14 Best Personal Loan Lenders of 2024
Personal loans can help you pay a big expense or consolidate debt. They often offer a better interest rate than credit cards, so they’ve become a common financial tool for many people. But you need to choose your lender wisely to get the best deal. Here’s our guide to personal loans and the best lenders of 2024.
What Is a Personal Loan?
A personal loan is a type of installment loan from traditional banks, credit unions, or online lenders. You borrow a lump sum and repay it in fixed monthly payments over a set period. Borrowers commonly use personal loans to consolidate debt because a single loan can replace multiple monthly payments and potentially offer a lower interest rate than credit cards. Other common uses include covering a big expense like a wedding or vacation.
Other than a couple of restrictions, including buying a home or paying for education costs, you can get pretty creative with how you use a personal loan. You can use a personal loan to fund renovations around the house or cover unexpected emergency medical expenses for you and your family (pets included).
Who Is the Best Personal Loan Lender?
The best personal loan lender is the one that offers you the best terms for the amount you want to borrow. We consistently recommend SoFi, which provides particularly fast funding. You can also use a comparison site like MoneyLion or AmOne to get offers from multiple lenders.
How Much of a Personal Loan Can I Get?
Personal loans offered by online lenders and traditional financial institutions tend to range between $5,000 and $40,000. However, some may start as low as $1,000, while others go to $100,000 or more. Interest rates depend on your credit score but are most often between 8% and 36%.
Repayment periods typically range between two and seven years. Most lenders offer a discounted interest rate, typically 0.25 or 0.5 percentage points, if you sign up for automatic payments.
How Can I Get a Personal Loan With Bad Credit?
Typically, you need good to excellent credit — a score of at least 670 — to qualify for the best personal loans. However, you can find lenders, especially through online platforms like MoneyLion, that cater to borrowers with lower scores. A few lenders offer perks, like repayment benefits or a free FICO score, that could make one more attractive for you than another.
The Top Personal Loan Lenders
The biggest selling point will likely be the cost of your loan. Check your prequalified rates with lenders (it doesn’t affect your credit score) to find the loan with the best APR (annual percentage rate), monthly payment and repayment period for your situation. Don’t forget to factor in potential costs, like origination fees and prepayment penalties, when determining the best personal loan for you.
Personal Loans at a Glance
| Company | APR with Autopay | Min/Max Loan Amounts | Loan Terms | ||
|---|---|---|---|---|---|
SoFi |
8.99% – 25.81% |
$5,000 – $100,000 |
2 – 7 years |
SEE DETAILS | |
LightStream |
7.99% – 25.49% |
$5,000 – $100,000 |
Up to 7 years |
SEE DETAILS | |
Credible Personal Loans |
4.60% – 35.99% |
$600 – $100,000 |
1 – 7 years |
SEE DETAILS | |
Upstart |
4.60% – 35.99% |
$1,000 – $50,000 |
3 or 5 years |
SEE DETAILS | |
PenFed |
$600 – $50,000 |
$5,000 – $50,000 |
1 – 5 years |
SEE DETAILS | |
Upgrade |
8.49% – 35.99% |
$1,000 – $50,000 |
24 – 84 months |
SEE DETAILS | |
Rocket Loans |
8.416% – 29.99% |
$2,000 – $45,000 |
36 or 60 months |
SEE DETAILS | |
Happy Money |
11.25% – 24.50% |
$5,000 – $40,000 |
2 – 5 years |
SEE DETAILS | |
Discover |
6.99% – 24.99% |
$2,500 – $35,000 |
36, 48, 60, 72 or 84 months |
SEE DETAILS | |
LendingClub |
9.57% – 35.99% |
$1,000 – $40,000 |
3 or 5 years |
SEE DETAILS | |
Prosper |
6.99% – 35.99% |
$2,000 – $40,000 |
3 or 5 years |
SEE DETAILS | |
Avant |
9.95% – 35.95% |
$2,000 – $35,000 |
24 – 60 months |
SEE DETAILS | |
LendingPoint |
7.99% – 35.99% |
$2,000 – $36,500, |
2 6 years |
SEE DETAILS |
SoFi
- No fees required
- Unemployment protection
- Potential for same-day funding
LightStream
- Same-day funding
- No fees
- Loans available for low credit scores
Credible
- Compare prequalified rates
- Loans for poor credit available
- Loan amounts as low as $600
Upstart
- AI-powered lending for partner banks
- Considers more than your credit history
- Potential for one-day funding
PenFed
- No hidden fees
- Loan amounts as low as $600
- Flexible terms
Upgrade
- Checking, credit and loans in one platform
- No prepayment penalties
- Next day funding
Rocket Loans
- Same day funding
- No prepayment penalties
- All-online application
Happy Money
- Specially designed for credit card payoff
- Borrow from community-based lenders
- Origination fee between 0% and 5%
Discover
- No fees (except late fees)
- Online privacy protection
- Free FICO credit score
LendingClub
- Borrow up to $40,000
- Joint loans available
- No prepayment penalty
Prosper
- Peer-to-peer lending
- Next-day funding
- No prepayment penalty
Avant
- Next-day funding
- Low minimum credit score
- Easy-to-use app
LendingPoint
- Next-day funding
- No co-sign loans
- AI technology that considers more than just cred
Types of Personal Loans
“Personal loan” is a broad category of lending that can be used for almost any financial need. Lenders often advertise things like home improvement loans, wedding loans, timeshare loans or adoption loans, but these are all technically just personal loans, structured the same way.
A few key differences to look out for are:
- Debt consolidation loans: Many people use personal loans for credit card debt consolidation or refinancing — replacing one or many debts with another. It can simplify repayment and reduce your interest rate. When you take out a personal loan for this purpose, the lender usually sends the money directly to your other creditors, instead of to you.
- Secured loan: A secured loan of any kind is one backed by collateral — that’s an asset you put on the line to turn over to the lender in case you can’t repay the loan. For mortgages, the collateral is your home; for auto loans, it’s the vehicle. Secured personal loans are also available, and you could put up anything of value as collateral, like a boat, jewelry, fine art or investment funds.
- Unsecured loan: Unsecured loans are those without any collateral backing them. This increases the risk for the lender, so you usually have to have excellent credit and income to qualify. If not, expect high fees and interest rates.
Personal Loan Costs to Consider
When you evaluate personal loan offers, you’ll probably focus on the interest rate, because that has a significant impact on the long-term cost of the loan. But there are other costs to consider.
Before accepting any loan offer or signing the agreement, make sure you know how much you’ll pay (if anything) in these common costs:
- APR: Annual percentage rate is what’s often referred to as your interest rate and usually the most prominently advertised feature of your loan. Though used interchangeably in everyday conversation, the APR is slightly different from the interest rate, as it reflects the total annual cost of the loan, including fees, expressed as a percentage. Personal loan APRss tend to fall between 5% and 36%. A higher credit score and shorter repayment period can lower the interest rate, while a lower credit score and longer repayment period can increase it.
- Origination fee: Many lenders take a bite out of your loan upfront, so you won’t receive 100% of the loan amount. Origination fees are usually around 2% or 3% of your loan amount, and lenders subtract them from the original loan amount you receive. Good credit borrowers can typically qualify for the best personal loans, which come without these fees.
- Late fee: Your loan agreement will likely come with a fee for late payments, usually a percentage of the payment due or sometimes a flat fee. Those fees are added to your loan balance when you’re late making a monthly payment.
- Prepayment penalties: They’re becoming less common, but some lenders still include prepayment fees in loan agreements. If you pay off part or all of the loan early, usually within a determined period after receiving it, the lender could charge you an additional fee. The prepayment fee is usually a percentage of the total loan balance at the time you pay it off.
The other thing that’ll help you determine whether a loan offer is right for you are the repayment terms. Along with any additional costs, look for the basics, including how long you have to repay and how much your monthly payments will be.
Who Can Take Out a Personal Loan?
Any individual can apply for a personal loan for just about any purpose.
Many lenders advertise loans for specific purposes, like vacations, weddings or home improvements — but those are usually marketing details. You can use personal loan funds almost any way you want, except for some uses that are restricted to dedicated types of loans, including buying a home and paying for education.
Unsecured personal loans tend to be tougher to qualify for than those dedicated loans, because they aren’t attached to any collateral or government backing.
A few companies look into alternative factors to forecast your ability to repay a loan, but most are looking for traditional creditworthiness, including:
- Credit score and credit history: Lenders usually want to see a credit score of at least 720 for personal loans, though some “bad credit loans” might be accessible for borrowers with scores as low as 5500 (300 in some extreme cases) — or no credit history at all.
- Debt-to-income ratio: Your debt-to-income ratio (DTI) is the difference between how much you make each month and how much you owe in mortgage and other debt payments, like credit card debt and existing loans. Lenders typically want to see a DTI no higher than 43%, but the lower the better.
- Income: Lenders typically require you to prove a regular source of income that shows your likely ability to make monthly payments. You can show this through pay stubs if you’re employed, or a recent tax return if you’re self-employed. If you don’t have either of those (or they don’t accurately reflect your expected income), contact a lender before submitting your application to make sure you can work out an alternative way to prove your income.
Where to Get a Personal Loan
You can find personal loans through several types of platforms, including:
- Banks and credit unions, where you could keep all of your banking, credit cards, investing and insurance under one financial institution.
- Online lenders, meaning companies that only offer loans, but not other banking or financial services.
- Marketplaces, like MoneyLionor AmOne, aggregate offers from multiple lenders and let you see pre-approved rates with a soft credit check. Some marketplaces also let you handle the entire loan application and origination process through their platform, while others simply connect you with lenders to complete the process on their site or over the phone.
How to Get a Personal Loan
Follow these steps to get a personal loan:
1. Consider your financial options. Is a personal loan the best way to meet your needs? You might have alternatives, like delaying a purchase and saving the money.
2. Review your finances. Figure out a monthly payment you can comfortably fit into your life for the next few years, and use that as a guide when reviewing loan offers.
3. Check your credit score. Personal loan lenders generally look for borrowers with good or excellent credit scores — about 700 or higher. Even those that accept borrowers with lower scores use your credit history to determine your repayment terms and interest rate. Know where you stand before applying by checking your credit score.
4. Compare lenders. Our ranking of the best personal loans is a great place to start! Checking reviews like ours and comparing loan offers through marketplaces can help you see lenders side by side easily. Check lender requirements and options for loan terms before applying and dinging your credit history.
5. Get pre-qualified. Either through a marketplace or directly on a lender’s site, you can give a little information to go through a soft credit check (that won’t affect your credit score) and get pre-qualified for a loan. You’ll see an interest rate and repayment terms a lender could offer you based on the credit check, so you can decide whether it’s worth putting in a full application.
6. Review the loan details. Look over offers carefully to make sure the terms, including the monthly payment, repayment period and any fees, fit with your financial plan.
7. Complete an application. Choose a loan you want, and fill out an application with the lender. You’ll go through a hard credit check (which shows up on your credit report as a request for credit and could lower your score temporarily), and likely be officially approved for the loan.
8. Receive the funds. Personal loan funds typically go straight into your bank account (unless you’re using them for debt consolidation), and many online lenders fund loans within the same day or the next day after you’re approved.
9. Set up a payment plan. Most lenders offer better interest rates if you set up automatic payments, which you can do through the lender’s website if you’re comfortable with it. If you’re paying back other debts at the same time, use a repayment method like the debt snowball or avalanche to determine where to direct your money whenever you’ve got extra to put toward your financial goals.
Frequently Asked Questions (FAQ) About Personal Loans
There are a lot of questions about how to acquire personal loans and which ones are the best. We’ve rounded up the answers to the most commonly asked questions.
The offer you get for a personal loan from any institution depends on your credit history, income and existing debt. Shop online or use a lending marketplace to compare options before applying and dinging your credit report. If you have a low credit score (below 700), look for online lending platforms that use innovative algorithms to assess creditworthiness with factors beyond your credit report, like education and bill payments. If you have a stellar credit and debt payment history, look for lenders that offer rewards like on-time payment bonuses and auto-pay discounts on interest.
While they’re steadily improving, most traditional banks have lengthier personal loan approval processes than online lenders. With a traditional bank, you might have to connect with a loan officer on the phone, mail in or drop off paper application materials and wait several days for approval. Online lending companies use technology to assess your application quickly and make loan offers almost instantly. Funding typically comes within one business day, and some even offer same-day funding.
Unsecured personal loans can be harder to qualify for than other types of loans, because they aren’t backed by collateral, like mortgages and auto loans; or supported by future potential earnings, like student loans. Secured personal loans can be easier to qualify for, even with a low credit score, because you put up collateral, like jewelry, a boat or investment funds, to mitigate the lender’s risk in case you don’t repay. Auto loans tend to be the easiest types of loans to qualify for, even with low income or credit scores, because they’re relatively small and are backed by collateral (a vehicle).
Most personal loan lenders offer loans up to around $40,000, but some offer personal loans as high as $100,000. Banks typically make minimum personal loans of around $5,000, while online lenders often lend as little as $1,000 or less. Repayment terms range between two and seven years, so you can work with a lender to land on a repayment plan that gives you a monthly payment you can accommodate.
How much income you need to qualify for a loan depends on the amount you want to take out, how much debt you already have and how long you’ll have to repay the loan. Lenders might set their own minimum income to qualify for a personal loan, or they might just want to see that you have regular income every month. Generally what’s more important than a minimum income amount is your debt-to-income ratio, the amount of debt payments you owe each month compared with your monthly income. Lenders want to see this to assess whether you can accommodate another loan payment.
Your monthly payment for a personal loan depends on your repayment period (how many months or years you have to repay the loan) and your interest rate. You should be able to see your estimated monthly payment in a loan offer before you apply, so you can figure out whether it’s a fit for you. A couple of examples: A $10,000 loan with a fixed 7% APR and three-year repayment term would come with a $309 monthly payment. A $10,000 loan with 17% interest and a seven-year term would come with a $204 monthly payment.
Contributor Timothy Moore has written about personal finance with specialities in banking and insurance since 2012. His work has appeared in publications such as Debt.com, Ladders, WDW Magazine, Glassdoor and The News Wheel. The Penny Hoarder staff contributed to this report.
