

  • Peer-to-Peer lenders

Peer-to-peer (P2P) lenders refers to private lenders and borrowers which are connected to one another online. P2P lending is a way for lenders to invest some money in small-scale loans, typically spread out across a large number of borrowers in order to offset the default risk. For borrowers without collateral who have less than ideal credit, these can be a great option, despite the origination fees and often high interest rates. 

  • Banks

This is the most traditional, tried-and-tested way to attain a loan. That said, banks tend to be more cautious, and if you’re credit isn’t in good shape, or you don’t have any collateral, you might have real trouble finding a loan through a bank. 

Applying for a Loan With a Cosigner 

Most of the best lenders allow cosigner loan. Find one that allows co signers with your level of credit, and get an idea of what type of fees or other terms they require, and then look for a cosigner.

True, money and loved ones don’t always mix, but sometimes you have to count on the people close to you for help. Your cosigner will have to be someone with better credit than you, but also ideally, with some good collateral to put up. If the person has a spotless financial record, it could really help you get a loan with good terms. That said, you need to keep in mind that if you default, it will also affect the financial record of your cosigner. Make sure it’s someone who won’t hold this over you, and who you can work with to pay off the debt.

Read here to find out more about attaining a loan with a cosigner.

How to Choose a Lender

Shop around: Compare several top lenders

This may go without saying, but don’t settle on the first lender you find. Make sure to cast a wide net and really invest your time in reading online reviews and comparing the best personal loan companies so you can get the most competitive rates and save money in the long run. If the terms the company is offering you aren’t to your liking, feel free to look elsewhere and remember - you're the customer, they’re looking for your business, and are likely to try to meet you in the middle.

Make sure the lender is legitimate

Does the lender have a good reputation? Do you find a high number of complaints online? What about customer service, are they responsive? Make sure to take a long look at the company’s pedigree to see if they are legitimate, how long they’ve been in business and whether or not they’ve built a good reputation with their clients.

Check the fees and charges

The cost of your loan isn’t merely a matter of the interest or how much you took out - there are also often origination fees at the start of the loan, as well as late fees, processing fees, and the like. Make sure that the fees are not going to be too much of a burden, and add it to your list of considerations.

In order to choose the best personal loan provider for you, you must first determine what your needs are as a borrower, compare lenders and then see which one can fulfill those needs at the best rate possible.

Some of the key criteria that you should check when comparing loan providers are:

  • Maximum Loan Amount: Some online loan providers offer loans up to $20,000, while others will offer loans as high as $100,000.
  • APR: Different lenders will give you differing APRs so it’s important to find rates that you know you will be able to keep up with.
  • Loan Term: These vary from months to years, so it is advisable to check with your lender when your loan must be paid off.
  • Qualifications: Some lenders will require you to have an excellent credit score in order to get a loan, while others will be more forgiving. You may be required to provide proof of employment or income as well. It is advisable not to waste your time applying for a loan before you check the lender’s basic requirements.
  • Simplicity and Speed: A major advantage that online lenders have over banks is that they generally cut out a lot of the bureaucracy from the process. This means an easier and quicker process for the borrower. Some lenders can transfer funds to you in as a little as a few days.

*  Marcus By Goldman Sachs® Offer Terms and Conditions:

Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. The availability of a loan offer and the terms of your actual offer will vary due to a number of factors, including your loan purpose and our evaluation of your creditworthiness. You may be required to have some of your funds sent directly to creditors to pay off down certain types of outstanding unsecured debt. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans. Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions

* LendingClub Terms and Conditions:

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 7.95% to 35.89%. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 9410

* Eloan Terms and Conditions: 

Rates from 7.99% up to 19.49% APR. Your APR will be determined based or your risk score and credit history. Loans start from $2,000 up to $35,000. The loan amount will be subject to credit approval. Eloan is a Division of Banco Popular de Puerto Rico. Subject to credit approval and meeting the parameters set forth by Banco Popular de Puerto Rico (“Banco Popular”). This offer applies to personal loans without collateral. Offer subject to presenting evidence and verification of acceptable income to Banco Popular. Banco Popular may deny your application if you do not meet the parameters and the established conditions. Other terms and conditions may apply.

† Credible Terms and Conditions:

Credible is so confident in the personal loan rates you’ll find on Credible, we’ll give you $200 if you find and close with a better rate elsewhere. See full terms and conditions

‡ Upgrade Terms and Conditions:

Personal loans made through Upgrade feature APRs of 7.99%-35.97%. All personal loans have a 2.9% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by Upgrade's lending partners. Information on Upgrade's lending partners can be found at https://www.upgrade.com/lending-partners/.