Top Best Lenders for Personal Loans Compared

A personal loan can be useful for covering significant expenses, emergencies, or consolidating debt. However, it can be overwhelming to find the right lender and navigate through the various options available. That’s where NerdWallet’s comprehensive guide comes in. We have compared different lenders to help you decide based on your unique needs and financial goals.

Our team at NerdWallet collects extensive data from over 35 financial institutions, considering factors such as credit score, credit report, and debt-to-income ratio to determine the best personal loan rates. With rates typically ranging from 6% to 35.99%, borrowers with better credit scores often qualify for lower interest rates.

Each lender offers unique features that can improve your borrowing experience. Before deciding, comparing APR, monthly payments, fees, funding time, payment flexibility, and any other consumer-friendly features is essential.

Whether you’re seeking a personal loan for a significant purchase, debt consolidation, or unexpected expenses, our guide will provide the necessary information to find the best lenders. Keep reading to discover the top lenders in the industry and make a well-informed financial decision.

What is a Personal Loan?

A personal loan is an unsecured loan that provides a lump sum of money repaid through fixed monthly payments. Unlike secured loans, personal loans do not require collateral like a house or car. Personal loans can range from $1,000 to $100,000 and are typically repaid over two to seven years. To determine eligibility, lenders assess credit score, credit report, and debt-to-income ratio. Personal loans can be used for various purposes, making them flexible for different financial needs.

How to Compare Personal Loans

When comparing personal loans, consider several factors to ensure you choose the best option for your financial needs. You can make an informed decision that aligns with your budget and repayment goals by assessing key metrics such as APR, monthly payment, fees, funding time, and payment flexibility.

1. APR (Annual Percentage Rate):

The APR represents the overall cost of the loan, including the interest rate and any fees. It is a crucial metric for comparing the cost of different loans. Opt for a lower APR to save money and make your loan more affordable in the long run.

2. Monthly Payment:

Consider the monthly payment based on the loan amount, interest rate, and repayment term. Ensure that the monthly payment fits comfortably within your budget so that you can consistently meet your repayment obligations.

3. Fees:

Evaluate the loan fees, such as origination fees or prepayment penalties. Ensure that these fees do not significantly impact the total loan amount or make the loan less desirable.

4. Funding Time:

If you require quick access to funds, pay attention to the funding time the lenders offer. Some lenders provide fast funding options, while others may have a longer processing time. Choose a lender that aligns with your timing requirements.

5. Payment Flexibility:

Payment flexibility allows you to modify your payment schedule or pause payments temporarily in case of financial hardships. Look for lenders that offer flexibility in payment options, ensuring you have the flexibility you need in unforeseen circumstances.

By comparing personal loans based on these factors, you can make an informed decision that suits your financial goals and ensures a smooth borrowing experience. Remember to thoroughly evaluate each loan offer before deciding to secure the best possible terms and conditions for your loan.

How to Get a Personal Loan

Getting a personal loan involves a few key steps to ensure a successful application process. By following these guidelines, you can increase your chances of obtaining the loan you need.

1. Review Your Credit Report: Start by obtaining a copy of your credit report and checking for errors or inaccuracies. Correcting any mistakes can help improve your credit score.
2. Improve Your Credit Score: If your credit score is lower than desired, improve it. Paying bills on time and reducing your debt can positively impact your creditworthiness.
3. Pre-Qualify with Multiple Lenders: Many lenders offer pre-qualification, which allows you to check rates and estimated payments without affecting your credit score. Pre-qualifying with multiple lenders also helps you compare offers and find the best terms.
4. Complete the Loan Application: Once you’ve found a lender that meets your needs, complete the loan application. This typically requires providing documents such as proof of income and identification.
5. Plan for Repayment: Before accepting the loan, create a repayment plan based on your budget and financial goals. This will help ensure that you can comfortably meet the monthly payments.
6. Reach Out in Financial Setbacks: In case of financial setbacks or difficulties in making payments, it’s essential to contact your lender promptly. They may offer hardship options such as deferring payments temporarily.

Once your loan application is approved, you can expect to receive the funds within a few days. Remember to use the loan responsibly and make timely payments to maintain a good credit history.

How to Manage a Personal Loan

Managing a personal loan involves careful financial planning and timely payment management to ensure a smooth borrowing experience. By following these essential tips, you can navigate the loan repayment process effectively and avoid potential setbacks.

Maintain On-Time Payments

One of the most crucial aspects of managing a personal loan is making on-time monthly payments. Setting a reminder or scheduling automatic payments can help ensure that you never miss a payment. By paying on time, you not only maintain a positive credit history but also avoid any late fees or penalties that may be incurred.

Create a Realistic Budget

Incorporate your loan payments into your monthly budget to ensure you can comfortably meet your payment obligations. Assessing your income, expenses, and other financial commitments is essential to avoid financial strain. By planning, you can allocate funds appropriately and efficiently to make your loan payments.

Reach Out in Case of Financial Setbacks

If you encounter unforeseen financial challenges or setbacks, such as a job loss or a medical emergency, it’s crucial to communicate with your lender immediately. Many lenders offer hardship programs or temporary deferral options that can provide temporary relief. By proactively contacting your lender, you can explore alternatives to help manage your loan during difficult times.

Have a Repayment Plan

It’s essential to have a clear repayment plan in place from the start. Determine how long it will take to pay off your loan and set milestones. Monitoring your progress will help you stay motivated and focused on clearing your debt. Additionally, consider making extra payments whenever possible to reduce the interest you’ll pay over the loan term.

Managing a personal loan requires responsible financial habits, regular communication, and proactive planning. By making on-time payments, sticking to a budget, and staying in touch with your lender, you can navigate your personal loan journey smoothly and achieve your financial goals.

Best Lenders for Excellent-Credit Borrowers

Regarding personal loans, excellent credit borrowers can access the best deals and rates in the market. Here are some of the top lenders that cater specifically to borrowers with excellent credit:

1. SoFi: SoFi is widely regarded as the best overall lender for personal loans. They offer competitive rates, no fees, and even provide rate discounts for borrowers with excellent credit scores.
2. LightStream: LightStream is known for offering low-interest rates to borrowers with excellent credit. They provide a seamless borrowing experience and flexible terms to suit individual needs.
3. LendingPoint: While LendingPoint is an excellent choice for borrowers with below-average credit, it also offers attractive options for those with excellent credit. It stands out for its fast funding and personalized service.
4. Upgrade specializes in working with borrowers with bad credit. However, it also provides competitive rates for borrowers with excellent credit. Its streamlined application process makes borrowing quick and easy.
5. Universal Credit: Universal Credit is an excellent option for borrowers who want to compare multiple offers in one place. Their user-friendly platform simplifies the loan comparison process for excellent-credit borrowers.

Additionally, there are other lenders with unique features that may be appealing to borrowers with excellent credit:

• Discover: Discover offers a unique feature where borrowers can benefit from no interest if the loan is repaid within 30 days. This feature makes them an attractive choice for borrowers who prefer short-term loans.
• Upstart: Upstart specializes in smaller loans starting at $1,000. It is an ideal option for excellent-credit borrowers who need a smaller amount of funds.
• Avant: Avant is known for providing borrowers with various repayment options to suit individual needs. They offer flexibility regarding loan amount, repayment period, and interest rates.

These lenders stand out for their excellent offerings and tailored services for borrowers with excellent credit. If you have an excellent credit score, exploring these options can help you secure the best personal loan for your financial needs.

Best Personal Loan Options According to Forbes Advisor

When finding the best personal loan options, relying on reliable and unbiased ratings is essential. Forbes Advisor offers comprehensive evaluations to help borrowers make informed decisions. Here are some of the top personal loan providers recommended by Forbes Advisor:

1. SoFi: Rated as the best overall personal loan provider, SoFi offers competitive rates, no fees, and rate discounts. It also provides a range of loan options to suit different needs.
2. LightStream: Known for offering the best interest rates, LightStream offers low rates for borrowers with solid credit profiles and a wide range of loan amounts and terms.
3. LendingPoint: If you need fast funding and have below-average credit scores, LendingPoint is recommended. They provide quick approval and funding for borrowers in need of immediate funds.
4. Upgrade: Considered the best option for borrowers with bad credit, Upgrade provides personal loans to those with lower credit scores. They offer flexible repayment terms and may help borrowers improve their credit.
5. Universal Credit: If you want to compare multiple loan offers, Universal Credit is recommended. They allow borrowers to receive and compare various loan options from different lenders.
6. Discover: Discover offers a unique feature that allows borrowers to avoid paying interest if the loan is repaid within 30 days. They also provide flexible repayment options.
7. Upstart: If you’re looking for smaller loan amounts, Upstart specializes in loans as low as $1,000. They offer quick approval and funding for borrowers with various credit profiles.
8. Avant: Avant provides a range of repayment options based on borrower preferences. It caters to different credit profiles and offers personal loans with flexible terms.

Consider factors like interest rates, fees, repayment terms, and loan amounts to find the best personal loan option. Forbes Advisor’s unbiased ratings can help you make an informed decision and choose the option that suits your financial goals.

How to Choose the Best Personal Loan

When finding the best personal loan, it’s essential to consider several crucial factors. Considering these key elements, you can make an informed decision aligning with your financial goals and needs.

1. Pre-qualification: Start by utilizing the pre-qualification process offered by various lenders. This allows you to compare loan offers without hurting your credit score. This valuable tool will evaluate multiple options and determine the best fit.
2. APR: The Annual Percentage Rate (APR) is a critical metric that represents the total cost of the loan, including both the interest rate and any associated fees. Comparing APRs will help you understand the overall expense of each loan option and choose the most cost-effective one.
3. Funding Time: If you need quick access to funds, funding time becomes crucial. Some lenders can provide funds within a few business days, while others may take longer. Assess your urgency and choose a lender with a funding time that meets your needs.
4. Loan Amount: Determine your required loan amount to meet your financial goals. Different lenders may have varying minimum and maximum loan amounts. Ensure that your lender can provide the necessary funds to fulfil your needs.
5. Special Features: Consider any particular features or benefits offered by the lenders. These could include rate discounts, financial planning services, or flexible repayment options. Find a lender that provides features that align with your preferences and can add value to your borrowing experience.

By carefully considering these factors, you can choose the personal loan that best aligns with your financial situation and goals. Remember to evaluate pre-qualification offers, compare APRs, assess funding time, determine the necessary loan amount, and take advantage of unique features that enhance your borrowing experience.

Personal Loan Interest Rates and Fees

Understanding a personal loan’s interest rates and fees is crucial for making an informed borrowing decision. Personal loan interest rates can vary depending on credit score, income, and debt-to-income ratio. These rates determine how much you’ll be paying in addition to the loan amount.

The Annual Percentage Rate (APR) is an essential metric to consider. It encompasses both the interest rate and any fees associated with the loan. By comparing APRs, you can understand the total cost of borrowing from different lenders. Keep in mind that a lower APR signifies a more affordable loan.

Additionally, it’s essential to know the various fees that might accompany a personal loan. Standard fees include origination fees, late payment fees, and charges for insufficient funds. These fees can significantly impact the overall cost of the loan, so it’s essential to review and understand them.

On average, personal loan interest rates range from 12.42% for those with excellent credit to 21.10% for individuals with lower credit scores. Different lenders may offer varying rates, so comparing options is crucial in finding the best interest rates and fees.

To give you a visual representation, here’s a comparison table showcasing average interest rates for personal loans based on credit scores:

Understanding the interest rates and fees associated with personal loans can help you make a more informed borrowing decision that aligns with your financial goals.

Best Place to Get a Personal Loan

Several options exist for obtaining a personal loan, including online lenders, banks, and credit unions. Choosing the best place to get a personal loan depends on various factors such as convenience, interest rates, and in-person support.

Online lenders offer fast and convenient loan application processes, allowing borrowers to easily apply for a personal loan from the comfort of their own homes. With online lenders, borrowers can typically complete the entire loan application process online, from submitting documentation to receiving funds.

On the other hand, banks and credit unions provide a more personalized approach to obtaining a personal loan. These financial institutions often have physical branches where borrowers can meet with loan officers, discuss their financial needs, and receive guidance throughout the loan application process.

Critical Considerations for Choosing the Best Place to Get a Personal Loan:

• Convenience: Online lenders offer the convenience of applying for a personal loan from anywhere at any time, while banks and credit unions provide a more traditional and in-person experience.
• Interest Rates: Compare interest rates among different lenders to ensure you get the most favourable terms for your loan.
• In-Person Support: If you prefer face-to-face interactions and personalized assistance during the loan application process, banks and credit unions may be your best option.

Ultimately, the best place to get a personal loan is a decision that depends on your individual preferences and financial needs. Consider the convenience, interest rates, and in-person support offered by online lenders, banks, and credit unions to make an informed choice.

Conclusion

Personal loans provide a versatile solution for various financial needs, from unexpected emergencies to consolidating debt or making home improvements. Thorough comparison is essential when seeking the best lender for personal loans. Factors such as interest rates, APR, fees, funding time, and payment flexibility should all be considered.

Individual financial situations and goals play a significant role in determining the optimal lender. Assessing personal needs and preferences is crucial to make an informed decision. By comparing lenders and their offerings, borrowers can find the best match for their loan requirements.

Personal loans can be valuable, but responsible borrowing is paramount. While securing a loan, borrowing only what is necessary and developing a repayment plan is essential. By exercising caution and choosing the right lender, borrowers can access the financial support they need while maintaining their overall economic health.