The Best Personal Loans For 2023

A personal loan is more flexible than a credit card and gives you more choices. Consider if you’re looking for an intelligent way to pay for home improvements, pay off debt, pay for a wedding, or pay for a medical emergency. Personal loans that are OK for your needs will vary from person to person. Still, these suggestions help you figure out what to do.

Credit cards are usually best if you can pay off a purchase in one month. On the other hand, a personal loan can last anywhere from one to twelve years, and you can use the money for almost anything you can think of! (except for making investments or paying for college). For example, you can use a personal loan like an auto loan or a debt consolidation loan to pay off other debts faster and with less hassle at a lower interest rate. Some lenders may even let you get money ahead of time. Most personal loans have a fixed interest rate, and most of the time, the faster you pay off the loan, the less interest you’ll pay.

Even though interest rates on personal loans are set, they can vary quite a bit, giving you choices as a consumer. Currently, annual percentage rates range from about 2% to over 30%, depending on the lender and your unique financial profile, which includes your credit score, credit history, and debt-to-income ratio. You want to find the loan that will cost you the least, including all fees and interest. You should also ensure the loan doesn’t have a prepayment penalty, which means you’ll have to pay a fee if you pay it off early. Depending on what the loan is for and how much money you make, these kinds of costs can add up.

For example, borrowing $10,000 at a 9.99 percent APR paid back over five years would take 60 monthly payments of $201.81 (and cost you $2,108.60 in total interest). Wells Fargo’s  Rate and Payment Calculator or SoFi’s Loan Calculator can help you understand how interest rates and loan terms affect your monthly payment and the overall cost.

Best Personal Loans, Compared

Loan issuerLightStreamSoFiMarcusAvantWells Fargo
APR2.49%-20.49%5.99%-18.53%6.99%-19.99%9.95%-35.99%5.99%-24.49%
Repayment terms2-12 years2-7 years3-6 years2-5 years1-7 years
Funding amounts$5,000 – $100,000$5,000 – $100,000$3,500 – $40,000$2,000 – $35,000$3,000 – $100,000
Funding timelineSame day7 days1-4 business daysNext business dayNext business day
Origination feeNoneNoneNoneUp to 4.75%None
Other feesNoneNoneNoneRejected payment: $15; late payment: $25Rejected payment: $39; late payment: $39
Credit requirement (estimated)700-800680 and upN/A600 and upN/A

Before applying for a loan, it’s a good idea to look around, but you should be smart about it. Even if your loan application is turned down or you decide not to move forward, it will still appear on your credit report as a “hard pull,” which could affect your credit score.

Lenders may offer more than one type of personal loan for different purposes, like paying for home improvements or getting rid of debt. Most of the time, though, there are only two main types of loans. A personal loan that doesn’t need collateral lets you borrow money and pay it back over time at a fixed interest rate. Before getting a collateralized personal loan, you must put up a valuable item as security. Even though most OK personal loans don’t charge for “origination,” “administration,” or “rejected payments,” people with lower credit scores may have to pay these fees because they don’t have many other options.

It’s also a good idea to read the fine print to see if any costs need to be clarified and to find out if any benefits need to be clarified. Some loans, for example, offer a discount if you pay on time. Depending on the type of personal loan and the lender, the interest rate may differ for each. A credit union with physical locations might have different rules than an online lender. Before you make any decisions, you should do your research.

We can help, however. We looked at the best personal loan companies in the United States and listed the best ones below. Most of the time, these lenders offer competitive individual loan rates, a range of loan amounts, flexible repayment terms, and quick funding (usually within one to four business days). Remember, each personal loan lender and loan offer can differ, with loan approval, availability, and terms and conditions that depend heavily on your financial situation.

LightStream delivers
  • APR: 2.49%-20.49%
  • Repayment terms: 2-12 years
  • Funding amounts: $5,000-$100,000
  • Funding timeline: 1 business day
  • Origination fee: None
  • Other fees: None
  • Minimum credit score required: “Good credit”

LightStream’s personal loans have no fees, money the same day, and a low APR. Your actual interest rate will depend on things like your credit history and how long you have to pay back the loan (up to 12 years). You can start your search for one with a personal loan. Trust is the result of the recent merger between SunTrust Bank and BB&T, which created LightStream.)

LightStream has strict credit requirements, so people with bad credit should be aware. When asked about what makes for good credit, the company said a few years of credit history with few late payments, a manageable amount of revolving credit card debt, some liquid reserves, and a steady and enough income.

  • APR: 5.99%-18.53%
  • Repayment terms: 2-7 years
  • Funding amounts: $5,000-$100,000
  • Funding timeline: Up to 7 days
  • Origination fee: None
  • Other fees: None
  • Minimum credit score required: 680

With SoFi loans, you can borrow up to $100,000 and pay nothing at the end. Even though all loan providers look at your credit history and how much debt you have compared to how much money you make, this lender is one of the few that is honest about the credit score you need to get a loan. At the moment, some of SoFi’s loans come with a bonus of up to $360.

Marcus

  • APR: 6.99%-19.99%
  • Repayment terms: 3-6 years
  • Funding amounts: $3,500-$40,000
  • Funding timeline: Up to 4 business days
  • Origination fee: None
  • Other fees: None
  • Minimum credit score required: Not specified

Marcus doesn’t charge any fees and has a range of reasonable APRs. You can pay it back over six years, making it a good choice for people who need a short-term loan. Let’s say you want to get a loan from Goldman Sachs with no fees. In that case, you might be disappointed that the white-glove investment firm will lend you at most $40,000.

wells Fargo
  • APR: 5.99%-24.49%
  • Repayment terms: 1-7 years
  • Funding amounts: $3,000-$100,000
  • Funding timeline: Next business day
  • Origination fee: None
  • Other fees: Rejected payment: $39; late payment: $39
  • Minimum credit score required: None

Online banks usually don’t have physical locations and now control most of the personal loan market. (Because they don’t have any branches to run, they can offer better terms for online personal loans.) “Some people may feel more comfortable borrowing money after meeting a bank employee in their neighborhood. Wells Fargo has the best APRs, the most flexibility, and the most ways to get money out of the big lenders. Wells Fargo may charge extra fees for late or NSF (nonsufficient funds) payments, also called rejected prices. These fees can change at any time. These can also add up.

Avant's kindest

  • APR: 9.95%-35.99%
  • Repayment terms: 2-5 years
  • Funding amounts: $2,000-$35,000
  • Funding timeline: Next business day
  • Origination fee: Up to 4.75%
  • Other fees: Rejected payment: $15; late payment: $25
  • Minimum credit score required: 600

People often say that “fair credit” is more important to Avant than “superior credit” when it comes to lending decisions. A company representative said that people with a credit score of 600 or higher “have the best chance” of getting a loan, but anyone can apply for one.

Most loans have higher fees and interest rates for people who don’t have a solid financial base. In some cases, Avant charges administrative fees of up to 4.75 percent. Interest rates are more likely to be higher if your credit score is less than 600. The highest interest rate you can get on an Avant loan is 35.99 percent, which could cost you hundreds of dollars in interest over time. When you do this, you should be careful.

Other loans to consider

Payoff

  • APR: 5.99%-24.99%
  • Repayment terms: 2-5 years
  • Funding amounts: $5,000-$40,000
  • Funding timeline: 2-5 business days
  • Origination fee: Up to 5%
  • Other fees: None
  • Minimum credit score required: 640

 

  • APR: 5.99%-29.99%
  • Repayment terms: 3-5 years
  • Funding amounts: $2,000-$35,000
  • Funding timeline: 1-3 business days
  • Origination fee: 0.99%-6.99%
  • Other fees: Rejected payment: $15; late payment: $15
  • Minimum credit score required: None

upgrade

  • APR: 7.99%-35.97%
  • Repayment terms: 3- and 5-year terms
  • Funding amounts: $1,000-$35,000
  • Funding timeline: Next business day
  • Origination fee: 2.9-8%
  • Other fees: Rejected payment: $10; late payment: $10
  • Minimum credit score required: None

upgrade

  • APR: 7.98%-35.99%
  • Repayment terms: 3- and 5-year terms
  • Funding amounts: $1,000-$50,000
  • Funding timeline: Next business day
  • Origination fee: Up to 8%
  • Other fees: Rejected payment: $15; late payment: 5% of payment or $15, whichever is greater
  • Minimum credit score required: None

What is a Personal Loan?

Take out a personal loan to consolidate debt, pay for home improvements, pay for a wedding or other family-related expense, or pay for a medical emergency. The lender will let you use the money for anything besides paying for school or investing.

But some lenders will give you anywhere from $1,000 to $100,000. The majority of personal loans range from $5,000 to $50,000. On average, it takes three to five years to pay back. Most institutions charge an average interest rate between 10% and 15%, but it can be as low as 2.4% or as high as 36%. But if you have a few bad marks on your credit history, lenders may be less likely to give you money.

Which factors determine my APR?

A personal loan’s APR is based on the same things that determine whether or not you can get the loan in the first place. Most of the time, the lowest annual percentage rate (APR) is given to people who have excellent credit and a long history of being responsible with their money. People with less-than-stellar credit histories will have to pay higher interest rates. Banks often give better terms to people who don’t need to borrow as much, which is a sad irony.

The APR may be lower on a smaller loan with a shorter term, which is another reason to pay off your loan as soon as possible. The size and length of the loan are also important things to think about. On the surface, longer terms may seem cheaper because the monthly payment is less, but in the long run, this can lead to more overall costs.

Do I need a certain credit score to qualify?

In order to qualify for a personal loan, most lenders consider a wide range of characteristics. Yes, your credit score is significant, but so are your credit history, present financial circumstances (including employment status and annual income), debt-to-income ratio, and any other debts or commitments you may have. Lenders want to know how likely it is that you will be able to pay back the loan on schedule.

An excellent credit score can help you get a better interest rate. It may be more difficult if you have a credit score below 600. The lower end of the range, though, may suffice if you have consistent employment or a steady income. The same holds true whether you’ve just recently lost your work or have a lot of outstanding bills.

Once I’m approved, when can I expect to receive my funds?

In general, an order takes between one and three business days to process. How quickly you answer questions about your finances could have a big effect. Keep in mind that transfers from other banks take longer to arrive at some checking accounts than at others.

What are the alternatives to a personal loan?

Paying in cash is preferable to taking out a personal loan. As a last resort, you could apply for a 0% APR debt transfer credit card or another credit card that offers an initial zero percent APR promotional term. During the introductory period, which typically lasts between six and 18 months, you must pay off the entire sum in order to avoid being exposed to the high APRs that are typical of these credit cards.

Poor credit means you may only qualify for a secured personal loan, which offers lower interest rates in exchange for the requirement that you put up some asset as security.

What’s the difference between a secured loan and an unsecured loan?

Lenders may advertise loans for things like home improvements or paying off debts. Most of the time, though, a loan is a loan, and there are only two types. With an unsecured personal loan, you can repay it over a set amount of time at a fixed interest rate. You must put up an asset as collateral if your credit score is low. So, you can only get a secured personal loan. Borrowers with low credit scores and few options may have no choice but to take out loans that require them to pay fees for “origination,” “administration,” or rejected payments.

What can’t I use a personal loan for?

Most lenders won’t let you use loan money to pay for college tuition or a student loan. Some states don’t let people borrow money to invest, buy, or sell real estate. Each lender has a small list of limits, and it’s always best to ask if you’re unsure.

What’s the difference between a personal loan for debt consolidation, home improvement, or other purposes?

Nothing. Some lenders propose that different sorts of loans are used for different objectives, but they’re all fundamentally the same: You borrow the money and then pay it back at regular intervals along with a fixed interest rate.

What happens if I miss a payment or default on a loan?

Even if you miss a payment and the lender doesn’t charge you a fee immediately, you are still responsible for paying off the debt. You may default if your loan payment is more than 30 days late. If you don’t pay back a loan, it can hurt your credit history, lower your credit score (by up to 100 points for every late payment), and make it much harder for you to get another loan in the future.

If you miss payments often, a lender can send your debt to a collection agency. This agency may charge its fees and call or email you a lot to get you to pay. If you don’t fix the problem, the lender can take you to court to get your money back. Be careful, deliver on time, and only borrow the money you can afford to repay.


The editorial information on this page is based completely on objective, independent assessments by our authors and is not influenced by advertising or partnerships. It was created independently, without the involvement of a third party. However, we may receive compensation when you click on links to products or services offered by our partners.

Follow AsumeTech on

More From Category

More From Author

Leave a Reply