Compare Personal Loans – Find Your Best Option

A personal loan is an unsecured loan that can be used for a variety of purposes, such as covering large expenses, consolidating debt, or paying for emergencies. There are multiple lenders offering personal loans, each with unique features and benefits. NerdWallet has rated and reviewed personal loans from over 35 financial institutions, collecting data points to help borrowers compare and choose the best loan options.

Personal loan amounts typically range from $1,000 to $100,000, with repayment terms of two to seven years. The interest rates on personal loans can vary from about 6% to 35.99%, depending on factors such as credit score, income, and debt-to-income ratio. When comparing personal loans, it’s essential to consider factors such as the APR, loan term, loan amount, qualification requirements, and customer support options. Taking the time to research and compare personal loans can help you find the best option and save money in the long run.

What is a Personal Loan?

A personal loan is a type of loan that allows you to borrow a lump sum of money and repay it in fixed monthly payments. Unlike secured loans, personal loans do not require any collateral, such as a house or car. This means that you don’t need to put up any assets as security to get the loan. Instead, lenders evaluate factors like your credit score, credit report, and debt-to-income ratio to determine your eligibility for a personal loan.

Personal loans can be obtained from various financial institutions, including banks, credit unions, and online lenders. The loan amounts for personal loans typically range from $1,000 to $100,000, depending on the lender and your creditworthiness. Repayment terms for personal loans usually vary from two to seven years, giving you flexibility in choosing a loan duration that suits your needs.

One of the key features of a personal loan is the fixed monthly payments. These payments allow you to budget and plan your finances accordingly, as you know exactly how much you need to repay each month. This can help you manage your cash flow effectively and ensure that you don’t miss any payments.

Personal Loan Rates

When seeking a personal loan, it’s important to understand the factors that can impact the interest rates you’ll be offered. Lenders consider various aspects, including your credit score, income, and their own criteria, in determining the interest rate for your personal loan. On average, personal loan rates can range from around 6% to 35.99%.

Borrowers with higher credit scores typically qualify for lower interest rates, making it easier to access larger loan amounts. So, if you have a good credit score, you may be eligible for more favorable loan terms. Additionally, lenders often rely on the Annual Percentage Rate (APR) to provide a clearer picture of the overall cost of the loan, including any associated fees.

It’s important to note that APR and interest rates are different. While the interest rate represents the cost of borrowing, the APR includes both the interest rate and any fees that may be associated with the loan. This is why it’s important to compare APRs when evaluating loan options.

For example, based on different credit rating ranges, the estimated APRs can be as follows:

• Excellent (720-850): 12.42%
• Good (690-719): 14.82%
• Fair (630-689): 18.08%
• Poor (300-629): 21.10%

To find the most competitive personal loan rates, it’s crucial to compare offers from multiple lenders. Shopping around allows you to evaluate the interest rates, APRs, and repayment terms provided by different financial institutions. By taking the time to compare, you can ensure that you secure the best loan option for your specific needs and financial situation.

Personal Loan Uses

Personal loans are versatile financial tools that can be used for a variety of purposes. Here are some common uses for personal loans:

• Debt Consolidation: Personal loans can be used to consolidate multiple debts into a single monthly payment. This can help streamline your finances and potentially lower your overall interest rate, allowing you to pay off your debts faster.
• Home Improvement: If you’re looking to make renovations or improvements to your home, a personal loan can provide the funds you need. Whether you’re adding a home office, installing a swimming pool, or updating your kitchen, a personal loan can be a convenient way to finance these projects.
• Large Expenses: Whether you’re planning to buy a boat, RV, or another major purchase, a personal loan can help you cover the cost. Personal loans typically offer competitive interest rates and flexible repayment terms, making them an attractive option for financing significant expenses.
• Weddings: Planning a wedding can be expensive, and a personal loan can help cover the costs. From venue rentals to catering services and everything in between, a personal loan can provide the necessary funds to create the wedding of your dreams.
• Emergencies: Unexpected expenses can arise at any time, and a personal loan can help you navigate these financial challenges. Whether it’s a sudden home repair or an unexpected car expense, a personal loan can provide the necessary funds to address these emergencies.

Personal loans offer flexibility and convenience, allowing you to use the funds for various purposes. As with any loan, it’s important to borrow responsibly and ensure that you can comfortably manage the loan repayment. Consider your financial goals and needs carefully to determine if a personal loan is the right choice for you.

How to Compare Personal Loans

When comparing personal loans, it’s crucial to consider several factors that can help you find the best loan option for your needs. By evaluating key elements such as APR, monthly payment, fees, funding time, payment flexibility, and other features, you can make an informed decision about the most suitable loan for you.

1. Compare APR

Start by comparing the Annual Percentage Rate (APR) of different loan options. The APR includes both the interest rate and any applicable fees, giving you a comprehensive view of the loan’s cost. A lower APR usually indicates a more affordable loan.

2. Evaluate Monthly Payment

Consider the monthly payment you’ll be responsible for. This payment is determined by factors such as the loan amount, interest rate, and repayment term. Make sure the monthly payment aligns with your budget and financial goals.

3. Take Note of Fees

Review any associated fees for the loan, such as origination fees or late fees. These fees can impact the overall cost of the loan and should be taken into account when comparing options.

4. Consider Funding Time

If you need the funds quickly, the funding time is an essential factor to consider. Some lenders offer quick funding, while others may require more time. Ensure the loan’s funding time aligns with your financial needs.

5. Evaluate Payment Flexibility and Other Features

Take into account the payment flexibility and other features offered by different lenders. Some lenders may provide rate discounts for certain qualifications or additional repayment options that suit your financial situation. These features can help you make a decision when comparing loan options.

By carefully considering these factors, you can compare personal loans effectively and select the option that best meets your financial needs and goals.

Before You Get a Personal Loan

Before applying for a personal loan, it’s important to take some preparatory steps to ensure you make the best borrowing decision. Here are some key factors to consider:

1. Check Your Credit Score

Start by checking your credit score to understand your borrowing options. Your credit score plays a crucial role in determining the interest rates and loan terms you may qualify for. You can access your credit score for free through various online platforms.

2. Compare Different Lenders and Loan Products

It’s essential to compare different lenders and loan products to find the best fit for your needs. Consider factors such as interest rates, repayment terms, and any fees associated with the loan. Online tools and platforms can help you compare options quickly and easily.

3. Find a Co-Applicant

If your credit score is not strong enough to qualify for favorable loan terms, consider finding a co-applicant with a better credit history. A co-applicant can boost your chances of loan approval and may help secure lower interest rates.

4. Consider a Secured Loan

Secured personal loans require collateral, such as a car or savings account, which can potentially result in lower interest rates. If you have valuable assets that you are willing to use as collateral, a secured loan may be an option worth considering.

5. Assess Your Financial Well-Being

Before taking on additional debt, assess your overall financial well-being. Consider factors such as your income, existing debts, and monthly expenses. Determine whether adding a personal loan payment into the mix aligns with your financial goals and ability to repay.

By following these steps, you can better prepare yourself for the personal loan application process and make a more informed borrowing decision.

How to Get a Personal Loan

Getting a personal loan involves a step-by-step process that starts with reviewing your credit report and ends with submitting your application. Here’s a breakdown of the personal loan application process:

1. Review your credit report: Before applying for a personal loan, it’s important to review your credit report for any errors or past-due accounts. Ensuring the accuracy of your credit report can improve your chances of loan approval and help you understand which lenders might be the best fit for your credit profile.
2. Calculate your payments: Determine the monthly payments you can afford based on your budget. This will help you narrow down your loan options and ensure you can comfortably repay the loan.
3. Pre-qualify with multiple lenders: To compare loan offers without impacting your credit score, pre-qualify with multiple lenders. This process involves providing basic information about your financial situation, and the lender will provide you with an estimate of the loan terms you are likely to be offered.
4. Gather necessary documents: Before applying for a personal loan, gather the necessary documents, such as proof of income, identification, and any other documents requested by the lender. Having these documents ready will expedite the application process.
5. Submit your application: Complete and submit your personal loan application. Be prepared for the possibility of a hard credit check, which may temporarily impact your credit score.
   

Once you have submitted your application, the lender will review it and make a decision on your loan. If approved, you can expect to receive the funds within a few days.

How to Manage a Personal Loan

Managing a personal loan requires responsible financial management and timely repayment. By making on-time monthly payments throughout the loan term, you can maintain a positive credit score and avoid additional fees or collection actions. Here are some essential steps to effectively manage your personal loan:

1. Make on-time payments: Ensure that you make your monthly payments on or before the due date to avoid any negative impact on your credit score. Set up automatic payments or reminders to help you stay on track.
2. Stay within your budget: Create and stick to a monthly budget to ensure you have enough funds to cover your loan payments along with other financial obligations.
3. Communicate with your lender: If you encounter financial setbacks or difficulties that may affect your ability to make payments, reach out to your lender as soon as possible. Open communication can help you explore hardship options and potential solutions.
4. Inquire about hardship options: In case of financial setbacks, such as job loss or unexpected expenses, inquire about hardship options with your lender. They may offer deferral or forbearance programs that allow you to temporarily pause or reduce your loan payments until you regain financial stability.

Remember, maintaining a good relationship with your lender through open communication is crucial. It can help you navigate any challenges that arise during the repayment process and ensure a successful loan experience.

Online Personal Loan Companies Reviewed by NerdWallet

NerdWallet has conducted comprehensive reviews of online personal loan lenders to identify the best options for borrowers with excellent credit. These reputable lenders offer fast approval and funding, flexible payment options, and attractive features that can help borrowers save money.

One of the key advantages of online personal loan lenders is the convenience they offer. Borrowers can complete the entire application process online, without the need to visit a physical branch. This streamlined process allows for faster approval and funding, ensuring that borrowers can access the funds they need quickly.

In addition to providing fast approval and funding, online personal loan lenders also offer flexible payment options. Borrowers have the flexibility to choose a repayment term that suits their financial situation, whether it’s a shorter term for faster repayment or a longer term for lower monthly payments.

NerdWallet’s reviewed lenders also offer attractive features such as rate discounts and no fees. These features can help borrowers save money over the life of the loan, making them an excellent choice for those with excellent credit.

Featured partner offers:

1. Company A: This lender offers competitive interest rates and flexible repayment terms. With a minimum credit score requirement of 720, borrowers with excellent credit can qualify for higher loan amounts and lower interest rates. Repayment terms range from 2 to 7 years, providing flexibility for borrowers to choose the term that suits their financial goals.
2. Company B: This lender specializes in fast approval and funding, making it an excellent option for borrowers who need the funds quickly. With flexible payment options and no fees, borrowers can access the funds they need without unnecessary costs.
3. Company C: Known for its exceptional customer service, this lender offers a wide range of repayment options to accommodate different budgets. Borrowers can choose from monthly, bi-weekly, or weekly payments, depending on their preference and financial situation.

By reviewing and comparing online personal loan lenders, borrowers with excellent credit can find the best options that meet their needs for fast approval and funding, flexible payment options, and attractive features. It’s essential to evaluate the various lenders’ terms and offerings to make an informed decision that aligns with their financial goals.

Types of Personal Loans and How to Compare

When considering personal loans, it’s important to understand the different types available and how to compare them effectively. Personal loans can be categorized into secured and unsecured loans, each with its own features and considerations.

Secured Personal Loans:

• Secured personal loans require collateral, such as a house or car, to secure the loan.
• Collateral reduces the lender’s risk, allowing for lower interest rates compared to unsecured loans.
• Secured loans may have more flexible qualification requirements, making them accessible to a wider range of borrowers.

Unsecured Personal Loans:

• Unsecured personal loans do not require collateral.
• These loans generally have higher interest rates compared to secured loans.
• Qualification requirements for unsecured loans may be stricter, typically focusing on factors like credit score and income.

When comparing personal loans, consider the following factors:

1. Permitted loan uses: Determine if the loan allows for the specific purpose you have in mind, such as debt consolidation or home improvement.
2. Qualification requirements: Understand the criteria lenders consider for approval, including credit score, income, and debt-to-income ratio.
3. Loan amounts: Evaluate the range of loan amounts offered by different lenders to ensure it aligns with your financing needs.
4. Repayment terms: Consider the duration of the loan and the associated monthly payments to find a term that suits your budget.
5. Interest rates: Compare interest rates to find the most competitive option, keeping in mind that secured loans generally offer lower rates.
6. Loan fees: Be aware of any fees associated with the loan, such as origination fees or prepayment penalties.
7. Time to fund: If you’re in urgent need of funds, check how quickly the lender can disburse the loan.
8. Customer support options: Research the customer support options provided by the lender, such as online chat, phone support, or in-person assistance.

By evaluating these factors, you can make an informed decision and select the personal loan that best fits your needs. Take the time to compare lenders and loan offerings to ensure you secure the most favorable terms and save money in the long run.

Conclusion

When considering personal loans, it is crucial to weigh key factors such as the annual percentage rate (APR), loan term, loan amount, qualification requirements, and customer support options. By assessing your financial situation and needs, comparing loan options from various lenders, and selecting the loan that best aligns with your goals, you can make an informed choice that suits your specific requirements.

By dedicating time to research and compare personal loans, you can find the best option for your needs and potentially save a significant amount of money in the long run. Evaluating the APR allows you to understand the total cost of the loan, while considering the loan term and amount ensures you can comfortably manage the monthly payments.

Qualification requirements and customer support options also play a crucial role in finding the best loan. Understanding what lenders look for in terms of credit score, income, and debt-to-income ratio can help you gauge your eligibility. Additionally, having access to helpful customer support can make the loan application and repayment process smoother.