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Updated: May 26, 2020 1:46 PM ET | Originally published: April 21, 2020
Money; Getty Images

A personal loan could finance your expensive home improvement project, refinance that lingering student loan debt, or consolidate your high-interest credit card debt at a lower rate.

Shoppers with excellent credit can access the best personal loans which have low-interest rates and no fees. Borrowers with lower credit scores have fewer loan options.

Whatever your creditworthiness, finding the right lender will be essential. The best lenders let you borrow the money you need with a monthly payment you can afford.

Your ideal lender depends on your unique circumstances, so we have compared a variety of the most popular lenders and banks.

Important Things to Know About Personal Loans

  • Unlike credit cards which have variable interest rates and loan payments that fluctuate from month to month, personal loans have fixed interest rates, fixed repayment periods, and a fixed monthly payment.
  • While many personal loans don’t charge fees, some do require application fees, prepayment fees, and loan origination fees.
  • Borrowers with very good or excellent credit, meaning a FICO score of 740 or above, could qualify for the best personal loan rates. However, borrowers with less-than-stellar credit can still qualify for a loan provided they’re willing to pay a higher rate and more upfront fees.
  • Many lenders let you get prequalified for a personal loan without a hard credit check. (Hard checks can lower your credit score). A prequalification could show your borrowing rates and loan payments before you complete an actual loan application.
  • With debt consolidation loans you should look for a new loan with a lower interest rate than most if not all of the existing loans you’re consolidating.

10 Best Personal Loan Providers of 2020

A lot of lenders offer personal loans, but many of them aren’t worth considering. They have punitive interest rates and high fees. You should avoid some loans, including payday and title loans, completely.

Based on our research, the following lenders and credit unions offer some of the best personal loans with reasonable rates and loan terms for consumers with different credit ratings:

  1. LendingTree
  2. PenFed Credit Union
  3. Marcus by Goldman Sachs
  4. SoFi
  5. LendingClub
  6. FreedomPlus
  7. Upstart
  8. Avant
  9. Prosper
  10. Lightstream by SunTrust

Best Personal Loan Reviews

The best lender for you depends on how much you need to borrow, your credit history, your debt-to-income ratio, and several other related factors.

These reviews can help you determine which lender or lending platform you need.

LendingTree

Lending Tree does not lend money; it’s an online loan comparison tool. Consumers can see how personal loan offers from different lenders stack up — all in one place.

You could fill out one application and access several different loan offers immediately, all prepared by Lending Tree’s lending partners. You can also get prequalification without a hard credit check.

When you see your loan offers, LendingTree lets you tailor your loan application. You could tweak your repayment timeline and choose a monthly payment to fit your budget and goals.

Summary of benefits:

  • Get prequalified without a hard inquiry on your credit report.
  • See multiple loan offers in one place.
  • Borrow between $1,000 and $50,000.
  • Tailor your monthly payment and repayment timeline to your goals.

PenFed Credit Union

PenFed Credit Union offers personal loans without an origination fee. You wouldn’t have to pay a percentage of your loan amount to have your loan funded.

PenFed, which is short for Pentagon Federal Credit Union, has great loan terms for consumers with excellent credit. Repayment terms could reach 60 months.

PenFed and other credit unions require you to become a member before you can qualify for a personal loan. PenFed is open to federal employees and their families.

You could also join PenFed if you have a military affiliation or even if you’ve volunteered with the American Red Cross.

Summary of benefits:

  • Must be a PenFed Credit Union member to apply.
  • Borrow up to $20,000.
  • Interest rates run as low as 6.49% (subject to change).
  • No origination fee for personal loans.
  • Repay your loan for up to 60 months.

Marcus by Goldman Sachs

Personal loans from Marcus by Goldman Sachs are popular with consumers because they require no fees — no origination fees, application fees, or prepayment penalties.

You can borrow up to $40,000 with Marcus by Goldman Sachs with interest rates as low as 6.99 percent APR if you have great credit. Personal loan rates could reach as high as 19.99 percent APR Your term could range from 36 to 72 months, and you could use your loan funds however you want.

Marcus by Goldman Sachs earned the No. 1 spot in J.D. Power’s 2019 U.S. Credit Card Satisfaction Study based on overall customer satisfaction, interaction, billing and payment, loan offerings and terms, and the application and approval process.

Summary of benefits:

  • Borrow up to $40,000 and repay your loan over 36 to 72 months.
  • Qualify for interest rates as low as 6.99% APR (subject to change).
  • No origination fees or other loan fees.
  • Get prequalified online without a hard credit check.

SoFi

SoFi is known for its student loan and student loan refinancing products, but this online lender also writes personal loans. You could borrow as much as $100,000 — considerably higher than most lenders would offer with an unsecured personal loan — if your creditworthiness holds up.

SoFi personal loans for home improvements or high-interest debt consolidation come with rates that start at 5.99 percent APR when you sign up for autopay.

There are also no origination fees, no prepayment fees, and no late fees at SoFi. You can even temporarily “pause” your loan payments for up to a year if you lose your job — a benefit few lenders offer.

Summary of benefits:

  • Borrow between $5,000 and $100,000 for 24 to 84 months.
  • Interest rates start at 5.99% APR with autopay (rates could change).
  • No origination fees or hidden fees.
  • Get prequalified online without a hard inquiry on your credit report.

LendingClub

If you want to borrow money from individual investors instead of a bank, consider Lending Club. This peer-to-peer lending platform lets people invest in your personal loan. When you repay your loan with interest, the investors make money. Lending Club’s rates and terms make its loans competitive with traditional lenders’ options.

You could borrow up to $40,000 with a fixed interest rate and a fixed repayment schedule. You can also check your rate online without a hard credit check. Interest rates range from 6.95 percent to 35.89 percent. The highest rates go to consumers with lower credit ratings.

Also note Lending Club charges an origination fee of 1 percent to 6 percent of your loan amount.

Summary of benefits:

  • Borrow up to $40,000 from individuals, not banks.
  • Interest rates as low as 6.95% borrowers with excellent credit.
  • Origination fee of 1% to 6% of your loan amount applies.
  • Get prequalified online without a hard inquiry on your credit report.

FreedomPlus

If your credit is less than stellar, consider FreedomPlus personal loans.

This online lender considers more than your credit history as it determines your loan qualification. Loans can be funded in as little as 48 hours with an ID, your signature, and a verified income and bank account — you could get your money fast.

FreedomPlus allows consumers to borrow between $7,500 and $40,000 and pay loans off for anywhere from 2 to 5 years. These loans don’t have prepayment fees, but your origination fee could reach 5 percent of your loan amount. Interest rates start at 5.99 percent and go up to 26.99 percent.

Summary of benefits:

  • Borrow between $7,500 and $40,000.
  • Repay your loan over 2 to 5 years.
  • Pay an origination fee up to 5% of your loan amount.
  • You could qualify with average credit.

Upstart

Upstart looks beyond your credit history to consider your profession, earning potential, and education level. You could get up to $30,000 in funding for credit card debt consolidation, a student loan refinance, or even to support yourself during boot camp.

Regardless of your loan purpose, Upstart provides terms of 36 to 60 months and interest ranging from 6.27 to 36.99 annual percentage rate. Borrowers with better creditworthiness access the best rates, and Upstart reports its average three-year loan comes in at 20 percent APR.

Since Upstart considers alternative credit criteria and funds peer-to-peer loans like Lending Club, you could still borrow even if you don’t meet the minimum credit score most lenders require. You could even get funds the same business day. But if you have a low credit score and a low future earnings potential, you could still be denied.

Although Upstart charges no prepayment penalties, you could face a steep loan origination fee — up to a massive 8 percent of the loan amount, a high among our favorite personal loan lenders. You’d also face late fees of at least $15 per month if you got behind on your monthly payments.

Like most of the lenders on our list you can get preapproved with a soft credit check. You can’t use a cosigner to help get approval or lower rates.

Summary of benefits:

  • Seamless application process for a peer-to-peer loan.
  • Borrow $5,000 to $30,000 from 3 to 5 years.
  • Broad APR range — 6.27% to 36.99%.
  • No prepayment fee but expect other fees.
  • Great for fair credit borrowers.
  • No hard credit pull required for prequalification.

Avant

Avant Personal Loans’ minimum credit score of 580 opens the door to less qualified borrowers, but an Avant installment loan’s best interest rate is 9.95 percent, and your fixed-rate could reach 35.99 percent. A consolidation loan at such a high rate won’t save you a ton on interest but it could simplify your life with one payment and one fixed rate.

Avant also has flexible repayment options your credit card companies won’t offer. After six months of successful, on-time monthly payments, you could refinance your loan at a lower rate, assuming your credit history has improved since your original loan.

Along with a FICO score of at least 580 and an annual gross income of $20,000, you’ll need to pay a 4.75 percent administrative fee to finalize your loan.

Avant also charges a $25 late fee after a 10-day grace period, and a $15 fee for unsuccessful payments. Someone who wants the best personal loan interest rates should choose a different lender on this list, but Avant offers a reliable option for a credit-challenged borrower who needs cash and wants to improve his or her credit history.

Summary of benefits:

  • Borrow up to $35,000 from 2 to 5 years.
  • Refinance at a lower rate later when you can qualify.
  • An administrative fee of 4.75 percent of the loan amount.
  • Borrow with a FICO score of 580 and an annual gross income of $20,000.

Prosper

Here’s another peer-to-peer option for borrowers with average to fair credit. A FICO of 640 could get you approved for an unsecured loan up to $40,000. Shoppers searching for the lowest rate in the market won’t find it with Prosper. But with more relaxed credit requirements, this P2P has the flexibility many borrowers need.

Loan options range from 3 to 5-year terms, and applicants should expect to wait 3 to 5 days to receive funds. Your APR could range from 7.95 percent to 35.99 percent — a broad APR range that reflects the variety of borrowers Prosper has served in its 15-year history.

Prosper does things a little differently, even for a P2P lender. Individual investors on the platform can choose to fund parts of your loan after you apply. If your application has not been funded to at least 70 percent of your request within 14 business days, your application will expire.

You can improve your chances of getting fully funded by asking someone with better credit to be your cosigner. Many personal loan providers do not offer this option.

Summary of benefits:

  • Origination fee varies but could reach 5 percent of your loan.
  • Apply with a credit score of 640.
  • Approval depends on investors who fund loan applications.
  • Borrow up to $40,000 for 3 to 5 years.
  • Broad APR range — 7.95% to 35.99%.
  • Join loan with a cosigner improves your changes.

Lightstream by SunTrust

Highly qualified borrowers could get a low-interest rate loan up to $100,000 through Lightstream, a division of SunTrust Bank. You could receive the funds as soon as today.

SunTrust believes borrowers with the best qualifications should get easy access to personal loans. Rates range from 3.49 percent to 19.99 percent, and all advertised rates reflect a 0.5 percent autopay discount.

Actual rates and terms vary widely depending on your purpose. You could borrow up to 12 years for a home improvement loan. Student loans, auto loan refinance loans, and credit card consolidation loans have terms up to 5 to 7 years.

Your loan purpose will also help determine your best rate. Borrowing to buy jewelry or fund a wedding costs more than borrowing to buy a new car or remodel your basement.

Summary of benefits:

  • No fee, low-interest loans for well-qualified borrowers.
  • Minimum credit score of 660 plus 2 years of credit history.
  • Cosigned loans available.
  • No prequalification online but borrowers usually don’t need it.
  • Loan purpose determines ranges for rates and terms.

How We Found the Best Personal Loans of 2020

The market for personal loans has expanded over the past couple of decades as online lenders and P2P lenders have joined traditional banks and credit unions as loan providers.

As we compared lenders for this list, we considered a variety of data points to help consumers save money and better access loans. We also looked for variety in underwriting methods and funding sources.

Here are the factors we considered and encourage you to consider as you shop for your best personal loan this year.

Competitive Interest Rates

Because interest plays the biggest role in long-term costs, we looked for lenders that offer competitive rates for borrowers with every type of credit.

Some of the lenders on this list charge pricey APRs to consumers without excellent credit, but we included lenders who offer a competitive starting rate for customers who have excellent or very good credit scores.

Low or Reasonable Fees

Fees you’re charged for your loan also play a role in the long-term costs of borrowing, and that’s especially true when it comes to origination fees. We looked for lenders that don’t charge an origination fee or at least ones that don’t charge a high origination fee to qualified borrowers with excellent credit.

Unfortunately lower credit borrowers face more punitive fees and loan terms, but any lender on this list beats payday or title lending. We believe even borrowers with no credit should use personal loans to build a more stable credit life.

No Prepayment Penalties

None of the individual lenders on our list charge prepayment penalties if you pay your loan off ahead of schedule. We believe that no one should have to pay a fee to pay off a loan early. This is mostly a “junk fee” you should avoid if you can.

Pre-qualification Option

Finally, we gave precedence to lenders or lender comparison sites that will prequalify you for a loan online without a hard inquiry to your credit report.

Since this perk makes it easy to see how much you could borrow as well as the interest rate you could qualify for before you apply, lenders who make this possible scored more points in our ranking.

What to Know Before Applying for a Personal Loan

Borrowing money has lasting consequences so find out what you’re getting into before you dive in. Your loan could be part of your life for years. The time you spend now understanding terms and conditions could pay off tremendously.

Use a Loan Calculator to Determine Your Long-Term Loan Costs

Spend a few minutes with a loan calculator before applying. A calculator can show how your monthly payments and total interest paid can vary with your APR. Seeing your loan payments in advance gives you time to consider whether you could afford the payment month after month and year after year.

Ideally, you’d want a loan payment you could afford without sacrificing your other financial goals. Your personal loan should help you out of a financial fix — not mire you into a more elaborate mess. A loan calculator has a way of letting you forecast your loan’s ongoing impact on your financial life.

Improving Your Credit Score Could Save You Thousands of Dollars

If your credit score is low, you’ll pay much higher interest rates and have few or no loan options without higher fees. Should you wait to borrow money after you’ve raised your credit score?

As you noticed on our list above, APR ranges from 3.99 to 36.99 percent with personal loan lenders. Here’s what that means in real life:

  • At 4 percent: You could borrow $15,000 for 5 years and pay $1,574.87 in finance charges and monthly payments of $276.25.
  • At 35 percent: You could borrow $15,000 for 5 years and pay $16,941.27 in finance charges and monthly payments of $535.25.

And this example does not include administrative fees, late payment fees, or loan origination fees.

Even small improvements to your credit score could make a big difference in the APR you qualify for. If you believe you could make substantial improvements to your credit score within a few months of work, waiting to apply for a personal loan could be well worth it.

Interest is the big factor, but good credit also cuts down on fees and qualifies you for more convenient loans like Lightstream’s products.

To improve your credit score, make consistent, on-time payments, try to pay down some accounts, and don’t apply for credit for a while.

Personal Loans or Low-Interest Credit Card?

You may have noticed that most personal loan companies and banks require a minimum loan amount of $2,000. If you need to borrow a small amount of money, consider a 0 percent annual percentage rate credit card instead of a personal loan.

Many credit cards feature 0 percent APR on purchases for up to 18 months, letting you score a “free” short-term loan provided you pay your balance off before your introductory offer ends. If you can’t pay off the balance before interest kicks in you could be facing more high-interest debt.

Some credit cards even offer rewards for each dollar you spend. You could earn a few percent cash back which could translate into gift cards, travel points, or a credit on your statement.

Like all good things, 0 percent APR offers eventually end. If you don’t pay your credit card balance off before your promotional rate expires, you’ll be stuck paying a much higher APR when your interest rate resets.

But 0 percent APR credit cards may be a better choice if you need to borrow a small amount of money and know you can pay it off over several months instead of several years. If you have bad credit you won’t qualify for a 0 percent credit card offer.

Personal Loan of Home Equity Loan?

Low rates make borrowing less painful financially, but unsecured loans can go only so low. Lenders need collateral to extend the lowest possible interest rates. That’s why auto loans have lower rates — if you couldn’t pay the car payment, your lender could reclaim the car and not take a total loss on your loan.

Home equity loans and home equity lines of credit let you use your home as collateral when you borrow which could unlock lower borrowing costs.

Here’s how home equity loans work: You borrow against the value you’ve built up in your home. If you own a $250,000 home and owe $200,000 on the mortgage, your equity is the difference between these two numbers: $50,000.

You could borrow up to $50,000 at better loan terms compared to your rate on an unsecured loan. Here’s the catch: Your lender would have a lien against your home. If you sold the home before paying off the loan, you’d have to pay off your equity loan in full.

Home equity loans work best as financing for home improvement projects or buying additional real estate. Home equity loans tend to have lower interest rates than home equity lines of credit.

Personal Loan or Personal Savings?

If you need to spend $10,000 on a new HVAC system for your home, should you borrow the money or spend money from your savings account?

It can be painful to deplete your bank account. But shouldn’t you avoid paying interest by using your own money?

Not necessarily. If your good credit qualifies you for a low-cost loan — let’s say 5 percent APY and no additional fees — you may want to hang onto your own savings, especially if you could invest the money and earn greater than 5 percent yourself.

You may want to ask a financial advisor you trust since this decision would be too personal to benefit from online advice. It’s something to consider, though.

Your Loan Should Work For You

When you borrow money, you’re the paying customer. Yes, you’re receiving money, but you’re paying for the privilege of using the money through interest and fees. The lender or bank will make money from your loan.

You owe it to yourself to pay less in fees and interest and to shop around for the best plan. You have to be your own advocate.

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