Sometimes you need a little extra cash. Where do you turn? Some people use credit cards, but high interest rates and a temptation to spend more and grow your balance means credit cards may not be the best choice. If this situation sounds familiar, you may want to consider a personal loan.
If you are in the market for a personal loan, make sure you only borrow what you need and that you have the ability to pay back any funds you borrow. Also plan to pay off the loan early, if you can afford to, as that will save you money over the life of the loan.
Your next big choice is going to be where to get your personal loan. But before you do that, let's take a glance at what criteria you need to consider to get the best personal loan possible. First, check the interest rate—it's how much you pay to borrow. Interest rates vary with your credit score and market interest rate conditions. A lower rate is better.
Next is fees: Some lenders charge origination and other fees. Always do your best to avoid fees when possible. If you can find a loan with no origination fee, that’s often your best personal loan option. One other thing to consider is prepayment penalty: Some loans charge a fee if you pay the loan back early. Avoid that if at all possible. In general, personal loans don't carry a tax burden.
Need some help finding out who you can turn to? We're here for you. We rounded up the most trusted and reputable personal loan companies, so you can count on getting the best rate and deal possible. We teamed up with QuinStreet to bring you the following personal loan offers. Below the table, we give you our top picks for personal loans and why we recommend them.
Best Personal Loan Companies of 2020
- Marcus by Goldman Sachs: Best Overall
- SoFi: Best for Young Professionals
- Prosper: Best for Marketplace Loans
- LendingClub: Best for Biggest Marketplace
- Best Egg: Best for Just Personal Loans
- Earnest: Best for Payment Flexibility
- Payoff: Best for Credit Card Consolidation
- Earnin: Best Alternative Personal Loan
Wall Street titan Goldman Sachs offers Marcus as its personal banking and borrowing brand. Marcus offers personal loans and savings accounts, both among the best in their respective industries. For lending, Marcus focuses on debt consolidation, credit card consolidation, home improvement, and other personal loans.
Marcus offers online loans from $3,500 to $40,000. As of this writing, interest rates range from 6.99% APR to 28.99% APR and loans are available with terms from 36 months to 72 months. All loans have a fixed interest rate with a fixed monthly payment. For New York residents, APR rates range from 6.99% to 24.99%.
In addition to competitive interest rates, the reason Marcus is at the top of our list is its no-fee guarantee and simple five-minute application. There is no origination fee, no prepayment fee and there are no late fees, though you should always make your full payment on time each month.
Want to learn more? Check out our full review of Marcus by Goldman Sachs.
SoFi started as a student loan lender, so it knows young professional finances inside and out. It offers student loans, student loan refinances and mortgage loans in addition to personal loans. SoFi also offers wealth management and life insurance products and has a bank account coming soon.
SoFi, short for Social Finance, empowers borrowers with tools to repay their loans and offers a range of useful services. Interest rates currently range from 5.99% to 20.91% with automatic payments. Loans are available from $5,000 to $100,000 in value in terms of 3, 4, 5, 6 or 7 years. Residents of California must borrow at least $10,000.
There are no fees for personal loans from SoFi, just interest. SoFi also offers a unique unemployment protection feature so you don’t get stuck in a jam should you lose your job. That’s a useful backup plan in any job market.
Prosper is a marketplace lender where individual investors join forces to fund your loan. It offers competitive rates and terms that put it head-to-head with other online lenders and even many traditional lenders.
Prosper personal loans are available for amounts of $2,000 to $40,000, with interest rates ranging from 6.95% to 35.99% APR. Low credit borrowers should beware of the high interest rates here, while those with the best credit history may find market leading rates.
Also, be on the lookout for some fees at Prosper you don’t see at all online lenders. While there is no prepayment fee, there is an origination fee. That fee ranges from 1% to 5% of the loan value, depending on your credit history.
LendingClub is one of the biggest and best-known marketplace lenders, and while it suffered some recent negative publicity in recent years on its investing side, it ranks as a top option for personal loan borrowers.
LendingClub is not a traditional lender. Instead of getting your loan funds from LendingClub, they come from loan investors in $25 increments. LendingClub has originated more than $35 billion in loans. It is a huge lending marketplace.
Personal loan interest rates currently range from 6.95% to 35.89% APR, making it both one of the cheapest and one of the most expensive personal lenders, depending on your personal credit history. Loans are available for up to $40,000 and you will receive funding in as few as three days. Just beware the origination fee—1% to 6% of the loan value based on your credit—if you choose to go with Lending Club.
Best Egg sounds like a breakfast restaurant, but it is, in fact, an online lender. Like many personal loan companies, it is popular for debt consolidation, home improvement and a range of other personal expenses.
Best Egg offers loans from $2,000 to $35,000 at interest rates of 5.99% to 29.99%. Best Egg charges an origination fee ranging from 0.99% to 5.99% of the loan value and offers three- or five-year repayment terms.
Best Egg is better for borrowers with a solid income and credit score. The minimum credit score is 640 at Best Egg, but the average credit score and income are 685 and $60,000 per year, respectively.
Earnest offers student loan refinancing, home loans, and personal loans, so it may fit into other lending plans in your future outside of personal borrowing. When you sign up for a loan with Earnest, you can tinker with multiple settings to choose your preferred monthly payment. This is a great option for those with repayment worries.
Earnest charges no origination fees and offers loans with interest rates from 5.99% to 17.24%, depending on the loan duration and your credit history. Loans are available in three-, four-, and five-year terms for amounts ranging from $5,000 to $75,000.
Applying is quick and easy, and the mobile app is a great tool to help you track and pay off your loan as quickly as possible.
Payoff offers a personal loan called “The Payoff Loan.” It is advertised primarily as an option to pay off and consolidate credit card debt. Hence the name Payoff.
Loan interest rates range from 5.99% to 24.99% and you'll have to pay an origination fee of 2% to 5% of the loan value. But there are no early payment fees, late fees or even returned check fees. This makes the loan very predictable once you have it set up.
The approval process is quick and simple. You need a 640 credit score to qualify and a debt-to-income ratio below 50%. You also must not have any current delinquencies and you can't have had any payments that were 90 days late in the last 12 months.
Payday loans have a bad reputation for a good reason: They are a huge ripoff for the most vulnerable borrowers. Earnin thought payday loans shouldn’t include the “ick” factor and offers short-term loans with no interest and no fees.
Yes, you read that right. You can borrow from Earnin with no interest and no fees. It is a “pay what you think is fair” product. If you can’t afford to pay any fees, you don’t have to. That’s pretty cool and is unique in the lending industry.
Loans are available for up to $100 per day and $500 per pay period through the Earnin app. If you just need a little extra cash to get by until payday, this is much cheaper than a traditional payday loan or a personal loan.