Best Personal Loans for 2018

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Mike Brown
Mike Brown
Updated: September 3, 2018

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Trying to figure out how to get the best unsecured personal loan online? Find out how below!

There are a lot of reasons why you might want to apply for a personal loan. From wanting to renovate your home to having to buy a new car, personal loans are a relatively easy way to access additional cash when you need it. They also tend to offer much more attractive interest rates compared to using credit cards for these types of expenses.

But if you’ve never applied for a personal loan before, you might be worried that the process will be difficult, time consuming, or confusing. To help you navigate applying for an unsecured personal loan, we made this quick guide.

Compare the Best Personal Loan Companies

Simplify your personal loan search by comparing personalized rates from top lenders in minutes. Check your rates today to see if you pre-qualify.

Citizens Bank

5.99%-18.99%2

Estimated APR

3 to 7 Years

Loan Terms

680

Min. Credit Score

What we like

  • Ability to add a cosigner
  • Interest rate reductions available to those with a Citizens Bank checking or savings account
  • No fees ever

Additional Information

See Citizens Bank Personal Loans Review and Important Disclosures

Loan Minimum $5,000
Loan Maximum $50,000
Time to Funding 3+ days on average
Min. Annual Income $24,000
Min. Credit History No Minimum
State Restrictions Available in any state
Origination Fees None
Prepayment Penalty None
Late Fees None
Marcus

6.99%-24.99%

Estimated APR

3 to 6 Years

Loan Terms

660

Min. FICO® 8.0

What we like

  • Marcus is backed by Goldman Sachs' 148 years of financial expertise
  • Tailored monthly payment options designed to fit your budget
  • No Fees. Ever. We don't deduct a sign-up fee from your loan amount
  • No late fees – you only pay interest for the additional days

Additional Information

See Marcus Personal Loans Review and Important Disclosures

Loan Minimum $3,500
Loan Maximum $40,000
Time to Funding 5 days on average
Min. Annual Income None
Min. Credit History Typically 3 years
State Restrictions Not available in MD
Origination Fees None
Prepayment Penalty None
Late Fees None
LightStream

4.99%-14.24%

Estimated APR

2 to 7 Years*

Loan Terms

660

Min. Credit Score

What we like

  • Rate Beat Program will beat a competitor’s published rate by 0.10%
  • Accepts joint applications for every loan type
  • LightStream has one of the highest loan limits; allowing borrowers take out up to $100,000
  • Zero origination, prepayment penalties, or late fees

Additional Information

See LightStream Personal Loans Review and Important Disclosures

Loan Minimum $5,000
Loan Maximum $100,000
Time to Funding As soon as the same day
Min. Annual Income None
Min. Credit History None
State Restrictions Available in any state
Origination Fees None
Prepayment Penalty None
Late Fees None
LendEDU

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SoFi

6.28%-14.87%1

Estimated APR

3 to 7 Years

Loan Terms

660

Min. Credit Score

What we like

  • SoFi has one of the highest loan limits; allowing borrowers take out up to $100,000
  • Unemployment protection is available for up to 12 months
  • Access to member perks including exclusive events, SoFi wealth advisors, and career planning
  • Zero origination, prepayment penalties, or late fees

Additional Information

See SoFi Personal Loans Review and Important Disclosures

Loan Minimum $5,000
Loan Maximum $100,000
Time to Funding 7 days on average
Min. Annual Income No Minimum
Min. Credit History No Minimum
State Restrictions Not available in MS
Origination Fees None
Prepayment Penalty None
Late Fees None
Prosper

6.95%-35.99%4

Estimated APR

3 or 5 Years4

Loan Terms

640

Min. Credit Score

What we like

  • Prosper was founded in 2006 and has funded more than $12 billion in loans
  • Receive funds in less than a week after approval
  • No prepayment penalty

Additional Information

See Prosper Personal Loans Review and Important Disclosures

Loan Minimum $2,000
Loan Maximum $40,000
Time to Funding 1 - 3 days after approval
Min. Annual Income None
Min. Credit History None
State Restrictions Not available in IA, ND, WV
Origination Fees 2.4% - 5% of the loan amount
Prepayment Penalty None
Late Fees $15 or 5% of the payment due
Upgrade

6.87%-35.97%

Estimated APR

3 or 5 Years5

Loan Terms

620

Min. Credit Score

What we like

  • Access to free credit monitoring, a credit simulator, and free educational resources
  • Upgrade may allow you to temporarily reduce your monthly payments due to hardships
  • Funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications
  • No prepayment penalties

Additional Information

See Upgrade Personal Loans Review and Important Disclosures

Loan Minimum $1,000
Loan Maximum $50,000
Time to Funding One business day
Min. Annual Income None
Min. Credit History Typically 3 years
State Restrictions Not available in CT, CO, IA, MD, VT, WV
Origination Fees 1% - 6% of the loan amount
Prepayment Penalty None
Late Fees Up to $10
FreedomPlus

4.99%-29.99%

Estimated APR

2 to 5 Years

Loan Terms

640

Min. Credit Score

What we like

  • Ability to lower interest rate by adding a cosigner
  • Direct pay discount allows you to lower your interest rate when your loan is issued directly to the creditor
  • FreedomPlus may offer you a lower interest rate if you have retirement savings of $40,000 or more

Additional Information

See FreedomPlus Personal Loans Review and Important Disclosures

Loan Minimum $10,000
Loan Maximum $35,000
Time to Funding 3 - 5 days after approval
Min. Annual Income None
Min. Credit History Typically 7 years
State Restrictions Not available in CO, CT, HI, KS, ME, NH, ND, NY, OR, RI, VT, WV, WI, WY
Origination Fees 0% - 5% of the loan amount
Prepayment Penalty None
Late Fees $15 or 5% of past due amount
LendingClub

6.16%-35.89%

Estimated APR

3 to 5 Years

Loan Terms

600

Min. Credit Score

What we like

  • Founded in 2007, LendingClub is the largest online lender for personal loans in the U.S.
  • Ability to add a cosigner
  • Borrowers facing hardship have the option to make interest-only payments for three months
  • No prepayment penalties

Additional Information

See LendingClub Personal Loans Review and Important Disclosures

Loan Minimum $1,000
Loan Maximum $40,000
Time to Funding Up to one week
Min. Annual Income None
Min. Credit History None
State Restrictions Not available in IA
Origination Fees 1% - 6% of loan amount
Prepayment Penalty None
Late Fees 5% of the unpaid amount or $15
Best Egg

5.99%-29.99%

Estimated APR

3 to 5 Years

Loan Terms

640

Min. Credit Score

What we like

  • Trusted lender with A+ BBB rating, more than 300,000 customers served and over $5 billion in funded loans
  • Funds can be deposited next day directly into your bank account
  • No hidden fees or prepayment penalties

Additional Information

See Best Egg Personal Loans Review and Important Disclosures

Loan Minimum $2,000
Loan Maximum $35,000
Time to Funding Typically next day
Min. Annual Income $40,000
Min. Credit History Typically 3 years
State Restrictions Not available in IA, WV, VT
Origination Fees 0.99% – 5.99% of loan amount
Prepayment Penalty None
Late Fees $15
Avant

9.95%-35.99%

Estimated APR

2 to 5 Years

Loan Terms

580

Min. Credit Score

What we like

  • Avant was founded in 2012 and has provided access to over $4 billion in personal loans
  • ​Late-fee forgiveness policy refunds late fee after three on-time, consecutive payments
  • ​Easy to use mobile app for tracking and paying loans
  • No hidden fees or prepayment penalties

Additional Information

See Avant Personal Loans Review and Important Disclosures

Loan Minimum $2,000
Loan Maximum $35,000
Time to Funding 2 days on average
Min. Annual Income $20,000
Min. Credit History None
State Restrictions Not available in IA
Origination Fees Up to 4.75% of loan amount
Prepayment Penalty None
Late Fees $25 after 10-day grace period
Upstart

8.69%-29.99%

Estimated APR

3 or 5 Years

Loan Terms

620

Min. Credit Score

What we like

  • Upstart considers factors other than your credit score when assessing your loan application
  • Accepts applicants with a part-time job or a job offer letter
  • Receive funds as quick as next day after approval
  • No prepayment penalties or hidden fees

Additional Information

See Upstart Personal Loans Review and Important Disclosures

Loan Minimum $10,000
Loan Maximum $50,000
Time to Funding Typically one day
Min. Annual Income None
Min. Credit History None
State Restrictions Available in any state
Origination Fees 0% - 8% of the loan amount
Prepayment Penalty None
Late Fees $10 after 15-day grace period
Payoff

5.99%-24.99%

Estimated APR

2 to 5 Years

Loan Terms

640

Min. Credit Score

What we like

  • Payoff may allow you to skip, defer, or adjust your monthly payment if you face financial hardship
  • Access to a Payoff member advocate to assist with financial planning
  • Payoff provides access to free monthly FICO scores
  • No late fees or prepayment penalties

Additional Information

See Payoff Personal Loans Review and Important Disclosures

Loan Minimum $5,000
Loan Maximum $35,000
Time to Funding 2 - 7 business days
Min. Annual Income None
Min. Credit History Typically 3 years
State Restrictions Not available in MA, MS, NE, NV, OH, WV
Origination Fees 0% - 5% of loan amount
Prepayment Penalty None
Late Fees None
LendingPoint

17.47% - 34.99%

Estimated APR

2 to 4 Years

Loan Terms

600

Min. Credit Score

What we like

  • LendingPoint considers other factors like your employment status and earning potential when assessing your loan application
  • ​Option to pay origination fees upfront or add to your interest rate and pay over time
  • ​Ability to request one loan modification over the term of your loan
  • No hidden fees or prepayment penalties

Additional Information

See LendingPoint Personal Loans Review and Important Disclosures

Loan Minimum $3,500
Loan Maximum $25,000
Time to Funding As quick as next day
Min. Annual Income $20,000
Min. Credit History None
State Restrictions Not available in CO, CT, ME, MA, NV, NY, VT, WV, WI, WY
Origination Fees 0% - 6% of loan amount
Prepayment Penalty None
Late Fees Varies by state

Top 13 Companies for the Best Online Personal Loans: In-Depth Reviews

In order to figure out which personal loan lender is the best for you, you should compare their interest rates, term lengths, fees, and eligibility requirements. Each lender also has different benefits and downsides to consider. Read on to learn more about what they offer so you can make the best decision for yourself.

Here are LendEDU's top picks for the best personal loan companies:

  • SoFi
  • Citizens Bank
  • Marcus
  • Prosper
  • Upgrade
  • FreedomPlus
  • Upstart
  • LightStream
  • LendingClub
  • Payoff
  • Best Egg
  • Avant
  • LendingPoint

1. Citizens Bank

Citizens Bank

LendEDU Rating (4.68 / 5.0)

  • Rates as low as 5.99% for fixed rates2
  • Qualify for loans between $5,000 and $50,000
  • Choose between payment plans of 3 to 7 years
  • No fees ever
Estimated APR

5.99% - 18.99%2

Loan Terms

3 to 7 years

Max Amount

$50,000

Origination Fees

No origination fees

Credit Needed

680

Fixed interest rates from 6.49% - 16.24% (6.49% - 16.24% APR) based on applicable terms. Lowest rates range from 5.99%-15.74% (5.99%-15.74% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.

The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.

Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

Personal loans must not be used for educational expenses or as a small business loan.

Show Disclaimer

The Basics

Citizens Bank is a financial services company that offers a very wide range of financial products, including traditional savings and checking accounts, student loans, mortgages, and some of the best personal loans. Unlike many other well-known online lenders, Citizens Bank has a great many physical locations throughout the country. In fact, they are the 13th largest retail bank in the United States. Their website offers an easy online application process that is able to approve borrowers for personal loans without requiring them to come in to a physical branch location of Citizens Bank. It is definitely one of the best personal loan companies available today.

Citizens Bank serves a large range of borrowers and offers personal loans for debt consolidation, vacations, special occasions, and major purchases. Their unsecured personal loan amounts range from a minimum of $5,000 to a maximum of $50,000. For the most part, they are a fairly traditional personal loan lender. Their stated APR on their website runs from 5.99% to 18.99% for fixed-rate loans. Personal loan terms run from 36 to 84 months. These are great terms and is why Citizens Bank offers some of the best personal loans available.

Citizens Bank offers some guidance online for would-be applicants. For starters, it requires a minimum income of $24,000 for approval and a "reasonably strong credit history."

The Benefits

Citizens Bank does state that it charges no origination, application, disbursement fees, or prepayment penalties. There are interest rate reductions for AutoPay through a Citizens Bank checking or savings account, and for customers using AutoPay.

Citizens Bank also has an app for smartphone users. One helpful option available through Citizens Bank that isn’t often available through other online personal loan lenders is the ability to obtain a cosigner. If a potential borrower applies and is rejected, they can reapply with a well-qualified cosigner. Citizens Bank will issue the personal loan using only the credit score of the well-qualified cosigner, which also saves the primary borrower money through a reduced interest rate.

Bottom Line

This is a good choice for a borrower with average to excellent credit who would like to know that their lender is very established. Citizens Bank is one of the few well-known lenders online who also have physical locations, which might make a difference to borrowers nervous about online-only lending institutions. Here is a summary of what you can expect:

  • Unsecured loans available from $5,000 to as much as $50,000
  • APR rates from 5.99% to 18.99% on personal loans
  • Terms vary from 36 to 84 months
  • Physical branch locations available
  • No fees ever
  • Online applications and online management of loans
  • Ability to use a cosigner
  • Smartphone app

2. Marcus by Goldman Sachs®

Marcus

LendEDU Rating (4.80 / 5.0)

  • Marcus is backed by Goldman Sachs' 148 years of financial expertise
  • Borrow up to $40,000
  • Zero origination or prepayment fees
  • No late fees – you only pay interest for the additional days
Estimated APR

6.99% - 24.99%

Loan Terms

3 to 6 years

Max Amount

$40,000

Origination Fees

No origination fees

Min. FICO 8.0

660

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. 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.

Show Disclaimer

The Basics

Marcus Personal Loans is a division of Goldman Sachs bank, one of the largest and oldest banks in the U.S.. In fact, the online personal loan lender is named after Marcus Goldman, one of the bank’s founders. While Goldman Sachs has been in business since 1869, Marcus Personal Loans was launched in 2016. It offers personal loans to those with prime credit. Goldman Sachs is headquartered in New York City.

Marcus Personal Loans offers online personal loans that you can apply for with a short and easy online application. They perform an initial soft credit check and then let you know if you qualify and how much you would pay in interest if you borrow from them. After that, you submit a full application and they perform a hard credit check and confirm your rate and acceptance. Their turn around time for funding loans is actually quite quick. You can get the money in as little as two business days if you are approved.

Their no-fee personal loans are for amounts between $3,500 and $40,000. Their APRs start at as low as 6.99% and go up to as high as 24.99%. Only the most creditworthy applicants qualify for the largest loans amounts and lowest rates. What you will pay will depend on your personal, financial, and credit situation. The term lengths on Marcus Personal Loans are between 36 months and 72 months. In order to qualify for a Marcus Personal Loan, however, you have to have fairly high credit. While most borrowers have a 660+ FICO, you’re more likely to get approved if your score is higher.

There are no origination fees or prepayment fees on Marcus Personal Loans. While that is fairly common with online personal loan lenders, what is truly unique is that they also don’t charge late fees – you only pay interest for the additional days. That means that if you’re late on your loan, you will not be financially penalized. Another feature of Marcus Personal Loans is that they allow borrowers to choose their monthly payment and loan amount. This allows borrowers to better customize their loan so that it’s right for them and their lifestyle.

The Benefits

There are a number of great benefits of getting a Marcus Personal Loan. The easy online application make it easy to borrow. The fact that they don’t perform an initial hard credit check is also great. It allows you to be pre-approved and to see what kind of rate you would qualify for without having a hard credit check impact your credit. Another benefit of Marcus Personal Loans is that they allow you to customize your monthly payment and loan amount. This makes their loans far more flexible than other lenders who only have a few term lengths to choose from.

Another big benefit of Marcus Personal Loans is that they have no fees. While not having prepayment fees and origination fees is becoming more standard in online personal loans, the fact that Marcus also has no late fees (you only pay interest for the additional days) is truly unique and beneficial. After all, if you’re late on your payments you’re probably already dealing with financial distress – you don’t need more of it. Another benefit of Marcus Personal Loans is the amount that you can borrow. The amounts vary from a low of $3,500 to as much as $40,000 – which is a wide range to choose from depending on your needs.

Bottom Line

While there are many great benefits to Marcus Personal Loans, there are also some key drawbacks. The first is that their interest rates are slightly higher than other online lenders who are targeting 660+ FICO borrowers. If you have excellent credit, you might be able to borrow money for less via another online personal loan company.

Also, if you don’t have great credit, then you likely will not be able to qualify for a Marcus Personal Loan because they are targeting prime borrowers. Still, the fact that they do not perform a hard credit check when you apply online until after you’ve been pre-approved means that it’s easy to to fill out their quick application and see if you qualify.

3. LightStream

LightStream

LendEDU Rating (4.83 / 5.0)

  • Rates as low as 4.99%* APR w/ AutoPay
  • Qualify for loans between $5,000 and $100,000
  • Choose between payment plans of 2 to 7 years*
  • Zero application, origination, or pre-payment fees
Estimated APR

4.99% - 14.24%

Loan Terms

2 to 7 years*

Max Amount

$100,000

Origination Fees

No origination fees

Credit Needed

660

Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

Payment example: Monthly payments for a $10,000 loan at 9.34% APR with a term of 3 years would result in 36 monthly payments of $319.58. LightStream disclosures here.

Show Disclaimer

The Basics

LightStream is a division of SunTrust Bank, which has existed in some form or another since the early 1890s, long before online lending took off. These days, LightStream exclusively makes online personal loans at competitive interest rates. Its website boasts "Loans for Practically Anything" and online reviewers agree. The only significant categories unavailable are business loans, post-secondary education, and the refinancing of existing LightStream loans. LightStream's offerings land it on the list of our best personal loan lenders.

LightStream targets the highly qualified borrower market, which means it routinely offers the lowest personal loan rates available – but only to a subsection of online loan-seekers. That said, when LightStream means a loan for practically anything, that’s exactly what it means. Virtually any stated purpose can be approved, from unsecured auto loans to purchasing a horse.

Terms for their loans range from 24 to 84 months* and rates start at 4.99%* APR w/AutoPay and go up to a maximum rate of 14.24% APR if enrolled in their AutoPay feature. However, it’s possible that through their Rate Beat Program those rates can be reduced further. All interest rates are fixed. The actual rate a borrower receives may be influenced by their creditworthiness, loan purpose, loan amount, loan terms, and whether they sign up for AutoPay from their bank account. Rates are half a point higher when a borrower chooses to be invoiced monthly instead of paying automatically. Though LightStream offers the best personal loan interest rates of all the lenders on this page, it does not mean that you will qualify for them.

Loan amounts range from $5,000 to an amazing $100,000. Interestingly, LightStream does not publish a minimum credit score requirement, only stating that it will take several factors into consideration when approving a loan. The company offers unsecured personal loans, as well as secured and unsecured auto loans, depending on an applicant's credit profile.

The Benefits

LightStream advertises that they charge no fees. This means no origination or servicing fees, and no prepayment penalty. By signing up for AutoPay, borrowers can save a hefty half a percentage point in interest each month, which can save a lot of money over the life of the loan.

Since the application process is entirely online, borrowers don’t have to travel to a physical branch of LightStream’s parent company, SunTrust Bank, to fill out an application. And the company’s Rate Beat Program will beat a competitor’s published rate by 0.10% if certain conditions are met (see site for details). For borrowers who qualify, LightStream has it all – competitive rates, long loan terms, and a huge variety of approved loan purposes.

Bottom Line

LightStream doesn’t publish a minimum credit score requirement, and this combined with their emphasis on well-qualified borrowers makes them unlikely to be a good choice for those seeking a debt consolidation loan on high-interest cards or wanting to raise their credit score. However, their very low rates make them a competitive choice for the most qualified borrowers. Here is a summary of what you can expect:

  • Unsecured loans available from $5,000 to as much as $100,000
  • APR ranges from 4.99% - 14.24%* APR w/AutoPay, or slightly higher with no AutoPay feature
  • Loan terms from 24 - 84 months*
  • No origination fees
  • No prepayment penalties
  • Very low advertised rates for well-qualified borrowers
  • Rate Beat Program available

4. SoFi

SoFi

LendEDU Rating (4.65 / 5.0)

  • Qualify for a loan as much as $100,000
  • Fixed rates as low as 6.58% APR
  • No application or origination fees
  • No late fees or prepayment penalties
  • Unemployment protection is available
Estimated APR

6.28% - 14.87%1

Loan Terms

3 to 7 years

Max Amount

$100,000

Origination Fees

No origination fees

Credit Needed

660

Fixed rates from 6.990% APR to 14.865% APR (with AutoPay). Variable rates from 6.255% APR to 12.555% APR (with AutoPay). SoFi rate ranges are current as of September 1, 2018 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. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. 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, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.255% APR assumes current index rate derived from the 1-month LIBOR of 2.08% plus 4.425% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. 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.

To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.

Show Disclaimer

The Basics

Since beginning in 2011, SoFi (or Social Finance) has grown into one of the best loan companies in the nation. The online lender covers many different types of loans in different industries; for instance, home mortgages, parent financing, personal loans, student loan refinancing, and mortgage refinancing all fall under the SoFi umbrella. One of these services, unsecured loans, competes well by offering competitive interest rates and terms to a wide variety of applicants. Out of all of the personal loan companies that we have reviewed, we have chosen SoFi as one of the best.

If you are looking to get approved, SoFi is one of the best places to start the application process. Borrowers can qualify for financing ranging from $5,000 to $100,000 for any of the standard borrowing reasons. Whether you need a small personal loan or a very large one, SoFi has your back. SoFi can be considered one of the best personal loan lenders now that the company offers both fixed and variable annual percentage rates (APR). Fixed APRs start as low as 6.58%, and the rates max out at 14.87%. The lowest possible variable APR is 6.28% while the maximum variable APR is 12.58%. These are some of the best personal loan rates in the industry!

Five possible payment plans are available. Borrowers can choose to pay back their unsecured personal loans within three, four, five, six, or seven years. Longer plans generally have lower APR while shorter payment plans have higher APR. SoFi adheres to industry standard by offering a no hidden fee application process. In other words, there are no application fees or origination fees on a SoFi unsecured financing. On top of this, there is no prepayment penalty for paying off the debt before the payment plan ends.

The Benefits

There are several aspects of SoFi and its unsecured personal loans that are beneficial to potential borrowers. The first thing to mention is flexibility. SoFi has the most flexible APR package by offering both variable and fixed personal loan rates. Many other online lenders only offer fixed rates on its loans. On top of this flexibility, SoFi has some of the lowest personal loan rates compared to other lenders. SoFi is one of the best places to apply online in 2018!

Another unique aspect of a SoFi unemployment protection. If a borrower loses their job and source of income, then they are eligible for this protection. SoFi temporarily halts payments until the borrower can find a new job; additionally, SoFi even helps its customers find new opportunities in the workplace. SoFi also offers the AutoPay options to borrowers, so they can make each monthly payment without having to go through any trouble.

One last benefit to mention is the application process. Since SoFi makes its name as an online lending platform, it is only natural that its online application takes only a few minutes.

Bottom Line

SoFi offers unsecured financing with a few unique aspects compared to other lenders. There are both good aspects and limitations to its unsecured loans. If you are considering SoFi for an unsecured personal loan, then here are a few pointers to keep in mind.

  • Both variable and fixed APRs are available
  • There is a $5,000 minimum for unsecured financing
  • You can get a loan of up to $100,000
  • 5, 7, 10, 15, and 20 year repayment terms
  • There are five payment plans (3, 4, 5, 6 or 7 years) of moderate length
  • There is no prepayment penalty
  • The application process is completely free
  • SoFi utilizes a credit score-based underwriting system

5. Prosper

Prosper

LendEDU Rating (4.15 / 5.0)

  • Easy online application
  • Low interest rate
  • Single monthly payment
  • Checking your rate won't affect your credit score
Estimated APR

6.95% - 35.99%4

Loan Terms

3 or 5 years4

Max Amount

$40,000

Origination Fees

2.4% - 5% of the loan amount

Credit Needed

640

For example a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.32% and a *2.41% origination fee for an APR of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $308.54. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 7.69% and a 5% origination fee for an APR of 9.88% APR. You would receive $9,500 and make 60 scheduled monthly payments of $201.28. Origination fees vary between 2.41%-5%. Annual percentage rates (APRs) through Prosper range from 6.95% APR (AA) to 35.99% APR (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility 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 loans made by WebBank, member FDIC.

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The Basics

Prosper is a peer-to-peer (P2P) marketplace lending platform operating exclusively online, which has to date facilitated more than $12 billion in loans. It was the first large-scale P2P online marketplace lending platform, and in some ways paved the way for future P2P lending platforms to enter the marketplace. These days, Prosper offers loans for a variety of purposes, including debt consolidation and healthcare financing. All loans through Prosper remain unsecured, no matter the designated purpose.

A personal loan through Prosper could be as low as $2,000 or as high as $35,000, and is always unsecured. The minimum credit score requirement for a loan is currently 640. Prosper offers only fixed-rate loans. Much like its main competitor, LendingClub, Prosper uses a proprietary formula to gauge how risky a borrower is and assign an interest rate based on that assessment. Borrowers should expect to have their credit score, credit report, income, and debt-to-ratio examined, but all the factors that go into an assessment by Prosper aren’t publicly known.

Annual percentage rates (APR) available through Prosper vary from a low of 6.95% to a high of 35.99%, depending upon the borrower, and Prosper offers 36 and 60 month loan terms.** Like many other P2P marketplace lending platforms, the company makes its money by charging investors an annual servicing fee of 1% and charging the originating bank a marketing fee associated with each originated loan.

The Benefits

Applying through Prosper is easy, and done 100% online. In fact, its website allows borrowers to get an idea of whether they qualify without an impact to their credit score. By entering general information such as the desired loan amount, loan purpose, and rough credit score, Prosper will tell a prospective applicant whether they are likely to get a loan approved, all without impacting their credit score. Of course, a full credit check is still required for a final decision, but this is a helpful way for those shopping for a loan to find out whether Prosper is a likely fit for them. With Prosper, borrowers never pay prepayment fees.

Bottom Line

Prosper is offering unsecured loans for almost any purpose, and it’s possible for borrowers to save a lot of money by using a loan through Prosper to consolidate debt or avoid higher-interest options. Here is a summary of what you can expect:

  • Unsecured loans from $2,000 to $35,000
  • Fixed interest rate loans only
  • Borrowers are assigned a proprietary Prosper score that judges their risk factors
  • No prepayment fees, and a one-time origination fee to borrowers
  • Fixed APR from 6.95% to 35.99%
  • Easy online application
  • Minimum credit score of 640
  • Better rates for creditworthy borrowers
  • No joint loan applications

6. Upgrade

Upgrade

LendEDU Rating (4.48 / 5.0)

  • Qualify for a loan as much as $50,000
  • Rates as low as 6.87%
  • No prepayment penalties
  • Credit monitoring tool
Estimated APR

6.87% - 35.97%

Loan Terms

3 or 5 years5

Max Amount

$50,000

Origination Fees

1% - 6% of the loan amount

Credit Needed

620

Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade's Terms of Use and Borrower Agreement for all terms, conditions and requirements.

Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

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The Basics

Upgrade is a personal loan lender based in San Francisco which launched in April 2017. While the company hasn't been around for very long, two members of the founding team, Soul Htite and Renaud Laplanche, previously co-founded Lending Club, the popular peer-to-peer personal lender. Lending Club is one of the top online personal lenders serving over 2 million U.S. customers and giving out over $28 billion in loans so far. Upgrade is slightly different in that it targets borrowers who don’t have ideal credit and the company gives out the loans themselves.

If you’re interested in getting a loan from Upgrade and your credit isn’t perfect – you’re in luck. Upgrade’s minimum credit score is 620 although their borrowers’ average credit score is 675. They also use alternative underwriting criteria, which means that they look at things outside just your credit score and income to make lending decisions. One of those things is your free cash flow. Upgrade requires that you have at least $1,000 left over each month after you pay all your bills. Free cash flow is different than just your income because it looks at things like how much you pay in rent or for your mortgage, how much you pay in taxes, and the average cost of living where you live. That means that it will likely require that you make more in order to qualify for a loan if you live in an expensive city than if you live in a cheap rural area.

Upgrade makes loans between $1,000 and $50,000 and their term lengths are either 36 or 60 months. How much you will pay in interest will depend on your personal financial situation, but their typical APR is between 6.87% and 35.97%. Upgrade charges a fixed interest rate over the life of your loan. They have a very quick application and it typically takes a day to get your cash after you verify your income and financials. They have no prepayment penalties. Upgrade has a number of unique programs for borrowers. For example, they provide a payment reduction option for people experiencing financial emergencies. They will temporarily or permanently modify your monthly payments. They also have programs that help you improve your credit including a credit score simulator and a credit monitoring tool. They also offer these tools to help people improve their credit score if they don’t currently qualify for an Upgrade personal loan. Upgrade loans are currently not available in Connecticut, Colorado, Iowa, Maryland, Vermont, or West Virginia.

The Benefits

Upgrade personal loans could be a good choice for those who have bad credit. By looking at alternative lending criteria other than just your income and your credit score, they provide an opportunity for people who might not have ideal credit to borrow money or get a more favorable rate.

They also specifically go out of their way to try to make it easier for people to repay their loans if they struggle by offering to reduce their payments if they experience a financial crisis. They also allow you to decide when your monthly payment due date is in order to ensure that it's at a time for that works best for you. Another benefit of Upgrade is that they help you build your credit score whether or not you qualify for an Upgrade Personal Loan.

Bottom Line

Upgrade personal loans are a good option you don't have great credit as they might be more likely to lend to you at a lower interest rate than other lenders because they use different criteria to make lending decisions. They also have a number of different programs that will help people who struggle with their debt. They also offer loans for as little as $1,000 to as much as $50,000 – which allows borrowers to borrow just what they need. However, Upgrade offers only two term lengths – which isn’t as many options as other lenders.

Whether Upgrade personal loans is the best personal loan option for you will likely depend on what kind of rate that you qualify for. Some of their personal loan rates are actually quite expensive, and it might not make sense to pay such a high interest rate when you could potentially qualify for a lower interest rates with another lender.

7. FreedomPlus

FreedomPlus

LendEDU Rating (4.46 / 5.0)

  • Qualify for a loan as much as $35,000
  • Rates as low as 4.99% APR
  • Simple online application
  • Loan decision in as little as 2 - 3 hours
Estimated APR

4.99% - 29.99%

Loan Terms

2 to 5 years

Max Amount

$35,000

Origination Fees

0% - 5% of the loan amount

Credit Needed

640

All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 4.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 4.99% APR loan, a borrower will need excellent credit on a loan of $15,000 with a term of 24 months, and qualify for at least two of the following discounts: (1) add a co-borrower who has sufficient income; (2) use at least fifty percent of the loan proceeds to directly pay off existing debt; or (3) show proof of having at least forty-thousand dollars in retirement savings – contact FreedomPlus for further details.

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The Basics

FreedomPlus Personal Loans is an online lender that looks at more than just your credit score when making lending decisions. The company is based in San Mateo, California and their loans are made by Cross River Bank. The company was founded in 2013 though their parent company Freedom Financial Network started making online loans in 2008.

FreedomPlus Personal Loans focusses on lending to those whose credit score is at least 640 - although the average score of FreedomPlus borrowers is 720. To qualify, you also have to earn at least $30,000 a year and have a debt-to-income ratio as of under 40%, although the average debt income ratio of borrowers is closer to 20%. FreedomPlus Personal Loans offers loans of between $10,000 and $35,000 for term lengths of between 2 to 5 years. Their interest rates start at just 4.99% APR and go up to 29.99% APR. They charge an origination fee of anywhere between 0% and 5%, depending on which state you live in. They have a very simple online application to fill out and they have no hidden fees.

While they decide who to lend to based primarily on traditional lending criteria like your credit score and income, they look at other criteria to set your interest rate. Like with many other lenders, you get a discount if you have a co-signer on your account. But they also have an interest rate discount for those who have a minimum of $40,000 in retirement assets. If you have at least that amount, your interest rate could drop by 2% to 4% - a significant difference! They also provide a discount on your rate if you use at least 50% of the amount of your loan to pay down existing debt. They make loan decisions quickly potentially responding to you within anywhere from 2 to 3 hours. Once you accept the loan and complete the paperwork, you can get money within 48 hours.

The Benefits

Some of the benefits of choosing FreedomPlus include their very quick online application and fast approvals. If you need money quickly, FreedomPlus Personal Loans is a good lender to approach. They make the lending process very easy. The fact that they also have some unique discounts for borrowers is also a benefit. These discounts are connected to factors that they have found increases a borrower’s likelihood to repay their loans and therefore they are willing to pass those savings on. That could significantly decrease the amount you pay in comparison to another lender. For that reason, they might be a good option for you.

Another great thing about FreedomPlus is that they have a relatively low cut off credit score and minimum annual income. This means that more people will potentially qualify for a loan with FreedomPlus.

Bottom Line

From their extremely quick online application to the fact that you can get discounts based on being financially responsible, FreedomPlus could be a great lender for those who are hoping to find a bank to lend to them who will look past their credit score and give them a good rate anyways.

Some of the downsides of FreedomPlus loans are that the top end of their interest rate spectrum is quite high at 29.99%. In addition, they charge an origination fee which can be as high as 5%, which is a significant amount. In addition, they do not offer very flexible loan amounts. The lowest amount you can borrow is $10,000, which is a significance amount and more than some people might want to borrow. For these reasons, another lender might be a better choice.

8. LendingClub

LendingClub

LendEDU Rating (4.48 / 5.0)

  • Fixed rates from 6.16% to 35.89% APR
  • Qualify for loans between $1,000 and $40,000
  • Choose payment plans up to 5 years
  • Zero application or prepayment fees
Estimated APR

6.16% - 35.89%

Loan Terms

3 to 5 years

Max Amount

$40,000

Origination Fees

1% - 6% of loan amount

Credit Needed

600

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.

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The Basics

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer. LendingClub is headquartered in San Francisco, California, but connects borrowers and investors across the United States through its online-only lending platform. Only borrowers in Iowa and West Virginia are ineligible to apply, based upon state laws. The majority of loans facilitated by LendingClub are unsecured personal loans used by borrowers to consolidate debt and pay off higher-interest credit cards, although personal loans can be used for almost any purpose. LendingClub now makes auto loans and small business loans, too.

Borrowers who sign up with LendingClub can borrow as little as $1,000 or as much as $40,000 in an unsecured loan, and the APR varies wildly based upon how risky LendingClub considers the borrower. At the time of approval, borrowers are assigned a risk grade between A and G, with an A grade being the safest borrower. APR for the most well-qualified borrowers is currently as low as 6.16%, while those deemed risky by LendingClub could expect to pay as much as 35.89%. This is a large range and your creditworthiness will determine if you qualify for the best rates.

Currently, LendingClub is accepting borrowers with credit scores as low as 600, although they look beyond credit score and also check an applicant’s credit report, calculate their debt-to-income ratio, and consider other factors. In turn, investors get to pick and choose whether they want to invest with a risky borrower and earn a higher rate of return, or invest with a safer borrower with a lower rate. LendingClub makes its money by charging borrowers an origination fee and investors a servicing fee. Loan terms are available up to 60 months, and LendingClub never charges a prepayment penalty for paying off a loan early. It also allows joint loan applications.

The Benefits

One of the best things about using LendingClub is that borrowers can apply for and manage their loan completely online. The website interface for LendingClub is known for being user-friendly, which makes sense considering all of its business is conducted through the website. LendingClub does not yet have an app for borrowers to track their accounts on the go, but borrowers can log in to their accounts using the browser on their smartphones.

Bottom Line

LendingClub is a great non-traditional choice for borrowers to obtain an unsecured personal loan, particularly for debt consolidation purposes. Here is a summary of what you can expect:

  • Unsecured loans from $1,000 to $40,000
  • Fixed rate loans with easy to understand terms
  • Borrowers are assessed and assigned a risk grade at application
  • Origination fees that differ according to risk grade
  • Fixed APR from 6.16% - 35.89%
  • Credit score minimum of 600, but with better rates going to well-qualified borrowers
  • Easy online interface
  • Loan terms up to 60 months, with no prepayment penalties
  • Allows joint loan applications

9. Best Egg

Best Egg

LendEDU Rating (4.20 / 5.0)

  • Use a Best Egg loan to pay off credit cards, for home improvements or other unexpected expenses
  • Personal loans up to $35,000
  • Apply online in just minutes, have funds in as little as one day!
Estimated APR

5.99% - 29.99%

Loan Terms

3 to 5 years

Max Amount

$35,000

Origination Fees

0.99% – 5.99% of loan amount

Credit Needed

640

*The Annual Percentage Rate (APR) is the cost of credit as a yearly rate and ranges from 5.99%-29.99%, which may include an origination fee from 0.99%–5.99%. Any origination fee on a 5-year loan will be at least 4.99% and is deducted from loan proceeds. The APR offered will depend on your credit score, income, debt payment obligations, loan amount, loan term, credit usage history and other factors, and therefore may be higher than our lowest advertised rate. Requests for the highest loan amount may resulting an APR 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 rate.

Best Egg loans are unsecured personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. Equal Housing Lender. "Best Egg" is a trademark of Marlette Funding LLC. All uses of "Best Egg" on this site mean and shall refer to "the Best Egg personal loan" and/or "Best Egg on behalf of Cross River Bank, as originator of the Best Egg personal loan," as applicable. Loan amounts generally range from $2,000-$35,000. Offers up to $50,000 may be available for qualified customers who receive offer codes in the mail. The minimum individual annual income needed to qualify for a loan of $50,000 is $130,000. Borrowers may hold no more than two open Best Egg loans at any given time. In order to be eligible for a second Best Egg loan, your existing Best Egg loan must have been open for at least six months. Total existing Best Egg loan balances must not exceed $50,000. All loans in MA must exceed $6,000; in NM, OH must exceed $5,000; in GA must exceed $3,000.

Borrowers should refer to their loan agreement for specific terms and conditions. A loan example: a 5–year $10,000 loan with 9.99% APR has 60 scheduled monthly payments of $201.81, and a 3–year $5,000 loan with 5.99% APR has 36 scheduled monthly payments of $150.57. Your verifiable income must support your ability to repay your loan. Upon loan funding, the timing of available funds may vary depending upon your bank's policies.

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. 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.

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The Basics

Best Egg is an online lending platform that provides some of the best personal loans for things like debt consolidation, credit card refinancing, personal expenses, big purchases, or home improvements. To date, over $4 billion in loans has been made to over 250,000 customers. Best Egg has an A+ rating with the Better Business Bureau. Using Best Egg’s online loan application you can check your rate in only a few minutes with no impact to your credit score. Once approved and verified, customers could get their money in as little as one business day. Best Egg loans are unsecured personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. Equal Housing Lender.

Applying for a loan from Best Egg is a three-step process. First, you check your rate by filling out an application that takes only a few minutes. If approved, you would select the loan offer that works best for you. After that, you may be required to send verification documents. Once verified, your loan could be funded in as little as one business day. Best Egg offers fixed rate loans with either 3 or 5 year repayment terms, but since Best Egg does not charge a pre-payment penalty, you can repay your loan in a shorter amount of time if you want. Best Egg allows you to borrow anywhere from $2000-$50,000 and you can hear back from them in as little as a few minutes. Best Egg charges interest rates that can range anywhere from 5.99% to 29.99% depending on your credit and the specifics of your loan and also charges an origination fee which is anywhere from 0.99% to 5.99%. The origination fee on a 5 year loans is at least 4.99%.

Best Egg considers a number of things when deciding whether to lend to you including the information on your loan application, information from credit bureaus, your credit score, and your debt-to-income ratio. Best Egg loans are designed for people who have strong and good credit histories.

The Benefits

One of the benefits of a Best Egg loan is that you can quickly apply and get an answer within minutes. Also, the fact that you might be able to get your money quickly is a huge benefit for those who are experiencing unexpected expenses and need their money ASAP. Another benefit of Best Egg is that you can borrow up to $35,000, which is more than many online lenders usually allow. Also, there are no hidden fees or pre-payment penalties.

Bottom Line

Best Egg offers quick personal loans with competitive interest rates. Best Egg charges origination fees, which consumers should think about before applying. Best Egg’s origination fee can be as high as 5.99%. In addition, the interest rates at Best Egg can range up to 29.99%. Ultimately, Best Egg is a good option for an online loan if you can qualify for a low interest rate from them. We always recommend that consumers compare all available options to find the best option for their unique circumstance. Whether or not it makes financial sense to choose a Best Egg loan depends on your personal financial situation and the interest rate that you qualify for with Best Egg.

  • Fixed rate terms of 3 or 5 years are available
  • There is a $2,000 minimum of unsecured financing, however minimum loan amounts vary by state
  • You can get a loan of up to $35,000, but offers up to $50,000 may be available for qualified customers
  • There is no prepayment penalty or hidden fees
  • There is an origination fee of between 0.99% - 5.99%
  • The application process is completely free
  • The application process is completely free
  • The Annual Percentage Rate (APR) ranges from 5.99% - 29.99% and will depend on your credit score

10. Avant

Avant

LendEDU Rating (4.63 / 5.0)

  • Qualify for loans between $2,000 and $35,000*
  • Choose payment plans from 2 to 5 years**
  • Checking your loan options won't impact your credit score
Estimated APR

9.95%-35.99%*

Loan Terms

2 to 5 years

Max Amount

$35,000

Origination Fees

Up to 4.75% of loan amount

Credit Needed

580

* The actual loan amount, term, and APR amount of loan that a customer qualifies for may vary based on credit determination and state law. Minimum loan amounts vary by state. Avant branded credit products are issued by WebBank, member FDIC.

For Example: 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.

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The Basics

Founded in 2012 and previously known as AvantCredit, this company has provided access to over $4 billion in personal loans to date. It has focused on building a proprietary formula to judge a borrower’s creditworthiness, utilizing advanced algorithms and analytical tools. By doing so, it claims to be a more discerning lending platform able to determine a borrower’s likelihood of satisfactory repayment. Currently, personal loans through Avant are available in most, but not all, states. Avant is seeking to redefine the way it assesses borrowers in the application process, but most of the terms offered to borrowers remain fairly standard in terms of lending options.

Fixed APR ranges from a low of 9.95% for the most well-qualified borrowers up to a high of 35.99% for riskier borrowers. Avant does not offer access to variable rates. Since their internal process for applicants is secret, it’s not always easy to judge how likely a borrower is to be approved, but many of the general lending guidelines apply. Borrowers with higher credit scores, low debt-to-income ratios, and stable income are more likely to be approved and have access to higher credit amounts.

A personal loan through Avant can be used for most consumer purposes and isn’t limited to credit card debt consolidation. The loan terms range from 24 to 60 months and from $2,000 to $35,000. The minimum amount of $2,000 is very low compared to other traditional lenders, and makes Avant a great choice for those who need access to a small personal loan. Although the final approval process can take days, if a borrower is approved their funds could be deposited into their bank account as soon as the following business day. Personal loans through the Avant platform are charged interest and an origination fee, but no prepayment fees. Interestingly, Avant does not publicize a minimum credit score, although its website says most borrowers have credit scores between 600-700.

The Benefits

Although the full application process might not be instant, most borrowers can expect a provisional decision within 15 minutes of applying through Avant’s easy to use website. Avant also has an app for smartphone users. The app allows borrowers to manage their loan from their smartphone, including seeing upcoming payments and payment history. Users can even adjust their payment or make additional payments through the app.

Bottom Line

Avant is a good choice offering some unique benefits and a mobile app with lots of options for managing borrowers’ loans. Here is a summary of what you can expect:

  • Unsecured loans available from $2,000 to $35,000*
  • ​APR ranges from 9.95% - 35.99%*
  • ​Loan terms are available from 24 months up to 60 months**
  • ​Origination fee of up to 4.75%
  • ​Proprietary application process
  • Possible minimum score of 580
  • ​Easy to use mobile app for tracking and paying loans
  • Checking your loan options won't impact your credit score

11. Upstart

Upstart

LendEDU Rating (4.43 / 5.0)

  • Rates as low as 8.69% APR for fixed rates
  • Qualify for loans between $1,000 and $50,000
  • Choose between payment plans of 3 or 5 years
  • Zero application or prepayment fees
Estimated APR

8.69% - 29.99%

Loan Terms

3 or 5 years

Max Amount

$50,000

Origination Fees

0% - 8% of the loan amount

Credit Needed

620

Annual Percentage Rates, terms of loan and monthly payments presented are estimated based upon analysis of information you entered, your credit profile and/or available rate information from lenders. While efforts have been made to maintain accurate information, the loan information is presented without warranty and the estimated APR or other terms presented do not bind any lender. Lenders generally have a range of available APRs (for example, a lender's range might be 5% to 36%) and only borrowers with excellent credit will qualify for the lowest rate available. Your actual APR will depend upon factors evaluated at the time of application, which may include credit score, loan amount, loan term, credit usage and history. All loans are subject to credit review and approval. When evaluating offers, please review the lender's Terms and Conditions for additional details.

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The Basics

Upstart found its start recently in 2012 when ex-Google employees decided to create a tech-lending platform. Upstart is unique because it incorporates a peer-to-peer lending system which breaks from traditional companies. Peer-to-peer lending means anyone can invest in a loan application, so this means that borrowers are funded by multiple individual investors instead of Upstart itself. The tech peer-to-peer lending platform specializes in unsecured personal loans which is its main product.

Borrowers looking for an online personal loan from Upstart can expect funding for anywhere between $1,000 and $50,000. This is a standard range compared to many competitors. Like the other best companies, you can obtain both large and small personal loans. Upstart uses a peer-to-peer system, there is a wide range of potential fixed APRs during financing. The minimum APR starts at 8.69% and can run all the way up to 29.99%. The qualifying rate is determined by Upstart’s underwriting process by taking into account credit score and other data points. Only those with the highest credit scores will be approved for the best personal loan rates.

Upstart only offers two different possible payment plans during the financing process. Borrowers can choose between either three or five years to pay back a personal loan. There is no threat of a prepayment penalty for those who decide to pay off debt sooner rather than later. This is a standard feature of many personal loan lenders.

The Benefits

Upstart works with one of the best personal loan servicers that boasts the progressive underwriting process that utilizes multiple sources of information. Plainly put, it is not dependent solely on credit score. It utilizes data such as current and future earning potential, education history, and job history. This is great news for people with sub-par credit because they can qualify for some of the best personal loan interest rates than offers from other lenders.

Another credit to Upstart that deserves mentioning is the online application process. While this is somewhat standard among tech-lending platforms, the application is fast and easy. It takes roughly two minutes to complete, and borrowers can see their interest rates immediately. In addition to a super quick application process, Upstart guarantees next day loan disbursement. Only a few companies match this speed which makes Upstart a great choice for someone in dire need of funds. Another positive of borrowing from Upstart is the AutoPay feature for its unsecured personal loans. Borrowers can set up AutoPay which deducts from a selected account and saves the borrower a monthly hassle when repaying on an installment basis.

Bottom Line

Whoever may be looking at Upstart for an unsecured personal loan would do well to consider some of these points. Borrowers can qualify for some solid loan options, but there is also room for less than desirable possibilities.

  • Peer-to-peer lending system
  • Innovative underwriting process
  • Possible loan options: $1,000 to $50,000
  • APR range: 8.69% - 29.99%
  • Three or five year payment plan options
  • No prepayment penalty
  • Next day loan disbursement

12. Payoff

Payoff

LendEDU Rating (4.22 / 5.0)

  • Rates as low as 5.99% APR for fixed rates
  • Qualify for loans between $5,000 and $35,000
  • Choose payment plans from 2 to 5 years
  • Zero application or prepayment fees
Estimated APR

5.99% - 24.99%

Loan Terms

2 to 5 years

Max Amount

$35,000

Origination Fees

0% - 5% of loan amount

Credit Needed

640

Annual Percentage Rates, terms of loan and monthly payments presented are estimated based upon analysis of information you entered, your credit profile and/or available rate information from lenders. While efforts have been made to maintain accurate information, the loan information is presented without warranty and the estimated APR or other terms presented do not bind any lender. Lenders generally have a range of available APRs (for example, a lender's range might be 5% to 36%) and only borrowers with excellent credit will qualify for the lowest rate available. Your actual APR will depend upon factors evaluated at the time of application, which may include credit score, loan amount, loan term, credit usage and history. All loans are subject to credit review and approval. When evaluating offers, please review the lender's Terms and Conditions for additional details.

Show Disclaimer

The Basics

Founded in 2009 and based in Costa Mesa, California, Payoff is a peer-to-peer (P2P) online lender that focuses on helping its borrowers consolidate and get rid of credit card debt. The company begun as an online portal that incorporated social media aspects to encourage and support people paying off their credit cards, and has evolved into a true P2P lender connecting investors with borrowers. One thing that sets Payoff apart from many other P2P online lenders is the fact that Payoff focuses exclusively on debt consolidation loans. To date, the company has helped refinance more than $100 million in credit card debt for its borrowers.

A borrower with Payoff can expect a fixed APR between 5.99%24.99%, with actual interest rates between 5.94% - 22.60%. No variable rates are available. Available loan terms come as short as 24 months or as long as 60 months, and amounts available range from a minimum of $5,000 to a maximum of $35,000. If you need a very small personal loan, you may have to look elsewhere.

Payoff’s origination fees vary according to loan term, as opposed to the creditworthiness of the borrower. Expect to pay an origination fee between 0-5% depending upon whether the length of the loan is 24, 36, 48, or 60 months, respectively. The good news is, the origination fee is all that the borrower pays other than interest. Payoff states that they have eliminated all other common fees, including application fees, late fees, and prepayment fees from their loans.

According to a study of Payoff users between March and July 2016, the average borrower saw a 40 point uptick in their FICO score within two months of receiving a Payoff Loan if they used it to pay off at least $5,000 in credit card debt. The minimum FICO score required by Payoff is 640, which makes it one of the P2P companies with the highest minimum score requirement.

The Benefits

Payoff has favorable reviews online from their borrowers, and is one of the more flexible P2P lenders. They’ve also eliminated late fees. If you experience a sudden financial hardship, such as unexpected job loss, Payoff claims it will work with you to adjust your payments and avoid defaulting on your Payoff loan. Not only that, Payoff offers extra services such as resume review and interview advice.

They also offer a streamlined application process that allows prospective borrowers to link their bank accounts to Payoff instead of independently uploading supporting documents for proof of income and resources. Payoff borrowers receive free monthly FICO score updates to help them stay on top of their credit score as they pay off their loan.

Bottom Line

Payoff offers some services other P2P lenders can’t match, such as flexible payments during job loss, but is more limited than most other P2P lenders because it only offers personal loans for the purpose of credit card debt consolidation. Here is a summary of what you can expect:

  • Unsecured loans from $5,000 to $35,000
  • Loan purpose is limited to debt consolidation
  • Fixed interest rates only
  • Easy application process
  • Origination fees that vary according to length of loan term
  • APR from 5.99% - 24.99%
  • Credit score minimum of 640
  • Loan terms up to 60 months

13. LendingPoint

LendingPoint

LendEDU Rating (4.15 / 5.0)

  • Specialize in lending to those with at least 600 credit score
  • Qualify for loans between $3,500 and $20,000
  • Choose between payment plans of 24 to 48 months
  • No prepayment penalty
Estimated APR

17.47% - 34.99%

Loan Terms

2 to 4 years

Max Amount

$25,000

Origination Fees

0% - 6% of loan amount

Credit Needed

600

Annual Percentage Rates, terms of loan and monthly payments presented are estimated based upon analysis of information you entered, your credit profile and/or available rate information from lenders. While efforts have been made to maintain accurate information, the loan information is presented without warranty and the estimated APR or other terms presented do not bind any lender. Lenders generally have a range of available APRs (for example, a lender's range might be 5% to 36%) and only borrowers with excellent credit will qualify for the lowest rate available. Your actual APR will depend upon factors evaluated at the time of application, which may include credit score, loan amount, loan term, credit usage and history. All loans are subject to credit review and approval. When evaluating offers, please review the lender's Terms and Conditions for additional details.

Show Disclaimer

The Basics

LendingPoint is an online lender that offers affordable personal loans to people who might have trouble getting approved for loans at reasonable interest rates otherwise. They target customers whose credit scores are ‘NearPrime™’ and specialize in lending to people with a credit score of at least 600 and a salary of $20,000 or more. LendingPoint uses alternative underwriting criteria that considers more than just your credit score. They decide whether or not to lend to you based on a number of other factors including your employment status, your current debts, your current delinquencies and bankruptcies, any charge-offs you have in the last 12 months, open tax liens, earning potential, and your debt-to-income ratio. LendingPoint is headquartered in Kennesaw, Georgia and was founded in 2014.

LendingPoint offers personal loans of between $3,500 and $20,000 with loan terms that range from 24 to 48 months. Their interest rates are fixed and they charge between 17.47% and 34.99% APR - depending on your credit and financial situation. They have an origination fee that varies from state to state, but can be as little as 0% or as much as 6% of your loan. Their online application is quite easy to fill out and you can potentially hear back from them within minutes and get funded as soon as the next business day.

Other than their alternative underwriting criteria that looks at your full financial picture, another thing that distinguishes LendingPoint from other online lenders is that you have more flexibility in your repayment. They have an option of two scheduled monthly payments rather than just one which makes it easier to budget for your loan and can reduce how much interest you’ll pay over the life of your loan. As of July 9th, 2018, LendingPoint currently operates in 34 states including Alabama, Alaska, California, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia, South Carolina, South Dakota, Utah, Washington, and the District of Columbia.

The Benefits

LendingPoint is a relatively good option for personal loans for those who have a reasonably good credit history, but are not prime borrowers. If your credit score is between 600 and 700, then their products are designed with you in mind and you might get a lower rate than you would elsewhere for that reason. They offer competitive interest rates and the opportunity to borrow more than you might be able to from other lenders. One key benefit is that they look at more than just your credit score not just when deciding whether to lend to you but also in setting your interest rate. That means that you might pay less or that if you've been turned down for loans from other lenders, you might be able to get a loan from LendingPoint based on other broader aspects of your financial and credit history.

Bottom Line

LendingPoint is a good option for those who don't have ideal credit, but it’s not ideal. While you might be able to get a lower interest rate than you would elsewhere, the range of interest rates they offer is quite broad and goes up to an expensive 34.99%. Depending on the state you live in, you might also be charged an origination fee of up to 6% of your loan.

In some cases, consumers may be better off getting a credit card rather than borrowing at a rate that high since they are more likely to pay a lower rate with a credit card. Other lenders might also potentially offer a better interest rate, depending on the borrower’s personal financial and credit situation. However, for those people who have been having a difficult time finding credit, LendingPoint’s alternative lending criteria might help you qualify for a loan at one of their lower and more reasonable rates.

  • Only fixed rate loans are available
  • Specialize in loans for people with credit scores between 600 - 700
  • Provide financing to those with 'NearPrime™' credit
  • There is a $3,500 minimum for unsecured personal loans
  • You can get a loan of up to $25,000
  • Interest rates vary from 17.47% - 34.99% APR
  • There are multiple term length options from 24 - 48 months
  • There is no prepayment penalty
  • There is an origination fee of up to 6% that varies by state
  • The application process is completely free and will not affect your credit score

More Information About Personal Loans

There are two main types of financing to consider:

  1. Secured
  2. Unsecured

A secured personal loan requires the borrower to submit some form of collateral. This collateral needs to be either material with value or legitimate cash. From the lenders perspective, a secured loan has a safety net to fall back on if the borrower defaults. From the other perspective, the borrower takes on a bit more risk since they can lose this collateral. These are less common with some lenders, but they do exist as options.

Unsecured personal loans are the more common option, but come with much more risk (and consequently, higher interest rates). The lender takes on much more accountability with an unsecured loan, so the application approval process is a bit stricter for unsecured personal loans than its secured counterpart. In short, these loans are not backed by anything, so borrowers need to have excellent credit if they want the best interest rates on an unsecured personal loan.

A new sort of subset of an unsecured personal loan is the peer-to-peer financing. Many of the best online companies operate in a peer-to-peer marketplace. A peer-to-peer product is backed by multiple third-party investors who have invested through a lending partner, who may also service the loans.

What is a Personal Loan Used for?

Personal loans can be used for:

  • To consolidate credit card debt
  • Medical bills
  • Home repair
  • Emergencies
  • Automobiles
  • Moving expenses
  • Funeral expenses
  • Vacation
  • Anything else you need money for

A tough or unexpected financial situation can mean just about anything, so you may be wondering what this type of financing can actually be used for. Well, the answer to this question may surprise you. Just about any financial situation can warrant a personal loan.

The most common reason is debt consolidation. Consumers who have multiple and various forms of debt have the option to consolidate this debt with an unsecured loan. The end result is one source of debt with a one new annual percentage rate (APR) which saves money on overall interest payments.

Aside from debt consolidation, the best reasons include medical bills, relocation expenses, dental bills, a celebration, or a new car purchase. While these all sound like standard reasons for borrowing, there are other reasons for using unsecured personal loans that are fairly surprising - whether you need a large or a small personal loan.

One positive of the best online personal loans is their degree of flexibility. You can qualify for financing for reasons other than financial hardship. There is a great example to illustrate this point; for instance, extra money for a vacation trip is a perfectly acceptable reason that qualifies on a personal loan application. If you have excellent credit, there is really no reason you cannot qualify for the best personal loans. This means you can get financing for new furniture, solar panels, a suit for an interview, or anything else. When you cannot find your reason on a lender drop-down list, you can literally select “other” and explain your reasoning.

Just to reiterate, a borrower with good credit can qualify for the best personal loans for just about any reason. Those with excellent credit can qualify for some of the best personal loan interest rates on the market. When you throw in the peer-to-peer marketplace aspect, it can get much easier to get approved. If you cannot wait and are willing to deal with interest, then check out some of these online personal loan companies below.


How to Apply for Personal Loans

Applying at Credit Unions

Credit unions or local banks are great places to apply because they often have broader lending criteria than big banks. If you bank with a credit union, you should apply there first as they might be able to give you a lower interest rate or give you the benefit of the doubt if your finances don’t make you an ideal candidate.

You’ll have to go into the bank and meet with a financing officer to discuss the type of financing you’re interested in and review your financial details. Dealing with a bank could mean that you get your money more quickly and they might offer more flexible terms than an online lender, but they often have the highest criteria for credit worthiness. That means it might be difficult for many people to qualify for a financing from a credit union or local bank.

Applying Through Best Online Lenders and Lending Partners

These days, online lenders and lending partners are offering installment options that are incredibly easy to apply for. They often have more flexible criteria than even the best credit unions and banks and that means that you’re more likely to get approved. Interest rates can sometimes even be lower than you would get at credit unions as well.

Applying with an online lender or lending partner doesn't take a lot of time and you don’t need an appointment with a financing officer. You just log on, fill out their forms, send them some scans of important documents, and you could hear whether you’ve been approved in as little time as a few minutes.

Approval Criteria

Each lender or lending partner has slightly different approval criteria, but, in general, most best lenders or lending partners will look at your FICO credit score and your income. The higher your income and credit score, the more likely you are to get approved for an unsecured financing.

Online companies tend to be more willing to approve borrowers who don’t have ideal credit scores, and they’re also starting to use additional criteria in order to make their credit decisions.

In fact, some online companies like SoFi and Earnest don’t use FICO credit scores to determine their lending decisions and instead focus on things like cash flow, savings, income potential, and employment history. These factors can make originating unsecured debt easier.

Information You’ll Need When Applying

When you’re applying you will need to provide the lender or lending partner with the information that they require to make their lending decisions.

For lenders or lending partners with alternative credit models, that might include additional information like your alma mater or your employment history. When applying to the best companies, you will likely need the following information:

  • Identification – Whether it is a driver’s license, Social Security card, or passport
  • Proof of Income - If you have an employer, you will need your W-2 forms and pay stubs. If you're self-employed, you will need your tax returns or bank statements
  • Verification of Address - You need an official piece of mail like utility bills with your address on it or a copy of your lease or deed
  • Social Security Number
  • A list of monthly expenses and current debt
  • Your gross income
  • Previous addresses

Online Unsecured Personal Loan Interest Rates

Current Unsecured Personal Loan Interest Rates

Variable APR: 5.17% - 15.96%

Fixed APR: 3.09% - 36.00%

When it comes to borrowing, one of the most important things to be aware of is the interest rate that you'll be charged. Your interest rate is the percentage that you will be required to pay of the principle of your loan as payment for the privilege of borrowing. Lenders determine the interest rate they charge you by calculating how big of a credit risk they believe you’ll be. If you’re seen as being highly likely to repay your loan, you’ll pay less, whereas if you’re seen as being less likely to repay your loan, you’ll pay more.

The lower the interest rate you’re charged, the less you'll have to pay over the life of your loan. A lower interest rate will make it easier for you to repay your installment payments since a higher proportion of the money you're putting towards your loan payment every month will go directly towards the principal. The best personal loans you can get have the lowest interest rate possible.

While interest rates are calculated on an annual basis, they are annualized over the year and charged on a monthly basis.

Fixed Rate vs. Variable Rate Loan

When you're applying for one of the best personal loans, you'll notice that you often have the option of either getting a fixed rate or variable rate loan. A fixed rate loan is one where the interest rate is the same throughout the entire life of that loan. That means that if the interest rate is 5% when you first take out your loan, it will be 5% when you make your last payment.

In contrast, variable rate loans have an interest rate varies over the course of making installment payments. The interest rate on variable rate loans is usually tied to a particular index such as a prime rate. This interest rate can go up or down and your variable rate loan’s interest rate will also go up and down correspondingly. That means that if you take out a variable rate loans that charges 5% interest, your interest rate could go up, for example, to 7% or 10% over the life of the loan or could go down to as low as 2% or 3%. Because of this uncertainty, variable rate loans are often discounted over fixed rate loans. For that reason, it might seem like your best option is a variable rate because it is a cheaper choice when you're applying for a loan.

What's important to take into account when deciding between fixed and variable rate loans is whether you believe the interest rates are going to go up or down over the course of your installment payments. If interest rates are very high when you’re taking out your loan, then a variable rate loan could give you the opportunity of paying a lower rate later on. But if interest rates are at a particularly low point, then you would have to be careful about taking out a variable rate loan because the likelihood that the interest rate on your loan would increase could be quite high.

Rising Interest Rates in 2018

Currently, interest rates are in a particularly low point. In fact, the Federal Reserve has stated that they intend to raise their interest rates over the course of the next few years. Unless something happens that causes them to stop or curtail their current plans, the likelihood that that the interest rate on a variable contract will go up in the next few years is quite high since prime rates and other indexes that determine variable interest rates are impacted by increases to the Federal Reserve rate.

For that reason, the best idea may be for you to take out a fixed interest rate in 2018, rather than a low interest variable rate loan. The exception to this is if you intend to repay that debt quite quickly. If you intend to repay the loan in six months or a year, then you might be better off taking a lower interest rate now. Of course, whether you come out on top is up to chance, world events, and the Federal Reserve.

How to Get the Lowest Rate

Here are a few things that will help you get the best personal loan rates:

Great Credit

One of the biggest determiners of the interest rate that you’ll qualify for is your credit score. If you have a high credit score, then you will likely qualify for a relatively low interest rate. That's because banks and lenders will feel confident that you will be able to repay the unsecured loan should they lend to you. If you have a low credit score, then lenders might be concerned that you might not be able to repay the loan and so they will price that risk into the interest rate they offer you by giving you a higher interest rate. Improving your credit will make a big difference on the interest rate you can qualify for and will make it easier to get approved for some of the best unsecured options available.

Having a Cosigner

If you don’t have great credit, you can potentially get a lower interest rate if you have a friend or family member with good credit cosign your loan. You would qualify for the interest rate that they would get if they had applied on their own.

A Stable Income

Even if you have good credit, you will likely find it very difficult to get a lower interest rate or even get approved for one of the best unsecured loans if you don't have a steady job or source of income. Having a job where you make it significant amount of money will likely to ensure that you get the lowest interest rate. If you make less money, you can expect a higher rate.

A Short Term Length

When you take out a loan, you often have a choice about how quickly you repay it – this is called the term length. For example, you might have a choice of 1 year, 2 year, or 3 year term lengths. Typically, the shortest term will have the lowest interest rate.

Your Choice of Lender

Interest rates vary from lender to lender. Credit unions tend to charge lower interest rates than banks and online lenders sometimes charge less than credit unions. Depending on your particular circumstances, you might qualify for a lower rate from an online lending partner because they use unique underwriting methods that calculate your credit worthiness using additional factors other than just your credit score. To learn more about unique underwriting methods – click here.

Variable Rate Loans

As mentioned previously, you will likely get a lower initial interest rate if you take out a variable rate loan, but you could end up paying more over the life of your personal loan.


Secured vs. Unsecured Personal Loans

If you’re considering applying, there are two main categories of loans to choose from: secured personal loans and unsecured personal loans. The type of personal loan that is right for you will depend on a number of factors including your personal financial situation, what you intend to do with the loan, and what kind of assets you own.

Secured Personal Loans

  • Require collateral
  • Less risky for the lender
  • Typically have lower rates
  • Easier to be eligible for
  • Less common

Unsecured Personal Loans

  • Do not require collateral
  • More risky for the lender
  • Typically have higher rates
  • Must have good credit history to be eligible
  • Widely available

Secured

Secured debt has an underlying asset or collateral that is used to provide the bank with a more solid guarantee that the debt will be repaid. For example, if you take out an auto loan, your auto financing is usually secured through the title to your vehicle. If you don't pay your loan payment, the bank or lender can repossess your car and sell it in order to pay off the remaining loan balance. Because the bank can take possession of this asset if you don’t pay, they are more likely to lend to you and offer you a lower interest rate as there is less risk involved in the loan.

Another common type of secured loan is a home equity financing. A home equity loan financing is guaranteed by the equity in your home. A home equity financing is similar to an auto loan in that it gives the bank or lender the right to foreclose on your home if you do not pay them back. They can then sell your house in order to recoup the remaining loan balance. For this reason, home equity loans offer some of the lowest interest rates available.

While one of the benefits of taking out a secured financing is that you're able to qualify much more easily, it can sometimes take longer to process the loan application because there is more paperwork and the collateral has to be verified. These are usually the best solutions for those looking for a personal loan with bad credit. Secured debts do usually offer you a lower rate of interest because there is less risk for the bank, but one of the downsides is that the bank or lender can repossess or foreclose on your property if you do not pay. For this reason, secured debt is not a good choice for those who are facing financial uncertainty and are worried about losing their home.

Another thing to consider when taking out a secured debt is if you might want to sell the asset you’re using as collateral before you pay off your loan. That’s because the balance of the debt is due when you sell the underlying asset. That could create problems for you. For example, if you have a home equity financing and you decide to move, but your home’s value has gone down since you took out the loan, you might face financial difficulties. You might not be able to pay off your home equity debt when you sell and you’ll have to find the money to cover the loan. That could be a significant financial burden for many people. For that reason, secured loans are not ideal for anyone who might have to sell their home or car in the near future.

Unsecured

In contrast, the best unsecured loans aren't guaranteed by an underlying asset or collateral. For this reason, they can often be approved more quickly and require less paperwork. Since you are not using an asset as collateral, unsecured loans can be more difficult to get approved and you’ll likely be charged a higher interest rate. When deciding whether to approve you for an unsecured loan, lenders look at your income, as well as your credit score.

If you have a high income and a good credit score, you will likely qualify for a relatively low interest rate – although it will be higher than what you would pay with a secured loan. If you have a moderate income, or if you have a sub-optimal credit score, you will potentially have a problem getting approved for the best unsecured loans, or you might have to pay an extremely high interest-rate. Some interest rates on unsecured personal loans can be as high as what you might pay on a credit card. However, some of the best online companies offer unsecured options with low interest rates.

The benefit of the best unsecured loans is that they’re available to people who don’t have collateral or who don’t want to risk their assets through secured loans. Popular forms of unsecured personal loans are consolidation loans, student loans, and medical loans.

What’s Right for You?

To decide what’s right for you, you need to first determine your priorities when it comes to taking out a secured or unsecured personal loan. If you want to get the lowest interest rate possible, then you’ll likely want to get a secured personal loan. If you are concerned about putting your assets at risk, or you don’t own assets, then an unsecured personal loan is likely the best choice. Both secured and unsecured financing has its pros and cons so make sure to do your research before applying online.


Using Personal Loans to Pay Off Credit Card Debt

People who have a significant amount of credit card debt often face difficulties paying it off. That's because the high interest rates that are charged on credit cards mean that a big portion of their monthly payments go toward paying interest and not toward paying down their debt. Rather than continuing to struggle trying to pay down your high-interest credit card debt, in some cases it makes more sense to take out an unsecured personal loan in order to pay off your credit cards. Bear in mind: Although refinancing your existing debts with a new loan may reduce your total monthly debt payments, the new loan may increase both the total number of monthly payments and the total amount paid over the term of the loan.

How to Apply

Many people believe that it's difficult or time-consuming to apply for an unsecured personal loan. While it does require that provide information and copies of certain important documents and information it isn’t as difficult as it once was.

While you can go into a bank or credit union branch in person and apply there, there are also lots of options to apply online. Online companies allow you to apply for personal loans in your pajamas from the comfort of your own home. They have streamline the process so that it doesn't take a significant amount of time. Another great thing about online lenders and lending partners is that they generally get back to you quickly to let you know whether you've been approved.

How to Do It

If you do decide to consolidate your credit card debt through a personal loan, then you should shop around to get the lowest interest rate. Each lender has different criteria by which they set interest rates and approve loans and that means that one lender might offer you a significantly lower interest rate than another.

One thing to keep in mind is that there is usually no origination fee when you apply with online companies. An origination fee is a set percentage of the amount you borrow that is charged when you take out your loan. However, sometime you may be asked to pay 2%-3% of the total loan balance, but it’s important that you factor this in when you are comparing the best places.

What’s Right for You

If you currently have credit card debt, you should look into whether you can qualify for financing to pay off your credit card debt. If you have a high credit score and a well-paying job, it will be easy for you to qualify and the lower interest rate that you’ll get will help you pay off your credit cards much faster.

Even if you don’t have perfect credit, you will likely still qualify to borrow money at a much lower interest rate than you’re currently paying on your credit cards. This will allow you to repay your loans much more quickly. If you’re not able to qualify to borrow by applying on your own, you might consider asking a friend or family member to cosign for your loan.


Applying With a Cosigner

If you're applying to borrow, but don't have a high credit score or a well-paying job, then you might consider asking a friend or family member to cosign for you. A cosigner is someone who legally commits to being responsible for the loan if you are unable to repay it.

If you have a cosigner, the lender will give you an interest rate and approve you for an amount that is commensurate with what your cosigner would get if they applied for a loan. That means that you will likely get a much lower interest-rate on unsecured financing and be able to borrow more money than you would have if you had applied on your own.

Benefits of Using a Cosigner:

  • More likely to be approved
  • Receive a lower interest rate
  • Have someone to motivate you to stay on top of loans
  • Cosigner may be discharged after certain number of on-time payments

Risks of Using a Cosigner:

  • Credit of primary borrower and cosigner will both be affected if payments are missed
  • Cosigner's retirement could be delayed
  • Cosigner will be required to make payments if primary borrower does not

The Advantages of Applying with a Cosigner

One big perk of having a cosigner is that you might qualify for one of the best unsecured loans that you might otherwise qualify for or you could qualify to borrow more money. You could also be charged a lower interest rate - which would mean that you would pay less over the life of your personal loan.

Getting a loan with the help of a cosigner is a great way to build credit. If you don’t have a long credit history, qualifying for a loan with a cosigner’s help and then paying that loan on time will help boost your score.

The Disadvantages of Having a Cosigner

One of the big disadvantages of applying for a loan with a cosigner is how difficult it is to find someone who is willing to cosign for you. Because people know that they will be responsible for the loan if you're unable to repay it, not many people are willing to cosign loans. Someone might believe you have the best intentions of repaying the loan but be worried that you could face health challenges that would interfere with your ability to repay your loan or that you could die unexpectedly.

Another downside of having a cosigner is that they usually can't be removed from the loan. If, at some point, your credit improves or you get a full-time job, it can be very difficult or impossible to get the cosigner removed from the loan. Even if you might be able to qualify for a better loan on your own, you will be stuck with having the cosigner involved unless you refinance your loan.

Another thing to consider is that not all lenders allow you to have a cosigner and so if you want to apply for a personal loan with a cosigner, you might not be able to get a loan from certain lenders or lending partners. This is particularly true with online companies who don’t routinely consider cosigners.

Finally, one of the downsides of having a cosigner is that you might not get as much of a benefit from having them cosign the loan as you might expect. Before you take out a loan with a cosigner, make sure you understand how much of a difference having one will make.

What’s Right for You?

Whether you should apply for a personal loan with a cosigner will depend on things like your credit score, your income, and the amount you want to borrow.

If you do decide to use a cosigner and want to get a personal loan online, there are some online lenders and lending partners that allow for cosigners or co-applicants include FreedomPlus, Lightstream, and LendingClub. FreedomPlus allows for cosigners and around 40% of their applicants have them. Another popular lender, Lightstream, does not allow you to apply with a cosigner, but does allow you to apply with a co-applicant. LendingClub is currently testing out a joint application feature as well.

Unique Underwriting Models Involving No Credit Score

When you apply for financing from a bank or credit union, they likely use your FICO credit score in order to decide whether to lend to you. In fact, 90% of lending decisions are made using FICO scores, despite the fact that FICO’s scoring method isn’t perfect and disadvantages young borrowers or borrowers without long credit histories.

Lately, some best online lenders and lending partners have been using alternative models to decide whether an applicant is credit worthy and to determine the interest rates offered. These models often take a more holistic view of a client’s financial situation and look at things like savings, cash flow, employment history, and earning potential – rather than just focusing narrowly on their credit score.

This is allows lenders and lending partners to give the best personal loans to credit worthy clients that have bad FICO scores, but who are likely to pay back their loans on time and in full. These clients are increasingly millennials who don’t have high credit scores because they don’t have long credit histories, might not have built their credit because they don’t have a credit card, or might be just out of school.

These clients don’t look like good loan applicants when evaluated using the traditional method, but online lenders and lending partners who are using alternative underwriting methods are finding that they faithfully repay their loans. This is allowing them to expand their business to clients that are often ignored or missed by mainstream lenders and banks.

SoFi

One example of an online lender with a unique underwriting is SoFi, a lender who started first by giving out student loans but has since moved into also providing some of the best personal loans and mortgages. They decided to stop using FICO scores because they found that the scores weren’t an accurate reflection of credit worthiness. Instead, they created a metrics that looks at savings, cash flower, earning potential and employment history. This allows them to provide loans to people they would have previously denied and to offer lower interest rates options.

Earnest

Another example of a lender who has decided to turn their back on FICO scores is Earnest. They decided to move away from using FICO as their sole way to test applicants’ credit worthiness when they looked at their data around their loan applications.

Many of their loan applicants were professionals in business, law, or the medical field and they had high levels student debt. They found that the higher the student debt an applicant had, the lower their credit score was likely to be.

If they looked at FICO scores alone, they felt like they would miss an opportunity to service clients who had a high lifetime value to them as a lender. Instead, they look at a borrower’s degree, income, and the value of their education to help them decide whether they are a good credit risk. Earnest has been able to offer lower interest rates to more individuals since expanding their views on how to get approved.

Upstart

One more great example of an online lender using an alternate underwriting strategy is Upstart. Upstart does use a FICO score in their lending decisions, but they will consider loan applications from borrowers who don’t have sufficient credit history to have a credit score.

In those cases, they use alternative lending criteria that they have found indicate that someone is a good credit risk. They look at the school someone attended, their grades, their work history, and their area of study. Getting approved at Upstart is much easier than it could have been.

What it Means for You?

The fact that lenders and lending partners are using alternative underwriting models in order to make credit decisions is good news for anyone who has a low FICO score or an insufficient credit history, but has good income potential, cash flow, or savings. These lenders and lending partners are changing how the loan industry works, that means that more millennials are now qualifying for some of the best personal loans. In short, it is getting relatively easy to get approved.


Other Personal Loan Companies

PersonalLoans.com

Finding the right personal loan can be daunting because of the wide array of requirements by different lenders. Instead of applying individually with many different companies, a site such as PersonalLoans.com uses a proprietary screening process to take a single borrower’s information and use it to find potential lenders which are good matches. PersonalLoans.com then refers the applicant to the lenders most likely to give an approval, saving time for the applicant and helping them avoid having too many hard inquiries on their credit report.

The Basics

PersonalLoans.com is not itself a lending institution, which means it does not advertise or offer APRs on its website. However, the lenders it works with currently offer APRs between a low of 5.99% and a high of 35.99%. The APR a borrower qualifies for is dependent upon the borrower’s creditworthiness and the particular lender’s requirements and APR offerings. In addition, the company matches an applicant to loans within the range of $500 to $35,000.

Once an applicant submits information through the website’s easy three-step process, PersonalLoans.com will come up with several matches from its lender network. Once successfully connected, borrowers can receive their money in as little as a single business day and have between 6 to 72 months to repay the personal loan. In order to be referred to a lender through PersonalLoans.com, an applicant must have a regular income, and most lenders also require a checking account.

The Benefits

For applicants who have less than stellar credit and won’t have a high approval rate across all lenders out there, using PersonalLoans.com can save stress and time. Instead of applying individually with lenders out of the blue, applicants who use PersonalLoans.com can think of it as a sort of screening tool. It will let applicants know ahead of time where their best bet for approval is, and then facilitate the application process between the applicant and different lenders. The three-step process on PersonalLoans.com is easy and doesn’t take the average applicant much time. It’s also great that the website does not cause any hard pulls on the applicant’s credit score. Until they actually apply with a lender, PersonalLoans.com does only a soft pull in order to help identify the best lender matches.

Bottom Line

PersonalLoans.com is an excellent tool for those seeking a personal loan who are unsure of where to start. Its unique and proprietary process will help to weed out lenders whose qualifications don’t match a potential borrower’s income and credit score. An applicant has nothing to lose by giving PersonalLoans.com a try since using the service is totally free to the applicant. Here are some of the benefits of using PersonalLoans.com:

  • Screens different lenders and identifies an applicant’s best matches
  • ​Partners with lenders offering loans between $500 - $35,000
  • ​Low minimum income and credit requirements with many partner lenders
  • ​All partner lenders accept electronic payments
  • ​Partner lenders offer many different types of loans, including peer-to-peer, personal installment, and bank personal loans
  • ​Easy, three-step process
  • Free!

Earnest

Earnest started up in 2013 and developed into an online lending marketplace that offers both student loan refinancing and some of the best personal loans. Since it specializes in online servicing and convenience, Earnest is an attractive site with easy to understand resources and services. It has one of the fastest application and approval notification processes in the market which makes it more competitive as a whole. Earnest is a well-respected and trusted company that you can't go wrong with choosing.

The Basics

Earnest does not break away from any trends as far as its offers are involved. Borrowers can apply to Earnest for unsecured personal loans ranging from $5,000 all the way to $75,000. Earnest offers both small personal loans as well as decently large ones, allowing them to serve a wide variety of customers.

Only fixed annual percentage rates are offered by Earnest, but they are low and competitive. The lowest possible APR is 5.49% while the highest fixed APR is up to 18.24%. These are some of the best personal loan rates in the industry!

There are only a few payment plans without much flexibility; these plans limit Earnest to short term financing. Borrowers can decide between repayment plans of either three, four, or five years.

No hidden fees are present in the Earnest online application process. This includes application fees or origination fees which is standard for most of the best personal loan lenders. On top of this, paying off a debt early does not warrant a prepayment penalty fee.

The Benefits

Earnest boasts a quick approval and disbursement process; in fact, online applicants can hear a decision within two days of submitting the application. This is especially helpful for borrowers in need of quick cash.

Possibly one of the most beneficial aspects of an Earnest is the underwriting system. Earnest underwrites its products based on extra data in addition to credit score and history. This extra data includes job history, earning potential, future income potential, saving patterns, and growth potential. This information helps Earnest make date-driven decisions on loan approval, and it improves an applicant’s chances of getting one of the best unsecured loan.

Earnest offers a mobile app that makes it easy for borrowers to monitor your repayment From the app, borrowers can check the principal loan balance, the next payment due date, and they can set up automatic payments (another perk of Earnest).

Bottom Line

Just like any lender, Earnest has both positives and negatives when it comes to its unsecured loans and offers. Borrowers who are looking for quick financial help should consider these points.

  • Application approval notice within 2 business days
  • ​Data driven underwriting process (not just credit score)
  • ​Possible borrowing ranges of $5,000 to $75,000
  • Fixed APR range of 5.49% to 18.24%
  • ​Short payment plan options: 3, 4, or 5 years
  • ​No prepayment penalty
  • ​No origination fee
  • Convenient mobile app