Online Loans: Borrow Over the Internet
Online loans make borrowing cash easy and convenient. Here’s our list of some top-rated online loan lenders for each credit category.
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Getting a loan isn’t as hard as it used to be. In your grandparents’ days, they had to put on their Sunday best, set up a meeting with a local banker, and make their case live and in-person.
Today? Thanks to the plethora of online loans there are available, all it takes is a few clicks of a button. Here’s everything you need to know about finding and applying for loans over the internet.
In this guide:
- Where to get a loan online
- Pros & cons of internet loans
- Online loans vs. payday loans: There’s a big difference
- How to get a loan online
- What to consider when comparing online loans
Where to get a loan online
You can get a number of different loan types online, but the most common (and typically most flexible) option is the online personal loan.
Personal loans are usually unsecured loans, meaning you don’t need collateral, and you can use them for virtually any purpose you need. You can also apply for them in a matter of minutes and often receive your funding as soon as the next business day
To compare some online personal loans, check out our list below.
LightStream
Rates (APR)
3.49% – 19.99%*
with AutoPay
Loan Amounts
$5,000 – $100,000
Credit Score
660+
LightStream ranks as our best overall personal lender and offers personal loans, car loans, debt consolidation loans, and more. It charges no origination fees or prepayment penalties, and there are discounts available if you’re willing to enable autopay. The lender also offers one-day funding in some cases.
- Credit score category: Excellent, good
- Soft credit pull to check rates: Not available
- Deposit time: As soon as the same day
- Origination fee: 0%
- Late fee: None
- Discounts: 0.50% interest rate reduction for enrolling in autopay
- Repayment terms: 24 – 144 months
Upgrade
Rates (APR)
7.99% – 35.97%
Loan Amounts
$1,000 – $35,000
Credit Score
620+
Upgrade offers online loans that are deposited in your account as soon as the next day. The company lends to borrowers with lower credit scores, and checking your interest rate on the site will not affect your score.
- Credit score category: Fair, bad
- Soft credit pull to check rates: Yes
- Deposit time: As soon as the next day
- Origination fee: 2.9% – 8%
- Late fee: $10
- Repayment terms: 36 or 60 months
Upstart
Rates (APR)
8.41% – 35.99%1
Loan Amounts
$1,000 – $50,0002
Credit Score
600+
Upstart is an online lending platform that partners with banks to provide personal loans that can be used for almost anything. Upstart’s lending model considers education, employment, and many other variables when determining eligibility.3 This model leads to 27% more approvals and 16% lower rates than traditional models.4
- Credit score category: Fair, bad
- Soft credit pull to check rates: Yes
- Deposit time: As fast as one business day
- Origination fee: 0% – 8%
- Late fee: $15 or 5% of payment
- Repayment terms: 36 or 60 months
Avant
Rates (APR)
9.95% – 35.99%
Loan Amounts
$2,000 – $35,000
Credit Score
580+
Avant offers personal loans with reasonable interest rates to borrowers with lower credit scores. The application can be completed online and you may receive your funds as soon as the next day.
- Credit score category: Fair, bad
- Soft credit pull to check rates: Yes
- Deposit time: As soon as the next day
- Origination fee: 4.75%
- Late fee: $25
- Repayment terms: 24 – 60 months
For additional options, check out our picks for the best personal loan lenders.
Pros & cons of internet loans
Pros
- Quick, convenient loan applications
- Same-day funding often available
- Flexible and can be used for debt consolidation, business expenses, home improvements, etc.
- Lower rates than online payday loans
- Unsecured, so no collateral is put at risk
- Easy to compare options and rates
- Bad credit options available
Cons
- Rates may be higher than a secured loan, such as a home equity loan
- Rates may be higher than with your personal bank or credit union
- Loans of less than $5,000 are hard to come by and may come with high interest rates
- Requires diligence (payday loans and predatory lenders like to pose as personal loan lenders)
Online loans vs. payday loans: There’s a big difference
The loans we’ve mentioned above are online personal loans, but there are payday loans out there you should be careful of. Payday loans are short-term loans that offer small amounts of cash (typically less than $1,000) in exchange for repayment out of your next paycheck.
Oftentimes, these loans prey on low-income individuals, charging sky-high interest rates and starting an ongoing cycle of debt and financial stress.
Make sure you understand the terms of your online loan, and always check reviews of your online lender before moving forward. Steer clear of predatory lenders that charge more than 36% APR, and stick to respected, well-reviewed lenders with reasonable rates and terms.
>> Considering a payday loan? Read our guide to the best short-term loans instead.
How to get a loan online
The online loan process is incredibly easy. With most lenders, you’ll only need to fill out a short form, submit to a credit check, and upload a little documentation to the lender’s online portal.
For many borrowers, funding happens within a few hours to a business day. (Keep in mind: The exact timing and process varies from lender to lender.)
What you’ll need to apply
Any type of personal loan—whether you’re applying online or in person—will require one or two forms of identification, personal information (like your Social Security number), proof of income, and a credit check.
Check out this full list of personal loan documentation to learn more about what documentation you may need to apply for your online loan.
What to consider when comparing online loans
Online loans make comparison-shopping both simple and convenient. But what should you be looking at when comparing your options and quotes from different lenders? Let’s look at a few components.
APRs
The APR—or annual percentage rate—indicates the overall costs to borrow across the year including both the interest rate and fees. An APR of 5% on a $30,000 loan, for example, would mean you’d pay about $1,500 in interest annually to borrow the money.
When you’re comparing offers from different lenders, it’s important to compare APRs and not just the interest rate, since one lender may have a lower rate but higher fees. You can learn more in our guide to APRs vs. interest rates.
Loan fees
Every lender charges slightly different fees. There are origination fees, late payment fees, application fees, and much, much more.
If you’re comparing APRs, some of these fees should already be accounted for. But there are other fees not included in the APR, such as late payment fees or prepayment penalties. You can learn more about them in our guide to common personal loan fees and charges.
Be sure to get a full breakdown of any fees you’d be expected to pay with each lender, so you can consider them in your decision, too.
Your repayment term & budget
You’ll need to compare the overall terms of each loan option, too. Longer repayment terms mean lower monthly payments, but they also mean paying more in interest in the long run.
Shorter terms mean a higher payment, but fewer interest costs over time. Which route is best for your budget? Sit down and evaluate your monthly income, debts, and other financial factors, and determine which loan options you can most comfortable handle.
Our personal loan calculator can help you determine how different repayment terms will affect your budget.
The bottom line
If you’re looking to get a loan online, the options are endless, but make sure to tread carefully.
Only consider well-reviewed and trusted online lenders (like those above) and steer clear of payday loans and predatory rates and practices.
*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.
1The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 15% and 36 monthly payments of $33 per $1,000 borrowed. There is no down payment and no prepayment penalty. Average APR is calculated based on 3-year rates offered in the last 1 month. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.
2Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.
3Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.
4As reported by the Consumer Financial Protection Bureau, based on an internal Upstart study which compares outcomes from Upstart’s underwriting and pricing model against outcomes from a hypothetical model that uses traditional application and credit file variables and does not employ machine learning (traditional lending model).
