Best Personal Loans of 2021: The Ultimate Guide

The best personal loans have a balance of affordability and accessibility. Take a look at our favorite options below to find the one that matches your needs.

1. Payoff

  • Estimated APR: 5.99%  to 24.99%
  • Loan Amounts:  $5,000 to $40,000 
  • Repayment Term: 2 to 5 years
  • Credit Check: Yes
  • Minimum Credit Score: 640 (confirmed)
  • Pros:
    • Flexible terms
    • Affordable rates
    • Nice education benefits and customer support
    • Raises credit score
    • Transparent qualification requirements
    • Can pre-qualify to check interest rates
  • Cons:
    • Need fair credit score to qualify
    • An origination fee of up to 5%
  • Best For: Consolidating credit card debt.
  • BBB Rating: A+

2. SoFi

  • Estimated APR: 5.99% to 20.94%
  • Loan Amounts: $5,000 to $100,000
  • Repayment Term: 2 to 7 years
  • Credit Check: Yes
  • Minimum Credit Score: 680 (Unconfirmed)
  • Pros:
    • High available principal amounts
    • Help from a financial planner for free
    • No fees at all, including late fees
    • Unemployment protection
  • Cons: 
    • Higher credit score requirements
    • Takes a few days to receive funds
  • Best For: Large balances
  • BBB Rating: A

3. Upgrade

  • Estimated APR: 6.94% to 35.97%
  • Loan Amounts: $1,000 to $50,000
  • Repayment Term: 3 to 5 years
  • Credit Check: Yes
  • Minimum Credit Score: 580 (unconfirmed)
  • Pros: 
    • Low credit scores required to qualify
    • Good customer service and reputation (High BBB review score)
  • Cons:
    • Higher rates than some competitors
    • Potentially large origination fee
  • Best For: People with bad credit
  • BBB Rating: A+

4. Avant

  • Estimated APR: 9.95% to 35.99%
  • Loan Amounts: $2,000 to $35,000$2,000 to $35,000$2,000 to $35,000
  • Repayment Term: 2 to 5 years
  • Credit Check: Yes
  • Minimum Credit Score: 550 (unconfirmed)
  • Pros:
    • Secured and unsecured options available
    • Funds as soon as next business day
  • Cons: 
    • Higher rates than most competitors
    • Higher minimum and lower maximum balances
    • More fees than average, including administration, late, and dishonored payment
  • Best For: People with bad credit scores
  • BBB Rating: A

5. LightStream

  • Estimated APR: 2.49% to 20.49%
  • Loan Amounts: $5,000 to $100,000
  • Repayment Terms: 2 to 12 years
  • Credit Check: Yes
  • Minimum Credit Score: 660 (unconfirmed)
  • Pros:
    • Exceptionally low rates among creditors
    • Rate Beat program ensures people won’t qualify for lower rates elsewhere
    • Large balances and longer repayment terms
    • No fees of any kind
  • Cons: 
    • Not accessible with fair credit
    • Lower BBB score than others
  • Best For: People with higher credit scores to get great rates
  • BBB Rating: B-

6. Marcus

  • Estimated APR: 6.99% to 19.99%
  • Loan Amounts: $3,500 – $40,000
  • Repayment Terms: 3 to 6 months
  • Credit Check: Yes
  • Minimum Credit Score: 660 (unconfirmed)
  • Pros: 
    • Customizable monthly payment
    • One month of interest deferral after a year of on-time payments
    • No fees of any kind
  • Cons: 
    • Lower than average loan amounts
    • Not accessible to poor credit
  • Best For: Those looking to optimize monthly payment
  • BBB Rating: A+

7. Upstart

  • Estimated APR: 8.27% – 35.99%
    • Fixed only
  • Loan Amounts: $1,000 – $50,000
  • Repayment Terms: 3 or 5 years
  • Credit Check: Yes
  • Minimum Credit Score: 620 (confirmed)
    • Upstart will accept applications from those with no credit scores
  • Pros:
    • Accessible to a wider range of people than traditional loans
    • Quick transfer of funds, within a single business day
  • Cons: 
    • Less flexible repayment terms, not a range
    • Rates aren’t as competitive as some others
  • Best For: People with no credit history
  • BBB Rating: A+

8. RocketLoans

  • Estimated APR:  7.16% to 29.99%
  • Loan Amounts: $2,000 to $45,000
  • Repayment Terms: 3 or 5 years
  • Credit Check: Yes
  • Minimum Credit Score: 600 (unconfirmed)
    • As suggested in their blog post
    • Other websites say 640, but can’t find that
  • Pros: 
    • Average rates with less demanding credit requirements
    • Quick transfer of funds (as soon as one day)
  • Cons: 
    • Inflexible repayment terms (only two options)
    • Origination fee up to 6%
  • Best For: People with fair credit
  • BBB Rating: A+

9. Best Egg

  • Estimated APR: 5.99% to 29.99%
  • Loan Amounts: $2,000 to $35,000
    • Up to $50,000 with a second loan
  • Repayment Terms: 3 to 5 years
  • Credit Check: Yes
  • Minimum Credit Score: 640 (unconfirmed)
  • Pros:
    • Competitive rates for the industry
    • Lowest rates are relatively achievable
      • 700 credit score and $100,000 income
    • Great customer service (high reviews on BBB)
  • Cons:
    • Fewer loan amount options than some in the industry
    • Origination of 0.99% to 6.99%
  • Best For: People with decent scores and high income (best rates) 
  • BBB Rating: A+

10. Prosper.com

  • Estimated APR: 7.95% to 35.99%
  • Loan Amounts: $2,000 to $40,000
  • Repayment Terms: 3 or 5 years
  • Credit Check: Yes
  • Minimum Credit Score: 640 (unconfirmed)
    • Maybe for healthcare programs
  • Pros: 
    • Transfer funds within a single business day
    • Allows credit pre-qualification
  • Cons: 
    • Inflexible repayment terms
    • Rates aren’t as competitive as some others
    • Origination fee of 2.41% to 5.99%
    • No discount for autopay
  • Best For: People who can’t qualify for better options?
  • BBB Rating: A+
  • Important Features: Prosper is a peer-to-peer lending provider

11. Lending Club

  • Estimated APR: 10.68% to 35.89%
    • All fixed rates
  • Loan Amounts: Up to $40,000
  • Repayment Terms: At least 3 years
  • Credit Check: Yes
  • Minimum Credit Score: 600 (unconfirmed)
  • Pros: 
    • Good customer support (high BBB reviews)
    • Rates are comparable for borrower profile
  • Cons: 
    • Funding can take up to three business days
    • Origination fee of 2% to 6%
    • Late fees after 15 days
  • Best For: People with lower credit scores and need a loan even if it’s at higher rates
  • BBB Rating: No Rating

When Should You Take Personal Loans?

Personal loans can be a useful tool in a wide variety of situations. They’re one of the most flexible forms of loans, and people can usually put the proceeds toward any expenses that they want.

That said, they’re not without their risks, and not all personal loans are the same. It makes the most sense to take out a personal loan when the potential borrower:

  • Has a good enough credit score to qualify for a loan with good terms, especially an affordable interest rate
  • Can reliably afford to make on-time payments toward the debt each month
  • Already tried to solve their financial issues without resorting to debt (cutting expenses, making a budget, earning more cash)
  • Needs to cover an expense that they can’t cover with cheaper forms of lending (like a paycheck advance)

For those who don’t meet the above criteria, personal loans might not make sense. Without a good credit score, personal loans can become very costly, and those who can’t afford their payments risk penalties and credit score damage.

It’s also always best to look for cheaper options before resorting to a personal loan, like cutting back on expenses or using a form of debt that’s more specialized and less expensive. For example, it wouldn’t make sense to take out a personal loan to pay for education costs since student loans are generally cheaper and more accessible.

What are the Best Types of Personal Loans to Get?

Personal loans are one of the most flexible forms of lending. They come in many varieties, and no one type is going to be a perfect fit for everyone. The only reliable way to assess a personal loan is to consider its terms as a whole.

Generally, personal loans vary most along these lines:

  • Collateral requirements
  • Type of interest rate (fixed or variable)
  • Annual Percentage Rate (APR)
  • Total amount available to borrow
  • Accessibility
  • Size of monthly payment
  • Repayment term

For most borrowers, one or two of these categories are going to mean more than the others. When looking for a loan to apply to, make sure to pick out those critical areas. Optimizing for them will usually require the sacrifice of some of the others. 

For example, someone with bad credit will probably need to focus on loans that rate well in accessibility. But those loans tend to have higher APRs, offer smaller principal balances, and sometimes even require collateral.

How Do Personal Loans Work?

Personal loans are usually medium-term installment loans with medium-sized principal balances.

That means that borrowers get a lump sum upfront and then pay back the principal plus interest over a set period. The amount a person can borrow with a personal loan usually ranges between $1,000 and $100,000, and repayment terms can be anywhere from a few months to several years.

For those who want to clarify some details, here are some key terms to know and answers to some frequently asked questions.

Key Terms

  1. Annual Interest Rates vs. Annual Percentage Rates: Interest rates are usually the most expensive part of borrowing. For every year the balance is outstanding, the balance will accrue interest at the set rate. But there are often other costs to borrow, like origination, application, and late fees. The Annual Percentage Rate is the total annualized cost to borrow including all interest rates and fees.
  2. Unsecured vs. Secured Loans: Unsecured loans do not require the borrower to supply collateral, while secured loans do. Collateral is an asset that the borrower pledges to let the lender seize should they fail to make their payments. It can be a house, a car, or even jewelry. Secured loans generally come with better terms because they’re safer for the lender. Personal loans can come in both variations, but unsecured ones are more popular.
  3. Repayment Terms vs. Payment Schedule: Repayment term is the length of time that the borrower will be in debt. People also refer to this as the life of the loan. The payment schedule is the frequency that a borrower must make payments. It’s usually monthly, but some personal loan providers require bi-weekly payments.
  4. Fixed vs. Variable Interest: Fixed interest rate loans lock in the interest rates at the beginning of the repayment term. Variable interest loans allow lenders to raise the rate during the life of the loan at their discretion. Generally, fixed-rate loans are more expensive. Personal loans can come in either form.

Frequently Asked Questions

How much can you borrow with a personal loan?

Personal loans are frequently anywhere from $1,000 to $100,000. Providers will each have specific principal balance limits that are usually easy to find on their websites. Not all borrowers will qualify for their full amounts.

Can I pay off my personal loans early?

Personal loan providers usually allow borrowers to pay their loans off early, but double-check that there are no prepayment fees before taking a loan.

What happens if I can’t pay back my personal loan?

Individual lenders get to decide what happens when a borrower is delinquent on payments for their loan products. Some will charge a fee immediately, and others will have a grace period of something like five to 15 days. They will also usually report late payments to the credit bureaus after that same period, which will damage credit scores.

Will personal loans hurt my credit score?

It’s hard to say what effect a personal loan will have on credit scores without knowing more specific circumstances. In general, applying for a loan will hurt scores, and receiving one will improve them. Missing payments on the loan will be harmful, but making them on time will raise scores.

How should I choose a personal loan company?

Consider these four criteria when choosing a personal loan company: approval requirements, annual percentage rates, loan amounts, and repayment terms. The best option will be the cheapest loan a person can qualify for that provides the amount they need and a repayment term they can afford. A longer repayment term usually creates lower monthly payments.

How does my credit affect my personal loan terms?

In general, better credit leads to better personal loan terms. If it’s possible to wait, people with bad credit are usually better off trying to improve their scores before applying for a personal loan.

How does the coronavirus affect personal loans?

COVID-19 has led to the creation of coronavirus hardship loans and additional personal loan relief options. Hardship loans are a type of personal loan for people who have lost income due to the pandemic with lower qualification requirements and interest rates.

Can I pre-qualify for a personal loan?

Many online personal loan providers allow borrowers to pre-qualify. That can reduce the need to go through unnecessary hard inquiries (which can damage credit scores) while shopping around for a loan.

What’s Better: A Personal Loan or a Credit Card?

Personal loans and credit cards can both be useful forms of debt. Neither one is inherently superior to the other, but one is often the better fit in specific situations.

The advantages of personal loans over credit cards are:

  • Lower interest rates than credit cards on average
  • Higher upper limits which are better for funding large lump-sum payments
  • More predictable monthly payments that make budgeting easy

These advantages make personal loans better for those who want to consolidate high-interest debts or make a big purchase. Credit cards usually aren’t as efficient for these transactions due to their higher interest rates, but they do offer the following benefits:

  • A reusable line of credit for almost any type of expense
  • Interest-free grace periods after making purchases
  • Cashback rewards and other incentives for those with high credit scores

These qualities make credit cards better for people with high credit scores who can make smaller purchases and pay off their balances every month. That allows them to avoid any interest and take advantage of the card’s discounts, points, or other perks.

How Fast Can I Get a Personal Loan?

People can get a personal loan often much faster than other forms of credit. Lenders recognize that many of the people who are looking for a personal loan (as opposed to a line of credit like a credit card) need cash to cover an expense that may be time-sensitive.

As a result, their loan applications are fairly quick, the approval is even faster, and they often transfer funds to their borrower’s bank account in as little as a single business day. Some lenders and some instances may take longer, but even on the high end, it’s usually something like two days.

For example, each of these lenders transfers funds within a single business day:

These are all great options for borrowers who need cash fast to fund an emergency expense at a decent price. Don’t resort to lenders who offer extremely fast cash, but charge triple-digit interest rates for the privilege. There are too many like those above who can provide a quick turnaround and a fair rate with reasonable credit scores.

How to Qualify for Personal Loans

Qualifying for a personal loan is a lot like qualifying for any other form of credit. The lender wants to see someone with:

  • A credit score above their minimum threshold
  • Stable employment and income history
  • Acceptable debt-to-income ratios

Before applying for a personal loan, make sure to check out what they’re looking for in each of these areas. Most lenders will publish some details on their preferred customer profile somewhere on their website. To save time, check out Credit Summit posts that summarize multiple options. Also, always take advantage of pre-qualification tools that can confirm the chances of acceptance without having a hard inquiry.

Can I Get a Personal Loan with Bad Credit?

Personal loans are one of the most flexible forms of credit. There are options out there for people in every range of credit score, including those who have no credit at all. Many lenders market their products specifically to people with bad credit, which is usually everything below the high 600 range.

That said, those personal loans are going to have drawbacks to them. They might have:

  • Lower available balances, especially for first-time borrowers
  • Higher interest rates to account for the increased risk to the lender
  • Additional (possibly hidden) fees that artificially inflate the APR

Be careful not to take out a personal loan that overcompensates for a borrower’s bad credit. Payday and online installment loan providers do this consistently, charging far more than is reasonable for the customers they work with. There’s no need to do business with them when there are so many affordable options, even for people with scores that aren’t the greatest. More reputable online lenders and credit unions are usually the best places to start looking.

Which Bank is the Easiest to Get a Personal Loan From?

It’s always better to use debt out of convenience than out of necessity. For example, someone who has the cash to buy groceries but puts it on their credit card to get points is pretty safe. Someone who can’t afford to buy groceries and turns to their credit card is taking a risk that could end in disaster if they’re not careful.

Using credit out of necessity is the first step to getting stuck in a cycle of debt. People with no other options are much more likely to take out loans that sacrifice cost for accessibility, and those loans can get shockingly expensive.

If you’re struggling to qualify for a loan, try not to resort to one that trades accessibility for cost.  It’s still possible to get an affordable loan with fair or bad credit. Here are some great options.

1. PenFed Credit Union

  • Estimated APR:  6.49% to 17.99%
  • Loan Amounts: Up to $20,000
  • Repayment Terms: Up to 5 years
  • Credit Check: Yes
  • Minimum Credit Score: 670 (unconfirmed)
  • Pros:
    • Affordable interest rates, even at their upper limits
    • Little to no fees for anything
    • Prequalification is available
  • Cons:
    • Decent credit required to qualify
    • To receive funds, applicants need to become a member
    • Funding takes a few days
  • Best For: Small balance affordable loans for people with fair credit
  • BBB Rating: A+

2. Discover

  • Estimated APR: 6.99% to 24.99%
  • Loan Amounts: $2,500 to $35,000
  • Repayment Terms: 3 to 7 years
  • Credit Check: Yes
  • Minimum Credit Score: 660 (unconfirmed)
  • Pros:
    • Customizable repayment terms at the choice of the borrower
    • Longer available repayment terms may allow for a lower monthly payment
    • Transfer of funds within a single business day
    • No origination fee and decent interest rates
  • Cons:
    • Balances available aren’t as high as some others
    • No grace period for late payments
    • Late fees are higher than most at $39
  • Best For: Those with fair credit who want a low monthly payment
  • BBB Rating: A+

3. TD

  • Estimated APR: 6.99% to 21.99%
  • Loan Amounts: $2,000 to $50,000
  • Repayment Terms: 1 to 5 years
  • Credit Check: Yes
  • Minimum Credit Score: 700 (confirmed)
  • Pros:
    • No origination fee
    • Transfer of funds within a single business day
    • Secured and unsecured options available
  • Cons:
    • Available in fewer states than competitors
    • Charges late fees up to $10
  • Best For: Those with good credit who need larger loan balances
  • BBB Rating: B

4. PNC

  • Estimated APR: 9.24% to 15.74%
  • Loan Amounts: $1,000 to $20,000
  • Repayment Terms: 6 months to 5 years (unconfirmed)
  • Credit Check: Yes
  • Minimum Credit Score: 650 (unconfirmed)
  • Pros:
    • No origination fee
    • Short-term, small balance loans available
    • The higher end of rates are lower than average
  • Cons:
    • Can’t borrow as much as with other lenders
    • The lower end of rates are above average
  • Best For: Those looking for small balance loans
  • BBB Rating: A+

5. U.S. Bank

  • Estimated APR: 6.49% to 16.99%
  • Loan Amounts: $1,000 to $25,000
  • Repayment Terms: 1 to 5 years
  • Credit Check: Yes
  • Minimum Credit Score: 680
  • Pros:
    • Low balances available
    • Competitive rates with good credit scores
  • Cons:
    • Smaller loan amounts available
    • Best rates only for those who meet extensive requirements
    • Loans only available to existing customers
  • Best For: Existing customers who need $10,000, a loan term of 10 to 36 months, with great credit (above 800)
  • BBB Rating: A+