Best Personal Loans

Final Verdict

Many lenders offer personal loans, but SoFi stands out because of its affordable rates, flexible terms, and fast funding. It also has perks that you might not be able to find elsewhere including unemployment protection and job-hunting assistance. However, depending on your needs or financial situation, any of the lenders on our list are a good choice.

Compare the Best Personal Loans

Guide for Choosing the Best Personal Loans 

Should You Consider a Personal Loan?

If you don’t have the cash on hand to cover an expense, you might want to consider getting a personal loan. It can be an effective way to pay for things like consolidating high-interest debt, an emergency expense, home improvements, or even something like a boat or vacation. 

Before you take one out, though, consider if there are other ways you might be able to pay for something and the potential implications to your credit score and your budget (since you will need to repay the loan). 

You’ll also want to carefully consider from which lender you get a personal loan. They’re typically offered by banks, credit unions, and online lenders. If you already have an account at a certain bank or credit union, you might want to explore their loan options, and you might be able to get better terms (even if it takes a little longer to get the funds). But if you prefer a fast application and approval process, an online lender is likely your best bet. 

How to Compare Personal Loan Lenders

When you shop around for a personal loan, it’s a good idea to compare these factors:

• APR: Annual percentage rate or APR is the total cost you’ll pay each year to borrow money, expressed as a percentage. The lower your APR, the less you’ll spend on your personal loan. 
• Loan Amounts: Loan amounts vary greatly by lender. The purpose of your loan will help you determine whether you’re searching for a small amount around $250 or a larger amount of up to $100,000.
• Terms: Terms refer to how long you have to repay your loan. While a longer term may lower your monthly payments, it will increase your total interest costs. 
• Funding Time: Fortunately, most lenders offer fast funding. This may be the same day you apply, within 24 hours, or in a few business days. If you have emergency expenses, fast funding should be a priority. 
• Customer Service: There’s a good chance you’ll need support with your loan at some point in time. Look for lenders with high customer service ratings who can help you via phone, email, and online chat. 

How to Apply for a Personal Loan

Once you’ve made a decision, it’s time to apply for a personal loan. Most lenders will let you go through the process online. Typically, you’ll need to fill out a short form and provide the following information:

• Full name
• Address
• Phone number
• Email
• Date of birth
• Social Security number
• Desired loan amount
• Intended loan use
• Employment status
• Monthly income
• Monthly housing cost

You might also be asked to submit certain documents to verify your identity, address, and income. These include a utility bill, government-issued ID, like a driver’s license or passport, and pay stubs or tax forms. Depending on the lender, you might also have a credit check and if you have a joint applicant, they will likely be asked to provide the same documentation. 

A decision about your application can be made the same day or it could take up to two (or more weeks, again depending on the lender). Once a decision is made, you should receive funds relatively quickly. 

Frequently Asked Questions

What is a Personal Loan?

Offered by banks, credit unions, and online lenders, a personal loan is a form of credit you can use to pay for a variety of expenses. Usually, it’s unsecured and doesn’t require collateral or something valuable you own. While personal loans vary greatly, many of them offer easy applications, flexible terms, and fast funding. 

How Does a Personal Loan Impact Your Credit? 

A personal loan can help or hurt your credit. As long as you make your payments on time, every time, your credit score will increase. A personal loan may also improve your credit mix and lower your credit utilization ratio, which can also benefit your credit. On the flip side, late payments may hurt your credit. 

What Can I Use a Personal Loan For?

In most cases, you can use a personal loan to cover any expense. The top reasons for personal loans include debt consolidation, home remodeling, moving, emergency expenses, and wedding costs. Keep in mind that some lenders impose restrictions and won’t let you use a personal loan on things like college or gambling. Make sure you verify with the lender before applying for the loan that you can use the funds for your intended purpose.

Methodology

Our team evaluated 38 lenders and collected 1,520 data points before selecting our top choices. We weighed more than 20 criteria and gave a higher weight to those with a more significant impact to potential borrowers. 

The top picks were selected based on factors like membership requirements (weighted 15%), average fixed APR (weighted 15%), and average origination fees (weighted 10%). 

We also considered the flexibility of repayment terms, helpful features like pre-qualification, and whether a co-signer or joint applications are permitted to ensure borrowers get the best possible experience. For further information about our selection criteria and process, our complete methodology is available.