Ever struggled with figuring out what kind of personal loan you want to take out for certain expenses and needs? Continue reading this review to find out more about personal loans.
Taking out a personal loan can improve your credit score (that is if it is already in decent standing), but there are a lot of factors to consider before just diving right in.
If it is your first time applying for a personal loan, then read this convenient review down below!
This review will entail all common necessities and drawbacks when it comes to applying for personal loans.
* See the Student Loan Refinancing and Personal Loans bonus offers from Credible and SoFi.*
What Are Personal Loans?
A personal loan is usually an unsecured loan with a fixed rate that doesn’t require any collateral or vehicle to apply for. A collateral is to ensure security, but you don’t necessarily need it for personal expenses.
Personal loans for the most part can be used for anything; debt consolidation, home improvement, auto purchases, special occasions and more.
However, there are some exceptions depending on the brand and company.
The Good
- More flexible terms
- Can be used for both personal and business needs
- Best for debt consolidation such as credit card debt
- Lowers monthly payments and interest rates
- Improves credit scores
The Bad
- Not every personal loan can be used for everything
- Some personal loans cannot be used for student debt or tuition
- If you aren’t careful, you could dig yourself a deeper hole
- Some personal loans require prior excellent credit history and scores
- You must be 18+
Factors To Consider
There are a few factors to keep in mind when applying for a personal loan. Each personal loan will vary in terms of amount, but some will have similar requirements.
- The APR (Annual percentage rate) is the interest accrued annually and they differ depending on loan amount
- Some lenders will limit the amount you can borrow
- Not all lenders have a wide variety of options, you will have to do more research to find terms that suit you
- Usually, a loan lender will check your initial credit score or history to make sure it is at least average. These are split into soft pull and hard pull credit checks.
- Soft Pull: can use other documents other than your credit inquiry
- Hard Pull: direct credit score check–has to be pretty good
- Most lenders have flexible repayment options and accept all kinds of payments.
- There are important fees to consider such as origination, prepayment and late fees. Make sure to keep up to date with the specific fees each lender provides.
- Most companies that have personal loans will have a mobile app available.
How To Qualify For The Best Rates
If you are interested in finding the best rates when applying for a personal loan, you will have to make sure these requirements are in tact.
- You will need a high, excellent credit score. The better your credit score is, the higher rates you can get.
- Just like your credit score, your credit history should also be prolonged and show that you have paid for a kinds of debt before.
- Those who earn higher income that the average person tend to get the most competitive rates.
- Some lenders will appreciate it if you have a low debt-to-income ratio.
Lenders At-a-Glance
Lender | Loan Amounts | Loan Terms | APR Range | Origination Fee | Minimum Credit |
LightStream | $5,000 – $100,000 | 2 – 7 years* | see website for current rates | None | 660 |
SoFi | $5,000 – $100,000 | 2 – 7 years | Fixed Rates: 5.99% APR to 18.28% APR (with AutoPay). |
None | 680 |
Prosper | $2,000 – $40,000 | 3 or 5 years | 6.95% – 35.99% | 2.4% – 5% | 640 |
LendingTree | $1,000 – $35,000 | 1 – 5 years | Varies | Varies | Varies |
LendingClub | $1,000 – $40,000 | 3 – 5 years | 10.68% to 35.89% | 1% – 6% | 600 |
Upstart | $1,000 – $50,000 | 3 or 5 years | 7.00% – 35.99% | 0% – 8% | 620 |
Payoff | $5,000 – $35,000 | 2 – 5 years | 5.99% – 24.99% | 0% – 5% | 640 |
PersonalLoans.com | $1,000 – $35,000 | 3 – 6 years | Varies | Varies | 580 |
Best Egg | $2,000 – $35,000 | 3 or 5 years | 5.99% – 29.99% | 0.99% – 5.99% | 640 |
Peerform | $4,000 – $25,000 | 3 or 5 years | 5.99% – 29.99% (*see more below) | 1% – 5% | 600 |
PenFed | $500 – $25,000 | 6 months – 5 years | 6.49% – 17.99% | None | None |
Wells Fargo | $3,000 – $100,000 | 1 – 5 years | 7.49% – 24.49% | None | 600 |
Avant | $2,000 – $35,000 | 2 – 5 years | 9.95% – 35.99% | 0% – 4.75% | 580 |
OneMain | $1,500 – $20,000 | 2 – 5 years | 18.00% – 35.99% | Varies | None |
*Payment example: Monthly payments for a $10,000 loan at 5.89% APR with a term of 3 years would result in 36 monthly payments of $303.72
5 Best Personal Loan Lenders
There isn’t just one single lending service that fits all kind of situations, but there are some well known ones that are specific. Here are some of the top companies that other loan borrowers would recommend.
SoFi: With Unemployment Protection
Max Amount $100,000 |
Loan Terms 2 to 7 Years |
APR 5.99% to 18.28% APR (with AutoPay) |
Origination Fee None |
SoFi is a direct online lender who is best known for financing student loans, but they also offer other options.
Even though, SoFi would prefer newly graduates to apply for a personal loan, they are no opposed to those who want to use it towards other payments.
To qualify, you need at least a minimum credit score of 680.
- Pros: Low interest rates, loan limit of $100,000, initial soft credit check, no origination fees or any other fees, community events, and unemployment protection.
- Cons: High borrower standards, relatively slow funding time.
LightStream: Rate Beat Program
Max Amount $100,000 |
Loan Terms 2 to 7 Years |
APR See website for current rates. |
Origination Fee None |
LightStream, an online division of SunTrust Bank, has a lending model that compares your situation to their loans to find you the right one.
LightStream is best recommended for those with pretty good credit scores and history, as you need about a minimum of 720.
- Pros: Low interest rates, loan limit of $100,000, no origination fee or any other fees, Rate Beat Program, $100 loan experience guarantee, and tree donation for every funded loan.
- Con: High borrower standards.
Prosper: With Clarity Money Compatibility
Max Amount $40,000 |
Loan Terms 3 or 5 Years |
APR 7.95% – 35.99% |
Origination Fee 2.4% – 5% |
Prosper is a peer-to-peer online lending service that has loans for investors. They have low fixed interest rates and are pretty straightforward with their services.
You will need a credit score of at least $620 to apply, but they conduct a soft pull.
- Pros: Low interest rates for good credit borrowers, initial soft credit check, no prepayment penalty, and compatible with Clarity Money app.
- Cons: High interest rates for bad credit borrowers, only two fixed term lengths to choose from, origination, check processing, late payment and insufficient funds fees.
LendingTree: Where Lenders Compete For You
Max Amount $35,000 |
Loan Terms 1 to 5 Years |
APR 5.32% – 36% |
Origination Fee Depends on Lender |
This particular lending company lets you receive multiple offers with just one application.
It is pretty much a loan matching service where LendingTree will find the right lender that suits your situation based on the information you give them.
- Pros: Low interest rates for good credit borrowers, initial soft credit check, mobile app with financial tools, and loan monitoring.
- Cons: High interest rates for bad credit borrowers, fees vary from lender to lender, and too much contact from lenders trying to woo you.
LendingClub: With Cosigner Option
Max Amount $40,000 |
Loan Terms 3 to 5 Years |
APR 10.68% to 35.89% |
Origination Fee 1% – 6% |
Another peer-to-peer lendner that connects you to investors that might be interested in funding you personal loan.
If you have a weak credit score or history, LendingClub allows you to apply for a cosigner to strengthen it.
You will still need a minimum of at least 600 for the initial credit check.
- Pros: Low interest rates for good credit borrowers, initial soft credit check, and no prepayment penalty.
- Cons: High interest rates for bad credit borrowers, origination and other fees.
Other Top Lenders
If those particular lenders may not fit your criteria or are too much for your credit score and history, you can take a look at these others.
Upstart: With A “Smarter” Credit Model
Max Amount $50,000 |
Loan Terms 3 or 5 Years |
APR 7.00% – 35.99% |
Origination Fee 0% – 8% |
Upstart looks more in depth than just a borrower’s credit score as a deciding factor on whether or not to approve a loan application like several other online lenders.
To qualify, you must have a minimum credit score of 620.
- Pros: Loan limit of $30,000, initial soft credit check, no prepayment penalty, no check processing fee, unique approval process, and ability to borrow twice.
- Cons: High interest rates, only two fixed term lengths to choose from, and origination, late payment and insufficient funds fees.
See our full review.
Payoff: Where Science Meets Finance
Max Amount $35,000 |
Loan Terms 2 to 5 Years |
APR 5.99% – 24.99% |
Origination Fee 0% – 5% |
Payoff is a company that offers personal loans that helps consumers pay off their credit card debt. They specifically are looking for high interest earners that need a loaning service to consolidate all their debt.
To qualify, you must have a minimum credit score of 640.
- Pros: Low interest rates for good credit borrowers, initial soft credit check, no penalty fees, personal service from Payoff Member Advocates, career support, and “empowerment science” assessments to better understand yourself and your financial habits.
- Cons: Only available for debt consolidation, high interest rates for bad credit borrowers, relatively slow funding time, origination fee, and only available in less than half of the United States.
See our full review.
Best Egg: Where You Can Borrow Twice
Max Amount $35,000 |
Loan Terms 3 or 5 Years |
APR 5.99% – 29.99% |
Origination Fee 0.99% – 5.99% |
Best Egg is an online lending platform that offers loans up to $35,000 with rates as low as 5.99%. They also strive for an easy and fast way for you to access personal loans.
To qualify, you must have a minimum credit score of 640.
- Pros: Low interest rates for good credit borrowers, initial soft credit check, no prepayment penalty, multiple payment options, mobile app, and ability to borrow twice.
- Cons: High interest rates for bad credit borrowers, only two fixed term lengths to choose from, origination, check processing, late payment and insufficient funds fees.
See our full review.
PersonalLoans.com: Where It’s Okay To Have Bad Credit
Max Amount $35,000 |
Loan Terms 3 to 6 Years |
APR 5.99% – 35.99% |
Origination Fee 1% – 5% |
PersonalLoans.com is a loan matching service that offers peer-to-peer lending, personal installments and bank personal loans.
To qualify, you must have a minimum credit score of 580.
- Pros: Low interest rates for good credit borrowers, relatively quick funding, and no prepayment penalty.
- Cons: High interest rates for bad credit borrowers, origination, late payment and insufficient funds fees.
See our full review.
Peerform: With Debt Consolidation Perks
Max Amount $25,000 |
Loan Terms 3 or 5 Years |
APR 5.99% – 29.99% |
Origination Fee 1% – 5% |
Peerform, a lending platform open to borrowers who have less than perfect credit, specializes in finding customers the right loans for their needs, but especially towards debt consolidation.
To qualify, you must have a minimum credit score of 600.
- Pros: Low interest rates for good credit borrowers, initial soft credit check, no prepayment penalty, and debt consolidation perks.
- Cons: High interest rates for bad credit borrowers, relatively slow funding time, only two fixed term lengths to choose from, origination, check processing, late payment and insufficient funds fees.
See our full review.
PenFed: With Debt Protection
Max Amount $25,000 |
Loan Terms 6 months to 5 Years |
APR 6.49% – 17.99% |
Origination Fee None |
As a credit union, PenFed requires that you join in order to apply for a loan. They offer personal loans for up to $25,000 with rates as low as 6.49% and are best recommended for home remodeling or traveling expenses.
- Pros: Low interest rates, no origination fee or prepayment penalty, flexible loan repayment, live customer service 24/7, and debt protection option.
- Cons: Available only to PenFed customers, hard credit check, and late payment and insufficient funds fees.
See our full review.
Wells Fargo: Where Relationship Matters
Max Amount $100,000 |
Loan Terms 1 to 5 Years |
APR 5.49% – 24.49% |
Origination Fee None |
Wells Fargo is an online lending platform that offers personal loans for those with pretty much excellent credit. They also eliminate several fees such as origination, prepayment or check processing fees. With really excellent credit you can get an APR as low as 7.49%.
- Pros: Low interest rates for good credit borrowers, loan limit of $100,000, cosigners welcomed, relatively fast funding time, no origination, prepayment or check processing fees, and small rate discounts for Wells Fargo checking account or certificate of deposit account customers.
- Cons: High interest rates for bad credit borrowers, hard credit check, and late payment and insufficient funds fees.
See our full review.
Avant: On Forbes’ Radar
Max Amount $35,000 |
Loan Terms 2 to 5 Years |
APR 9.95% – 35.99% |
Origination Fee 0% – 4.75% |
]Avant understands that getting credit with a traditional bank loan can require a lot of up front paperwork and be extremely time consuming.
To qualify, you must have a minimum credit score of 580.
- Pros: Initial soft credit check, relatively quick funding time, no prepayment penalty, mobile app, and live customer service seven days a week.
- Cons: High interest rates, origination, late payment and insufficient funds fees.
See our full review.
OneMain: Where Bad Credit Is Okay
Max Amount $20,000 |
Loan Terms 2 to 5 Years |
APR 18.00% – 35.99% |
Origination Fee Varies |
OneMain Financial offers customized loan solutions and has personal loans up to $20,000 for those who have bad credit.
There are no set credit score, income or DTI requirements to qualify.
- Pros: Cosigners and collateral welcomed, initial soft credit check, relatively quick funding time, flexible payment options, no prepayment penalty, seven-day commitment guarantee, and OneMain Rewards program.
- Cons: High interest rates, must meet in person to complete the application, origination, late payment, insufficient funds and payment processing fees, full coverage insurance required for collateral.
See our full review.