A personal loan is money you borrow to cover a large, one-time expense and repay with interest in monthly installments. Compared to credit cards, it can be a cheaper way to finance a big project like a home improvement or to consolidate debt.
But in a time of relatively high interest rates, getting the lowest rate and no fees requires near-perfect credit. But according to Finder’s Consumer Confidence Index, that hasn’t stopped the 34% of Americans who have or plan to get a personal loan in 2024.
While rates on personal loans typically range from 6% to 35.99%, the average personal loan interest rate is 12.35% as we near July. Some lenders also charge origination fees which can push up the APR, but if you have very good to excellent credit, you shouldn’t have to pay these.
The lenders in this list offer some of the most competitive rates and terms available today, with options for all credit types.
The Finder Score crunches 6+ types of personal loans across 50+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
50+ personal loan lenders reviewed and rated by our team of experts
6+ types of personal loans analyzed
Evaluated under our unbiased rating system covering 9 categories
20+ years of combined experience covering financial topics
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LightStream offers some of the lowest rates out there, with no origination or other fees. Its Rate Beat program promises a rate .10% below any competitor's unsecured loan rate if you're approved for that lower rate. It also has a generous 0.5% autopay discount if you set this up before funding and offers a $100 satisfaction guarantee. But you may struggle to qualify if you don't have good credit. You also can't check your rate without affecting your credit, as it doesn't offer prequalification.
Why it's one of the best
Best rate guarantee. LightStream's Rate Beat program can help ensure you're getting the lowest rate possible on your personal loan. Only unsecured loan rates qualify.
No origination fees. Unlike some lenders, LightStream nevers charges origination fees, which means you get the full amount you qualify for at funding time.
Flexible amounts and uses. LightStream offers loans up to $100,000 that can be used for most expenses, including debt consolidation, home improvements, medical expenses, adoption, tiny home financing and more.
Min. credit score
660
APR
7.49% to 25.49%
Loan amount
$5,000 to $100,000
LightStream offers some of the lowest rates out there, with no origination or other fees. Its Rate Beat program promises a rate .10% below any competitor's unsecured loan rate if you're approved for that lower rate. It also has a generous 0.5% autopay discount if you set this up before funding and offers a $100 satisfaction guarantee. But you may struggle to qualify if you don't have good credit. You also can't check your rate without affecting your credit, as it doesn't offer prequalification.
Why it's one of the best
Best rate guarantee. LightStream's Rate Beat program can help ensure you're getting the lowest rate possible on your personal loan. Only unsecured loan rates qualify.
No origination fees. Unlike some lenders, LightStream nevers charges origination fees, which means you get the full amount you qualify for at funding time.
Flexible amounts and uses. LightStream offers loans up to $100,000 that can be used for most expenses, including debt consolidation, home improvements, medical expenses, adoption, tiny home financing and more.
Unlike most personal loan lenders, Upstart accepts credit scores as low as 300, making it ideal for people who haven't built up a credit history yet. That's because it uses more than just your credit to make a decision — your employment history and education also play a role. However, Upstart's application asks for more information that you might otherwise give a lender, like your SAT score, in some cases. And while there is technically no credit score minimum, most Upstart borrowers have a score in the high 600s.
Why it's one of the best
Holistic underwriting process. Upstart is one of the few lenders that takes into account your education and career when making a decision, not just your credit score.
Job offer loans. You could possibly qualify for an Upstart loan with a job offer letter for a position starting in the next six months.
Prequalification available. Upstart offers online prequalification so you can check if you qualify for a loan without impacting your credit score.
Min. credit score
300
APR
7.40% to 35.99%
Loan amount
$1,000 to $50,000
Not available in: Connecticut, Iowa, Maine, Maryland, Nevada, New York, Oklahoma, Oregon, West Virginia
Unlike most personal loan lenders, Upstart accepts credit scores as low as 300, making it ideal for people who haven't built up a credit history yet. That's because it uses more than just your credit to make a decision — your employment history and education also play a role. However, Upstart's application asks for more information that you might otherwise give a lender, like your SAT score, in some cases. And while there is technically no credit score minimum, most Upstart borrowers have a score in the high 600s.
Why it's one of the best
Holistic underwriting process. Upstart is one of the few lenders that takes into account your education and career when making a decision, not just your credit score.
Job offer loans. You could possibly qualify for an Upstart loan with a job offer letter for a position starting in the next six months.
Prequalification available. Upstart offers online prequalification so you can check if you qualify for a loan without impacting your credit score.
OneMain Financial is highly rated lender that doesn't have a minimum credit score requirement, making it ideal for bad and poor credit borrowers. While its interest rates start higher than some of its competitors, it caps its rates at 35.99%. While still high, it may not be a bad deal for borrowers with poor credit – as its rates are much lower than payday and installment loans. You may also be able to secure your loan with collateral to get a lower interest rate. But it's still expensive compared to some other lenders, especially if you have good credit.
Why it's one of the best
Bad credit ok. OneMain Financial doesn't have a set credit score requirement, which means you could qualify even with bad credit.
Options to lower your rate. Unlike many lenders, OneMain Financial accepts collateral and co-signers on its loans which could help lower your rate.
Physical locations. OneMain Financial has more than 1,300 branches nationwide if you prefer in-person service.
Min. credit score
Not specified
APR
18% to 35.99%
Loan amount
$1,500 to $20,000
Not available in: Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island, Vermont
OneMain Financial is highly rated lender that doesn't have a minimum credit score requirement, making it ideal for bad and poor credit borrowers. While its interest rates start higher than some of its competitors, it caps its rates at 35.99%. While still high, it may not be a bad deal for borrowers with poor credit – as its rates are much lower than payday and installment loans. You may also be able to secure your loan with collateral to get a lower interest rate. But it's still expensive compared to some other lenders, especially if you have good credit.
Why it's one of the best
Bad credit ok. OneMain Financial doesn't have a set credit score requirement, which means you could qualify even with bad credit.
Options to lower your rate. Unlike many lenders, OneMain Financial accepts collateral and co-signers on its loans which could help lower your rate.
Physical locations. OneMain Financial has more than 1,300 branches nationwide if you prefer in-person service.
Pros
Same day debit card funding
All credit scores accepted
Offers secured loans which could help lower your rate
Not all applicants will be approved. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). If approved, not all applicants will qualify for larger loan amounts or most favorable loan terms. Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Loan approval and actual loan terms depend on your state of residence and your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). APRs are generally higher on loans not secured by a vehicle. Highly-qualified applicants may be offered higher loan amounts and/or lower APRs than those shown above. OneMain charges origination fees where allowed by law. Depending on the state where you open your loan, the origination fee may be either a flat amount or a percentage of your loan amount. Flat fee amounts vary by state, ranging from $25 to $500. Percentage-based fees vary by state ranging from 1% to 10% of your loan amount subject to certain state limits on the fee amount. Visit omf.com/loanfees for more information. Loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z such as college, university or vocational expense; for any business or commercial purpose; to purchase cryptocurrency assets, securities, derivatives or other speculative investments; or for gambling or illegal purposes.
Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. North Dakota: $2,000. Ohio: $2,000. Virginia: $2,600.
Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: North Carolina: $7,500. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.
Example Loan: A $6,000 loan with a 24.99% APR that is repayable in 60 monthly installments would have monthly payments of $176.07.
Time to Fund Loans: Funding within one hour after closing through SpeedFunds must be disbursed to a bank-issued debit card. Disbursement by check or ACH may take up to 1-2 business days after loan closing.
MoneyLion is a free service that connects you with top lenders to find a personal loan tailored to your needs, whether it's for home improvement, debt consolidation, or unexpected expenses. Loans range from $500 to $100,000 depending on your credit score, income, and other factors. It also claims it can even help borrowers with less-than-stellar credit gain access to a loan.
To get started, you complete a quick and simple online application that won't impact your credit score. You'll receive multiple options based on your eligibility and requirements. These options allow you to easily compare rates, terms, and monthly payments.
However, reviews of the company are mixed. While Trustpilot and BBB reviews rate the company highly, there's also a BBB alert due to an ongoing pattern of complaints.
Why it's one of the best
Convenient. MoneyLion lets you compare multiple lenders with just a single form. This can save you the time and effort of searching individual lenders on your own.
Wide range of products. MoneyLion lets you compare a wide range of products, including personal loans, credit cards auto and student loan refinancing, cash advances and more.
No impact to credit score. Using MoneyLion is free and there's no impact to your credit score to compare lenders.
Min. credit score
Varies by lender
APR
Varies by lender
Loan amount
$500 to $100,000
Not available in: Colorado, Connecticut, New York, Vermont, West Virginia
MoneyLion is a free service that connects you with top lenders to find a personal loan tailored to your needs, whether it's for home improvement, debt consolidation, or unexpected expenses. Loans range from $500 to $100,000 depending on your credit score, income, and other factors. It also claims it can even help borrowers with less-than-stellar credit gain access to a loan.
To get started, you complete a quick and simple online application that won't impact your credit score. You'll receive multiple options based on your eligibility and requirements. These options allow you to easily compare rates, terms, and monthly payments.
However, reviews of the company are mixed. While Trustpilot and BBB reviews rate the company highly, there's also a BBB alert due to an ongoing pattern of complaints.
Why it's one of the best
Convenient. MoneyLion lets you compare multiple lenders with just a single form. This can save you the time and effort of searching individual lenders on your own.
Wide range of products. MoneyLion lets you compare a wide range of products, including personal loans, credit cards auto and student loan refinancing, cash advances and more.
No impact to credit score. Using MoneyLion is free and there's no impact to your credit score to compare lenders.
Pros
Compare lenders without affecting your credit score
Compared to other lenders, PenFed offers flexible loan amounts and competitive rates. You can apply for a loan starting at just $600 all the way up to $50,000. PenFed Credit Union accepts borrowers with credit scores as low as 580 and, like all federal credit unions, caps interest rates at 17.99% – instead of 36% like other types of personal loan lenders. To apply for a loan, you need to become a member – but it only requires that you open a savings account with $5 deposit.
Why it's one of the best
No origination fee. PenFed doesn't charge origination fees on its personal loans, which means you get the full amount you qualify for at funding time.
Easy membership requirements. Unlike other credit unions, PenFed Credit Union membership is open to everyone with just a $5 deposit.
Available in most states. PenFed offers loans in most states, making it possible to apply even if you don't live in a state with a physical branch.
Min. credit score
580
APR
8.99% to 17.99%
Loan amount
$600 to $50,000
Available in all states
Compared to other lenders, PenFed offers flexible loan amounts and competitive rates. You can apply for a loan starting at just $600 all the way up to $50,000. PenFed Credit Union accepts borrowers with credit scores as low as 580 and, like all federal credit unions, caps interest rates at 17.99% – instead of 36% like other types of personal loan lenders. To apply for a loan, you need to become a member – but it only requires that you open a savings account with $5 deposit.
Why it's one of the best
No origination fee. PenFed doesn't charge origination fees on its personal loans, which means you get the full amount you qualify for at funding time.
Easy membership requirements. Unlike other credit unions, PenFed Credit Union membership is open to everyone with just a $5 deposit.
Available in most states. PenFed offers loans in most states, making it possible to apply even if you don't live in a state with a physical branch.
Pros
No origination fee
Online application
Accepts fair credit
Interest rates capped at 17.99%
Cons
ACH transfers may not be available for every applicant
SoFi is one of the truly no-fee lenders out there, and doesn't charge a mandatory origination fee or any late payment fees. It offers competitive rates and loans up to $100,000 as soon as the same day you're approved. On top of this, SoFi borrowers can access perks like free financial planning and networking events. This makes it great for young professionals who want help establishing their career and building wealth. SoFi can also send money to your creditors directly if you want to consolidate debt and offers a 0.25% discount for choosing this option.
Why it's one of the best
No mandatory origination fee. Sofi doesn't charge a mandatory origination fee, but you could choose to pay one in exchange for reducing your rate.
Wide range of financial products. Sofi offers a wide range of financial products and services, including high APY checking and savings accounts, insurance, student loans, and more.
Member benefits. Sofi members can take advantage of multiple benefits like financial planning, rate discounts, travel services and military benefits.
Min. credit score
680
APR
8.99% to 29.99% fixed APR
Loan amount
$5,000 to $100,000
Available in all states
SoFi is one of the truly no-fee lenders out there, and doesn't charge a mandatory origination fee or any late payment fees. It offers competitive rates and loans up to $100,000 as soon as the same day you're approved. On top of this, SoFi borrowers can access perks like free financial planning and networking events. This makes it great for young professionals who want help establishing their career and building wealth. SoFi can also send money to your creditors directly if you want to consolidate debt and offers a 0.25% discount for choosing this option.
Why it's one of the best
No mandatory origination fee. Sofi doesn't charge a mandatory origination fee, but you could choose to pay one in exchange for reducing your rate.
Wide range of financial products. Sofi offers a wide range of financial products and services, including high APY checking and savings accounts, insurance, student loans, and more.
Member benefits. Sofi members can take advantage of multiple benefits like financial planning, rate discounts, travel services and military benefits.
Pros
0.25% autopay discount available
Same-day funding available
No fees or prepayment penalties
Cons
High $5,000 minimum loan
0.25% autopay discount only available with Sofi checking account and direct deposit
Fixed rates from 8.99% APR to 29.99% APR. APR reflects the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi Platform personal loans are made either by SoFi Bank, N.A. or , Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 3/06/23 and are subject to change without notice. Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. Loan amounts range from $5,000– $100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 9.99% of your loan amount for Cross River Bank originated loans which will be deducted from any loan proceeds you receive and for SoFi Bank originated loans have an origination fee of 0%-7%, will be deducted from any loan proceeds you receive. Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi. Direct Deposit Discount: To be eligible to potentially receive an additional (0.25%) interest rate reduction for setting up direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A. or eligible cash management account offered by SoFi Securities, LLC (“Direct Deposit Account”), you must have an open Direct Deposit Account within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled payroll direct deposits of at least $1,000/month to a Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion. This discount will be lost during periods in which SoFi determines you have turned off direct deposits to your Direct Deposit Account. You are not required to enroll in direct deposits to receive a Loan.
Discover can send funds directly to your creditors, making it easy to pay off high-interest debts. It also doesn't charge origination fees and can disburse your loan as soon as the next business day. But the maximum loan amount is low compared to other lenders on our list. And Discover charges a high late fee of $39 as soon as you miss a payment. Most lenders have a 15-day grace period.
Why it's one of the best
No origination fee. Discover doesn't charge origination fees on its personal loans, which means you get the full amount you qualify for with nothing deducted at funding time.
Low maximum rate. Unlike other lenders that charge up to 35.99% APR on personal loans, Discover's personal loan rates cap out 24.99% APR.
Pay creditors directly. If you're using funds for debt consolidation, Discover can pay your creditors directly to save you time.
Min. credit score
Good to excellent credit
APR
7.99% to 24.99%
Loan amount
$2,500 to $40,000
Available in all states
Discover can send funds directly to your creditors, making it easy to pay off high-interest debts. It also doesn't charge origination fees and can disburse your loan as soon as the next business day. But the maximum loan amount is low compared to other lenders on our list. And Discover charges a high late fee of $39 as soon as you miss a payment. Most lenders have a 15-day grace period.
Why it's one of the best
No origination fee. Discover doesn't charge origination fees on its personal loans, which means you get the full amount you qualify for with nothing deducted at funding time.
Low maximum rate. Unlike other lenders that charge up to 35.99% APR on personal loans, Discover's personal loan rates cap out 24.99% APR.
Pay creditors directly. If you're using funds for debt consolidation, Discover can pay your creditors directly to save you time.
Finder’s lending experts review more than 120 lenders against 16 key metrics to narrow down the best personal loans:
Minimum APR
Maximum APR
Origination fees
Minimum loan amount
Maximum loan amount
Minimum loan term
Maximum loan term
Number of states served
Minimum credit score
Joint application availability
Turnaround time
Online application availability
Prequalification process
BBB ratings
Trustpilot ratings
Other features, such as rate discounts
We weigh the lender’s minimum and maximum APR to focus on the best low-interest personal loans. And we regularly review our top selections as lenders enter and leave the market.
Honorable mentions
The following lenders could be a good option but didn’t quite measure up to our picks for the best in the category.
Runner-up for fair credit: Upgrade
Why it didn’t make the cut: Upgrade charges a 1.85% to 9.99% origination fee, which is high — especially for a lender that doesn’t work with bad credit borrowers.
This lender specializes in fast, fair-credit personal loans as an alternative to what you’d find at a bank.
Why it didn’t make the cut: This fair-credit lender charges slightly higher rates than Upstart and more heavily relies on credit scores.
While there’s a chance you won’t pay an origination fee at Prosper, this lender charges slightly higher APRs than Upstart — from 8.99% to 35.99%. Upstart’s unique credit rating system makes qualifying for a reasonable rate easier, even when your credit history is thin. So, while Prosper might accept credit scores as low as 600, Upstart may offer a better deal to fair-credit borrowers.
Why it didn’t make the cut: Happy Money’s rates run slightly higher than Discover, and it offers credit card consolidation only.
Happy Money (formerly Payoff) offers a niche product for credit card consolidation. But Happy Money rates start at a relatively high 11.72% APR, and an origination fee will apply — meaning you might not be able to save as much as with other lenders. It doesn’t consolidate different types of debt, which makes it more limited than our debt consolidation winner, Discover.
Over 200 respondents were polled on which lenders they would recommend. Credible received a straight 100% recommendation rate, and SoFi, Upgrade, Best Egg and Upstart weren’t far behind.
Lender
% of customers who recommend this lender
Credible
100%
SoFi
88.89%
Upgrade
87.50%
Best Egg
83.33%
Upstart
78.57%
Other
74.50%
How to compare personal loans
Keep in mind these top factors to find the best personal loan for your budget and needs:
Review the requirements, especially the minimum credit score, to help avoid lenders you are ineligible for.
Look at the APR to compare costs quickly. This number represents the interest and fees you’ll pay over one year.
Consider origination fees to weigh the upfront cost of the loan. Lenders typically deduct this from the funds before you receive them or add it to your balance.
Rule out lenders that don’t offer the loan amount you’re looking for to avoid overborrowing.
Look for a repayment term that offers affordable monthly payments. Use our personal loan calculator to see how the term affects your payments.
Assess the lender’s reputation by reading vetted customer reviews on sites like the Better Business Bureau and Trustpilot.
Also, consider how the application process meets your needs by looking at factors like the turnaround time and whether you can apply online. When you’ve narrowed your choices, prequalify with your top picks to compare personalized offers — if those lenders offer prequalification.
When to get a personal loan
Ideally, a personal loan should help you save money or even increase your wealth. The most common way to use a personal loan is to consolidate debt or invest in a home improvement.
Debt consolidation involves getting a loan to pay off one or more credit accounts. According to LendingTree, the average credit card rate is 24.80%, nearly 13% higher than the average personal loan. That means you can likely save on interest and get out of debt more quickly by using a personal loan to pay down your accounts.
A personal loan’s low, fixed rates make it great for minor home improvements, such as renovating a bathroom, that can increase your home’s equity by inflating its value.
When to avoid a personal loan
A personal loan can be a lifesaver to help cover a medical or emergency expense, but it might not be the best choice in a pinch.
Personal loan monthly payments are the same every month, which can strain your budget if your income changes. Payment flexibility can be essential as 43% of Finder’s Consumer Confidence Index respondents are stressed about personal loan payments, while only 34% worry about credit card debt.
How to get a lower rate on your personal loan
Use the following strategies to get the lowest interest rate possible on a personal loan.
Watch our 60 second video below!
Increase your credit score
Check your credit score online to understand the number your lender will see.Most personal loans require a FICO score of 670 or higher. If your FICO score is below 670, consider improving your credit by paying your bills on time, reducing debt and correcting any inaccuracies on your credit reports.
Consider an alternative lender
Not all lenders rely solely on your FICO score to determine your creditworthiness. Some, like Upstart, have found their algorithms are more accurate in predicting your likelihood of defaulting on a loan. That allows lenders to specialize in specific borrowers — in Upstart’s case, young professionals who haven’t had the chance to build a strong credit history.
You still need strong personal finances to qualify with these lenders, but these alternative credit scoring methods offer more ways to highlight financial strengths, like a consistent savings habit.
Apply for a shorter term
Lenders tend to offer lower interest rates for short-term loans. For example, SoFi provides the lowest personal loan rates on two-year loans, while rates for their seven-year loans can be more than 5% higher.
The gap is tighter at LightStream, where seven-year loan rates are almost 4% higher than their two-year loans.
Apply with a federal credit union
The National Credit Union Administration (NCUA) bars federal credit unions from charging more than 18% interest. This maximum rate is regularly updated by the NCUA board, which could extend the cap or increase it on September 10, 2024.
But even if the rate increases a percentage point or two, it’s still lower than the average rates of many other lenders. For example, the average interest rate on Upstart personal loans is 26.57%, even though it offers rates as low as 7.4% APR.
Stick with your bank
Your bank might offer a relationship discount on your interest rate if you have a current checking or savings account. Banks can offer discounts as high as 0.5%, and using your own bank may also help you get your loan funds faster.
Sign up for autopay
Some lenders offer a 0.25% rate discount if you sign up to have payments automatically debited from your account. This rate can be on top of your other relationship discounts if you use autopay for a loan from your current bank.
Look for low-rate guarantees
Lenders like LightStream don’t just offer competitive rates but also guarantee to beat other lenders if your offer meets specific requirements.
Shop around
Don’t just go with the first loan offer you find. Comparing lenders can sometimes lead you to an even better deal.
Prequalifying for a loan allows you to see what kind of loan you can qualify for based on some basic financial and credit information. Because it usually involves a soft credit check, it doesn’t affect your credit score — unlike an application. There’s no guarantee you’ll get the rates and terms quoted, but prequalifying can give you an idea of the kind of offer you might receive.
If you decide to pursue the personalized offer after prequalification, the lender moves forward with a hard credit pull and asks you to provide more documents for loan approval.
Most lenders offer calculators that allow you to enter your own financial details to see the rates you qualify for without going through the prequalification process, but the results you get won’t be as accurate and aren’t binding.
Where to get a low-interest personal loan
While banks are a traditional choice for borrowing money, you can get a personal loan from various lenders, including digital lenders and fintechs.
Lender type
Details
Credit unions
Customer-owned institutions that offer low rates to a wide range of credit types compared to other lenders. Federal credit unions legally can’t charge rates over 18%.
Banks
Offers some of the lowest rates out there with a credit score of at least 670 to qualify — and some only offer loans to current customers.
Online lenders
Lenders may offer higher rates on average, but typically put less weight on credit score than a bank or credit union.
Connection services
Helps you prequalify with partner lenders to find the lowest rate you qualify for.
How fees affect your rate
Your APR is not just your interest rate. It includes the interest and fees you’d pay over one year, giving you a more accurate idea of your loan’s cost.
The main fee that factors into your APR is the origination fee, which can run between 1% and 10% of your loan amount. Lenders include this in the APR because it applies to every borrower as part of the closing process.
However, your APR doesn’t include fees that borrowers might have to pay. Prepayment penalties, which some lenders charge if you repay your loan early to compensate for lost earnings on interest, don’t affect your APR since not all borrowers must prepay their loan. The same goes for late and insufficient funds fees — these only apply if you miss a payment.
We use APR to provide an apples-to-apples way to compare the cost of a loan for most borrowers. But it’s worth considering other fees if you think there’s a chance they might apply. If you’re considering prepaying the loan, ask the lender how it calculates interest. Some lenders front-load interest payments so that you won’t be able to save much by paying off the loan early, even if there isn’t a prepayment penalty.
Can I get a no-fee personal loan?
Borrowers with good or excellent credit scores above 670 can find a lender that doesn’t charge fees. When interest rates were lower, the best lenders didn’t charge origination fees, prepayment penalties, late or NSF fees. However, no-fee personal loans were not available to borrowers with fair or bad credit. With a credit score below 670, you would likely need to pay an origination fee — if you qualify for a loan.
But no-fee personal loans have become difficult to find since the Federal Reserve raised interest rates. That’s because they increase the cost to fund a loan. Some lenders that previously offered no-fee personal loans, like Marcus by Goldman Sachs, have pulled back from the personal lending space altogether, while others have added fees.
A no-fee personal loan may not spell savings in the current economic climate. SoFi, known for its strict no-fee policy, offers personal loans with fees in exchange for lower APRs.
Your credit score is one of the most important factors that lenders use to determine the interest rates you qualify for. The two credit scoring models are FICO and VantageScore 4.0.
It’s not a perfect science, and FICO and VantageScore have some differences. Still, your credit scores help predict what interest rates you may receive.
If you need your money fast, you can find lenders that fund your loan in 24 hours or less. But you may be trading a more competitive interest rate for a quicker turnaround time.
Consider the following factors that could affect how quickly your loan gets funded:
Eligibility requirements. Choose a loan option that you can easily qualify for for faster turnaround.
Loan amount. If the amount you need is too close to a lender’s maximum loan amount, you may have to jump through additional hoops, adding time to the underwriting process.
Employment. Self-employed borrowers and those who work irregular hours may have to spend more time proving their income.
Doing your research and having your documents in order can also help move things along.
Planning how to manage your loan payments can give you more confidence as you apply.
Keep in mind these three loan management features:
Sign up for automatic payments to save money on interest and late fees. But make sure you budget for the new payment to ensure the money’s in your account on the payment day each month.
Check your loan agreement for prepayment penalties to ensure you won’t take a financial hit if you pay off your loan early.
Check out your lender’s forbearance program to see whether you can pause your payments if a hardship makes you unable to repay for a few months. These programs can make your loan more expensive but help keep you from defaulting.
Personal loan alternatives
A personal loan may not be the best option in all situations — especially when rates are high and it’s challenging to qualify for a low rate.
Consider four alternatives before you apply:
Home equity lines of credit (HELOCs) allow you to open a line of credit secured against your home equity and access funds as needed. They typically have lower rates than personal loans, but you risk foreclosure if you default.
Personal lines of credit work like a credit card but give you funds in cash for expenses you can’t pay on credit. They typically offer lower interest rates than credit cards but are not as common as other financing options.
Credit cards may be an option if you don’t always have room in your budget for fixed monthly payments. With high rates, credit card payment flexibility might be worth the extra cost.
Cash advance apps offer quick, small paycheck advances. But while there might not be a fee associated with the advance, some apps require you to pay a membership fee.
Rates on personal loans range between 6% and 35.99%, with the lowest rates reserved for very good credit borrowers with scores of 720 and up.
The rate may you qualify for depends largely on your credit score:
720 to 850: 10.73% to 12.50% APR
690 to 719: 13.50% to 15.50% APR
630 to 689: 17.80% to 19.90% APR
300 to 629: 28.50% to 32.00%
However, interest rates on personal loans from credit unions are currently capped at 18% regardless of your creditworthiness, if you are approved.
What is the monthly payment on a personal loan?
Your monthly personal loan payment amount depends on how much you borrow, the interest rate, and the loan’s repayment term. Use our personal loan calculator to get an estimate of what your monthly payment might be.
Can I get a personal loan with bad credit?
Yes, it’s possible to get a personal loan with bad credit – that is, a score under 579. However, if you do get approved for a bad credit personal loan, your rate will likely be over 20% and you’ll probably be on hook for origination fees up to 10%, making it an expensive form of financing.
How soon can I get funds?
Once you’ve submitted all your paperwork and have been approved for a loan, funds could be available as soon as one to three business days – or same day in some cases. For example, Sofi and OneMain Financial are two lenders that offer same-day funding.
Heather Petty was a personal finance writer at Finder, specializing in home and personal loans. After falling victim to a disreputable mortgage broker when buying her first home, she’s on a mission to help readers avoid similar experiences when managing their own finances. A self-proclaimed word nerd, her writing and analysis has been featured on MSN, Credit.com and MediaFeed, among other top media. Heather previously worked as a technical writer and editor for the casino systems industry and is an internationally published young adult mystery author. She earned a BA in English with a minor in journalism from the University of Nevada, Reno. See full bio
Heather's expertise
Heather has written 94 Finder guides across topics including:
Kat Aoki was a personal finance writer at Finder, specializing in consumer and business lending. She’s written thousands of articles to help consumers make better decisions on their home loans, bank accounts, credit cards, cryptocurrency and more. Kat is well versed in working with leading brands in the real estate, mortgage and personal finance industries, and her expertise has been featured on Forbes Advisor, Lifewire and financial comparison sites like iSelect and realestate.com.au. She holds a BS in business administration from California State University, Sacramento and enjoys hiking and yoga in her spare time. See full bio
Kat's expertise
Kat has written 184 Finder guides across topics including:
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