Best Personal Loans of 2019

Introduction

A personal loan is a loan taken out for a short period of time, usually between two and five years. The length of time is fixed and does not fluctuate, unlike a credit card or line of credit. Most personal loan amounts are between $1,000 and $50,000, depending on your need and creditworthiness. Each bank has its own set of limitations on how much you can borrow for a personal loan.

A personal loan is unsecured, which means there is no collateral backing the loan, such as a car or house. Different types of lenders offer personal loans, including traditional brick-and-mortar banks and online-only lenders. They serve borrowers with varying credit scores, income and other variables.

This guide explains how you can evaluate online lenders for personal loans. It offers guidance for finding the right lender for your credit history and income, interest rates offered, how much you can borrow, what you can and can’t use the loan for, and if you can have a co-signer. Choosing the right lender and terms can save you thousands of dollars.

Reasons to Get a Personal Loan

Personal loans are not a solution for most financial situations, says Eric Roberge, certified financial planner and owner of financial planning website Beyond Your Hammock. “Most times, they are just a Band-Aid on improper money management,” he says.

A situation where Roberge recommends a personal loan is if you have credit card debt with high interest rates. Paying off debt with a high interest rate, such as a 24 percent annual percentage rate, can be difficult because the more interest you owe, the higher your payments will be and the longer it could take you to be debt-free. But if you qualify for a personal loan with a much lower interest rate, you can pay off the debt faster and spend less on interest.

“One bad reason to take out a personal loan is to invest in the stock market,” he says. “There is no reason to go into debt just to get money in the market. Save and then invest.”

Some of the worst uses for personal loans are vacations, weddings, engagement rings and other unnecessary expenses. If you’re having trouble saving for an expense like a wedding or vacation, delaying it until you can pay for it in cash is a better option than a personal loan.

Personal loans are also not a good idea for home repairs. It’s usually better to use the equity built up in your home, since secured loans usually have lower interest rates.

Personals Loans vs. Payday Loans

While personal loans are offered by trustworthy lenders, payday loans are predatory, often signing up their users for debt that takes several cycles to pay off. A payday loan is a short-term loan, usually limited to a few hundred dollars. The borrower agrees to pay the lender the amount of the loan plus interest, and writes a check or gives access to their bank account. The lender then deposits the check when the loan comes due, which is typically the borrower’s next payday. However, if the borrower does not have enough money in the bank at that time, the lender will usually extend the loan until the next payday.

Most payday loans have exorbitant interest rates, often around 400 percent APR and sometimes up to 700 percent. Many borrowers end up extending their loans several times over. Because the interest rate is so high, they struggle to repay the loan.

“Subprime lenders that don’t care about a customer’s ability to repay are probably counting on them not being able to pay the loan back on time,” says Jared Kaplan, CEO of OppLoans, an online lender that focuses on customers with fair to poor credit.

He says this sounds counterintuitive, as lenders might be out of business if customers can’t repay loans. But lenders commonly extend the loan’s repayment term in exchange for charging additional fees or interest. This practice is known as rollover or sometimes reborrowing if a person is paying one loan off and then immediately taking out a new one to meet other expenses. Payday loans that continue to roll over with additional fees or interest are how consumers get trapped in a nasty cycle of debt, says Kaplan.

A payday loan is never a good idea, especially if you’re having trouble making ends meet. They can lead to bigger financial problems and can often cost you far more than you originally borrowed. If you find yourself contemplating a payday loan, consider borrowing money from family or friends, or sell something you own.

U.S. News Survey: Cost drives personal loan decisions, but borrowers aren’t doing enough comparative research

U.S. News conducted a survey of consumers with personal loans to find out how borrowers are applying for and using personal loans. Often, borrowers aren’t sufficiently researching loans before they apply and may not be prepared to get the best rates and loan products. Most respondents considered cost as the deciding factor for their loan, but many did not compare rates from multiple lenders before choosing a loan company. Many borrowers didn’t check their credit score or report before applying and most did not consider alternatives to personal loans.

Many borrowers are using personal loans for debt consolidation or home improvement.

Debt consolidation and home improvement are the two most common uses for personal loans. Other common personal loan purposes include unexpected expenses and large purchases.

(Conducted using Google Surveys – July/August 2018)

More than half of borrowers who used their personal loan for debt consolidation said the loan helped them reduce overall debt.

(Conducted using Google Surveys – July/August 2018)

Many borrowers aren’t adequately researching personal loans before applying.

Although 27 percent of borrowers spent four or more hours researching personal loans, 34 percent did minimal research, spending two hours or less. More than 20 percent of respondents didn’t spend any time researching loans before submitting an application.

(Conducted using Google Surveys – July/August 2018)

More than half (52 percent) of respondents didn’t use preapprovals to compare rates and fees from multiple lenders. Just 21 percent compared rates from at least three lenders. Obtaining preapprovals from multiple lenders can make it easy to identify the personal loan companies that are likely to approve your application at the best rate.

(Conducted using Google Surveys – July/August 2018)

Cost is the deciding factor for most personal loan borrowers.

A lower APR or lower fees were the deciding factors for 36 percent of respondents when they chose a lender. Convenience or ease of application were the most important factors for 20 percent of respondents.

(Conducted using Google Surveys – July/August 2018)

Many borrowers aren’t checking their credit or considering alternatives to personal loans.

More than 48 percent of respondents said they didn’t check their credit report or score before applying, while almost 5 percent said they didn’t know how to check. Reviewing your credit report and taking action to improve your credit score can help you qualify for the best rates on loans.

(Conducted using Google Surveys – July/August 2018)

The majority of respondents (57 percent) didn’t consider common alternatives to personal loans including credit cards, savings, home equity loans and mortgage refinancing. It’s a good idea to research loan alternatives, as some may offer better rates or terms. For example, 21 percent of respondents used their personal loan for home improvement, but only 13 percent considered a home equity loan. Home equity loans may offer a lower interest rate than personal loans.

(Conducted using Google Surveys – July/August 2018)

Survey methodology:

U.S. News ran a nationwide survey through Google Surveys between July 13 and August 11, 2018.
The sample size was the general American population and the survey was configured to be representative of this sample.
The survey asked 10 questions relating to obtaining and using a personal loan.
All winning answers were statistically significant at the 95 percent confidence level.
See the full survey data, questions and results.

Risks of Personal Loans

How Personal Loans Affect Your Credit

When you apply for a loan, the lender will check your credit. There are two ways the lender can check it: a soft inquiry and a hard inquiry. A soft inquiry will only be visible to you and won’t count negatively against your credit score. But a hard inquiry will show up on your report and will be visible to any creditor who views the report. It will typically stay on the report for two years and may negatively affect your score for one year.

New hard inquiries specifically affect the new credit portion that makes up 10 percent of your FICO credit score, which is the score most commonly used by lenders when evaluating applicants. New credit refers to how many new credit inquiries you have and how many new lines of credit you opened recently.

Any time you open a new loan, you alter the average age of your credit. The length of your credit history counts for 15 percent of your FICO credit score, and the average age of your accounts is a factor in the length of your credit history. If you don’t have many loans or other types of credit, then a new account can significantly affect the average age of all your credit accounts.

Risk of Defaulting

If you stop making payments on a personal loan, you risk defaulting on the loan and damaging your credit.

“If you’re taking out an unsecured personal loan, you don’t have to risk losing your home or your car, but that doesn’t mean they’re risk-free,” says Kaplan. “Failing to pay the loan back, also known as defaulting, could do some pretty serious damage to your FICO score. That will make it harder and more expensive to borrow money in the future.”

Defaulting can lead to having the loan go to collections and getting a judgment issued against the borrower, both of which can stay on a credit report for years.

How to Get a Personal Loan

Some of the most common requirements for a personal loan are:

Minimum credit score: Most lenders require that you have at least fair or good credit when applying for a personal loan. Each lender sets its own cutoff for what it considers to be excellent, good, fair or bad credit. In general, fair credit is a FICO score between 580 to 669 and good credit is a score between 670 to 739. Most companies require a score of at least 600, but some have greater requirements. A higher score will increase your ability to be approved, and the higher your score, the lower interest rate you’ll qualify for too.
Clean credit history: Lenders don’t like to see defaults, collections or bankruptcies. If you have one or more of these on your credit report, you might not be approved for a personal loan. If you’re approved, you may have to pay an exorbitant interest rate.
Stable employment: A lender needs to know that if it lends you money, you’ll have the means to repay it over time. Without a stable job, you could miss payments or default on the loan. Proof of employment validates your loan application.
Proof of identification: Lenders usually need to see proof of identification, such as a copy of your driver’s license or passport, before approving your loan. Identity theft is common and they want to prevent thieves from taking out loans under another person’s credit.

How Your Credit Score Affects Interest Rates

The lenders in this guide distribute personal loans with an APR starting at 2.19 percent and up to 36 percent at the time of research. Jeff Rose, certified financial planner and CEO of financial planning firm Alliance Wealth Management, says consumers can get a better interest rate the higher their credit score.

In addition, the higher your credit score, the greater selection you’ll have in choosing a personal loan with favorable terms. Companies want to work with people who have good or excellent credit scores and are more likely to offer these consumers better terms.

Joseph A. Carbone, Jr., certified financial planner and founder of financial planning firm Focus Planning Group, says, “Realistically, you probably need a credit score of 680 to 700 or higher [to qualify for a personal loan]. If you are in a range of 620 to 680, you might need a co-signer to secure the line.”

Your credit score is not the only component that determines your approval and your interest rate for a personal loan.

Rose explains, “A lot of factors go into the approval process: the purpose of the loan, loan amount, repayment term, credit history and current financial situation.”

Companies will request information about your job, how much you earn, how stable your income is, what kind of savings you have and more. These are all important answers that can determine your eligibility.

For example, Lightstream offers some of the best interest rates for personal loans. It also requires a FICO score of 680 or higher, which is more than most lenders require.

Understanding the Application Process

When you first apply for a loan, if you meet the lender’s criteria, you’ll get a preapproved interest rate, which is a rate you receive that’s valid for a certain amount of time, usually up to 90 days. The preapproval rate may change once the final application goes through. Rates are not guaranteed and it’s up to borrowers to ask the lender how long the rate is guaranteed and it if might change before the application is finalized.

When you formally apply for the loan, you’ll choose what kind of term you want, which includes the length of the loan. You’ll also learn what interest rate you’ll have and if you have to pay any other fees, such as origination fees.

Most personal loans range from one to seven years. Typically, the longer the term, the higher the interest rate. The formal application will lead to a hard inquiry on your credit report, where it will stay for two years, but only factor into your credit score for one year.

Once you finalize the loan, you’ll start repaying it according to the terms of the loan agreement. Remember, personal loans are not like credit cards. There’s a finite end date when you have to repay the entire sum plus interest.

Applying for a Personal Loan

Determine How Much You Can Afford to Pay

Examine your budget to determine how much you can afford paying each month. Getting an idea of this number before you look at a loan will help you choose the best lender for you. It doesn’t matter if you get an offer of 2 percent APR if the monthly payment isn’t something you can afford each month. This could lead to you defaulting on the loan, which will damage your credit.

“A loan with a longer repayment term might cost a little more overall, but that longer term will also lower the monthly payment amount,” Kaplan points out. “And if those payments are a much better fit for a person’s budget, then that loan is probably the best one for them.”

Get Preapproved Rates

Compare lenders to see what your preapproved interest rates are. Make sure that the lenders you’re requesting information from will only perform a soft inquiry on your credit.

When you request a rate quote, you’ll enter in your personal information, such as your address, income and Social Security number. You’ll indicate how much you want to borrow and the reason for borrowing. Once submitted, you’ll get an email from the lender with rates and information on how to formally apply for the loan. However, even if you’re a good applicant, you’re not guaranteed to be approved or get the interest rate you were hoping for.

If you have received preapproved offers in the mail or electronically, keep those in mind, but you should do further research. Choose your top one or two lenders and then apply formally.

Research the Lender

Kaplan recommends researching lenders through the Better Business Bureau website to see if there are any negative marks or complaints against them. This can help you avoid an unscrupulous lender. Scams are rife in the lending industry and choosing the wrong company can cost you thousands. You should also consider only borrowing from lenders you know, such as your local credit union or the bank where you already have a loan.

“Consumers can choose the best personal loan by doing their research, shopping around between multiple lenders, reading the fine print and only selecting a loan that they know they can afford to repay,” Kaplan says.

Choosing a Personal Loan Company

Each lender has its own terms and conditions, so it’s important to figure out what you’re looking for before you start comparing lenders.

Type of Lending Company

There are two types of lenders you can choose from: banks and peer-to-peer lenders. Banks offering personal loans include Earnest and LightStream and peer-to-peer lenders include Upstart, LendingClub, Prosper and Peerform.

Peer-to-peer, or P2P, loans are offered by people who decide to invest in other individuals by lending them money. Marketplace-based lenders usually have less strict credit score requirements than their bank-based counterparts. For example, LendingClub and Peerform only require a FICO score of 600 while bank-based companies such as EarnestPayoff have minimum FICO scores of 660.

In general, marketplace-based lenders also have higher APR ranges and lower maximum loan amounts than bank-based lenders.

Interest Rates

Every personal loan comes with a fixed or variable interest rate. A variable rate changes over the life of the loan, depending on the market’s fluctuations. A fixed rate will stay the same through the duration of the loan. Variable rates are often lower than fixed rates but come with the caveat that you might end up paying a higher interest rate if rates change while you’re repaying the loan. Some borrowers don’t want the uncertainty of a variable-rate loan and prefer to stick with a fixed-rate loan.

Loan Terms

Each lender has its own specific terms on how much it will lend, how long the borrower has to pay the money back and restrictions on what they can use the funds for.

Every lender has a minimum and maximum loan amount. For example, SoFi will lend up to $100,000 while Payoff lends up to $35,000. If you need to borrow $45,000, then only look at lenders who offer that amount or more. No lender will make a personal exception if you need to borrow more than its maximum.

Lenders also have a minimum and maximum loan period, which is how long your repayment term is. Lenders typically have a loan period of at least two years and up to seven years. The longer your loan period is, the lower your payments will be, but you will pay more in interest. If you can afford a higher monthly payment, go with the shorter loan period to save some money on interest.

Some lenders have restrictions on what your loan can be used for. Payoff only allows you to apply its personal loan funds toward your credit card debt, while LightStream does not allow borrowers to pay for college tuition with a personal loan. Don’t lie about what you’re going to use the money for. Lying on your loan application can be deemed loan fraud and can result in extra fees and charges.

Lenders also have their own time frame for how quickly you’ll receive the funds from a personal loan. Usually, funds are distributed in no more than five business days. Sometimes, you can receive it the same day. Most lenders will disburse the funds via wire transfer.

A few lenders offer discounts if you set up automatic payments online. For example,

SoFi offers a 0.25 percent interest discount if you set up autopay, and LightStream offers a 0.50 percent discount. This can help you avoid missing a payment and save a little on interest at the same time.

Fees and Penalties

One of the most important aspects to compare before choosing a personal loan is the fees the lender charges. Fees can significantly increase the cost of a personal loan. For example, a 3 percent origination fee on a $25,000 loan is $750.

An origination fee is the fee a lender charges to administer the loan. Only a few lenders, including Lightstream, SoFi and Earnest, do not charge an origination fee. Most lenders have an origination fee between 1 and 6 percent. The amount you pay for your origination fee may depend on your credit score, so the higher your score, the lower the origination fee.

While some lenders charge a prepayment fee, none of the lenders in this guide do. A prepayment fee is a fee you pay for repaying your loan early or ahead of schedule.

Late fees are still enforced with most lenders, so always pay your bill on time. Autopay can help you avoid late fees and forgetting to make your payment. Paying your loan late will also damage your credit score.

Most lenders charge a minimal fee for returned payments, which happens when the lender tries to take money out of your designated account and the funds are insufficient to cover the payment.

Repayment Options

Most lenders offer a few different repayment options including autopay, check by mail or online. These vary based on the lender, so if you find a lender you like, make sure it offers the repayment option that works best for you.

Some lenders including LendingPoint, Best Egg and Upstart allow you to change the payment due date.

Additional Features

Some lenders have additional features that make them a better fit for some borrowers. Discover lets you return personal loan funds within 30 days with no interest fees or other charges if you change your mind after the loan has been approved and finalized. SoFi has an employment assistance program, which allows you to temporarily suspend payments and get personalized help finding a new job if you lose your job through no fault of your own.

Lender Approval Requirements

Credit History and General Qualifications

Lenders have a minimum credit score that a borrower needs to have to qualify for a personal loan, but the higher your score, the better interest rate and loan terms you’ll get.

Lenders also like to see a long credit history for borrowers and some require a certain number of years worth of credit to qualify. They also care about your debt-to-income ratio, which is how your monthly debt repayments compare to your monthly income. Lenders like to see a low debt-to-income ratio.

Unfortunately, not every lender in this guide is licensed to lend money in every state. Before comparing lenders, check to make sure they can offer a loan where you live. For example, Discover provides loans in every state, while Payoff doesn’t offer loans in more than 10 states.

Very few lenders allow you to take out a personal loan with a co-signer. A co-signer is helpful for those who don’t have enough income or credit history to qualify for a loan on their own. With a co-signer, you can sometimes get a lower interest rate since the lender is taking into account the co-signer’s credit score and history as well, and there’s someone else the lender can go after if you stop making payments. The loan will also appear on the co-signer’s credit history, which could affect their ability to be approved for future credit. Keep this in mind if you ask someone to co-sign for you.

A few lenders, including Earnest, Upstart and LendingPoint, offer merit-based qualifications, which means they will count your education, earning potential and more when approving you for a loan. This is especially helpful to low-income borrowers in the beginning of their careers.

Each lender has a minimum income requirement that a borrower must meet to qualify for a personal loan. Borrowers with higher incomes tend to be better applicants because they have more money to pay back their loans with. However, a high income can’t fix a low credit score or high debt-to-income ratio.

Some lenders require that you work a certain number of years before you’re eligible for a personal loan. If you don’t have a long employment record or high income, you should make sure your credit score is strong.

Best Personal Loan Companies of 2019

Best for well-established credit, low APR and no origination fees: LightStream
Best for good credit, no origination fees and a range of offerings: SoFi
Best for good credit and low APR with merit-based qualifications: Earnest
Best bank for good credit with a wide range of loan terms: Discover
Best bank for fair to good credit with merit-based qualifications: LendingPoint
Best for fair to good credit with a co-signer option: LendingClub
Best for fair credit with flexible approval requirements: NetCredit
Best for fair credit with a low APR: FreedomPlus

U.S. News evaluated personal loan companies in five key areas and each company website was reviewed for data on eligibility, loan terms, fees, repayment methods and additional features. Whenever information was not available on the website, the company was contacted for clarification.

Each consumer has different needs, and many lenders specialize in specific areas designed to meet them. Because no lender is perfect for every consumer, recommendations are based on eligibility requirements, interest rates and features that make them good matches for different types of consumers.

Top lender for well-established credit, low APR and no origination fees

LightStream

Overview:
LightStream is the online consumer division of SunTrust Bank, which has branches mostly in the Southeast United States. It prides itself on customer service and offers a $100 guarantee if you aren’t completely satisfied.

Best features:
LightStream has few restrictions on what you can use personal loan funds for. Except for college, mortgage, commercial or refinancing of other LightStream loans, you can use the money for anything, including IVF, jewelry, adoption fees, medical bills or building a pool. However, you must use the funds for the specific purpose listed on the application.

Loans are offered as high as $100,000. Borrowers can take up to seven years to pay back the loan for most uses. If you’re borrowing $25,000 to $100,000 for home improvement, you can choose a loan term of up to 12 years.

LightStream doesn’t charge origination, prepayment or late fees. This can save borrowers a lot of money, especially if you’re taking out a $100,000 loan.

Drawbacks:
LightStream prohibits borrowers from using funds for college education expenses or business financing.

LightStream’s minimum loan amount is $5,000, while many other lenders provide personal loans as low as $1,000 to $2,000, which isn’t a good fit for those who only need to borrow $2,000, for example.

LightStream also adds 0.50 percent to your interest rate if you don’t have autopay set up, which is a drawback for those who want more control over when they pay their bill.

This lender doesn’t disclose minimum approval requirements or allow preapprovals, so you have to file a complete application to find out if you’re approved or what your interest rate will be.

Best for people who

Have several years of credit history
Need to borrow at least $5,000
Want long-term financing on home improvements

Type of lending company

Bank-based

Credit history and general qualifications

Minimum FICO score: Not disclosed
General FICO score range recommended: Good to excellent
Maximum debt-to-income ratio: Not disclosed
Minimum credit history: Not disclosed
State restrictions: None
Co-signer option: Yes
Additional eligibility considerations: Not disclosed

Employment requirements

Minimum income: Not disclosed
Minimum employment eligibility: Not disclosed

Interest rates

Rate types: Fixed
Preapproval for rate quotes: No

Loan and refinancing terms

Minimum loan amount: $5,000
Maximum loan amount: $100,000
Minimum loan period: Two years
Maximum loan period: Seven years (up to 12 years for home improvement loans of $25,000 to $100,000)
Restrictions on what the loan may be used for: No business, mortgage, postsecondary education or refinancing of other LightStream loans
Time to receive funds: As soon as the same day when deadlines are met
Disbursement options: Bank deposit
Discounts: None

Fees and penalties

Origination fee: None
Prepayment fee: None
Late fees: None

Repayment options

Autopay
Online
By mail

Additional features

Rate beat program
$100 loan experience guarantee

Top lender for good credit, no origination fees and range of offerings

SoFi

Overview:
SoFi applies Silicon Valley principles to banking, offering student loan refinancing, parent PLUS loan refinancing and other innovative financial products.

Best features:
SoFi has tough standards for borrowers, who must have a credit score of at least 680, stable employment and sufficient income to pay the loan. However, co-borrowers are accepted if you need help meeting SoFi’s approval standards.

Borrowers will pay no origination, prepayment or late fees.

SoFi offers both fixed- and variable-rate personal loans and is the only lender reviewed by U.S. News to offer variable rates. Consumers can borrow as much as $100,000 for up to seven years.

Drawbacks:
You need to be a strong candidate to qualify for a personal loan with SoFi. The minimum credit score required for a SoFi loan is 680, and the general FICO score range recommended by the lender is very good to excellent.

The minimum loan amount is $5,000, while other lenders can loan as little as $1,000. If you need less than $5,000, you’re better off finding another lender.

While many personal loan companies offer funds within a day of approval, SoFi delivers funds in seven days on average.

Best for people who

Need to borrow a large amount
Have a good credit score
Can wait about a week for funds

Type of lending company

N/A

Credit history and general qualifications

Minimum FICO score: 680
General FICO score range recommended: Very good to excellent
Maximum debt-to-income ratio: Not disclosed
Minimum credit history: Not disclosed
State restrictions: Loans prohibited in Mississippi. Maximum interest rate, use restrictions and minimum loan amounts may apply in other states.
Co-signer option: No, co-borrowers accepted
Additional eligibility considerations: Free cash flow

Employment requirements

Minimum income: Sufficient to meet monthly payments
Minimum employment eligibility: Sufficient to meet monthly payments

Interest rates

Rate types: Fixed and variable
Preapproval for rate quotes: Yes

Loan and refinancing terms

Minimum loan amount: $5,000
Maximum loan amount: $100,000
Minimum loan period: Three years
Maximum loan period: Seven years
Restrictions on what the loan may be used for: Personal, family or household purposes are permitted. Real estate, business purposes, investments, purchases of securities, post-secondary education and short-term bridge financing are not permitted.
Time to receive funds: Seven days on average
Disbursement options: ACH
Discounts: Autopay discount of 0.25 percent

Fees and penalties

Origination fee: None
Prepayment fee: None
Late fees: None
Other fees: None

Repayment options

Autopay
Online
Check

Additional features

Unemployment protection
Career counseling
Access to complimentary certified financial planners

Top lender for good credit and low APR with merit-based qualifications

Earnest

Overview:
Founded in 2014, Earnest is another fast-growing lender in Silicon Valley. It uses a custom algorithm that identities good loan prospects by considering more than just their credit score.

Earnest clients can decide how much they want to pay each month and then Earnest gives them an interest rate to match. By letting customers decide what they’re comfortable paying, this could also cut down on defaults and late payments.

Best features:
Interest rates with Earnest start lower than many other lenders, and the maximum interest rate is lower than many others as well..

Earnest prides itself on evaluating customers on more than just their credit score, taking into account, “savings habits, education and earning potential.”

Drawbacks:
Preapprovals are not available. That means you’ll have to fill out an application and submit to a hard credit inquiry before finding out if you’ll be approved and what your APR will be. Earnest does not offer a co-signer option, so borrowers will have to qualify for a loan on their own.

Although Earnest offers a wide range of loan amounts from $5,000 to $75,000, its loan periods of three to five years are shorter than other lenders that offer large loan amounts.

Best for people who

Can pay off debt quickly
Have a good savings history
Have at least a 680 FICO credit score

Type of lending company

Bank-based

Credit history and general qualifications

Minimum credit score: 680
General FICO score range recommended: Not disclosed
Maximum debt-to-income ratio: Not disclosed
Minimum credit history: A history of on-time payments, no open collections and no bankruptcy within the last three years
State restrictions: Lending is prohibited in Alabama, Delaware, Kentucky, Nevada and Rhode Island
Co-signer option: No
Additional eligibility considerations: Merit-based on education, income, savings and employment history

Employment requirements

Minimum income: Consisent income
Minimum employment eligibility: Not disclosed

Interest rates

Rate types: Fixed
Preapproval for rate quotes: No

Loan and refinancing terms

Minimum loan amount: $5,000
Maximum loan amount: $75,000
Minimum loan period: Three years
Maximum loan period: Five years
Restrictions on what the loan may be used for: No college tuition, business capital or real estate
Time to receive funds: Not disclosed
Disbursement options: Not disclosed
Discounts: None

Fees and penalties

Origination fee: None
Prepayment fee: None
Late fees: None
Other fees: Not disclosed

Repayment options

Autopay

Additional features:

Choose your monthly payment amount

Top bank for good credit with a wide range of loan terms

Discover

Overview:
Established in 1985, Discover offers a wide variety of financial products, including personal loans. Discover has offered personal loans to more than 1 million borrowers, who can use funds for debt consolidation, home improvement and more.

Best features:
Discover offers loan terms ranging from three to seven years on loans from $2,500 to $35,000. Although Discover’s maximum loan amount is lower than some other lenders, Discover offers borrowers more time to pay off their loan than other lenders that offer similar loan amounts.

No fees apply as long as borrowers pay on time. There is no origination or prepayment fee. However, a late fee of up to $39 may be charged if the full payment is not made by the due date. You can adjust your payment date two times during the life of the loan with at least 12 months between the two requests.

Discover accepts borrowers who are unemployed under certain circumstances. Borrowers must have a minimum $25,000 annual household income and a credit report indicating satisfactorily shared financial obligations with the household member earning income.

If you change your mind about your loan, you can return loan funds to Discover within 30 days and pay no interest.

Drawbacks:
Discover requires a minimum FICO credit score of 660, which is at the high end of fair credit. The average FICO credit score for Discover personal loans borrowers is 747. Co-signers are not accepted.

You must have a minimum household income of $25,000 annually to qualify for a Discover personal loan.

Best for people who

Have at least a $25,000 annual household income
Have at least a 660 FICO credit score
Want up to seven years to pay off a loan of up to $35,000

Type of lending company

Bank

Credit history and general qualifications

Minimum FICO score: 660
General FICO score range recommended: 747 is the average FICO credit score for Discover personal loans borrowers
Maximum debt-to-income ratio: Not disclosed
Minimum credit history: Not disclosed
State restrictions: None
Co-signer option: No
Additional eligibility considerations: Applicants must be a U.S. citizen or permanent resident at least 18 years old with a minimum annual household income of $25,000.

Employment requirements

Minimum income: $25,000 annually
Minimum employment eligibility: None. However, a $25,000 minimum annual household income is required.

Interest rates

Rate types: Fixed
Preapproval for rate quotes: Yes

Loan and refinancing terms

Minimum loan amount: $2,500
Maximum loan amount: $35,000
Minimum loan period: Three years
Maximum loan period: Seven years
Restrictions on what the loan may be used for: Debt consolidation, home improvement or other major purchases are permitted. Debt consolidation loans must use at least 70 percent of the loan to pay off debt with direct creditor payments.
Time to receive funds: As early as the next business day after loan approval and term acceptance
Disbursement options: Direct payment to creditors, direct deposit, check
Discounts: None

Fees and penalties

Origination fee: None
Prepayment fee: None
Late fees: $39
Other fees: No fees as long as you pay on time

Repayment options

Autopay
Check
Wire transfer
Electronic bill payment

Additional features:

Adjustable payment date; can be adjusted two times during the life of the loan with at least 12 months between the two requests
Loan funds can be returned within 30 days with no interest charges.

Top bank for fair to good credit with merit-based qualifications

LendingPoint

Overview:
LendingPoint began in Georgia and has been slowly making its way across the country. It currently lends to borrowers in 32 states and specializes in lending to those who have fair to good credit.

Best features:
LendingPoint has no restrictions on what you can use the personal loan for, so the money can be used for student loans, business and other expenses. Some lenders restrict personal loans to specific uses, which makes LendingPoint better for customers who need a personal loan for a wedding, home repairs or fixing a car.

LendingPoint accepts borrowers with FICO credit scores as low as 580 and offers merit-based loans, which means it considers more than just your credit score. Factors considered by LendingPoint include job history, income, financial history and credit behavior.

If you don’t qualify for a personal loan with LendingPoint, the lender offers a credit-builder loan program.

Drawbacks:
LendingPoint has a higher starting APR than other recommended lenders. LendingPoint’s maximum loan amount is $25,000, while other lenders cap their loans at $35,000 to $100,000. That may not be enough money for some borrowers.

LendingPoint does not accept co-signers, so borrowers will have to qualify for the loan on their own. You must have at least 24 months of credit history and a debt-to-income ratio of 35 percent or below.

Best for people who

Have fair to good credit
Might not qualify for other personal loans
Want a small personal loan

Type of lending company

Bank-based

Credit history and general qualifications

Minimum FICO score: 580
General FICO score range recommended: 580 to 720
Maximum debt-to-income ratio: 35 percent or less
Minimum credit history: 24 months
State restrictions: Available in 34 states (Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Virginia, Washington) and Washington, D.C.
Co-signer option: No
Additional eligibility considerations: More than 10,000 attributes for each applicant are considered when evaluating applications.

Employment requirements

Minimum income: $20,000 annually
Minimum employment eligibility: 12 months at current job is encouraged but not required

Interest rates

Rate types: Fixed
Preapproval for rate quotes: Yes

Loan and refinancing terms

Minimum loan amount: $2,000
Maximum loan amount: $25,000
Minimum loan period: Two years
Maximum loan period: Four years
Restrictions on what the loan may be used for: Any legal personal expense or purchase
Time to receive funds: Up to next business day after approval
Disbursement options: ACH
Discounts: None

Fees and penalties

Origination fee: Zero to 6 percent, rolled into APR
Prepayment fee: None
Late fees: $15 after 15-day grace period
Other fees: $25 or lower fee (depending on state laws) for dishonored payments

Repayment options

ACH
Debit card
Check

Additional features:

Unemployment protection
Credit-builder loans

Top lender for fair to good credit with a co-signer option

LendingClub

Overview:
LendingClub offers personal loans to individuals with fair credit and has extended more than $38 billion to more than 2.5 million customers. Personal loans can be used for debt consolidation, home improvements and major expenses.

Best features:

LendingClub has a low FICO score requirement of 600. That means those with fair credit may be eligible to receive a personal loan, even if they don’t qualify with other lenders.

Although many other lenders don’t allow co-signers on personal loans, LendingClub is one of the few that does.

Drawbacks:

LendingClub has less leniency in fees than other lenders and has a late fee that is the greater of $15 or 5 percent after a 15-day grace period. However, you can move your payment date to 15 days before or after your original payment date.

There is an origination fee between 1 to 6 percent, and the APR can be as high as 35.89 percent.

Best for people who

Have fair to good credit
Need a co-signer

Type of lending company

Alternative

Credit history and general qualifications

Minimum FICO score: 600
General FICO score range recommended: 600 to 850
Maximum debt-to-income ratio: 40 percent for single applicants, 35 percent for joint applicants
Minimum credit history: Three years
State restrictions: Lending is prohibited in Iowa.
Co-signer option: Yes
Additional eligibility considerations: Borrowers must be at least 18 years old.

Employment requirements

Minimum income: Not disclosed
Minimum employment eligibility: Not disclosed

Interest rates

Rate types: Fixed
Preapproval for rate quotes: Yes

Loan and refinancing terms

Minimum loan amount: $1,000
Maximum loan amount: $40,000
Minimum loan period: Three years
Maximum loan period: Five years
Restrictions on what the loan may be used for: Post-high school education, investments or illegal activities
Time to receive funds: Typically three days or less
Disbursement options: ACH
Discounts: None

Fees and penalties

Origination fee: 1 to 6 percent
Prepayment fee: None
Late fees: $15 or 5 percent, whichever is greater, after a 15-day grace period
Other fees: Not disclosed

Repayment options

ACH
Personal check

Top lender for fair credit with flexible approval requirements

NetCredit

Overview:
Based in Chicago, NetCredit is an online lender and wholly owned subsidiary of Enova International, Inc., a multinational financial services company. The lender is known for flexible approval requirements on personal loans.

Best features:
NetCredit serves borrowers with FICO credit scores of fair and above without specific minimums or maximums for credit score, debt-to-income ratio or minimum credit history.

Although steady income is required, NetCredit will consider all types of income, including traditional employment, self-employment and retirement benefits.

There are no restrictions on loan use. Funds can be available as soon as the next business day with a direct deposit.

Drawbacks:
Large loans are not available with NetCredit. Loans range from $1,000 to $10,000 and may vary by state.

NetCredit loans are not available nationwide. They are only available to residents in 14 states: Alabama, California, Delaware, Georgia, Idaho, Illinois, Missouri, North Dakota, New Mexico, South Carolina, South Dakota, Utah, Virginia and Wisconsin.

Co-signers are not accepted; borrowers will have to qualify for the loan independently.

Best for people who

Have fair to good credit
Want a small loan
Have a steady income

Type of lending company

Bank

Credit history and general qualifications

Minimum FICO score: None
General FICO score range recommended: Fair and above
Maximum debt-to-income ratio: None
Minimum credit history: None
State restrictions: Lending is only available in 14 states.
Co-signer option: No
Additional eligibility considerations: Not disclosed

Employment requirements

Minimum income: Not disclosed
Minimum employment eligibility: Steady income required, can be traditional employment, self-employment, retirement or other income

Interest rates

Rate types: Fixed
Preapproval for rate quotes: No

Loan and refinancing terms

Minimum loan amount: $1,000 (varies by state)
Maximum loan amount: $10,000 (varies by state)
Minimum loan period: Six months (varies by state)
Maximum loan period: Five years (varies by state)
Restrictions on what the loan may be used for: None
Time to receive funds: As soon as the next business day
Disbursement options: Direct deposit
Discounts: None

Fees and penalties

Origination fee: Varies by state
Prepayment fee: None
Late fees: Varies by state
Other fees: Not disclosed

Repayment options

ACH
Debit card
Check
Money order

Top lender for fair credit with a low APR

FreedomPlus

Overview:
FreedomPlus offers personal loans with fast approval and fund delivery. Personal loans with FreedomPlus are primarily offered for debt consolidation.

Best features:
FreedomPlus has the lowest APR of all personal loan lenders reviewed by U.S. News. However, borrowers with less-than-perfect credit may not qualify for the best rates.

Personal loans are available to borrowers with FICO credit scores as low as 600. There are no restrictions on loan use. Approvals are available in as little as one day, and funds can be available in as few as two days.

Drawbacks:
Loan sizes offered by FreedomPlus are somewhat narrow, starting at $7,500 with a maximum of $35,000. Other personal loans may have smaller or larger loans available.

An origination fee of up to 5 percent may apply to your loan, which could offset some of the savings offered by a potentially low APR.

Best for people who

Have fair to good credit
Want a low APR
Have an annual income of at least $21,500

Type of lending company

Bank

Credit history and general qualifications

Minimum FICO score: 600
General FICO score range recommended: At least 600
Maximum debt-to-income ratio: 45 percent
Minimum credit history: Usually three years
State restrictions: Lending is available in 36 states and Washington, D.C. (Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington)
Co-signer option: Yes
Additional eligibility considerations: Not disclosed

Employment requirements

Minimum income: $21,500 annually
Minimum employment eligibility: Not disclosed

Interest rates

Rate types: Not disclosed
Preapproval for rate quotes: Not disclosed

Loan and refinancing terms

Minimum loan amount: $7,500
Maximum loan amount: $35,000
Minimum loan period: Two years
Maximum loan period: Five years
Restrictions on what the loan may be used for: None
Time to receive funds: As soon as two days
Disbursement options: Not disclosed
Discounts: Directly paying creditors can reduce your APR by 1 to 3 percent, 2 to 4 percent discount for holding retirement assets of $40,000 or more

Fees and penalties

Origination fee: Up to 5 percent
Prepayment fee: None
Late fees: $15, or 5 percent of the amount due, whichever is greater, after a 10-day grace period
Other fees: Not disclosed

Repayment options

Not disclosed

Comparison table of lenders

Company	Minimum FICO score	Loan amounts	Loan periods	Origination fee
Prosper	640	$2,000 to $40,000	Three to five years	2.41 to 5 percent
Discover	Not disclosed	$2,500 to $35,000	Three to seven years	None
RocketLoans	640	$2,000 to $35,000	Three to five years	1 to 6 percent
Payoff	660	$5,000 to $35,000	Two to five years	2 to 5 percent
Best Egg	700 recommended	$2,000 to $50,000	Three to five years	0.99 to 5.99 percent
Peerform	600	$1,000 to $25,000	Three years	1 to 5 percent
Avant	600	$1,000 to $35,000	Two to five years	1.5 to 3.75 percent

Company	Minimum FICO score	Loan amounts	Loan periods	Origination fee
Avant	580	$2,000 to $35,000	Two to five years	4.75 percent
Best Egg	640	$2,000 to $35,000	Three to five years	0.99 to 5.99 percent
Discover	660	$2,500 to $35,000	Three to seven years	None
Earnest	680	$5,000 to $75,000	Three to five years	None
FreedomPlus	600	$7,500 to $35,000	Two to five years	Up to 5 percent
LendingClub	600	$1,000 to $40,000	Three to five years	1 to 6 percent
LendingPoint	580	$2,000 to $25,000	Two to four years	Up to 6 percent (part of the APR)
LightStream	Not disclosed	$5,000 to $100,000	Two to 12 years (maximum only applies to home improvement loans $25,000 to $100,000)	None
Marcus by Goldman Sachs	Not disclosed	$3,500 to $40,000	Three to six years	None
NetCredit	None	$1,000 to $10,000 (varies by state)	Six months to five years	Varies by state
Payoff	640	$5,000 to $35,000	Two to five years	2 to 5 percent
Prosper	640	$2,000 to $40,000	Three to five years	2.41 to 5 percent
Rocketloans	640	$2,000 to $35,000	Three to five years	1 to 6 percent
Upstart	620	$1,000 to $50,000	Three to five years	1 to 6 percent