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Best installment loans in February 2024

Feb 21, 2024

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    Explore loans ranging from $500 to $100,000
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Personal loans

Best for joint applications

LendingClub
Rating: 4.1 stars out of 5
4.1
Est. APR
9.57%–35.99%
Loan amount
$1k– $40k
Term: 2-5 yrs
Min credit score
600
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Personal loans

Citi: Best for multiple discounts

Citi® Personal Loan
Rating: 4.6 stars out of 5
4.6
Est. APR
10.49%–19.49%
Loan amount
$2k– $30k
Term: 1-5 yrs
Min credit score
720
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on Bankrate

Personal loans

Best for bad credit

Upstart
Rating: 4.7 stars out of 5
4.7
Est. APR
7.80%–35.99%
Loan amount
$1k– $50k
Term: 3-5 yrs
Min credit score
Not specified
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Personal loans

Best for excellent credit

LightStream
Rating: 4.7 stars out of 5
4.7
Est. APR
7.99%–25.49%
* with AutoPay
Loan amount
$5k– $100k
Term: 2-7 yrs
Min credit score
695
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Personal loans

Best for credit card debt consolidation

Happy Money
Rating: 4.6 stars out of 5
4.6
Est. APR
11.72%–17.99%
Loan amount
$5k– $40k
Term: 2-5 yrs
Min credit score
Not specified
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Check rate with Bankrate

Personal loans

Best for bad credit

Avant
Rating: 4.5 stars out of 5
4.5
Est. APR
9.95%–35.99%
Loan amount
$2k– $35k
Term: 1-5 yrs
Min credit score
550
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Personal loans

Best online lender

SoFi
Rating: 4.7 stars out of 5
4.7
Est. APR
8.99%–29.99%
with all discounts
Loan amount
$5k– $100k
Term: 2-7 yrs
Min credit score
680
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on Bankrate

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How to compare installment loan lenders

Compare offers from at least three lenders before deciding on one. To choose the best installment loan, consider the following:

  1. Approval requirements: Each lender has its own loan approval requirements. They consider your credit score, debt-to-income (DTI) ratio and overall financial health. Some lenders also consider other factors, like your education and job history. 
  2. Interest rates: The lowest advertised interest rate is never guaranteed. Make sure you compare fees charged by each lender when reviewing their offers. 
  3. Loan amounts: Some lenders offer loan ranges better suited for small purchases, while others offer loans up to $100,000. Check the lender’s loan minimums and maximums before applying to make sure they offer the amount you need. 
  4. Repayment options: Personal loan lenders typically offer repayment term options ranging between one and seven years. A longer repayment period will decrease your monthly payment, but a shorter repayment period cuts down on overall interest.
  5. Unique features: Keep an eye out for perks offered by lenders, such as introductory APRs, discounts and online financial tools.
  6. Customer service: Different lenders provide different levels of customer service. If you are more comfortable with in-person service, choose a lender that offers that. Many lenders have online chat features and daily customer support phone hours.

Compare installment loan rates from Bankrate's top picks

LENDER BEST FOR EST. APR LOAN AMOUNT LOAN TERM MIN CREDIT SCORE
LendingClub Joint applications 9.57%-35.99% $1,000-$40,000 2-5 years 600
Citi Best for multiple discounts 10.49%-19.49% $2,000-$30,000 1-5 years 720
Upstart Fair credit 7.80%-35.99% $1,000-$50,000 3 or 5 years No requirement
LightStream Large loan amounts 7.99%-25.49%* with Autopay $5,000-$100,000 2-7 years 695
Happy Money Credit card debt consolidation 11.72%-17.99% $5,000-$40,000 2-5 years 640
SoFi Unemployment protection 8.99%-29.99% $5,000-$100,000 2-7 years 680
Avant Bad credit 9.95%-35.99% $2,000-$35,000 1-5 years 550

How we made our picks for best installment loans

To select the best personal loans, Bankrate’s team of experts evaluated over 30 lenders. Each lender was ranked using a meticulous 20-point system, focusing on four main categories:

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    Affordability
    The interest rates, penalties and fees are measured in this section of the score. Lower rates and fees and fewer potential penalties result in a higher score. We also give bonus points to lenders offering rate discounts, grace periods and that allow borrowers to change their due date. 
  • Checkmark
    Availability
    Minimum loan amounts, number of repayment terms, eligibility requirements, ability to apply using a co-borrower or co-signer and loan turnaround time are considered in this category.
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    Customer experience
    This category covers customer service hours, if online applications are available, online account access and mobile apps.
  • Checkmark
    Transparency
    For this factor, we consider how well information is presented to the borrower on the lender’s website. This includes listing credit requirements, rates and fees, in addition to offering prequalification.
Clock Wait
47
years in business
Credit Card Search
30+
lenders reviewed
Loan
20
loan features weighed
Rates
665
data points collected

What to know about installment loans

What is an installment loan?

Installment loans are a form of credit that allows you to borrow a fixed sum of money and pay it back over a set period. 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 can track when your final payment will be due.

Installment loans often have lower interest rates than credit cards, so they’re more affordable. They are a far better choice than payday loans, which come with triple-digit interest rates and high fees and must be repaid once you receive your paycheck.

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Where to get personal loans

You can get a personal loan from three types of lenders: banks, credit unions and online lenders. To get a personal loan, here's what to know.

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Types of installment loans

Some installment loans are restricted to a specific use, while others are more versatile. There are five common types of installment loans.

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A personal loan is a lump-sum loan that's usually unsecured and repaid in one to seven years. The money from the loan can be used to consolidate debt, fund home improvement projects, pay for a wedding, cover emergency expenses and more.

A mortgage is a secured loan that is used for a single purpose: to buy a house. The home serves as collateral and secures the loan, which is paid monthly over 15 to 30 year terms.

An auto loan is a secured loan 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.

 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.

Buy now, pay later (BNPL) loans have payments that are usually split up into four installments. They have recently gained in popularity because they are usually interest-free if the payments are made on time and may come with the flexibility to change payment due dates. 

Pros and cons of installment loans

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Pros

  • You can typically get the funds quickly — in some cases even the same day you’re approved.
  • Payments are predictable and have fixed terms and interest rates.
  • Interest rates tend to be lower than credit card interest rates.
  • You can use installment loans to cover just about any expense.
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Cons

  • A lower credit score means you could end up with an interest rate upwards of 30%.
  • Some lenders may charge origination fees as high as 10 percent.
  • Personal loan limits at some lenders may not give you enough cash for your goals.
  • Some lenders may charge a prepayment penalty for paying off your loan early.

How many installment loans should you have?


Nationally recognized student financial aid expert

Installment loans are best for major purchases, such as buying a home or car. Examples include mortgages and auto loans. Installment loans let you spread out the cost over several years, so you don’t have to pay for a big expense all at once. Most people do not have enough money saved to buy big ticket items with cash. You should devote no more than a third of your income to repaying debt, so you have enough money to cover your living expenses and pay your taxes. Installment loans can also help you build good credit if you make the monthly payments on time every time.

Senior Loans Writer

The answer to this depends on why you’re getting the installment loans in the first place. One installment loan is enough if it’s used to replace a handful of revolving debt like credit cards. You may need an additional one to finance a car if you don’t have cash to pay for it. However, there’s no flexibility when it comes to your monthly payment on an installment loan. There’s no minimum monthly payment and you can’t re-use any balance you’ve paid off like you can with a credit card. Financial experts often suggest you spend no more than a third of your take home pay on monthly debt. That’s good advice, but you also need to look at your lifestyle spending. If you spend a lot on eating out, entertainment or expensive hobbies like golfing, you should limit the number of installment loans you take out.

How to get an installment loan

There are a handful of steps to follow to apply for and get an installment loan. 

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Bankrate tip: Getting an installment loan with bad credit.

While it’s possible to get a bad credit installment loan, you may need to shop around a bit more to find the best terms. You may want to check for secured personal loans to get lower rates. You may want to add a co-signer if you’re having trouble qualifying on your own. 

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 for flexibility. That said, they tend to have higher interest rates than personal loans. 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.
  • 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