Best overall personal loan

SoFi
4.6Check rate with Bankrate
- Min. credit score:
- Not disclosed
- Fixed APR From:
- 7.99% –22.73%
- Loan amount:
- $5,000–$100,000
- Term lengths:
- 2 to 7 years
- Min. annual income:
- $30,000
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Dori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Bankrate, her bylines have appeared on CNET, Yahoo Finance, MSN Money, Wirecutter, Quartz, Inc. and more. She loves helping people learn about money, specializing in topics like investing, real estate, borrowing money and financial literacy.
Aylea Wilkins is an editor specializing in personal and home equity loans. She has previously worked for Bankrate editing content about auto, home and life insurance. She has been editing professionally for nearly a decade in a variety of fields with a primary focus on helping people make financial and purchasing decisions with confidence by providing clear and unbiased information.
Mark Hamrick is Washington Bureau Chief for Bankrate. He is a national award-winning business and financial news journalist.
Personal loans allow you to borrow a lump-sum to pay for a large expense and then pay it back over time in monthly installments. They have a couple of key factors to keep in mind when comparing options.
The best personal loan interest rates currently range from about 3 percent to 36 percent. The actual rate you receive depends on multiple factors, such as your credit score, annual income and debt-to-income ratio. The best rate that you can qualify for might not be the best loan you can qualify for — consider additional features offered and the other listed factors as well.
The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where and in what order products appear. This table does not include all companies or all available products. Bankrate does not endorse or recommend any companies.
Answer a few questions in two minutes or less to see which personal loans you pre-qualify for. It's free and will not impact your credit score.
Bankrate’s scores for personal loan lenders evaluate 11 data points related to loan costs and terms, as well as customer experience. | The annual percentage rate (APR) includes your interest rate, plus any loan fees. It reflects the total cost of borrowing. | The range of loan amounts that a lender will service. The maximum value is the largest amount a lender will give although this amount may not be available to borrowers who don’t have good or excellent credit. Amount ranges may vary for non-loan products. Term refers to the amount of time you have to repay the loan. | The minimum credit score typically required to qualify for a loan with a given lender. Exact thresholds are not always disclosed by a lender and in certain cases the minimum score is the best estimate based on publicly available information. Credit score refers to FICO 9.0 unless otherwise stated. | ||
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APR from 5.73%* with AutoPay | Loan Amount $5k- $100k* Term: 2-7 yr* | Min. Credit Not disclosed | ![]()
* Applications submitted on this website may be funded by one of several lenders, including: FinWise Bank, a Utah-chartered bank, Member FDIC; Coastal Community Bank, Member FDIC; and LendingPoint, a licensed lender in certain states. Loan approval is not guaranteed. Actual loan offers and loan amounts, terms, and annual percentage rates ("APR") may vary based upon LendingPoint's proprietary scoring and underwriting system's review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 7% may apply depending upon your state of residence. Upon final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. Loans are offered from $2,000 to $36,500, at rates ranging from 7.99% to 35.99% APR, with terms from 24 to 72 months. Minimum loan amounts apply in Georgia, $3,500; Colorado, $3,001; and Hawaii, $1,500. For a well-qualified customer, a $10,000 loan for a period of 48 months with an APR of 24.34% and origination fee of 7% will have a payment of $327.89 per month. (Actual terms and rate depend on credit history, income, and other factors.) Customers may have the option to deduct the origination fee from the disbursed loan amount if desired. If the origination fee is added to the financed amount, interest is charged on the full principal amount. The total amount due is the total amount of the loan you will have paid after you have made all payments as scheduled. | Apply on partner site | |
APR from 6.95- 35.97% with AutoPay | Loan Amount $1k- $50k Term: 2-7 yr | Min. Credit Not disclosed | ![]()
* Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 6.95%-35.97%. All personal loans have a 1.85% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.59% APR (which includes a 13.94% 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 $341.48. Over the life of the loan, your payments would total $12,293.46. 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. †Accept your loan offer and your funds will be sent to your bank or designated account within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes the transaction. From the time of approval, funds sent directly to you should be available within one (1) business day. Funds sent directly to pay off your creditors may take up to 2 weeks to clear, depending on the creditor. Fast Funding —You should receive your funds within a day of clearing verifications† | Check rate with Bankrate | |
APR from 7.99% 3 or 5 year term | Loan Amount $2k- $50k Term: 3-5 yr | Min. Credit Not disclosed | ![]()
DISCLOSURE UPDATE AS OF 08.2022 *Trustpilot TrustScore as of June 2020. Best Egg personal loans, including the Best Egg Secured Loan, are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender or Blue Ridge Bank, a Nationally Chartered Bank, Member FDIC, Equal Housing Lender. “Best Egg” is a trademark of Marlette Holdings, Inc., a Delaware corporation. All uses of “Best Egg” refer to “the Best Egg personal loan”, “the Best Egg Secured Loan”, and/or “Best Egg on behalf of Cross River Bank or Blue Ridge Bank, as originator of the Best Egg personal loan,” as applicable. The term, amount, and APR of any loan we offer to you will depend on your credit score, income, debt payment obligations, loan amount, credit history and other factors. Your loan agreement will contain specific terms and conditions. About half of our customers get their money the next day. After successful verification, your money can be deposited in your bank account within 1-3 business days. The timing of available funds upon loan approval may vary depending upon your bank’s policies. Loan amounts range from $2,000– $50,000. Residents of Massachusetts have a minimum loan amount of $6,500 ; New Mexico and Ohio, $5,000; and Georgia, $3,000. For a second Best Egg loan, your total existing Best Egg loan balances cannot exceed $50,000. Annual Percentage Rates (APRs) range from 7.99%–35.99%. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0.99%–8.99% of your loan amount, which will be deducted from any loan proceeds you receive. The origination fee on a loan term 4-years or longer will be at least 4.99%. Your loan term will impact your APR, which may be higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest APR. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents. Best Egg products are not available if you live in Iowa, Vermont, West Virginia, the District of Columbia, or U.S. Territories. | Check rate with Bankrate | |
APR from 7.99- 22.73% with AutoPay | Loan Amount $5k- $100k Term: 2-7 yr | Min. Credit Not disclosed | ![]()
*Personal Loan Disclaimer Fixed rates from 7.99% APR to 22.73% APR APR reflect the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi rate ranges are current as of 8/1/22 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. | Check rate with Bankrate | |
APR from 5.99% | Loan Amount $5k- $40k Term: 2-5 yr | Min. Credit Not disclosed | ![]()
"This does not constitute an actual commitment to lend or an offer to extend credit. Upon submitting a loan application, you may be asked to provide additional documents to enable us to verify your income, assets, and financial condition. Your interest rate and terms for which you are approved will be shown to you as part of the online application process. Most applicants will receive a variety of loan offerings to choose from, with varying loan amounts and interest rates. Borrower subject to a loan origination fee, which is deducted from the loan proceeds. Refer to full borrower agreement for all terms, conditions and requirements." | Check rate with Bankrate | |
APR from 6.34- 35.89% | Loan Amount $1k- $40k Term: 3-5 yr | Min. Credit Not disclosed | ![]()
A representative example of loan payment terms is as follows: you receive a loan of $13,411 for a term of 36 months, with an interest rate of 12.16% and a 5.30% origination fee of $711, for an APR of 15.99%. In this example, you will receive $12,700 and will make 36 monthly payments of $446.46. Loan amounts range from $1,000 to $40,000 and loan term lengths are 36 months or 60 months. Some amounts and term lengths may be unavailable in certain states. APR ranges from 6.34% to 35.89% and is determined at the time of application. Origination fee ranges from 2% to 6% of the loan amount. Lowest APR is available to borrowers with excellent credit. Advertised rates and fees are valid as of 3/15/22 and are subject to change without notice. 1. Between July 2021 and September 2021, more than two-thirds of personal loans issued by LendingClub Bank were funded within 48 hours after loan approval. The time it takes for a loan to be funded is not guaranteed and individual results vary based on multiple factors, including but not limited to investor demand. 2. Checking your loan rate generates a soft credit inquiry on your credit report, which is visible only to you. A hard credit inquiry, which is visible to you and others, and which may affect your credit score, only appears on your credit report if and when a loan is issued to you. Your loan APR will depend upon your credit score and other key financing characteristics, including but not limited to the amount financed, loan term length, and your credit usage and history. Unless otherwise specified, all loans and deposit products are provided by LendingClub Bank, N.A., Member FDIC, Equal Housing Lender (“LendingClub Bank”), a wholly-owned subsidiary of LendingClub Corporation, NMLS ID 167439. Loans are subject to credit approval and sufficient investor commitment. Deposit accounts are subject to approval. Only deposit products are FDIC insured. “LendingClub” and the “LC” symbol, and “Radius” and the “R” symbol, are trademarks of LendingClub Bank. © 2021 LendingClub Bank. All rights reserved. | Check rate with Bankrate | |
APR from 6.99- 24.99% | Loan Amount $3.5k- $40k Term: 3-6 yr | Min. Credit Not disclosed | ![]()
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, our evaluation of your creditworthiness, your credit history, if we have recently declined your loan application and the number of loans you already have with us. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. 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. You may be required to have some of your funds sent directly to creditors to pay down certain types of unsecured debt. Receive a 0.25% APR reduction when you enroll in AutoPay. This reduction will not be applied if AutoPay is not in effect. When enrolled, a larger portion of your monthly payment will be applied to your principal loan amount and less interest will accrue on your loan, which may result in a smaller final payment. See loan agreement for details. | Check rate with Bankrate | |
APR from 7.95- 35.99% | Loan Amount $2k- $40k Term: 3-5 yr | Min. Credit 560 | ![]()
For example, a three-year $10,000 personal loan would have an interest rate of 11.74% and a 5.00% origination fee for an annual percentage rate (APR) of 15.34% APR. You would receive $9,500 and make 36 scheduled monthly payments of $330.90. A five-year $10,000 personal loan would have an interest rate of 11.99% and a 5.00% origination fee with a 14.27% APR. You would receive $9,500 and make 60 scheduled monthly payments of $222.39. Origination fees vary between 2.41%-5%. Personal loan APRs through Prosper range from 7.95% to 35.99%, with the lowest rates for the most creditworthy borrowers.
Eligibility for personal loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility for personal loans is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All personal loans made by WebBank, Member FDIC.
| Check rate with Bankrate | |
APR from 9.95- 35.99% | Loan Amount $2k- $35k Term: 2-5 yr | Min. Credit 550 | ![]()
*A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33. Minimum loan amounts may vary by state. If approved, the actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. An administration fee of up to 4.75% will be deducted from the loan proceeds. Avant branded credit products are issued by Webbank, member FDIC. | Check rate with Bankrate | |
APR from 7.99- 35.99% | Loan Amount $1k- $35k Term: 1-3 yr | Min. Credit None | ![]()
| Check rate with Bankrate |
Why trust Bankrate?
At Bankrate, we strive to make the personal loan experience simple and straightforward. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure the content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.
We compare lenders based on availability, affordability and customer experience. Our goal is to provide you with all the information you need to make informed borrowing decisions. The lenders we highlight have been assessed for low APRs, good lending terms, low fees and good customer service.
Personal loans are short-term loans that consumers can receive from banks, credit unions or private lenders like online marketplace lenders and peer-to-peer lenders. The loan funds can be used for just about any purpose, such as paying off other debt, financing a home renovation or paying for family needs, like a wedding or adoption.
A personal loan is repaid in monthly installments, similar to a car loan or home mortgage, with loan terms typically ranging from 24 months to 60 months or even longer. Personal loans are typically unsecured, meaning they are not backed by collateral such as a car, house or other assets. If you need cash fast, these loans are a good choice because the approval and funding process is often faster than that of a home equity line of credit, which lets you borrow funds as you need them rather than in a lump sum.
LENDER | CURRENT APR RANGE | LOAN TERM | LOAN AMOUNT | BEST FOR |
---|---|---|---|---|
SoFi | 7.99%–22.73% (with autopay) | 2 to 7 years | $5,000–$100,000 | Overall personal loan |
LightStream | 5.73%–19.99% (with autopay) | 2 to 12 years | $5,000–$100,000 | Generous repayment terms |
Avant | 9.95%–35.99% | 2 to 5 years | $2,000–$35,000 | People with bad credit |
Marcus by Goldman Sachs | 6.99%–19.99% (with autopay) | 3 to 6 years | $3,500–$40,000 | Debt consolidation |
Best Egg | 7.99%–35.99% | 3 to 5 years | $2,000–$50,000 | Low APRs |
Upgrade | 6.95%–35.97% (with autopay) | 3 to 5 years | $1,000–$50,000 | Fast funding |
Payoff | 5.99%–24.99% | 2 to 5 years | $5,000–$40,000 | Paying credit card debt |
Upstart | 5.40%–35.99% | 3 or 5 years | $1,000–$50,000 | Little credit history |
LendingClub | 6.34%–35.89% | 3 or 5 years | $1,000–$40,000 | Using a co-borrower |
PenFed | 6.74%–17.99% | 1 to 5 years | $600–$50,000 | Small loan amounts |
TD Bank | 6.99%–18.99% | 3 to 5 years | $2,000–$50,000 | Few fees |
PNC Bank | Starting at 5.99% (with autopay) | 6 months to 5 years | $1,000–$35,000 | In-person banking |
LENDER | CURRENT APR RANGE | LOAN TERM | LOAN AMOUNT | BEST FOR |
---|---|---|---|---|
LightStream | 5.73%–19.99% (with autopay) | 2 to 12 years | $5,000–$100,000 | Generous repayment terms |
Payoff | 5.99%–24.99% | 2 to 5 years | $5,000–$40,000 | Paying credit card debt |
Best Egg | 7.99%–35.99% | 3 to 5 years | $2,000–$50,000 | Low APRs |
SoFi | 7.99%–22.73% (with autopay) | 2 to 7 years | $5,000–$100,000 | Unemployment protection |
FreedomPlus | 7.99%–29.99% | 2 to 5 years | $7,500–$50,000 | Quick approval |
PenFed | 6.74%–17.99% | 1 to 5 years | $600–$50,000 | Small loan amounts |
Upstart | 5.40%–35.99% | 3 or 5 years | $1,000–$50,000 | Little credit history |
LendingClub | 7.04%–35.89% | 3 or 5 years | $1,000–$40,000 | Using a co-borrower |
Prosper | 7.95%–35.99% | 3 or 5 years | $2,000–$40,000 | No prepayment penalty |
Upgrade | 6.95%–35.97% (with autopay) | 2 to 7 years | $1,000–$50,000 | Fast funding |
Marcus by Goldman Sachs | 6.99%–19.99% (with autopay) | 3 to 6 years | $3,500–$40,000 | Debt consolidation |
TD Bank | 6.99%–18.99% | 3 to 5 years | $2,000–$50,000 | Few fees |
LENDER | CURRENT APR RANGE | LOAN AMOUNT | MIN. CREDIT SCORE | BEST FOR |
---|---|---|---|---|
Upstart | 5.40%–35.99% | $1,000–$50,000 | No minimum requirements | Little credit history |
OneMain Financial | 18.00%–35.99% | $1,500–$20,000 | Not specified | Secured loans |
TD Bank | 6.99%–18.99% | $2,000–$50,000 | Not specified | Low rate caps |
Avant | 9.95%–35.99% | $2,000–$35,000 | 580* | A range of repayment options |
LendingPoint | 7.99%–35.99% | $2,000–$35,000 | 590 | Small loans |
Upgrade | 6.95%–35.97% (with autopay) | $1,000–$50,000 | Not specified | Fast funding |
LendingClub | 7.04%–35.89% | $1,000–$40,000 | 600 | Online experience |
*Avant's minimum credit score is 580 FICO and 550 Vantage.
For more information on bad credit loan rates, check out our page on bad credit personal loans.
LENDER | CURRENT APR RANGE | LOAN AMOUNT | MIN. CREDIT SCORE | BEST FOR |
---|---|---|---|---|
SoFi | 7.99%–22.73% (with autopay) | $5,000–$100,000 | 680 | High borrowing limits |
Marcus by Goldman Sachs | 6.99%–19.99% (with autopay) | $3,500–$40,000 | Not specified | Personal loans without any fees |
LendingClub | 7.04%–35.89% | $1,000–$40,000 | 600 | Borrowing money from other investors |
LightStream | 5.73%–19.99% (with autopay) | $5,000–$100,000 | Not specified | Borrowers who can qualify for the best rates |
Prosper | 7.95%–35.99% | $2,000–$40,000 | 640 | Joint loans |
Rocket Loans | 5.97%–29.99% (with autopay) | $2,000–$45,000 | Not specified | Fast funding |
Best Egg | 7.99%–35.99% | $2,000–$50,000 | 600 | Borrowers with “okay” credit |
Discover | 5.99%–24.99% | $2,500–$35,000 | 660 | A range of repayment terms |
Credible | 3.49%–35.99% (with autopay) | $600–$100,000 | Varies | Borrowers who want to price shop |
Earnest | Starting at 2.49% | $1,000–$100,000 | Varies | Borrowers who want other factors considered in their application |
Citizens Bank | Varies by location | $5,000–$15,000 | Not specified | Small loan amounts |
Payoff | 5.99%–24.99% | $5,000–$40,000 | 640 | Borrowers who want to consolidate debt |
LENDER | CURRENT APR RANGE | LOAN TERM | LOAN AMOUNT | BEST FOR |
---|---|---|---|---|
Best Egg | 7.99%–35.99% | 3 to 5 years | $2,000–$50,000 | High-income earners with good credit |
Payoff | 5.99%–24.99% | 2 to 5 years | $5,000–$40,000 | Consolidating credit card debt |
LightStream | 5.73%–19.99% (with autopay) | 2 to 12 years | $5,000–$100,000 | High-dollar loans and longer repayment terms |
PenFed | 6.74%–17.99% | 1 to 5 years | $600–$50,000 | Smaller loans with a credit union |
OneMain Financial | 18.00%–35.99% | 2–5 years | $1,500–$20,000 | Fair to poor credit |
Discover | 5.99%–24.99% | 3–7 years | $2,500–$35,000 | Good credit and next-day funding |
Upstart | 5.40%–35.99% | 3 or 5 years | $1,000–$50,000 | Consumers with little credit history |
Marcus by Goldman Sachs | 6.99%–19.99% (with autopay) | 3 to 6 years | $3,500–$40,000 | Consolidating large debts |
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Personal loan interest rates currently range from about 3 percent to 36 percent, depending on your credit score. As of July 20th, 2022, the average personal loan interest rate is 10.60 percent. The better your credit score, the more likely you are to qualify for a personal loan with the lowest interest rate available. Compare personal loan offers to see what you are eligible for before applying for a personal loan.
In order to combat inflation, the Federal Open Market Committee (FOMC) raised interest rates three-quarters of a percentage point in June, making the new benchmark 1.5-1.75 percent. Officials from the Federal Reserve have indicated that there is likely to be another 0.75 percentage-point rate rise at the FOMC’s upcoming meeting.
These rate hikes impact personal loan interest rates. Most personal loans have fixed interest rates, so borrowers who already have personal loans do not need to worry. However, those looking to take out a personal loan may face higher interest rates.
The average personal loan interest rate has risen from 10.41 percent at the beginning of May 2022 to 10.60 percent as of July 20th, 2022. Personal loan interest rates are likely to continue rising if the Fed raises the prime rate again at its next meeting.
Despite rising interest rates, there are things borrowers can do to cut down on costs when taking out personal loans. The rate you receive from a lender depends on factors within your control such as your credit score, desired loan amount and existing debts.
If you want to take out a personal loan and are looking to qualify for a better interest rate, here are some things you can do:
Average personal loan interest rates range from 10.3 percent to 12.5 percent for “excellent” credit scores of 720 to 850, 13.5 percent to 15.5 percent for "good" credit scores of 690 to 719, 17.8 percent to 19.9 percent for "average" credit scores of 630 to 689 and 28.5 percent to 32.0 percent for “poor” credit scores of 300 to 629.
CREDIT BAND | CREDIT SCORE RANGE | AVERAGE PERSONAL LOAN INTEREST RATE |
---|---|---|
Excellent Credit | 720–850 | 10.3%–12.5% |
Good Credit | 690–719 | 13.5%–15.5% |
Average Credit | 630–689 | 17.8%–19.9% |
Bad Credit | 300–629 | 28.5%–32.0% |
Excellent-credit loans are loans that are geared toward borrowers with excellent credit, typically with credit scores between 720 and 850. Having such a high credit score can come with many benefits, including average APRs as low as 10.3 percent — though some lenders go even lower. If your credit score falls into this range, look for excellent-credit lenders with low advertised rates and few fees.
Good-credit loans offer competitive interest rates and generally low fees. You're considered to have good credit if you have a credit score between 690 and 719, and with such a high score, you may qualify for average APRs as low as 13.5 percent. However, if you have good credit and are interested in a personal loan, shop around; you may be able to qualify for an even lower interest rate.
If you have a fair or average credit score, it can be hard to find a personal loan that offers reasonable rates and fees. If your credit score falls between 630 and 689, your credit score is average. While this is considered a less-than-stellar score, you still may be able to qualify for a personal loan with an average APR as low as 17.8 percent. This list of the best personal loans for fair credit features lenders that cater to people with scores in the mid-600s.
You can get approved for a loan even with bad credit, although you won't qualify for the best APRs. If your credit score is between 300 and 629, the best interest rate available could be around 28.5 percent. However, a bad-credit loan, even one with a rate close to 30 percent, is a better financial option than a payday loan; to see what rates are available, compare offers from a few bad-credit lenders.
With the exception of loans from a few niche lenders, like Payoff, most personal loans can be used for any purpose. Personal loans come in a few common categories.
Debt consolidation is when you pay off several debts with a new personal loan, then pay off the personal loan through monthly payments.
Who it’s best for: Personal loans for debt consolidation are best for people who have several high-interest debts, generally through credit cards.
What to watch out for: Look carefully to make sure the debt will cost less in the long run. Don’t consolidate debt unless you can get a better interest rate, and check to make sure any fees don’t add costs to the loan.
When to get started: If you have several high-interest debts, generally through credit cards, and can qualify for a lower interest rate with a personal loan, you may want to consider it.
How to get started: Evaluate what debts to consolidate and how much money you could save on interest rates, then compare top lenders. Get quotes from lenders to estimate how much you could save.
Unexpected expenses like a car repair or hospital bill can throw off your monthly budget, and a small personal loan can alleviate the immediate cost.
Who it’s best for: Anyone dealing with a large emergency expense who doesn’t have the option of rainy day savings or a payment plan to pay for it without putting it on a high-interest credit card.
What to watch out for: A loan will cost more because of interest rates, so it’s best to avoid getting a loan unless it is absolutely necessary. Look for the lowest APR you can qualify for, and don’t take out a large loan than you need. If possible, see if there are other options before getting a loan.
When to get started: If there’s an emergency and you need a significant amount of funds in a short time, get started as soon as you know that a personal loan is the best option for you.
How to get started: After you have project estimates, look for lenders that offer home improvement loans and find the one that will offer you low APRs.
A personal loan may be a great way to pay for a large home renovation project and boost the equity in your home.
Who it’s best for: People who can make home renovations that will increase the home’s value and can make the payments on the loan without financial hardship.
What to watch out for: The goal is to increase your financial stability, so don’t get a loan with high APRs or fees that will outweigh possible benefits.
When to get started: Apply for a loan once you determine how much you need by getting estimates from contractors. You don’t want to apply for more or less than you need, so you should have a good idea of what to expect first.
How to get started: After you have project estimates, look for lenders that will offer you low APRs.
Personal loans are often used to cover major expenses, such as a wedding or vacation.
Who it’s best for: Anyone who needs to make a large purchase.
What to watch out for: It’s not generally a good idea to take on a lot of debt, especially for something that only lasts for a short period of time. It’s better to save up or cut expenses than to be paying for something with added interest for years afterward.
When to get started: If you have determined that a personal loan is the best way to go, apply for the loan by the deadlines you would need for the major event or when you plan to make the large purchase.
How to get started: Shop around with different lenders to find the best option for what you have in mind for your purchase or event. The lender that will work best for you depends on your needs. For example, if you are looking to buy a boat, try looking into lenders that offer boat loans. If you want to buy an RV, an RV loan may help you find options that will work best for you.
APR stands for annual percentage rate. It refers to the extra amount borrowers pay on top of their loan amount, or principal. APR is different from your interest rate; it equals your interest rate plus any loan fees.
Secured loans are backed by a piece of the borrower’s property as collateral, typically a vehicle or house. Because the borrower stands to lose personal property if they default, secured loans tend to have lower interest rates.
Unsecured loans are not backed by collateral, but instead by the borrower’s creditworthiness. Because the lender takes on more of a risk with an unsecured loan, interest rates tend to be higher. Lenders also require that borrowers seeking unsecured loans have higher-than-average credit scores. Learn more about the key differences between secured and unsecured loans.
You will generally need several documents to apply for a personal loan, including documents that prove your identity and financial status. You'll generally need at least ID, income verification and proof of address. These documents and the rest of your information will help the lender determine what origination fee you will pay if applicable.
Personal loan costs vary by lender. For excellent credit, there are some lenders that don’t charge any fees. You’re only responsible for paying back the principal (or the amount you borrowed) plus interest. The lower your interest charges, the less you’ll pay back over the life of the loan.
Calculate your potential loan payments to help you decide whether you can afford the personal loan you’re considering.
When it comes to shopping for personal loans, the better your credit score, the more options you have. Generally speaking, there are three main places to get a personal loan:
How your personal loan can be used is open as long as it’s for a legal purpose. The most common uses for a personal loan are debt consolidation, home renovations and emergency expenses. However, you can't use personal loan funds to pay for your education costs, and some lenders may restrict usage further. Payoff, for instance, limits its personal loans to credit card debt consolidation.
The exact loan amounts available often depend on your credit score. The good news is that with excellent credit, you'll likely have access to the full range of loan amounts that a lender offers. Most lenders have minimum loan amounts from $1,000 to $5,000, and maximums can stretch from $50,000 to $100,000.
Lenders use this information to determine if you meet their borrowing criteria, so it helps to calculate your debt-to-income ratio before you apply. First, add up your debts and your monthly income. Divide your monthly debts by your monthly gross income to determine your ratio.
The impact of COVID-19 has left millions of Americans without a reliable source of income, and many may be searching for personal loans to cover emergency expenses. In response to unprecedented market conditions, some banks announced new loan offerings and lower interest rates, though many have also tightened their eligibility requirements.
For existing borrowers, some lenders have extended their loan relief programs into 2021, waiving fees or letting customers temporarily defer payments. Long-term unemployment will mean some borrowers continue to rely on these programs, says Greg McBride, Bankrate’s chief financial analyst. He encourages those who are having trouble making payments on their personal loans to contact their lenders rather than ignoring the problem.
To select the top personal loan lenders, Bankrate considers 15 factors. These factors include credit requirements, APR ranges, fees, loan amounts and flexibility to account for a wide range of credit profiles and budgets. Of the 32 lenders reviewed, 12 made Bankrate's list of best personal loans. Each lender has a Bankrate rating, which consists of three categories. These categories include: