7 Best Personal Loans for Good Credit

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Good credit can open a lot of doors. The higher your credit score, the more options you’ll have when you apply for a loan. That’s because lenders view you as a good bet to make all your payments on time — so they’re eager to lend to you.

If you have a good credit score, you can be discerning as you shop around, seeking the best interest rate and terms and avoiding any fees. Here are a few good places to start.

7 lenders with the best personal loans for good credit

If you have good credit and you’re looking for a personal loan, consider the following four Credible partners.

Axos

Axos offers a wide selection of loan terms for people with good credit and funds its loans within two days.

Minimum credit score: 740
Loan terms: One, two, three, four, or five years
Loan amount: $5,000 to $35,000
Good for: People looking for fast funding

LendingClub

With good credit, you’re likely to get several rate offers from LendingClub and its investors.

Minimum credit score: 600
Loan terms: Three or five years
Loan amount: $1,000 to $40,000
Good for: People who want a smaller loan

Prosper

Prosper matches investors with individual loans they’d like to fund. This often includes special cases like adoption loans, engagement ring financing, and green energy home improvement loans.

Minimum credit score: 640
Loan terms: Three or five years
Loan amount: $2,000 to $40,000
Good for: People with a special financial need

SoFi

With a maximum loan amount of $100,000, SoFi offers some of the biggest loans in the industry. That can make it a good choice if you need a large chunk of cash.

Minimum credit score: Not disclosed
Loan terms: Two to seven years
Loan amount: $5,000 to $100,000
Good for: People who need a large loan

You can compare personal loan rates from multiple lenders using Credible.

Other personal loan lenders to consider

Here are three more good credit personal loan lenders that Credible evaluated. Keep in mind that these lenders are not offered through Credible, so you won’t be able to easily compare your rates with them on the Credible platform like you can with partner lenders.

Citizens Bank

Citizens Bank personal loans don’t come with any fees, and if approved you’ll receive your loan funds often within two business days.

Minimum credit score: Does not disclose
Loan terms: Three, four, five, six, or seven years
Loan amount: $5,000 to $50,000
Good for: People who already bank with Citizens

Earnest

Earnest is an online platform that connects you with different lenders. But keep in mind that it doesn’t offer loans in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

Minimum credit score: 680
Loan terms: Three, four, or five years
Loan amount: $5,000 to $75,000
Good for: People who want to shop around before choosing a lender

Laurel Road

Laurel Road offers an autopay discount, and it doesn’t charge any fees on its personal loans.

Minimum credit score: 660
Loan terms: Three, four, or five years
Loan amount: $5,000 to $45,000 (depending on loan type)
Good for: People who want a loan without paying any fees

Methodology: How Credible evaluated lenders

Credible evaluated good credit personal loan lenders based on a variety of categories, including the minimum fixed rate, customer experience, time to fund, maximum loan amount, loan terms, and fees. Credible’s team of experts gathered information from each lender’s website, customer service department, and via email support. Each data point was verified to make sure it was up to date.

What to know about personal loans for good credit

A personal loan is a relatively small short-term loan that you can get with no collateral — meaning you don’t have to stake your home or car as a guarantee you’ll make your payments. Personal loans typically have fixed rates, giving you a stable monthly payment over the time you repay the loan. With virtually no restrictions on what you can use the money for, personal loans can be a good way to consolidate credit card debt, pay off medical bills, finance unexpected car repairs, or make a large purchase.

Most personal loan lenders advertise a range of interest rates. With a good credit score, you’ll typically qualify for the best rates and terms a lender has to offer.
Why are credit scores important?

Your FICO credit score is a numerical gauge of how likely you are to pay back a loan. For a lender, it’s a way to determine how big a risk it would be to lend you money. Therefore, the better your score, the lower your risk — and the more likely you are to qualify for good loan terms.

Many lenders have a minimum credit score requirement to qualify, meaning people with a credit score below their minimum won’t be able to get a loan. Even if you do qualify, you’ll typically pay higher interest rates if you have a lower credit score.

What’s a good credit score?

Credit scores generally range from 300 to 850, and the higher the score, the better. Once you reach a score of 700, you’re considered to have good credit. At 750, you have excellent credit.

To calculate your credit score, credit-rating agencies take many elements of your credit history into account.

• Your payment history and how often you pay bills on time
• Your overall debt
• The types of financial accounts you have
• The length of time you’ve had your accounts
• The number of recent loan applications
• Any recent bankruptcies, foreclosures, or debts sent to collection

Good credit can make a personal loan cost less

Personal loans often come with fees. But if you have good credit, you can often avoid them altogether. Here are some common personal loan fees to look for when comparing lenders.

• Application fee — This is a charge simply to apply for a loan, even if you don’t ultimately accept it.

• Late payment fee — This fee is charged for making a monthly payment after it’s due.

• Origination fee — This fee is usually assessed as a percentage of the loan, and can be as much as 8% or more. It’s often taken out of the total loan amount you receive.

• Prepayment penalty — This fee can be charged for paying off your loan early, or making more than the standard payment at a time.

If you have good credit, lenders tend to offer you a better rate on a personal loan. A good credit score also means you can generally avoid all of these fees. Make sure as you’re shopping around that the lenders you consider don’t charge origination fees, application fees, or prepayment penalties. Getting a personal loan with lower interest rates and no fees can save you hundreds of dollars over the life of the loan.

What personal loan rate can I get with good credit?

A small difference in interest rate can translate to significant differences in costs. Even a marginal difference in credit score can lead to lower interest rate offers. A good credit score can save you thousands of dollars compared with a fair score by getting you the best personal loan rates. The rates used in the example below are drawn from Credible’s average minimum rates for different credit ranges.

Good credit personal loan
Loan amount: $10,000
Loan term: Five years
APR: 14%
Monthly payment: $233
Total interest charges: $3,961
Total repayment amount: $13,960

Fair credit personal loan
Loan amount: $10,000
Loan term: Five years
APR: 22%
Monthly payment: $276
Total interest charges: $6,571
Total repayment amount: $16,571

In this scenario, the person with good credit would save $2,611 in interest over the life of the loan.

See how much you could save on interest by comparing personal loans on Credible.

Pros and cons of personal loans for good credit

Any type of loan comes with advantages and disadvantages. Before you commit to a personal loan, it’s important to weigh your financial situation and determine whether this type of loan makes sense for you.

Pros

• Fixed monthly payment — Most personal loans have fixed interest rates, so you’ll know from the outset what your payment will be each month. One of the most common uses for a personal loan is consolidating credit card debt, allowing you to take all of your ever-changing card payments and replace them with a single, steady monthly payment.

• Lower interest rates — A personal loan typically has lower interest rates than a credit card or other unsecured debt, especially if you have good credit.

• No foreclosure risk — With an unsecured personal loan, you aren’t pledging your home as collateral. That means you can’t lose your home to foreclosure if you don’t make your payments, unlike with home equity loans or home equity lines of credit.

Cons

• Higher interest costs than some other loan options — Since personal loans are often unsecured, they tend to have higher interest rates than secured loans, like a home equity loan.

• Shorter repayment terms — Most personal loans have repayment periods of two to seven years. That’s much shorter than the terms on a home equity loan or HELOC, meaning your monthly payment is likely to be higher.

• Fees may apply — Though you can often avoid them, many personal loans come with fees for applying for or originating the loan, as well as late fees.

Tips for comparing personal loans and lenders

Before settling on a personal loan, be sure to get rate quotes from multiple lenders. As you evaluate each offer, compare the following aspects:

• APR — The annual percentage rate of a loan includes its interest rate and any fees charged, representing the total cost of borrowing money. Using APR instead of interest rate to evaluate two loan offers makes for a better comparison.

• Fees — With a good credit score, you shouldn’t need to pay fees. Don’t agree to an application fee and watch out for origination fees, which are deducted from the total loan amount you receive from the lender.

• Repayment terms — Your repayment term is how long you have to pay back the loan. This can be as short as one year, or as long as 12. The longer the term, the shorter the monthly payment — but the more you’ll ultimately pay in interest.

How to get a personal loan for good credit

If you’re sure a personal loan is right for you, here are the steps to follow to get one.

• Check your credit score. Even if you know you have a good credit score, it’s important not to skip this step. Take a look at your credit report and dispute any errors you find. You can get a free copy of your credit report from each of the credit bureaus each year from AnnualCreditReport.com.

• Shop around. Most lenders publish ranges of interest rates they offer on their personal loans. With a good credit score, you can generally look at the lower end of the range. Keep in mind that many lenders only advertise their rates that include an autopay discount.

• Prequalify. Request a rate quote from a few lenders you believe may work for your situation. Most lenders allow you to do this quickly online with just a little basic information about yourself, including your Social Security number. Double-check that the lenders you’re considering will only use a “soft pull” on your credit to quote you a rate, protecting your credit score from being harmed by multiple applications.

• Apply. After evaluating each offer, you’re ready to pick a personal loan and apply. With good credit, you can have some confidence that you’ll be approved. After sending in more information about your financial situation, your lender will make a final credit decision.

• Accept your loan. Once you’re approved, many lenders will deposit your loan funds into your bank account within just a few days – sometimes as soon as the next business day.

Credible makes it easy to shop for personal loans to find the one that fits your needs.

Personal loan alternatives when you have good credit

Remember, good credit opens up doors. A personal loan isn’t your only option if you find yourself needing cash for an unexpected expense or a planned purchase. Here are a few others to consider.

• Borrowing from family and friends — There are no applications or fees, but this option isn’t without risks. You don’t want to put your personal relationships in jeopardy if you can’t pay back the money.

• Peer-to-peer lending — Peer-to-peer lenders match people who want to borrow money with investors willing to put up their own funds and earn a return. You may find different rates or terms with these online lender platforms.

• Balance transfer cards — This refers to a type of credit card you can use to consolidate different credit card balances onto one new card. The best balance transfer cards have a 0% interest rate for a limited period of time to help you pay down debt quickly.

• Home equity loan — Home equity loans use your home as collateral. You’re borrowing against the equity in your property, or the difference between how much you still owe on your mortgage and what your property is worth if you were to sell. Interest rates are lower on these types of loans than they are for personal loans. But using home equity loans for debt consolidation in particular can be risky, since you’re converting unsecured debt to secured debt and could risk foreclosure if you fall behind on payments.
  

  About the author: Andrew Dunn is an award-winning mortgage and finance writer with a decade of experience in covering personal finance. He’s written for LendingTree, where he was previously managing editor for mortgage content, Credit Karma, Business North Carolina magazine and the Charlotte Observer. His work has been recognized by the Society of American Business Editors and Writers, and the N.C. Press Association.

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