Personal loans are a versatile financial product that can help you cover expenses, consolidate debt, or finance a big purchase. Unlike credit cards, personal loans offer a fixed term and interest rate, which makes them a more predictable and affordable option for many borrowers. Personal loans are also unsecured, which means you don’t have to put up collateral to get approved. Instead, your creditworthiness and income are the primary factors lenders use to assess your eligibility for a personal loan. However, because personal loans can vary widely in terms of fees, rates, and loan amounts, it can be challenging to find the best loan for your needs. In this article, we’ll take a look at some of the most important factors to consider when shopping around for a personal loan, as well as some of the best personal loans on the market today. Whether you’re looking to pay off high-interest debt, cover an unexpected expense, or invest in your home, we’ll help you choose the right loan for your budget and goals.
Factors to Consider When Choosing a Personal Loan
When shopping around for the best personal loans, there are several factors to consider, including:
- Interest rates: A lower interest rate can save you money over the life of the loan, but keep in mind that rates can vary widely depending on your credit score. Compare rates from multiple lenders to find the best deal.
- Loan terms: Look at the length of the loan term, repayment schedule, and any prepayment penalties to ensure you can afford the monthly payments.
- Fees: Fees can eat into your loan amount and make it more expensive. Look for loans with no or low fees, such as origination fees or prepayment penalties.
- Loan amounts: Some lenders have minimum and maximum loan amounts, so make sure the loan you choose covers your expenses.
- Approval requirements: Lenders have different credit score and income requirements, so make sure you meet the lender’s eligibility criteria before applying to avoid unnecessary credit checks.
When comparing personal loans, it’s important to have a clear understanding of these factors to make an informed decision. You can use comparison websites such as Bankrate, NerdWallet, or LendingTree to compare several loan options from different lenders. Some lenders also offer pre-qualification, which allows you to get an estimate of the loan terms and rates before submitting a full application. By doing your research and comparing your options, you can find a personal loan that fits your budget and financial goals.
How do I choose a personal loan?
When choosing a personal loan, it’s important to shop around and compare your options. Here are some factors to consider:
- Interest rates: Look for low interest rates, as they can save you money over time.
- Loan terms: The length of your loan will affect your monthly payments. Decide what monthly payment you can afford and how long you want to be in debt.
- Fees: Look for any additional fees, such as origination fees or prepayment penalties, that may be associated with the loan.
- Credit score: Your credit score will affect the interest rate you receive. Check your credit score and credit report before applying for a loan.
Make sure to read the terms and conditions of the loan carefully before signing anything. You can use websites like Bankrate or Credit Karma to compare offers from different lenders.
Top Personal Loan Lenders
There are several lenders offering personal loans with competitive rates and flexible repayment terms. Here is a comparison of some of the best lenders in the market:
- LightStream: offers rates from 2.49% to 19.99%, loan amounts ranging from $5,000 to $100,000, loan terms from 24 to 144 months, and no origination or prepayment fees.
- SoFi: offers rates from 5.99% to 18.85%, loan amounts ranging from $5,000 to $100,000, loan terms from 24 to 84 months, and no origination or prepayment fees.
- Discover: offers rates from 6.99% to 24.99%, loan amounts ranging from $2,500 to $35,000, loan terms from 36 to 84 months, and no origination or prepayment fees.
- Payoff: offers rates from 5.99% to 24.99%, loan amounts ranging from $5,000 to $40,000, loan terms from 24 to 60 months, and no application or prepayment fees.
- Upgrade: offers rates from 7.99% to 35.97%, loan amounts ranging from $1,000 to $50,000, loan terms from 36 to 60 months, a 1.5% to 6% origination fee, and no prepayment fee.
Some interesting facts about these lenders:
- LightStream offers a rate beat program, where they will beat any competitor’s rate by 0.10 percentage points, subject to certain terms and conditions.
- SoFi also offers personal loans for home renovations or credit card consolidations
- Discover provides free access to your FICO credit score on your monthly statement
- Payoff offers a member advocacy team to provide support throughout the loan process and beyond
- Upgrade uses a unique mix of technology and human touch to underwrite loans and provide customer support
As always, it’s important to do your research and compare your options when choosing a personal loan. Each lender might have different requirements and loan terms, so make sure to read the fine print and understand all of the costs involved before making a decision.
What is a Comparison Rate on a Personal Loan?
A comparison rate on a personal loan is a tool to help borrowers compare different loans based on their overall costs, including fees and interest rates. It’s expressed as a percentage and includes the interest rate plus any extra charges associated with the loan. It’s important to note that the comparison rate is only a guide, and borrowers should always read the product disclosure statement before making a final decision. Some websites, such as Canstar and Finder, offer comparisons of personal loans and their comparison rates.
Best Personal Loans for Bad Credit
If you have bad credit, obtaining a personal loan can be a challenge. However, there are still lenders that offer loans for those with less-than-perfect credit. Here are some of the best personal loans for bad credit:
| Lender | Interest Rate | Loan Amount | Loan Term | Fees |
|---|---|---|---|---|
| OneMain Financial | 18.00% – 35.99% | $1,500 – $20,000 | 24 – 60 months | Origination fees vary by state |
| LendingPoint | 9.99% – 35.99% | $2,000 – $36,500 | 24 – 60 months | Origination fees vary by state |
| Avant | 9.95% – 35.99% | $2,000 – $35,000 | 24 – 60 months | Origination fee up to 4.75% |
| NetCredit | 34.00% – 155.00% | $1,000 – $10,000 | 6 – 60 months | Varies by state |
Some lenders that cater to borrowers with bad credit:
- OneMain Financial offers loans to borrowers with bad credit, but the interest rates can be high. However, they require no minimum credit score.
- LendingPoint looks beyond credit scores to consider your overall financial health, and may even allow co-borrowers to help you qualify.
- Avant specializes in personal loans for borrowers with less-than-perfect credit, with funds available as soon as the next business day after approval.
- NetCredit provides personal loans even to borrowers with no credit history at all, although rates can be steep.
It is important to note that personal loans for bad credit often come with higher interest rates and fees compared to loans for borrowers with good credit. If possible, working on improving your credit score before applying for a loan can help you qualify for better interest rates and terms.
Can I Get a Loan with 500 Credit Score?
It is possible to get a loan with a 500 credit score, but it will be challenging. Many lenders consider a score below 600 to be poor or bad credit, which suggests a higher risk for loan default. Here are some options:
- Consider a secured loan, such as a car title loan or a home equity loan, where you put up collateral to borrow money.
- Look for lenders who specialize in bad credit loans, such as personal loans, payday loans, or online installment loans.
- Try to improve your credit score by paying off debts, keeping credit utilization low, and disputing any errors on your credit report.
Remember, however, that loans for bad credit tend to have higher interest rates and fees, which could make borrowing more expensive over time. Before signing any loan agreement, make sure you understand the terms and conditions, and shop around for the best deal. Some websites, like LendingTree or Credit Karma, can help you compare loan offers and lenders.
Best Personal Loans for Quick Approval
If you need funds quickly, finding a personal loan with fast approval can be a lifesaver. These lenders specialize in getting your funds to you as quickly as possible. Here are some of the best personal loans for quick approval:
| Lender | Interest Rate | Loan Amount | Loan Term | Fees |
|---|---|---|---|---|
| Upstart | 8.69% – 35.99% | $1,000 – $50,000 | 36 or 60 months | Origination fees up to 8.00% |
| Funding Circle | 10.49% – 35.00% | $25,000 – $500,000 | 6 months – 5 years | Origination fee up to 4.99% |
| SoFi | 5.99% – 18.83% | $5,000 – $100,000 | 24 – 84 months | No fees |
Some key features of these lenders include:
- Upstart uses artificial intelligence to quickly approve loans, sometimes within minutes. Loans can be used for a variety of purposes, including credit card debt consolidation, wedding expenses, and even moving costs.
- Funding Circle specializes in small business loans, with decisions on loans typically made within 24 hours.
- SoFi offers a variety of loan products, including personal loans, student loan refinancing, and mortgages. Loans have no fees and typically get approved quickly, often within a day or two.
It is important to note that while these lenders prioritize fast approval, they may have higher interest rates compared to other lenders. It’s also important to make sure you can afford the loan before taking it out, even if it is approved quickly.
What are the easiest loans to get approved for?
If you’re looking for loans that are easy to get approved for, here are some options to consider:
- Payday loans
- Personal loans
- Auto title loans
- Pawnshop loans
- Guarantor loans
- Secured loans
However, keep in mind that these types of loans often come with higher interest rates and fees compared to traditional bank loans. It’s important to carefully consider your financial situation and budget before taking out any loans.
If you’re interested in learning more about loans and financial products, websites like NerdWallet and Credit Karma offer helpful guides and comparisons to help you make informed decisions.
Best Personal Loans for Bad Credit
If you have bad credit, you may still qualify for a personal loan. These lenders specialize in working with borrowers with lower credit scores. Here are some of the best personal loans for bad credit:
| Lender | Interest Rate | Loan Amount | Loan Term | Fees |
|---|---|---|---|---|
| OneMain Financial | 18.00% – 35.99% | $1,500 – $20,000 | 24, 36, 48 or 60 months | Origination fee varies by state |
| Avant | 9.95% – 35.99% | $2,000 – $35,000 | 24 – 60 months | Up to 4.75% administration fee |
| CreditLoan.com | 5.99% – 35.99% | $250 – $5,000 | 3 – 72 months | Varies by lender |
Some key features of these lenders include:
- OneMain Financial offers both secured and unsecured loans and has a quick application process. Borrowers can also visit a physical branch to apply in person.
- Avant has a minimum credit score requirement of 580 and provides next-day funding upon approval. Loans can be used for debt consolidation, emergencies, or home improvements.
- CreditLoan.com works with borrowers with all credit types and is a good option for those with poor credit. The website connects borrowers with a network of lenders and matches them based on their needs and credit score.
It’s important to note that these lenders may have higher interest rates compared to other lenders and may have additional fees. Additionally, borrowers with lower credit scores may not be approved for the full loan amount.
Conclusion
Choosing the best personal loan depends on your needs and financial situation. It’s important to consider factors such as interest rates, fees, repayment terms, and borrowing limits before making a decision. Researching and comparing lenders can help you find the best deal.
Remember to only borrow what you can afford to repay and make sure to read the fine print before committing to a loan. Personal loans can be a valuable tool for achieving your financial goals, whether it’s consolidating debt, making home improvements, or covering unexpected expenses.
When it comes to finding the best personal loan, take the time to assess your options and compare offers. With careful consideration, you can find the right personal loan to fit your needs and help you achieve your financial goals.
