Best Installment Loans of 2020

Bankrate's guide to choosing the best installment loans

By Holly Johnson

As of Monday, June 01, 2020

Installment loans are financial products that let you borrow a fixed sum of money, then pay it back slowly over time. These loans, which include personal loans, also come with the benefit of fixed interest rates and fixed monthly payments, so you always know how much you owe each month and when your final payment will be due.

Where credit card interest rates tend to be high, installment loans extend much lower rates to consumers with good or excellent credit. This guide can help you compare the best online installment loans.

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When shopping for an installment loan, compare APRs across multiple lenders to make sure that you’re getting a competitive rate. Also look for lenders that keep fees to a minimum and offer repayment terms that fit your needs. Loan details presented here are current as of the publish date, but you should check the lenders’ websites for more current information. The installment loan lenders listed here are selected based on factors such as APR, loan amounts, fees, credit requirements and other factors.

Best installment loans of 2020

Lender
Best for
Est. APR
Min credit score
Loan term
Loan amount
Marcus by Goldman Sachs
Good credit
6.99% - 28.99%
660
3 - 6 years
$3,500 - $40,000
LendingClub
Peer-to-peer lending
6.95% - 35.89%
600
3 or 5 years
$1,000 - $40,000
Upstart
Fair credit
6.53% - 35.99%
620
3 or 5 years
%5,000 - $50,000
LightStream
Large loan amounts
3.49% - 16.79%
660
2 - 12 years
$5,000 - $100,000
Payoff
Debt consolidation
5.99% - 24.99%
640
2 - 5 years
$5,000 - $35,000
SoFi
Unemployment protection
5.99% - 18.82%
680
2 - 7 years
$5,000 - $100,000
Avant
Bad credit
9.95% - 35.99%
580
2 - 5 years
$2,000 - $35,000

Summary: installment loans of 2020

How do installment loans work?

Unlike credit cards, which offer a line of credit you can borrow against, installment loans give you a fixed sum of money upfront. You’ll have a fixed interest rate and a fixed monthly payment, which means you’ll know exactly when your loan will be paid off.

For example, if you were to borrow $20,000 with an 8.99 percent APR and a 60-month repayment timeline, you would pay $415 per month for five years.

What can I use an installment loan for?

You can typically use installment loans for any purpose, but many people use them for debt consolidation, home remodeling projects or emergency expenses.

Should you get an installment loan?

Before you apply for an installment loan, there are a few steps you should take. Consider these moves before you borrow money that might take several years to pay back.

  • Check your credit score and take steps to improve it. While installment loan companies consider an array of factors when approving you for a loan, your credit score is one of the most important details they look at. With that in mind, make sure to check your credit score and get it in good shape before applying. Our guide on how to improve your credit score can help you craft a plan, but you should start by paying all your bills on time and paying down other debts in order to lower your credit utilization.
  • Take a close look at your monthly income and bills. Before you borrow money, make sure you have the excess funds to pay it back. Taking a close look at your monthly income and bills can help you determine how much discretionary money you have each month, which can in turn help you figure out if you can afford a loan.
  • Compare rates with at least three lenders. The best way to save money on your installment loan is by shopping around and comparing rates with at least three lenders. Note that some of the lenders in our ranking let you check your rate without a hard inquiry on your credit report, which makes the process easy and risk-free.
  • Don’t borrow more than you need. Determine how much money you need to borrow before you apply. Your monthly payment will hinge on your loan amount and your APR, and borrowing more than you need can lead to much higher payments and interest costs over time.

Details: installment loans in 2020

  • Best installment loan for good credit: Marcus by Goldman Sachs
  • Best peer-to-peer installment loans: LendingClub
  • Best installment loan for fair credit: Upstart
  • Best installment loan for large loan amounts: Lightstream
  • Best installment loan for debt consolidation: Payoff
  • Best installment loan for unemployment protection: SoFi
  • Best installment loan for bad credit: Avant

Best for good credit: Marcus by Goldman Sachs

Overview: Marcus by Goldman Sachs offers installment loans with competitive interest rates and no fees. You can borrow up to $40,000 with a fixed interest rate and fixed repayment timeline, making it easy to budget for your loan payments over time. Marcus by Goldman Sachs also earned the top ranking in J.D. Power’s 2019 U.S. personal loan satisfaction study, so it's likely that you'll receive top-notch customer service.

Perks: Interest rates are low for consumers with good or excellent credit, and you can even secure a 0.25 percent rate discount when you sign up for autopay. There are also no sign-up, prepayment or miscellaneous fees.

What to watch out for: You’ll need a credit score of at least 660 to qualify, so this lender won’t work for everyone.

Read Bankrate's expert Marcus by Goldman Sachs Review

Best peer-to-peer installment loan: LendingClub

Overview: LendingClub is a peer-to-peer lender, meaning you receive your loan funds from individual investors instead of a traditional bank. You can borrow money for nearly any reason, ranging from debt consolidation to home improvement projects, and interest rates can be competitive depending on your interest rate, starting at just 6.95 percent.

Perks: LendingClub makes it easy to get prequalified online and without a hard inquiry on your credit report. Like all installment loans, you also qualify for a fixed interest rate, a fixed monthly payment and an exact date when your loan will be paid off.

What to watch out for: LendingClub installment loans can come with an origination fee of up to 6 percent of your loan amount.

Read Bankrate's expert LendingClub Review

Best for fair credit: Upstart

Overview: Upstart is an online installment loan lender that offers competitive loan products to borrowers with good or even fair credit. You can apply for your loan online and get your money as soon as the next business day. While Upstart isn’t necessarily a household name among lenders, this lender secured the third spot out of 14 ranked providers in J.D. Power’s personal loan satisfaction study.

Perks: Upstart looks at more than your credit score when approving you for a personal loan. It also considers your education, area of study and job history.

What to watch out for: Upstart’s interest rates can be on the high side for consumers with imperfect credit, with rates capping at 35.99 percent. Also watch out for origination fees as high as 8 percent of your loan amount.

Read Bankrate's expert Upstart Review

Best for large loan amounts: Lightstream

Overview: LightStream offers installment loan amounts up to $100,000, as well as some of the lowest interest rates for consumers with excellent credit. You can also apply online and have access to your funds within the same day. Due to its strong customer service, this lender secured the No. 2 spot out of 16 lenders profiled in J.D. Power’s personal loan satisfaction study.

Perks: LightStream offers a discount on your APR when you sign up for autopay, and you can borrow considerably more with this lender than you can with some competitors — up to $100,000. These loans also come with no fees.

What to watch out for: While LightStream doesn't list specific eligibility requirements, it does mention that LightStream borrowers typically have several years of credit history with a variety of accounts, such as credit cards, auto loans and mortgages. If you don't fit this profile, LightStream may not be the best fit.

Read Bankrate's expert Lightstream Review

Best for debt consolidation: Payoff

Overview: Payoff is an online lender that gears its installment loans to consumers who need to consolidate high-interest credit card debt. Interest rates start at just 5.99 percent, and these loans don’t come with common fees like prepayment fees, application fees or even late fees.

Perks: Because Payoff offers loans solely for credit card debt consolidation, borrowers can focus on repaying existing debt and boosting their credit score.

What to watch out for: Payoff installment loans can charge an origination fee of up to 5 percent of your loan amount. Payoff is also not the right choice for anyone looking to use a loan for anything other than credit card debt consolidation.

Read Bankrate's expert Payoff Review

Best for unemployment protection: SoFi

Overview: While SoFi is mostly known for its popular student loan refinancing products, it also offers installment loans with long repayment timelines. SoFi installment loans also come with unemployment protection that allows you to temporarily pause your monthly payments in the event that you lose your job.

Perks: SoFi installment loans don’t charge any obvious fees or hidden fees, and you may be able to borrow up to $100,000 depending on your income and other factors.

What to watch out for: These loans are geared toward consumers with good credit, so you’ll need to have a credit score of at least 680 to get approved.

Read Bankrate's expert SoFi Review

Best for bad credit: Avant

Overview: Avant focuses on installment loans for consumers with fair and poor credit, so it may be a good option if your score falls in this range. Interest rates start at 9.95 percent APR, so it’s possible to get a reasonable rate and save money on debt consolidation or any other loan purpose.

Perks: Avant lets you get prequalified online without a hard inquiry on your credit score. It also serves a wider range of credit scores than many other lenders, claiming that most of its customers fall in the 600-to-700 range.

What to watch out for: Watch out for administration fees, late fees and dishonored payment fees. Interest rates can also be high for consumers with the lowest credit scores, peaking at 35.99 percent.

Read Bankrate's expert Avant Review

Frequently asked questions about installment loans

Can I get an installment loan with bad credit?

Installment loans for bad credit do exist, but you’ll need to shop around and compare several options, since every lender has different eligibility requirements. With poor credit, you can also expect your installment loan to have a higher interest rate and more loan fees.

Are installment loans secured or unsecured?

The installment loans we profiled here are unsecured, meaning you don’t have to put down any collateral to qualify. With that being said, secured loans that require collateral are also available and may be your best option if you have poor credit.

How do installment loans work for debt consolidation?

Installment loans are popular for debt consolidation due to the fact that they tend to offer lower interest rates than credit cards. For example, if you have multiple lines of credit card debt at an 18 percent APR, you can save money by transferring that debt to an installment loan at a 9 percent APR. That way, you pay less in interest and can focus on paying one fixed bill instead of several.

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