money Best Personal Loans of 2021
Content provided by Credible. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.
Personal loans are relatively small, unsecured loans that you can get from a bank or an online lender. You typically pay them back at a fixed interest rate, meaning you have a steady monthly payment for the time it takes to repay the loan.
Unsecured personal loans can be a great way to consolidate your credit card debt, pay off some pressing bills, or cover an unforeseen expense like a car repair.
When you’re shopping for a personal loan, it’s important to understand all the costs that go into borrowing money. Consider using a Personal Loan Calculator to figure out how much you might pay each month and over the life of your loan. Then check rates and terms from multiple lenders — even a small difference in your interest rate can affect how much you pay.
Best personal loans with the lowest interest rates
No matter which personal loan lender you choose, the interest rate you’re offered can vary dramatically based on your financial situation. Your credit score plays a major role in the rate you can get — typically the higher your score, the lower the interest rate. That’s because you’re considered less of a risk to default on your loan and fail to pay it back.
Many other factors, like loan term length and income, affect your interest rate. Be sure to get rate quotes from multiple lenders and find the lowest interest rate for you. You can quickly compare rates from multiple lenders through Credible.
Best personal loans for good credit
Credit scores typically range from 300 to 850. A good credit score is one that’s over 700, and a score of 750 or higher is considered excellent. If you fall into this category, here are a few personal loans from different lenders that might work well for you. The best personal loans for good credit will typically have low interest rates and low (or no) fees.
The following lenders are Credible partner lenders. Credible evaluates personal loan companies based on multiple data points, including minimum fixed interest rate, term lengths, fees, discounts, customer experience, time to funding, maximum loan amounts, and other factors.
LightStream
Term length range: Two to 12 years
Minimum credit score: 660
Prepayment penalties: None
Fees: None
PENFED Credit Union
Term length range: One to five years
Minimum credit score: 670
Prepayment penalties: None
Fees: None
SoFi
Term length range: Two to seven years
Minimum credit score: Not disclosed
Prepayment penalties: None
Fees: None
Best personal loans for fair credit
Fair credit scores range from 640 to 699. Chances are you’ll qualify for most personal loans with fair credit, though you’ll likely pay a higher interest rate than people with good credit. It might be worth your while to invest time in boosting your score by checking your credit report for any errors or focusing on making your payments on time and getting current on all of your debt. The best personal loans for fair credit typically offer lower interest rates than you might get with poor credit.
The following lenders are also Credible partners.
Best Egg
Term length range: Three to five years
Minimum credit score: 600
Prepayment penalties: None
Fees: Origination fee of 0.99% to 5.99%
Payoff
Term length range: Two to five years
Minimum credit score: 640
Prepayment penalties: None
Fees: Origination fee of 0% to 5%
Prosper
Term length range: Three or five years
Minimum credit score: 640
Prepayment penalties: None
Fees: Origination fee of 2.41% to 5%
Best personal loans for bad credit
Once your credit score falls below 640, you’re considered to have a bad or poor credit history. In this range, the number of offers you’ll get on a personal loan dramatically decreases.
At this point, you may want to consider working with a credit counseling agency to come up with strategies to improve your score. You’ll need to slowly rebuild your credit, making sure to pay all your bills on time, pay off your credit cards, and keep your debt down.
If you have bad credit, it can be more difficult to qualify for a personal loan — but you may still have options. These Credible partner lenders all lend to people with poor credit.
Avant
Term length range: Two to five years
Minimum credit score: 550
Prepayment penalties: None
Fees: Administration fee of up to 4.75%
Universal Credit
Term length range: Three to five years
Minimum credit score: 580
Prepayment penalties: None
Fees: Origination fee of 4.25% to 8%
Upstart
Term length range: Three or five years
Minimum credit score: 580
Prepayment penalties: None
Fees: Origination fee of 0% to 8%
Best personal loans for debt consolidation
When you consolidate debt, you take out a new loan to pay off all your existing credit cards and loans, leaving you with a single monthly payment. One way to do this is with a balance transfer credit card — many of them offer 0% interest for a limited period of time to help you catch up.
Personal loans are also a good option for consolidating debt. They tend to have lower interest rates than credit cards, and you’ll have a fixed monthly payment over a period of time to get debt-free.
The best personal loans for debt consolidation will offer to make direct payments to your creditors, paying off your debts and saving you from the hassle of doing it yourself — and the temptation to spend the money on something else. These three Credible Partner lenders all offer this feature.
Discover
Term length range: Three, four, five, six, or seven years
Minimum credit score: 660
Prepayment penalties: None
Fees: None
FreedomPlus
Term length range: Two to five years
Minimum credit score: Not disclosed
Prepayment penalties: None
Fees: Origination fee of 1.99% to 4.99%
Marcus
Term length range: Three to six years
Minimum credit score: 660
Prepayment penalties: None
Fees: None
Best personal loans for quick funding
Sometimes you’ll need cash quickly and unexpectedly, like if your car breaks down and you’re facing a big bill to get it back on the road. Many personal loan lenders offer fast funding, often within just a few days. These lenders, who are all Credible partners, offer personal loans with same-day funding, which means you could get your money the very day you apply.
LightStream
Term length range: Two to 12 years
Minimum credit score: 660
Prepayment penalties: None
Fees: None
OneMain Financial
Term length range: Two, three, four, or five years
Minimum credit score: None
Prepayment penalties: None
Fees: Origination fees apply. These can be flat fees between $25 and $500 or a percentage of 1% to 10% of the loan amount.
Rocket Loans
Term length range: Three or five years
Minimum credit score: 640
Prepayment penalties: None
Fees: Origination fee of 1% to 6%
Best personal loans for home improvement
Home improvement projects can be big-ticket items. Many people choose to tap their home equity to pay their contractors, either through a cash-out refinance or home equity loan.
But a personal loan for home improvement can be a good option and has the advantage of being unsecured. That means you don’t put your home at risk if you fail to make your payments.
The best personal loan lenders in this category will have loans specifically tailored to home improvement. These three Credible partner lenders fit that bill.
Axos
Term length range: One, two, three, four, or five years
Minimum credit score: 720
Prepayment penalties: None
Fees: Origination fee of 0% to 2%
LendingClub
Term length range: Three or five years
Minimum credit score: 600
Prepayment penalties: None
Fees: Origination fee of 3% to 6%
Upgrade
Term length range: Two to seven years
Minimum credit score: 580
Prepayment penalties: None
Fees: Origination fee of 2.9% to 8%
Best personal loans for medical expenses
When medical expenses stack up, it’s best to negotiate with your hospital or see if they’ll offer you a 0% interest payment plan. But in some cases, you might consider a personal loan to consolidate your bills or medical loans and get on track to pay them all off.
The good news is that medical loans are typically flexible when it comes to repayment. Taking advantage of a longer-term loan will give you more time to pay the money back, and you’ll have lower monthly payments.
The best personal loan lenders for medical expenses will have experience in health-care financing and be able to walk you through the process. These three lenders, who are Credible partners, qualify. (As always, be sure to also look at the interest rate they offer.)
Prosper
Term length range: Three or five years
Minimum credit score: 640
Prepayment penalties: None
Fees: Origination fee of 2.41% to 5%
SoFi
Term length range: Two to seven years
Minimum credit score: Not disclosed
Prepayment penalties: None
Fees: None
Upstart
Term length range: Three or five years
Minimum credit score: 580
Prepayment penalties: None
Fees: Origination fee of 0% to 8%
Other lenders to consider
The following three lenders are not Credible partners, so you won’t be able to easily compare your rates with them on the Credible platform. But they may also be worth considering if you’re looking for a personal loan.
Citizens Bank
Term length range: Three to seven years
Minimum credit score: Does not disclose
Prepayment penalties: None
Fees: None
Good for: Borrowers who want multiple repayment term options
Earnest
Term length range: Three, four or five years
Minimum credit score: 680
Prepayment penalties: None
Fees: Does not disclose
Good for: Borrowers who need a larger amount (loans up to $75,000)
Laurel Road
Term length range: Three to five years
Minimum credit score: 660
Prepayment penalties: Yes
Fees: None
Good for: Borrowers with good credit
Methodology
Credible evaluated the best personal loan lenders based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, 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.
Best personal loan Frequently Asked Questions
How do personal loans impact credit scores?
Many personal loan lenders will allow you to check your rate using only a “soft pull” of your credit, which doesn’t affect your score. But when you formally apply, your new personal loan will ding your credit score for a short period of time. After that, how a personal loan impacts your credit score all depends on how you pay it off. If you make all your payments on time, your loan will help your credit score. If you make late payments, your score will drop.
How can I get a low interest rate on a personal loan?
Getting a low interest rate on a personal loan depends primarily on your credit score. Having a good or excellent credit score (700 or above) will typically yield you the best rates each lender offers. Additionally, you can choose a short-term loan, since many lenders feel there is a higher chance of getting their money back this way. You may also get a discount on your rate if you sign up for automatic payments.
Visit Credible to check your personal loan rates without affecting your credit.
Is it good to pay off a personal loan early?
Paying off your loan early can save you a significant amount of money in interest. But you’ll want to double-check that your loan doesn’t have any prepayment penalties, which are fees the lender charges if you pay off your loan early. The best personal loans don’t charge prepayment penalties, so it can be a great idea to pay them off early if you can afford it.
How do I apply for a joint personal loan?
With a joint personal loan, two borrowers — instead of just one — own the loan and are responsible for payments. If your co-borrower has good credit, using a joint loan may make it easier to qualify for a loan and get a better interest rate.
To apply for a joint personal loan, compare rates and choose the one that’s best for you. You’ll need to complete an application and confirm your identity, employment, and income. Keep in mind that your joint borrower will have to complete a loan application on their own. Depending on how long it takes them to complete an application, it could potentially take longer to receive your loan funds.
What is APR and what factors determine which APR I qualify for?
Your APR, or “annual percentage rate, reflects all the costs of borrowing money. This includes the interest rate you pay and any fees. Using APR rather than interest rate can make it easier to compare two different loan offers side by side. The better your credit score, the better APR you’re likely to qualify for.
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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