Best personal loans for January 2022
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When you need to , finance home improvement projects or come up with a larger stream of money quickly, a personal loan can be a more affordable alternative to a . Personal loans often have lower interest rates and more flexible repayment schedules than credit cards, and can often be funded quickly (between one and four business days, on average).
We’ve evaluated the major national personal loan providers and highlighted the best personal loan options below. We’ll update this list regularly as terms change and new loan products are released.
- APR: 3.99%-19.99%* (with AutoPay)
- Repayment terms: 2-12 years*, depending on loan purpose
- Funding amounts: $5,000-$100,000
- Funding timeline: As soon as same business day (conditions apply)
- Origination fee: None
- Other fees: None
- Minimum credit score required: «Good credit»
LightStream delivers just about everything you want in a personal loan: flexible repayment terms, a $100,000 maximum, no fees, same-day funding (please note: it’s possible, but not guaranteed) and a low APR range — though, of course, your interest rate will reflect your specific credit profile. As such, we think it’s a great place to start your search for a personal loan. (Note that LightStream is a division of SunTrust Bank, which recently merged with BB&T to become Truist.)
Personal loans through LightStream also come with longer repayment terms. If you’re borrowing for home improvement purposes, you could receive repayment terms up to 12 years. All other personal loan repayment terms extend up to seven years.
Folks with a checkered credit history or blemished financial profile should take note: LightStream’s credit requirements are stringent. When asked about its criteria for good credit, the company said that there’s «no single definition» — but that people who qualify for loans usually have several years of credit history with few delinquencies, a «manageable» amount of revolving credit card debt, some liquid savings and a stable and sufficient income.
- APR: 5.99%-18.85% (with AutoPay)
- Repayment terms: 2-7 years
- Funding amounts: $5,000-$100,000
- Funding timeline: Up to 7 days
- Origination fee: None
- Other fees: None
- Minimum credit score required: 680
SoFi’s personal loans feature low rates, a $100,000 maximum loan amount and no origination, administrative or late fees. It’s also one of the few lenders that is transparent about its credit score requirements — though all loan providers take into account factors such as credit history and debt-to-income ratio when determining eligibility. It’s worth noting that SoFi routinely runs promotions on its site; at the moment, the company is offering a bonus of up to $310 on some loans.
Marcus
- APR: 6.99%-19.99%
- Repayment terms: 3-6 years
- Funding amounts: $3,500-$40,000
- Funding timeline: Up to 4 business days
- Origination fee: None
- Other fees: None
- Minimum credit score required: Not specified
Marcus doesn’t charge any fees such as an origination fee or loan application fee and offers a relatively low APR range, with repayment terms of up to six years. As one of the few mass-market products offered by the white-glove investment bank Goldman Sachs, it’s a bit surprising that the loan amount tops out at $40,000 — but if you’re looking for a low-cost, fee-free lender, these loans are worth a look. Be sure to also enroll in AutoPay to save up to 0.25% on your APR.
- APR: 5.74%-24.49%
- Repayment terms: 1-7 years
- Funding amounts: $3,000-$100,000
- Funding timeline: Next business day
- Origination fee: None
- Other fees: Rejected payment: $39; late payment: $39
- Minimum credit score required: None
The personal loan market has come to be dominated by a fleet of online banks that, in most cases, don’t have physical branches. (With no branches to maintain, they can often offer better online personal loan terms.) But some people may feel more confident about borrowing money after an in-person conversation with an employee from a bank located in their neighborhood. Among the big national lenders, Wells Fargo offers a reasonable range of APRs, no fees, flexible repayment terms and a wide array of funding amounts. One caveat: Wells Fargo may change fees for rejected payments (also called NSF or nonsufficient funds payments) and late payments. And those can add up.
- APR: 9.95%-35.99%
- Repayment terms: 2-5 years
- Funding amounts: $2,000-$35,000
- Funding timeline: Next business day
- Origination fee: Up to 4%
- Other fees: Rejected payment: $15; late payment: $25
- Minimum credit score required: 600
For those with — politely referred to as «» by lenders — Avant could be a good loan option. Though the company will accept a loan application from anyone, applicants with a score of 600 or higher «have the best chance of being accepted,» according to a company rep.
As with most financial products, those with a less stable financial standing or consistent credit card debt can expect to pay higher fees and more interest for a personal loan. Avant charges up to 4.75% in administrative fees, depending on factors including your credit history and where you live. And if your credit score is 600 or lower, you will likely end up with a higher APR. Avant’s top rate annual percentage rate is a whopping 35.99%, which could end up costing you thousands of dollars in interest over the course of a loan. Proceed with caution.
Other loans to consider
Payoff
- APR: 5.99%-24.99%
- Repayment terms: 2-5 years
- Funding amounts: $5,000-$40,000
- Funding timeline: 2-5 business days
- Origination fee: Between 0% and 5%
- Other fees: None
- Minimum credit score required: 640
- APR: 5.99%-29.99%
- Repayment terms: 3-5 years
- Funding amounts: $2,000-$50,000
- Funding timeline: 1-3 business days
- Origination fee: 0.99%-5.99%
- Other fees: Rejected payment: $15; late payment: $15
- Minimum credit score required: None (700 to qualify for lowest APR)
Upgrade
- APR: 5.94%-35.97%
- Repayment terms: 2-7 years
- Funding amounts: $1,000-$50,000
- Funding timeline: Next business day
- Origination fee: 2.9%-8%
- Other fees: Rejected payment: $10; late payment: $10
- Minimum credit score required: None
Upstart
- APR: 6.76%-35.99%
- Repayment terms: 3- and 5-year terms
- Funding amounts: $1,000-$50,000
- Funding timeline: Next business day
- Origination fee: Up to 8%
- Other fees: Rejected payment: $15; late payment: 5% of payment or $15, whichever is greater
- Minimum credit score required: None
How to choose a personal loan
If you can pay off a purchase within one month, credit cards are usually best. Conversely, the loan term of a personal loan can range from 1 to 12 years and lenders will allow you to use the money for just about any loan purpose (except paying for college or making investments). For example, you can use a personal loan as an auto loan, or you can use it as a debt consolidation loan, letting you pay off other bills more quickly at a lower interest rate. Some loans may even offer a cash advance, depending on the borrower. With most personal loans, you pay a fixed interest rate and the quicker you pay off the lender, the less you’ll spend on interest.
Though personal loan interest rates are fixed, they can vary widely — which gives you choices as the consumer. A personal loan’s annual percentage rate currently ranges from about 2% to 30%, depending on the lender and your financial profile, which includes your , credit history and debt-to-income ratio. Ultimately, you want to find the least expensive personal loan option available, factoring in both fees and interest. You also want to look at the loan offer closely to be sure there’s not a prepayment penalty, which means you’ll pay a fee for paying off the loan early. Depending on your income, your loan purpose and where the loan proceeds are going, these types of fees can add up.
For example, borrowing $10,000 at a 9.99% APR paid back over five years would require 60 monthly payments of $201.81 (and would cost you $2,108.60 in total interest). Wells Fargo’s or can help you get a sense of how interest rates and loan terms will impact your monthly payment and the total cost of a loan.
Best personal loans, compared
|
Loan issuer |
LightStream |
SoFi |
Marcus |
Avant |
Wells Fargo |
|---|---|---|---|---|---|
|
APR |
3.99%-19.99%* (with autopay) |
5.99%-18.85% (with autopay) |
6.99%-19.99% |
9.95%-35.99% |
5.74%-24.49% |
|
Repayment terms |
2-12 years* (depending on purpose) |
2-7 years |
3-6 years |
2-5 years |
1-7 years |
|
Funding amounts |
$5,000 — $100,000 |
$5,000 — $100,000 |
$3,500 — $40,000 |
$2,000 — $35,000 |
$3,000 — $100,000 |
|
Funding timeline |
As soon as same day (conditions apply) |
7 days |
1-4 business days |
Next business day |
Next business day |
|
Origination fee |
None |
None |
None |
Up to 4% |
None |
|
Other fees |
None |
None |
None |
Rejected payment: $15; late payment: $25 |
Rejected payment: $39; late payment: $39 |
|
Credit requirement (estimated) |
700-800 |
680 and up |
N/A |
600 and up |
N/A |
Before you apply for a loan, it’s worthwhile to shop around for the best personal loan — but do so carefully. Submitting a loan application will trigger , which may impact — even if you don’t end up with loan approval or you choose not to go through with it. Pay special attention to any origination fee and if there is a loan application fee. You need to know what interest rate the lender is charging, the repayment term and the monthly payment annual percentage rate.
Lenders may advertise different types of personal loan options for specific purposes such as paying for home improvements or consolidating debt. But in most cases there are only two major types of personal loans. With an unsecured personal loan, you borrow money and pay it back at regular intervals over the repayment term with a fixed rate of interest. A secured personal loan requires you to put up an asset as collateral before you can secure loan funding. And though the best personal loans don’t charge fees for «origination» or «administration» or rejected payments, borrowers with bad credit may have no choice but to pay them since they have fewer options.
You also want to take a look at the fine print — not just to look for hidden fees, but also to look for hidden perks. For instance, some loans offer an autopay discount. Another personal loan option might have a different loan rate depending on the loan purpose and lender. An online lender may have different rules from a credit union with brick-and-mortar locations. You as the borrower need to do your due diligence before making any decisions.
Frequently asked questions
What is a personal loan?
Most people take out a personal loan to consolidate debt, finance home improvements, pay for a wedding or other family-related expense or pay for a medical emergency — but lenders will allow you to use funds for any purpose other than paying educational expenses or making investments.
Personal loan amounts generally fall between $5,000 and $50,000, though some lenders will lend you as little as $1,000 or as much as $100,000. The average repayment period (or term) is between three and five years. Most institutions charge an interest rate between 10% and 15%, though they can go as low as 2.49% and as high as 36%. Borrowers may tailor a loan to their specific circumstances, though lenders may be less flexible if your credit history has blemishes.
Which factors determine my APR?
The factors that determine your eligibility for a personal loan will also dictate the APR you’re offered. An applicant with a high credit score, a long and consistent credit history and stable financial standing will usually qualify for the lowest APR. Those with less sterling credentials will be subject to higher APRs. (One of the bitter ironies of financial services is that those who have less need to borrow are usually offered better terms.)
Loan size and term length will also play a role; a shorter-term loan may have a lower APR, which is another good reason to pay back your loan as soon as possible. Though the notion of a low monthly payment can be appealing, longer terms usually result in higher total costs over time.
Do I need a certain credit score to qualify?
Most lenders look at an array of factors to determine eligibility for a personal loan. Yes, your credit score is important — but so are your credit history, current financial situation (including employment status and annual income), debt-to-income ratio and any other debts and obligations. Lenders want to understand how likely you are to pay off the loan on time.
Having a credit score of 700 and up increases your chances of being approved. A credit score under 600 may make it more challenging. That said, if you are on the lower end of that range, a steady job or dependable income may be enough to compensate. Likewise, if you have a high credit score but recently lost your job or have many outstanding debts, you may be denied.
‘s «» page includes a helpful criteria overview.
Once I’m approved, when can I expect to receive my funds?
Usually between one and three business days. That depends on whether any questions about your financial situation surface — and how quickly you respond to them. It’s worth noting that your bank plays a part here; some checking accounts take longer than others when it comes to receiving transfers from outside institutions.
What are the alternatives to a personal loan?
The best alternative to taking out a personal loan is saving up and paying in cash. If that’s not possible, you could apply for a or other card that offers an introductory 0% APR period. You will need to pay off the entire credit card balance during that introductory period, which usually lasts between six and 18 months, before being subject to the high APRs that are customary for these types of credit cards.
If you don’t have excellent credit, you may be eligible only for a secured personal loan, which may offer a lower interest rate but requires you to put up an asset as collateral.
What’s the difference between a secured loan and an unsecured loan?
Lenders may advertise different types of loans for specific purposes such as paying for home improvements or consolidating debt. But, in most cases, a loan is a loan — with two basic types. With an unsecured personal loan, you borrow money and pay it back at regular intervals with a fixed rate of interest. If you have a lower credit score, you may only be eligible for a secured personal loan, which will require you to put up an asset as collateral. And though the best personal loans don’t charge fees for «origination» or «administration» or rejected payments, borrowers with lower credit scores, and fewer options, may have no choice but to take out loans that require you to pay such fees.
What can’t I use a personal loan for?
Most lenders don’t allow loan funds to be used to pay for higher education costs such as college tuition or paying off a student loan. Some prohibit the use of loans for investing or real-estate deals. Each lender has its own short list of restrictions — and if you’re not sure, it’s always better to ask.
What’s the difference between a personal loan for debt consolidation, home improvement or some other purpose?
Nothing. Some lenders suggest that different types of loans be used for different purposes but, at the end of the day, they’re all essentially the same: You borrow the money and then you pay it back at regular intervals along with a fixed rate of interest.
What happens if I miss a payment or default on a loan?
Even if a lender doesn’t immediately charge you a fee if you miss a payment, you’re still responsible for paying off the loan. If your payment is more than 30 days late, your loan could be considered in default. Defaulting on a loan can carry severe consequences; your credit history will suffer, your credit score will plunge — as much as 100 points per late payment — and you’ll be far less likely to get another loan in the future.
If you continually miss payments, a lender can sell your debt to a collection agency that may charge its own fees and aggressively pursue you through emails and phone calls. Ultimately, a lender can take you to court to seek reparations if you don’t remedy the situation. Be careful, make your payments promptly and don’t borrow money that you can’t pay back.
*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.
Payment example: Monthly payments for a $10,000 loan at 5.93% APR with a term of 3 years would result in 36 monthly payments of $303.90.
Truist Bank is an Equal Housing Lender. SunTrust, Truist, LightStream, the LightStream logo, and the SunTrust logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.
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