Best Personal Loans: The Ultimate Guide

For many people, a personal loan is the best way to finance a major expense or consolidate debt. Yet, while personal loans may at times be necessary, high interest rates and poor loan terms can cause them to become a financial burden.

That’s why it’s important to know what to look for in a lender, as well as to understand why the personal loan is necessary in the first place. In this article, you’ll learn about the best personal loan rates, lenders, and what to expect when choosing a loan product.

Table of Contents

Best Personal Loan Rates and Options

Whether you have good or bad credit, here are the 14 best personal loan options in 2021. Keep in mind that all credit scores are based on the FICO standard. Vantage Scores may be slightly different.

Best Overall Loan: SoFi

Lender Site: Personal loan | Sofi
Lender BBB Profile: SoFi | Better Business Bureau® Profile

SoFi offers personal loans to those with good credit and decent income.

  • Loan amounts: $5,000 to $100,000 (some states have higher minimums)
  • APR: 5.99% to 18.85% APR with autopay (up to 20.69% without autopay)
  • Loan terms: 2 to 7 years
  • Minimum credit score: 680
  • Payment info: Monthly payments
  • Fees: No origination, prepayment, or late fees
  • Application process: Online, secure, and easy
  • Time to funding: Several days
  • Joint applications: Yes, for those with lower credit or who desire a better interest rate
  • Other requirements: Short credit history is okay as long as the borrower has consistently made on-time payments

What makes it stand out: SoFi offers exclusive benefits to members such as access to online financial resources and financial advisors. The lender also offers unemployment protection, which allows those experiencing financial hardship or sudden unemployment to defer payments for up to 12 months without hurting their credit.

Customer reviews: SoFi has 3.2 out of 5 stars on Trustpilot. Most customers enjoyed the easy application, approval process, and great customer support. Negative reviews are mainly about slow turnaround times and high qualification requirements, particularly for mortgage loans.

Rates if You Have Good Credit

  • Loan amounts: $5,000 to $100,000
  • APR: 4.99% to 19.63% with autopay
  • Loan terms: 2 to 7 years
  • Minimum credit score: 680
  • Other requirements: Must have verifiable income and no major delinquencies on your credit report

Rates if You Have Bad Credit

  • Loan amounts: $5,000 to $100,000
  • APR: 5.99% to 20.69% APR
  • Loan terms: 2 to 7 years
  • Other requirements: May need a joint application or high income to qualify

Debt Consolidation Loan Rates

  • Loan amounts: $5,000 to $100,000
  • APR: 4.99% to 19.63% with autopay, but often less than 10% APR
  • Loan terms: 2 to 7 years
  • Other requirements: 90+ days’ employment and sufficient income (varies based on the loan amount and other qualifying factors) 

Best for People with Bad Credit: Avant

Lender Site: Personal loan | Avant
Lender BBB Profile: Avant | Better Business Bureau® Profile

Avant offers small and medium-sized personal loans to borrowers with poor or fair credit, making it ideal for those who need funding but can’t get it elsewhere.

  • Loan amounts: $2,000 to $35,000
  • APR: 9.95% to 35.99% APR
  • Loan terms: 2 to 5 years
  • Minimum credit score: 580
  • Payment info: Monthly payments
  • Fees: $15 fee for returned payment for insufficient funds. $25 late payment fee. Up to 4.75% origination fee. No early repayment fee.
  • Application process: Online and secure with a fast approval
  • Time to funding: 1 to 2 business days
  • Joint applications: None
  • Other requirements: Undisclosed minimum income

What makes it stand out: Avant’s personal loans are great for refinancing, debt consolidation, and major purchases. The lender has an app that makes it convenient to manage the loan, see your payment history, and make on-time payments.

Customer reviews: Avant has a 4.7 on Trustpilot out of 17,000+ reviews. Most customers appreciate the easy application process, fast approval, and great customer service. Some customers complain about high interest rates though.

Rates if You Have Good Credit

  • Loan amounts: $2,000 to $35,000
  • APR: As low as 9.95% with excellent credit
  • Loan terms: 2 to 5 years with no prepayment fee
  • Recommended credit score: 700+

Rates if You Have Bad Credit

  • Loan amounts: $2,000 to $35,000
  • APR: As high as 35.99% with a credit score below 680
  • Loan terms: 2 to 5 years with flexible repayment options
  • Other requirements: Since there are no joint applications, you need to meet the minimum credit score requirements, as well as have a low DTI (debt-to-income) ratio and verifiable income.

Debt Consolidation Loan Rates

  • Loan amounts: Up to $35,000
  • APR: Between 9.95% and 35.99%
  • Loan terms: 2 to 5 years
  • Other requirements: May need a 700+ credit score to qualify for the best rates and make debt consolidation worth it through this lender

Best for Repayment Flexibility: Lightstream

Lender Site: Personal loan | Lightstream
Lender BBB Profile: Lightstream | Better Business Bureau® Profile

With flexible repayment terms and potentially high loans available, Lightstream is ideal for those with good credit who need greater repayment flexibility.

  • Loan amounts: $5,000 to $100,000
  • APR: 2.49% to 19.99% with autopay (maximum APR 20.49%)
  • Loan terms: 2 to 12 years
  • Minimum credit score: Unspecified
  • Payment info: Monthly payments
  • Fees: No hidden fees or prepayment penalties
  • Application process: Online only
  • Time to funding: Same-day funding may be available
  • Other requirements: Applicants need solid credit history with few delinquencies. They must also provide proof of income and the ability to save through investments, a savings account, or a retirement fund.
  • Worth mentioning: No preapprovals. The payment date cannot be changed once the loan is funded. Paying more than 18 days early counts as an extra payment, but does not count towards your regularly scheduled payment.

What makes it stand out: Besides personal loans, Lightstream offers auto loans with decent terms without a down payment.

Customer reviews: On Trustpilot, Lightstream received 2.1 out of 5 stars. Most negative ratings are about the loan products themselves and high qualification requirements.

Rates if You Have Good Credit

  • Loan amounts: Up to $100,000 with good or excellent credit
  • APR: As low as 2.49% with autopay
  • Loan terms: Flexible, up to 12 years
  • Other requirements: Unspecified requirements, but be prepared to have proof of income, several years’ credit history, savings, and a good credit score

Rates if You Have Bad Credit

  • Loan amounts: Loans as low as $5,000 (consumers with poor credit are unlikely to qualify for higher maximums)
  • APR: Up to 20.49%
  • Loan terms: 2 to 12 years

Debt Consolidation Loan Rates

  • Loan amounts: Between $5,000 and $100,000
  • APR: 4.98% to 20.49% with autopay
  • Loan terms: 2 to 12 years

Best for Debt Consolidation: Marcus by Goldman Sachs

Lender Site: Personal loan | Marcus
Lender BBB Profile: Marcus | Better Business Bureau® Profile

Marcus by Goldman Sachs is an online bank that offers no-fee personal loans, high-yield savings accounts, and high-yield certificates of deposit (CDs).

  • Loan amounts: $3,500 to $40,000
  • APR: 6.99% to 19.99% with autopay
  • Loan terms: 3 to 6 years
  • Minimum credit score: 660
  • Payment info: Monthly payments
  • Fees: No origination, signup, or prepayment fees
  • Application process: Online and secure
  • Time to funding: Several business days
  • Joint applications: None
  • Other requirements: Proof of income and good credit

What makes it stand out: With flexible loan terms and competitive interest rates, Marcus by Goldman Sachs is ideal for those who need to consolidate credit card debt for a better interest rate.

Customer reviews: Marcus by Goldman Sachs has a 3.4 out of 5 on Trustpilot. While mostly positive, most of the complaints revolve around slow funding.

Rates if You Have Good Credit

  • Loan amounts: Up to $40,000
  • APR: As low as 6.99%
  • Loan terms: 3 to 6 years
  • Other requirements: Unspecified, but expect to have a low DTI ratio, good credit, and a solid income 
  • Worth mentioning: For every 12 consecutive on-time payments, you may defer 1 payment with no extra interest

Rates if You Have Bad Credit

  • Loan amounts: As low as $3,500
  • APR: Potentially high at 19.99%
  • Loan terms: 3 to 6 years
  • Worth mentioning: Expect to have verifiable income if applying for a loan with this lender

Debt Consolidation Loan Rates

  • Loan amounts: $3,500 to $40,000
  • APR: Lower than the average credit card APR for those with good credit
  • Loan terms: 3 to 6 years with regular monthly payments
  • Minimum credit score: 660+
  • Other requirements: Proof of income (varies based on loan amount)

Best Personal Loan with the Lowest Fees: TD

Lender Site: Personal loan | TD
Lender BBB Profile: TD | Better Business Bureau® Profile

TD offers small and large personal loans with lower-than-average fees. The lender operates online and has storefront locations in 15 states and Washington, D.C.

  • Loan amounts: $2,000 to $50,000
  • APR: 6.99% to 21.99%
  • Loan terms: 3 to 5 years
  • Minimum credit score: 680
  • Payment info: Monthly payments with the option to change the payment date
  • Fees: No origination or application fee. 5% late payment fee on the current payment or $10 (whichever’s lower).
  • Application process: Secure and online
  • Time to funding: Same-day funding possible
  • Joint applications: No co-signer or joint loans allowed.
  • Other requirements: Vague eligibility requirements

What makes it stand out: For those who want the brick-and-mortar banking experience, TD is a solid option. It’s also good for both debt consolidation and financing major purchases.

Customer reviews: Existing customers enjoy access to various financial resources and good customer service. However, some reviews note that it may be easier to qualify for a loan if you’re already a customer and have good or excellent credit.

Rates if You Have Good Credit

  • Loan amounts: Up to $50,000 to fund most major purchases or consolidate debt
  • APR: Starting at 6.99%
  • Loan terms: 3 to 5 years with fixed rate payments
  • Other requirements: Unspecified

Rates if You Have Bad Credit

  • Loan amounts: Starting at $2,000
  • APR: As high as 21.99%
  • Loan terms: 3 to 5 years
  • Worth mentioning: TD only offers unsecured personal loans, so borrowers with bad credit may not qualify or may only be eligible for smaller amounts

Debt Consolidation Loan Rates

  • Loan amounts: $2,000 to $50,000
  • APR: For good credit borrowers, the APR may be as low as 6.99%
  • Loan terms: Flexible 3 to 5-year terms
  • Worth mentioning: No direct payment to creditors

Best Option if You Have Little Credit History: Upstart

Lender Site: Personal loan | Upstart
Lender BBB Profile: Upstart | Better Business Bureau® Profile

Upstart offers unsecured personal loans to borrowers with very little credit history or a lower credit score.

  • Loan amounts: $1,000 to $50,000
  • APR: 4.37% to 35.99%
  • Loan terms: 3 to 5 years
  • Minimum credit score: 600
  • Payment info: Monthly payments
  • Fees: Up to 8% origination fee. $15 returned payment fee. 5% or $15 past due fee. One-time fee of $10 for paper copies.
  • Application process: Online
  • Time to funding: 1+ business day
  • Joint applications: No joint applications or co-signers
  • Other requirements: $12,000 annual income

What makes it stand out: Upstart is a flexible lender that works with borrowers who need to consolidate debt or secure financing for things like a vehicle.

Customer reviews: Upstart has 4.9 out of 5 stars on Trustpilot with 15,000+ reviews. Most reviewers liked the hassle-free application process, quick funding, and transparent loan terms and conditions. Some reviewers mention that Upstart’s loans have higher interest than others.

Rates if You Have Good Credit

  • Loan amounts: Up to $50,000
  • APR: Highly competitive (starting at 4.37%)
  • Loan terms: 3 to 5 years
  • Other requirements: Unspecified

Rates if You Have Bad Credit

  • Loan amounts: Starting at $1,000
  • APR: Could be high for those with poor credit or limited credit history
  • Loan terms: 3 to 5 years
  • Other requirements: Although a 600 credit score is required, the lender may consider other factors like income and DTI ratio
  • Worth mentioning: Good for building credit

Debt Consolidation Loan Rates

  • Loan amounts: Up to $50,000
  • APR: 4.37% to 35.99%
  • Loan terms: Flexible
  • Worth mentioning: No direct payment to creditors

Best option if you need to pay off credit card debt: Payoff

Lender Site: Personal loan | Payoff
Lender BBB Profile: Payoff | Better Business Bureau® Profile

Payoff has served over 100,000 customers by providing personal loans to help them manage credit card debt.

  • Loan amounts: $5,000 to $40,000
  • APR: 5.99% to 24.99%
  • Loan terms: 2 to 5 years
  • Minimum credit score: 640
  • Payment info: Monthly payments
  • Fees: No fees
  • Application process: Fast, secure, and online
  • Time to funding: 2 to 14 days
  • Joint applications: None

What makes it stand out: Payoff focuses on consolidating credit card debt into one easy monthly payment to make it easier for consumers to manage their finances and build credit.

Customer reviews: Although some customers complain about the slow approval and funding process, most people like how easy it is to consolidate their credit card debt at a competitive rate.

Rates if You Have Good Credit

  • Loan amounts: Up to $40,000
  • APR: As low as 5.99% for those with good or excellent credit
  • Loan terms: 2 to 5 years
  • Other requirements: Unspecified

Rates if You Have Bad Credit

  • Loan amounts: As low as $5,000
  • APR: Up to 24.99%
  • Loan terms: 2 to 5 years
  • Other requirements: 640 credit score is required, though the lender may consider other factors
  • Worth mentioning: Since Payoff doesn’t allow joint applications, borrowers must apply based on their own merit

Debt Consolidation Loan Rates

  • Loan amounts: Up to $40,000
  • APR: Lower than most major credit cards, especially with good credit
  • Loan terms: 2 to 5 years

Best if You Need Your Money Fast: Upgrade

Lender Site: Personal loan | Upgrade
Lender BBB Profile: Upgrade | Better Business Bureau® Profile

Upgrade offers a variety of hassle-free financial products at competitive rates, including affordable personal loans.

  • Loan amounts: $1,000 to $50,000
  • APR: 5.94% to 35.97%
  • Loan terms: 2 to 7 years
  • Minimum credit score: 620
  • Payment info: Monthly payments
  • Fees: 2% to 8% origination fee (average is 5%). No prepayment fee.
  • Application process: Online and secure
  • Time to funding: Up to same-day funding
  • Joint applications: Yes
  • Other requirements: 680 credit score recommended
  • Worth mentioning: Not available in WV, MD, CO, or IA

What makes it stand out: Upgrade’s mission is to provide customers a better banking experience than what they’d traditionally receive. The lender does this by offering affordable personal loans and credit cards. It also offers a high-yield checking account.

Customer reviews: Upgrade has 4.6 out of 5 stars on Trustpilot with 19,000+ reviews. Positive reviews mention helpful service, a hassle-free application process, fast funding, and good rates. A few customers complain about limited refinancing options.

Rates if You Have Good Credit

  • Loan amounts: Up to $50,000
  • APR: As low as 5.94%
  • Loan terms: Flexible
  • Other requirements: Need at least 680 credit score for the best rates

Rates if You Have Bad Credit

  • Loan amounts: Starting at $1,000
  • APR: Could be as high as 35.97%
  • Loan terms: 2 to 7 years
  • Other requirements: Unspecified
  • Worth mentioning: Up to an 8% origination fee

Debt Consolidation Loan Rates

  • Loan amounts: $1,000 to $50,000
  • APR: 5.94% to 35.97%
  • Loan terms: 2 to 7 years
  • Worth mentioning: Personal loans through Upgrade have flexible terms designed to fit the borrower’s timeline and monthly budget

Best if You Still Bank In-Person: PNC

Lender Site: Personal loan | PNC
Lender BBB Profile: PNC | Better Business Bureau® Profile

PNC Bank offers personal loans and other traditional banking products to borrowers who prefer to bank in person rather than online.

  • Loan amounts: $1,000 to $20,000
  • APR: 6.39% to 28.74%
  • Loan terms: 6 months to 5 years
  • Minimum credit score: 660
  • Payment info: Monthly payments
  • Fees: No application fee. No origination fee. No prepayment penalty. Variable late fee.
  • Application process: Easy and mostly online, but customers may need to visit a branch in-person to receive funds.
  • Time to funding: Next-day funding
  • Joint applications: Yes
  • Other requirements: Must be an existing customer for online funding
  • Worth mentioning: Loan terms and amounts vary based on state (ex. maximum loan amount in CA is $10,000)

What makes it stand out: Unlike most modern lenders, which operate solely or mostly online, PNC Bank still provides a traditional banking experience for people who prefer to conduct business in person.

Customer reviews: Most positive reviews mention that PNC’s loan products are less expensive than other banks. However, some negative reviews mention having issues with existing accounts and mortgage loans. Some reviewers also note there’s no fee forgiveness.

Rates if You Have Good Credit

  • Loan amounts: Potentially up to $35,000 for borrowers with good credit
  • APR: Fixed rates starting at 6.39%
  • Loan terms: Flexible
  • Worth mentioning: Existing PNC Bank customers may receive a 0.25% discount on their loan’s APR with autopay

Rates if You Have Bad Credit

  • Loan amounts: Starting at $1,000
  • APR: Caps out at 28.74%
  • Loan terms: Up to 5 years
  • Other requirements: Although not specified, most existing customers had at least a 660 credit score

Debt Consolidation Loan Rates

  • Loan amounts: Varies by location
  • APR: 6.39% to 28.74%
  • Loan terms: Up to 5 years

Best loan if you have fair to bad credit: Bestegg

Lender Site: Personal loan | BestEgg
Lender BBB Profile: BestEgg | Better Business Bureau® Profile

Bestegg offers hassle-free personal loans to individuals with fair or poor credit at reasonable, fixed rates.

  • Loan amounts: $2,000 to $50,000
  • APR: 5.99% to 29.99%
  • Loan terms: 3 to 5 years
  • Minimum credit score: 600
  • Payment info: Monthly payments
  • Fees: $15 late fee. $15 returned payment fee. 0.99% to 5.99% origination fee.
  • Application process: Online and secure
  • Time to funding: 1 to 3 business days
  • Joint applications: None
  • Other requirements: Maximum DTI ratio is 65%

What makes it stand out: Unlike many other lenders, Bestegg grants unsecured personal loans to borrowers with minimal credit history and fair or bad credit.

Customer reviews: Bestegg has overwhelmingly positive reviews on Trustpilot. Most reviews are about the easy application and approval process and fair interest rates.

Rates if You Have Good Credit

  • Loan amounts: Up to $50,000
  • APR: Starting at 5.99%
  • Loan terms: 3 to 5 years

Rates if You Have Bad Credit

  • Loan amounts: Starting at $2,000
  • APR: As high as 29.99%
  • Loan terms: Flexible
  • Other requirements: Maximum DTI ratio is 40%

Debt Consolidation Loan Rates

  • Loan amounts: $2,000 to $50,000
  • APR: 5.99% to 29.99%
  • Loan terms: Flexible
  • Other requirements: Unspecified
  • Worth mentioning: Best for high-income earners with good credit

Best Loan if You Can Add Collateral or Have a Co-Borrower: OneMain Financial

Lender Site: Personal loan | OneMain Financial
Lender BBB Profile: OneMain Financial | Better Business Bureau® Profile

OneMain Financial offers secured and joint personal loans to borrowers who need funding relatively quickly and are having trouble qualifying with other lenders.

  • Loan amounts: $1,500 to $20,000
  • APR: 18% to 35.99%
  • Loan terms: 2 to 5 years
  • Minimum credit score: None
  • Payment info: Monthly payments with flexible payment dates
  • Fees: $25 to $500 origination fee in some states (or 1% to 10%). No prepayment fee.
  • Application process: Fast, secure, and online
  • Time to funding: Same-day funding is available
  • Joint applications: Yes.
  • Other requirements: Borrowers must have a stable credit history, manageable debt, and proof that they can repay the loan. The average income is $45,000.
  • Worth mentioning: Storefront branches are available in 44 states. Some states have higher or lower loan maximums.

What makes it stand out: Rather than relying on a borrower’s credit score, OneMain Financial assesses an individual’s eligibility based on its own underwriting system.

Customer reviews: On Trustpilot, OneMain Financial has 4.8 out of 5 stars with over 35,000 reviews. Positive reviews mention great customer service, an easy application process, and fast funding. Some negative reviews mention not knowing how high the APR would be until after qualifying for the loan.

Rates if You Have Good Credit

  • Loan amounts: Up to $20,000
  • APR: Varies, but the average is 25%
  • Loan terms: Flexible
  • Other requirements: 690+ recommended
  • Worth mentioning: 7-day cancellation policy with no penalty

Rates if You Have Bad Credit

  • Loan amounts: Starting at $1,500
  • APR: Relatively high (up to 35.99%)
  • Loan terms: 2 to 5 years
  • Other requirements: May need a joint application or collateral worth the amount of the loan to qualify

Debt Consolidation Loan Rates

  • Loan amounts: $1,500 to $20,000
  • APR: 18% to 35.99%
  • Loan terms: 2 to 5 years
  • Other requirements: May require collateral or a good credit score

Best for comparing multiple loan options: LendingTree

Lender Site: Personal loan | Lending Tree
Lender BBB Profile: Lending Tree | Better Business Bureau® Profile

LendingTree isn’t a traditional lender. Instead, it’s an online marketplace that connects borrowers with prospective lenders to try to find the best possible rates.

  • Loan amounts: Vary based on lender
  • APR: Maximum 35.99%
  • Loan terms: Variable
  • Minimum credit score: 600
  • Payment info: Monthly payments
  • Fees: Based on lender
  • Application process: Easy, online, and secure
  • Time to funding: Within 2 business days, depending on the lender
  • Joint applications: Yes
  • Other requirements: Eligibility requirements based on lender

What makes it stand out: LendingTree has established a reputation for itself as a trustworthy platform to match borrowers with lenders. It offers personal loans, home loans, debt consolidation, and insurance.

Customer reviews: On Trustpilot, LendingTree has received 4.5 out of 5 stars with 10,000+ reviews. Most reviews mention transparent terms and fast turnaround time. A few negative reviews note that refunding extra payments is slow.

Rates if You Have Good Credit

  • Loan amounts: Up to $50,000
  • APR: Variable
  • Loan terms: Flexible
  • Other requirements: Depends on the lender

Rates if You Have Bad Credit

  • Loan amounts: Variable
  • APR: Up to 35.99%
  • Loan terms: Flexible
  • Other requirements: Depends on the lender

Debt Consolidation Loan Rates

  • Loan amounts: $1,000 to $50,000
  • APR: Average 10%
  • Loan terms: Variable
  • Other requirements: Variable

Best Loan With Tools to Help You Improve Your Finances: Rise

Lender Site: Personal loan | Rise
Lender BBB Profile: Rise | Better Business Bureau® Profile

An online lender, Rise (Elevate) offers installment loans to borrowers with bad credit.

  • Loan amounts: $300 to $5,000
  • APR: 50% to 299%
  • Loan terms: 4 to 26 months
  • Minimum credit score: None
  • Payment info: Monthly payments
  • Fees: No origination fee, application fee, or prepayment penalty.
  • Application process: Quick application with fast approval
  • Time to funding: Within 1 business day
  • Joint applications: None
  • Other requirements: Minimal
  • Worth mentioning: Not available in 18 states or Washington, D.C. Military personnel and families are not eligible.

What makes it stand out: Unlike the other lenders on this list, Rise offers short-term installment loans to people who need fast funding and who want to improve their credit score and financial situation.

Customer reviews: Rise has 4.7 out of 5 stars on Trustpilot with more than 3,400 reviews. Some of the positive reviews mention the fast, easy application process. A few negative reviews mention low maximum loan amounts and high interest rates.

Rates if You Have Good Credit

  • Loan amounts: Up to $5,000
  • APR: Starting at 50%
  • Loan terms: Short-term
  • Worth mentioning: These loans are best for individuals with poor credit

Rates if You Have Bad Credit

  • Loan amounts: A few thousand dollars
  • APR: Up to 299%
  • Loan terms: Flexible, but short
  • Other requirements: Unspecified
  • Worth mentioning: Borrowers may rebuild credit since the lender reports to all 3 credit bureaus

Debt Consolidation Loan Rates

  • Loan amounts: Up to $5,000
  • APR: Starting at 50%
  • Loan terms: 4 to 26 months, depending on the state
  • Worth mentioning: With high interest rates, these loans are not recommended for debt consolidation

Best for Peer-to-Peer Lending: Prosper

Lender Site: Personal loan | Prosper
Lender BBB Profile: Prosper | Better Business Bureau® Profile

As the first peer-to-peer lending, online marketplace, Prosper offers affordable personal loans to borrowers with all kinds of financial and credit history.

  • Loan amounts: Up to $40,000
  • APR: 7.95% to 35.99%
  • Loan terms: 3 to 5 years
  • Minimum credit score: Average is 600
  • Payment info: Monthly payments
  • Fees: Based on lender
  • Application process: Fast, secure, and easy
  • Time to funding: Next day funding is available
  • Joint applications: Yes
  • Other requirements: Depends on the lender

What makes it stand out: Prosper matches borrowers with the best investors to help them meet their financial needs.

Customer reviews: Prosper has 4.6 out of 5 stars on Trustpilot with nearly 7,000 reviews. While most reviews are positive, a few customers complain about being denied a loan after a hard credit inquiry.

Rates if You Have Good Credit

  • Loan amounts: Up to $40,000
  • APR: Starting at 7.95%
  • Loan terms: 3 to 5 years
  • Other requirements: Based on lender

Rates if You Have Bad Credit

  • Loan amounts: Variable, but may be lower for borrowers with poor credit
  • APR: Caps out at 35.99%
  • Loan terms: 3 to 5 years
  • Other requirements: Variable

Debt Consolidation Loan Rates

  • Loan amounts: Up to $40,000
  • APR: As low as 7.95%
  • Loan terms: 3 to 5 years
  • Other requirements: Depends on the lender

What is a Personal Loan?

Personal loans are a common type of installment loan. In fact, around 22% of adult American consumers have taken out a personal loan at some point in their life.

These loans can be used to pay for nearly anything, including:

  • medical bills
  • home repairs or refinancing
  • debt consolidation
  • honeymoon or family vacation
  • other major purchases

As an installment loan, personal loans are repaid in set monthly installments that include the principal balance of the loan, APR (annual percentage rate), and any other fees. Most personal loans have a payoff period of 1 to 7 years.

Personal loans may be either secured or unsecured, depending on the lender and the consumer’s credit history, income, DTI ratio, and other factors.

Average Interest Rates for a Personal Loan

Lenders determine interest rates based on several factors, including the borrower’s credit score. If you’re trying to figure out what kind of interest rate you may qualify for, here’s what to expect (based on data from Experian).

Excellent Credit Loans

An excellent credit score is between 800 and 850. Borrowers with an excellent credit score are likely to qualify for most loans and receive the best rates. The average interest rate ranges from around 2.49% to 5.99%.

Good Credit Loans

A good or very good credit score ranges from 670 to 799. Consumers with a good credit score may not get the absolute best rates, but they’re likely to receive better rates than borrowers with lower credit. The average interest rate is between 5.99% and 12.5%, though it may be higher in some cases.

Fair Credit Loans

A fair credit score ranges from 580 to 669. People with a credit score in this range may have trouble qualifying for financial products like loans. If they do qualify, they may face unfavorable terms or rates. In general, fair credit loans have an average interest rate ranging from 17.80% to 28.5%.

Bad Credit Loans

Consumers with a 300 to 579 credit score fall in the “bad credit” category. In this range, the average interest rate for a personal loan is around 36%. People with a bad credit score are often declined for personal loans, credit cards, and other financial products. Because of this, many people turn to high-interest installment or payday loans with interest in the triple digits.

What are the Requirements for a Personal Loan?

Although some lenders have specific requirements, here’s what’s required for most personal loans:

  • A minimum credit score of 600
  • Proof of income with at least 3 months’ steady employment (this may include paystubs, W-2s, tax returns, or other documentation)
  • 2 forms of identity (passport, driver’s license, birth certificate, social security card, etc.)
  • Contact information (full name, address, phone number, email, etc.)
  • Banking information (for direct deposit or withdrawal)

Check with potential lenders to see what their minimum and recommended eligibility requirements are before applying for a personal loan.

Pros and Cons of Personal Loans

Pros

  • Easy application process
  • Fast funding with a lump-sum payment
  • Unsecured loans are available
  • Lower interest rates and longer repayment terms than other options like payday loans
  • Ability to build credit with on-time payments

Cons

  • Potentially high APRs, especially for people with poor credit
  • Difficult to qualify for unsecured personal loans
  • Some lenders charge other fees like origination fees, late fees, and returned payment fees
  • Not all lenders allow joint applications or co-signers
  • They increase the borrower’s total debt
  • It may be difficult to manage another monthly payment

How to Choose the Best Personal Loan for You

The first thing to do is make sure you know how much you need to borrow and why. Once you can answer this, it’s time to check out lenders. Here are the main things to look for:

  • Approval requirements. Each lender has its own eligibility requirements. Make sure you qualify based on things like DTI ratio, credit score, credit history, and state residency.
  • Interest rates. Personal loans usually cap out at 36%, even for borrowers with bad credit. However, many lenders offer more competitive interest rates. When consolidating debt, make sure the interest rate is lower than the debt you already have to make it worthwhile. Some loans come with fixed (not changing) interest, while others have variable (subject to change) interest.
  • Other fees. Common fees to watch out for are administrative or origination fees, late payment fees, returned payment fees, early payoff fees, and other one-time fees. These can add up if you’re not careful.
  • Loan amounts. Personal loans range widely from around $1,000 to $100,000. While it may be tempting to get a larger loan, only take out a loan that covers exactly what you need.
  • Repayment options. Some online lenders allow the borrower to set up automatic withdrawals for their monthly payments, while others require it. Other lenders allow payment through a mobile app or online.
  • Any unique features. Look for anything that makes the lender stand out. Some lenders, like SoFi, offer unique features like a one-month payment deferment. Others have customized payment schedules. Lenders may also offer discounts to loan products at different times of the year.
  • Customer service. Read online reviews about different lenders to see how they stack up when it comes to customer service. Look for reviews that mention responsive, reliable, and friendly customer service.

Which is Better? Personal Loans or Low-Interest Credit Card Offers 

Although they may seem similar, personal loans and low-interest credit cards are quite different.

For example, personal loans come in a lump that you must repay over a set period. Credit cards, meanwhile, are a form of revolving credit. This means that, unlike with personal loans, you can continue borrowing money until the credit card caps out. Even then, some financial institutions will increase the cap based on factors like income and credit score.

Low-interest credit cards may come with 0% APR, but this usually only lasts for the first 12 or 14 months. After that, the amount on the credit card will start to accrue interest. For the most part, personal loans come with lower interest rates than credit cards. That said, you won’t be charged interest on a credit card if you pay the balance in full every month.

A personal loan may be better than a low-interest credit card if you need to consolidate debt (especially credit card debt), finance larger purchases, or pay for things like medical bills or home repairs.

A low-interest credit card may be better for paying for smaller expenses like groceries or gas, especially if you can pay off the balance each month. Some credit cards also come with certain perks like cashback rewards or travel points.

Both options can be used for nearly anything, but personal loans are more predictable with set monthly payments, interest rates, and payoff terms.

Types of Personal Loans

According to Experian, the most common types of personal loans are for:

  • Debt consolidation. 26% of consumers took out a personal loan to consolidate credit card or other high-interest debt. Another 9% used personal loans to refinance their debt for a better rate.
  • Emergencies. Between 6% and 11% of people used a personal loan to cover an emergency.
  • Home renovations. 17% of people used a personal loan to pay for renovations or repairs on their home.
  • Major life events. Approximately 28% of all borrowers used their personal loan for a major life event like a wedding, cross-country move, or family vacation.

FAQs

What’s the Difference Between a Secured Loan and an Unsecured Loan?

Secured loans require the borrower to put up some form of collateral or personal asset like home equity or a paid-off vehicle. The lender will use this collateral to pay off the loan if the borrower fails to make payments or defaults.

Unsecured loans do not require collateral and instead rely on the borrower’s own merit (creditworthiness, financial history, income, etc.) to pay back the loan.

Will a Personal Loan Affect my Credit Score?

Yes. This is because the lender performs a hard credit pull into your report when determining your eligibility. This hard inquiry may cause your credit score to drop by a few points. Additionally, any new credit application or account will have a small, short-term impact on your credit score. In both cases, you’ll be able to bring your credit score back up over time if you make on-time payments.

How Does my Credit Score Affect my Personal Loan Offer?

Your credit score will help the lender determine whether or not to approve you for the loan, how much you qualify for, loan terms, and the interest rate. The general rule of thumb is this: The higher your credit score is, the higher the chances of approval at the best rates.

What is an APR and How is it Different from an Interest Rate?

APR stands for “annual percentage rate.” This refers to the yearly cost of the loan including the principal balance and other fees (ex. origination fee). Interest rate is a percentage that indicates how much the lender charges for the loan. Since APR takes all fees into account, it is almost always higher than the interest rate.

Can I Pay Back my Personal Loan Early?

This depends on the lender. Some lenders charge a prepayment fee to those who try to pay back their loan early. If your lender doesn’t charge a prepayment fee, then you can pay back the loan early without extra cost.