Many borrowers turn to personal loans when they need money. They’re cheaper than credit cards, convenient to secure, you can use them for many purposes, and borrowers with a good credit history can score excellent loan rates.
You’ll find plenty of loan options from online lenders, but they’re quite different when you start exploring their terms. Some are fee-free; others are transparent about the fees upfront. And some don’t make the fees evident until you’ve completed an application.
Being educated about the personal loan process and what’s available can help save you money. We’ve researched the best no-fee personal loans and all the charges you should avoid.
In this guide;
4 best no-fee personal loans
Your credit score is a reliable guide to the type of personal loan lender you should apply with. Most lenders focus on borrowers with certain credit scores. Some lenders will only approve you if you have excellent credit, for example, while others specialize in bad-credit loans.
Often your bank or credit card company will offer free credit score updates. You can also pay to see your FICO score. Most people use a service such as Credit Karma to see their VantageScore—which is often close to the FICO score lenders use but not always exact.
Credit scores fall into the following categories, which you can use to guide your choice of lenders to shop with:
- 800+: Excellent
- 740 – 799: Very good
- 670 – 739: Good
- 580 – 669: Fair
- Less than 580: Poor
We’ve ranked and rated the best no-fee lenders for people with good, fair, and bad credit scores to make it easier for you to find the loan that’s right for you:
- If you have good credit
- If you have fair credit
- If you have bad credit
Best no-fee loans for good credit
Best for excellent credit: LightStream
Editorial rating: 4.8 out of 5
- Quick funding
- No fees or prepayment penalties
- Rates are based in part on the loan’s purpose
If you’re searching for personal loans with no origination fee, LightStream is a terrific option.
LightStream offers plenty of upsides, such as low rates and quick funding. Its personal loans come with various uses, such as home improvement and debt consolidation.
We’ve looked into the most important information about LightStream’s personal loan.
Key features
- Minimum credit score: 660
- Loan amounts: $5,000 – $100,000
- Loan terms: 24 months – 144 months
- APRs: 5.99% – 24.49%
- Fees: None
- Full review: LightStream Personal Loan Review
Best for good credit: SoFi
Editorial rating: 5 out of 5
- No fees required
- Unemployment protection in case of job loss
- Excellent customer service
If you have good to excellent credit, SoFi can be a solid choice. Founded in 2011, SoFi offers a quick online application process for a comprehensive list of loan types and top-notch customer service.
SoFi offers an Unemployment Protection feature that puts your monthly loan payments on hold if you lose your job through no fault of your own. A SoFi personal loan comes with many other benefits, such as access to free financial advisors and career coaching.
Here’s what you need to know about SoFi’s loans.
Key features
- Minimum credit score: Not disclosed
- Loan amounts: $5,000 – $100,000
- Loan terms: 24 – 84 months
- APRs: 7.99% – 23.43%
- Fees: None required
- Full review: SoFi Personal Loan Review
Best no-fee loans for fair credit
Bethpage Federal Credit Union
Personal loan
- No application, origination, or prepayment fees
- Credit union membership is open to anyone who deposits $5
- Debt protection options available
Credit unions are community-driven, nonprofit banking organizations. They’re often more willing to meet you where you are when you need to borrow money, even if you don’t have stellar credit.
Most credit unions have restrictive membership requirements. Bethpage allows anyone to join as long as you deposit $5 in a savings account to establish your membership. You can wait until after you’re approved for a loan to do this.
Here’s how Bethpage FCU’s loan compares.
Key features
- Minimum credit score: Not disclosed
- Loan amounts: $1,000 – $35,000
- Loan terms: 12 – 84 months
- APRs: Starting at 9.24%
- Fees: None
DCU
Editorial rating: 3.7 out of 5
- No loan payments for 60 days
- Generous 0.50% rate discount for autopay
- No fees
Digital Federal Credit Union also requires you to join before accepting your loan proceeds if you’re approved. Anyone can join DCU by joining a partner organization, such as Reach Out for Schools ($10 fee), or having certain community ties in Massachusetts.
A significant advantage of DCU’s loans is you won’t need to make any loan payments for the first 60 days after taking out the loan. If you have a DCU checking account, you can also get a 0.50% rate discount, which will save money and lower your payments.
Here’s a breakdown of DCU’s terms.
Key features
- Minimum credit score: Not disclosed
- Loan amounts: Not disclosed
- Loan terms: Up to 60 months
- APRs: Starting at 9.74%
- Fees: None
- Full review: DCU Personal Loan Review
Can I get a no-fee loan for bad credit?
Getting a no-fee personal loan can be difficult when you have poor credit. Most personal loan lenders willing to approve borrowers with bad credit charge high fees and interest rates. This can make repaying your loan challenging.
We don’t recommend lenders that charge APRs higher than 36%, considered the industry maximum among reputable lenders.
Before looking for one of these lenders, consider adding a cosigner with good credit to your application for one of the lenders above, or look into other borrowing options, such as a home equity loan or line of credit. If you’re in a tight financial spot, use 211.org to find assistance options in your area.
If you’re confident a personal loan from a no-fee lender is your best option, you have a few choices. Rise Credit, Jora Credit, and OppLoans offer no-fee bad-credit loans, but be warned: High APRs may make these loans more costly than credit card debt.
Personal loan fees to avoid
The best personal loans charge no fees, but fee-free loans are rare. Here are the most common personal loan fees you should be aware of so you can avoid them:
- Origination fees: This is a fee lenders can charge to cover the costs they incur from underwriting and processing the loan.
- Application fees: Lenders sometimes charge this fee to process an application for the loan.
- Late payment fees: If you make a late payment, lenders may charge you a late fee. Many lenders that advertise no-fee loans may still charge late fees, but they aren’t an inevitable upfront cost built into the loan. You’re responsible for on-time payments.
- Prepayment fees: Lenders might impose a prepayment penalty for those who pay off their loans ahead of schedule. These fees are rare, however.
- Annual fees: Many lenders don’t charge annual fees, but some do to help with the expenses of processing and collecting monthly payments.
A company may include one type of fee and not the others or impose several fees. The best way to protect yourself from unexpected fees is to read the fine print of any offer you’re considering.
It’s better to spend time looking into the small details than realize you’ve signed a contract for a loan that will cost you far more than you expected. Keep a copy of the loan agreement in your files that you can refer back to later if any questions arise.
How fees affect your loan
Fees make your loan more expensive, making it harder to repay. If you suffer financial setbacks, such as losing your job or needing to buy a new car, it can put you at risk of missing a payment or even defaulting on the loan.
That can spiral into other negative consequences, including losing your home. Higher fees also leave less money for other purposes, such as emergency fund savings or medical care.
If you plan to pay off a loan early, look for a loan that doesn’t carry a prepayment penalty. Otherwise, you may not save much (if anything) by repaying that debt early.
How fees affect your APR
Your loan’s APR is a measure of the total cost of the loan, all upfront fees and interest included. It’s a better number to compare loan offers than just the interest rate, which doesn’t give you the whole picture.
For example, let’s say you need to borrow $10,000, and you’re trying to decide between two loans. Loan 1 charges 10% interest plus a 10% origination fee, while Loan 2 charges 11% interest with no origination fee.
On the surface, it might seem like Loan 1 is the better option due to the lower rate, even if you have to pay a fee. However, you’d pay about $700 more with this loan over five years because of that fee.
You can pull back the curtain and see this difference by comparing the APRs for the two loans. Loan 1 has an actual APR of 14.65%, and Loan 2’s APR is 11% since there are no fees. Most lenders are upfront about advertising APRs.
How fees affect your total loan amount
Loan application and origination fees often come out of your loan when it’s disbursed. While it may seem like a relief not to pay that money on top of the loan amount, it cuts back on your total loan proceeds.
You might need to calculate how much extra you should borrow if you need a specific amount. Some lenders also allow you to roll these fees into the loan, which is essentially the same thing. Either way, it’ll increase the cost of the loan.
Going back to our example of Loan 1—a $10,000 loan with a 10% origination fee and a 10% interest rate—here’s how your loan might look depending on which option you use to pay the origination fee:
| Fee payment method | Actual loan size | Amount you receive | Monthly payment | Total cost of loan |
| Rolled into loan | $11,111.11 | $10,000 | $236 | $4,165 |
| Deducted from loan proceeds | $10,000 | $9,000 | $212 | $2,748 |