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Best installment loans in March 2023

Mar 21, 2023
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An installment loan lets you borrow a fixed sum of money and pay it back over a set period of time. It can be an attractive choice if you want to finance a large-ticket item, an unexpected car repair or if you just need flexibility in the loan’s use.

Installment loans often have lower interest rates than credit cards, so they’re more affordable. They are also a far better choice than payday loans, which tend to charge excruciatingly high interest rates and fees, and must be repaid once you receive your next paycheck.

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4.6

Bankrate Score
APR from

9.99- 25.99%*

with Autopay
Loan Amount

$5k–$100K*

Term: 2-7 yr*
Min. Credit

Not disclosed

Apply on partner site

4.7

Bankrate Score
APR from

8.49- 35.97%

with AutoPay
Loan Amount

$1k–$50K

Term: 2-7 yr
Min. Credit

560

Check rate with Bankrate

4.7

Bankrate Score
APR from

8.99- 35.99%

Loan Amount

$2k–$50K

Term: 3-5 yr
Min. Credit

600

Check rate with Bankrate

4.6

Bankrate Score
APR from

7.99- 35.99%

Loan Amount

$5k–$50K

Term: 2-5 yr
Min. Credit

620

Check rate with Bankrate

4.6

Bankrate Score
APR from

10.50- 29.99%

Loan Amount

$5k–$40K

Term: 2-5 yr
Min. Credit

640

Check rate with Bankrate

4.1

Bankrate Score
APR from

8.05- 36.00%

Loan Amount

$1k–$40K

Term: 2-5 yr
Min. Credit

Not disclosed

Check rate with Bankrate

4.1

Bankrate Score
APR from

18.00- 35.99%

Loan Amount

$1.5k–$20K

Term: 2-5 yr
Min. Credit

Not disclosed

Check rate with Bankrate

4.5

Bankrate Score
APR from

9.95- 35.95%

Loan Amount

$2k–$35K

Term: 1-5 yr
Min. Credit

Not disclosed

Check rate with Bankrate

DEBT RELIEF

Check rate with Bankrate

Best installment loans of 2023

LENDER EST. APR LOAN TERM LOAN AMOUNT MIN CREDIT SCORE BEST FOR
LendingClub 8.05%-36.00% 2-5 years $1,000-$40,000 Not specified Peer-to-peer lending
Upstart 6.70%-35.99% 3-5 years $1,000-$50,000 No requirement Fair credit
LightStream 9.99%-25.99%* (with AutoPay) 2-7 years $5,000-$100,000 Not specified Large loan amounts
Happy Money 10.50%-29.99% 2-5 years $5,000-$40,000 640 Credit card debt consolidation
SoFi 7.99%-23.43% (with autopay) 2-7 years $5,000-$100,000 680 Unemployment protection
Avant 9.95%-35.95% 1-5 years $2,000-$35,000 580 Bad credit

Best peer-to-peer installment loan

LendingClub

LendingClub

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Check rate with Bankrate

Min. credit score:
Not disclosed
Fixed APR From:
8.05% –36.00%
Loan amount:
$1,000– $40,000
Term lengths:
2 to 5 years
Min. annual income:
Not disclosed
Overview: LendingClub is a peer-to-peer lender, meaning you receive your loan funds from individual investors instead of from a traditional bank.
Why LendingClub is the best peer-to-peer installment loan: LendingClub’s loans can be used for any purpose, ranging from debt consolidation to home improvement projects. The lender’s origination fees are lower compared to other peer-to-peer lenders and funding is relatively fast.

Best for fair credit

Min. credit score:
Not disclosed
Fixed APR From:
6.70% –35.99%
Loan amount:
$1,000– $50,000
Term lengths:
3 to 5 years
Min. annual income:
$12,000
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.
Why Upstart is the best for fair credit: Upstart has no minimum credit score requirement. The lender evaluates other factors for approval, such as your field of study or job history, so you could still secure a competitive rate with less-than-perfect credit.

Best for large loan amounts

Min. credit score:
Not disclosed
Fixed APR From:
9.99% –25.99%
Loan amount:
$5,000– $100,000
Term lengths:
2 to 7 years
Min. annual income:
$50,000
Overview: LightStream’s installment loans feature 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.
Why LightStream is the best for large loan amounts: You can borrow considerably more with this lender than you can with some competitors — up to $100,000. Lightstream also offers flexible repayment options of up to seven years, to make payments more manageable.

Best for credit card debt consolidation

Happy Money

Happy Money

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Check rate with Bankrate

Min. credit score:
640
Fixed APR From:
10.50% –29.99%
Loan amount:
$5,000– $40,000
Term lengths:
2 to 5 years
Min. annual income:
$30,000
Overview: Happy Money is an online lender that gears its installment loans toward consumers who need to consolidate high-interest credit card debt.
Why Happy Money is the best for credit card debt consolidation: Happy Money offers loans solely for credit card debt consolidation, with competitive starting APRs. The lender doesn’t charge any prepayment penalties, application or late fees, so borrowers can focus on getting out of debt and boosting their credit scores.

Best for unemployment protection

Min. credit score:
Not disclosed
Fixed APR From:
7.99% –23.43%
Loan amount:
$5,000– $100,000
Term lengths:
2 to 7 years
Min. annual income:
Not disclosed
Overview: While SoFi is mostly known for its popular student loan refinancing products, it also offers installment loans with long repayment timelines.
Why SoFi is the best for unemployment protection: SoFi offers unemployment protection that allows you to temporarily pause your monthly payments for a total of up to 12 months in the event that you lose your job.

Best for bad credit

Min. credit score:
Not disclosed
Fixed APR From:
9.95% –35.95%
Loan amount:
$2,000– $35,000
Term lengths:
1 to 5 years
Min. annual income:
$14,400
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.
Why Avant is the best for bad credit: Avant’s minimum FICO credit score is 580, the lowest among the lenders profiled on this page. Interest rates start at 9.95 percent APR, so it’s possible to get a reasonable rate and save money on debt consolidation or a personal loan.

What is an installment loan and how does it work? 

Installment loans are financial products that let you borrow a fixed sum of money and pay it back slowly over time. These loans, which include personal loans, typically 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.

Say you were to borrow $30,000 with a 11 percent APR and a 60-month repayment timeline. You would pay about $652 a month for five years.

What can I use an installment loan for?

One of the attractive features of an installment loan is its versatility. Personal loans, which are a popular type of installment loan, can be used for multiple purposes, including the following:

  • Debt consolidation.  Debt consolidation loans are personal loans intended to combine multiple high-interest debts into a single loan, typically with a lower interest rate. The goal of debt consolidation loans is to make your payments more manageable, while allowing you to pay off your debt faster.
  • A wedding. Personal installment loans can be used to finance major expenses such as a wedding. However, you should consider other options before taking out a loan to finance your wedding.
  • Home remodeling projects. Both personal loans and home equity loans can be used to finance home improvement projects.
  • Emergency expenses. Installment loans can also be used to cover emergency expenses — such as a car or home repair. There are loans specifically intended to cover emergencies, typically with quicker funding times and lower borrowing amounts.

Types of installment loans

There is a wide range of installment loans, all designed for specific purposes. Here are some of the most common:

  • Personal loan: A personal loan is a lump-sum loan that's usually repaid in one to seven years. It's usually unsecured, and the money from the loan can be used in myriad ways: to consolidate debt, fund home improvement projects, pay for a wedding, cover emergency expenses, and more.
  • Mortgage: A mortgage is a secured loan that is used for a single purpose: to buy property, usually a house. The home serves as collateral and secures the loan, which is paid monthly over a long term, usually 15 or 30 years.
  • Auto loan: An auto loan is a secured loan that is used to buy a car, with the vehicle serving as collateral. The loan is paid monthly, typically in two to seven years. Use our auto loan calculator to determine what your monthly payment might be.
  • Student loan: A student loan is a type of unsecured loan that can be used to pay for education expenses, such as tuition, fees and room and board. These can be obtained through the federal government or through private lenders and have repayment terms ranging from five to 20 years.

Pros and cons of installment loans

Pros

  • Checkmark

    You can get the funds rather quickly — even the same day you’re approved, in some cases.

  • Checkmark

    There are no surprises, as they have fixed terms and interest rates.

  • Checkmark

    Interest rates tend to be lower than those of other credit products, such as credit cards.

  • Checkmark

    You can use installment loans to cover just about any expense, from home renovations to emergency expenses.

Cons

  • If you have less-than-stellar credit, you may end up with a double-digit interest rate.

  • Some lenders may charge origination fees as high as 10 percent.

  • Your credit score could take a hit if you miss a payment.

  • Some lenders may charge a prepayment penalty for paying off your loan early.

Where to get installment loans

You can get an installment loan from almost any type of lender. These include banks, credit unions, online lenders and peer-to-peer lenders.

If you have good to excellent credit, banks are usually the best choice as they tend to have lower interest rate caps than other lenders. Banks also tend to offer autopay and loyalty discounts, which may help you further reduce your rate. 

On the other hand, If you have fair credit, credit unions and online lenders may be the better option as they tend to be more lenient with their credit requirements. Peer-to-peer lenders also tend to lend to those with less-than-stellar credit. However, they often charge origination fees of up to 10 percent and interest rates as high as 36 percent.

How an installment loan affects your credit

The strength of your credit impacts the loan amounts, rates and terms you qualify for. Once you get an installment loan, here's how it can impact your credit:

  • Making on-time payments could boost your credit score. As payment history makes up 35 percent of your score, being on time with your monthly payments can help your credit. On the flip side, being late or having missed payments could negatively impact your score.
  • Paying the loan in full can improve your credit. While paying the loan off on time and in full can bump up your score, paying it off early most likely won't have a huge impact over paying it off on the agreed-upon schedule.
  • It'll stay on your credit report for 10 years. Once your loan is paid off, it's considered a closed account. Closed accounts that are in good standing could do good for your credit, as they stay on your credit file for 10 years.

How to compare installment loans

Comparing installment loans is key to ensuring you get the best terms and interest rates available for your financial situation. Here are some steps to follow when shopping for the best installment loan:

  • Check your credit. Review your credit to make sure there aren't any errors. Certain types of discrepancies, such as whether you were late on a payment, could ding your score. If you find any mistakes, you can always dispute them with the credit bureaus to get them corrected.
  • Practice healthy habits for maintaining a good score. If your credit file is thin or you're working on building good credit, be sure to make on-time payments, keep your debt-to-income ratio low and consider having a mix of credit.
  • Research eligibility requirements: While your credit score is one of the most important factors in determining your eligibility, lenders may also look at your income and debt-to-income ratio. If your credit is fair or bad, look for lenders that don't weigh credit scores as heavily and that might look at your income to determine your creditworthiness.
  • Look at repayment terms: Most personal loan lenders set repayment terms at one to seven years, although some offer terms as long as 12 years. Choosing a shorter repayment term will increase your monthly payment but will decrease the interest you’ll pay overall. If you can't snag the best interest rates because of your credit score, shortening the time you take to pay your loan off could help you save money.
  • Prequalify: Many lenders offer prequalification tools, so you know what terms and interest rates you may be eligible for, without hurting your credit. When comparing installment loans, make sure you get prequalified with at least three lenders, as this will increase your chances of getting the best offer.

Alternatives to installment loans

If, after evaluating your options, you’re still wary about applying for an installment loan, here are some alternatives you can explore to get the funds you need:

  • Credit cards: Depending on the size of your expense, using a credit card to fund could be a great option. Credit cards offer quick funding and longer-than-average repayment terms. That said, they tend to have some of the highest interest rates in the market. If possible, try applying for a 0 percent introductory rate credit card, as this will give you more room to pay off your balance without accruing interest.
  • Money from your savings: If you have enough money saved to fund your expense without cutting yourself short, then this is a good option to explore. By using your savings, you avoid spending money on interest and fees. Additionally, you’re protecting yourself from potential credit damages that may result from late payments or defaulting on a loan.
  • Tap into your retirement account: Although not ideal, withdrawing money from an IRA or a 401k is another choice to consider. That said, you could be facing a higher tax bill by doing this, plus you may fall behind on your retirement savings.
  • Help from family or friends: If you only need to borrow a small amount, you can ask a family member or a friend to lend you money until you can get back on your feet.

FAQs about installment loans

Methodology

To select the top installment loan lenders, Bankrate considered factors that help consumers decide whether a lender is a good fit for them, such as credit requirements and APR ranges. We sought lenders with low fees and a range of loan amounts for borrowers with varying budgets and credit profiles. We also looked for conveniences like online applications and fast funding.

The lenders featured here were also evaluated for notable features like customer discounts, flexible repayment options, free access to financial tools and more.