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Online lenders offer personal loans to people at all credit levels, better than payday loans.
You can get personal loans to pay for emergencies, consolidate debts, pay off high-interest credit cards, complete home renovations or pay for major purchases or events.
Applying for a personal loan through an online lender is a relatively fast and straightforward process.
If a personal loan is not right for you, alternatives include credit cards, HELOCs or personal lines of credit.
Compare the rates available to you and get a personalized quote based on your credit score with MoneyLion.
A personal loan can help you pay for unexpected expenses, consolidate debts, pay for home renovations or plan a dream wedding. While some people might have trouble getting a personal loan from a traditional bank or credit union, many online lenders work with people at all credit levels.
We have researched online lenders and compared them to provide you with a list that offers the best terms and rates, no matter your credit score.
What is a personal loan?
A personal loan is money you borrow from banks, credit unions or online lenders that you can use for multiple purposes. For example, you might take out a personal loan to pay off high-interest credit cards, renovate your home, consolidate debt or pay for a planned vacation.
You must repay a personal loan during its repayment term together with interest. Some lenders may also charge additional fees.
How do personal loans work?
When you’re approved for a personal loan, the lender will provide you with a lump sum, which you can use to pay for multiple types of expenses. You must then repay the loan plus the assigned interest rate through a series of regular installments. Repayment terms can range from as little as one month for small emergency loans up to seven years for large personal loans.
Unlike student, auto, and mortgage loans, personal loans are not tied to defined expenses. However, some lenders may restrict how the funds can be used. Personal loans are generally unsecured and have fixed interest rates, which makes payments predictable.
Depending on your financial needs and circumstances, you can choose from different types of personal loans for various purposes.
Debt consolidation loans
If you have many debt payments at high interest rates, you might consider taking out a personal loan to consolidate them. This works by using the funds to pay off your creditors. You’ll be left with a single loan and one payment schedule.
This can be a smart idea as long as you don’t run up your credit card balances after taking out your debt consolidation loan. If you do, you could be in a worse financial position than you previously were.
Emergency expense loans
During an emergency such as an accident, an unexpected layoff or a car breakdown, you might want to take out a small personal loan to pay for any unforeseen expenses. This can be a good idea if you don’t have an emergency fund available, as it can help make ends meet while you get back on your feet.
Home renovation loans
Some people take out personal loans to pay for home renovations rather than taking out a second mortgage or a home equity line of credit (HELOC). One advantage of using a personal loan to pay for home renovations is that it is unsecured. This means that if you struggle to make your payments, your home will not serve as collateral and won’t be at risk.
Major purchases/events loans
Many people take out personal loans to pay for vacations, weddings or other major purchases. If you can’t save enough money to pay for them before they occur, this can be a good way to pay them off over time.
How to choose the best lender
To find the best lender for a personal loan, take the following steps:
Know your credit score/standing: Before you apply for a personal loan, check your credit score and credit history. You can get a free copy of your credit reports once per year from the three major credit bureaus: Experian, Equifax and TransUnion. Review them carefully and challenge any erroneous information.
For credit scores, most lenders will use FICO to evaluate borrowers. You can see your FICO score online by paying a small fee. Alternatively, you can ask your bank about your credit score or look at a free site like Credit Karma. Knowing where you stand gives you a good idea of the type of lender you should look for.
Identify lenders: Once you know your credit score and standing, identify lenders that offer personal loans to borrowers similar to you. Make a list of lenders, and then research them.
Compare rates and terms: Carefully review lenders’ information on their websites to find APRs, loan amounts and terms. If a lender doesn’t disclose information transparently, you can look for information about them online by reading reviews.
Where to get a personal loan
• Banks: Most banks offer personal loans to people with good credit. If you have a favorable credit score, you might want to check with your bank to see what it might offer.
• Credit unions: Credit unions may offer personal loans at rates less than banks might provide to people with good credit. If you are a credit union member with good credit, check with a loan officer to see what is available.
• Online lenders: Many online lenders offer personal loans to people with various credit backgrounds. If you can’t get a personal loan from your bank or credit union, an online lender with a good reputation, such as those listed above, can be a reasonable alternative.
• Brick-and-mortar personal finance lenders: Personal finance companies often have offices that allow people to apply for personal loans in person. This might be an option for those with less-than-perfect credit who need access to funds and are willing to pay higher APRs.
Check your credit score before you apply for a personal loan. This can tell you your approval chances and help determine which lenders might work with you.
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Compare rates and terms:
Compare rates, loan amounts, and repayment terms offered by reputable lenders working with people with your credit background. Calculate loan interest to see how much interest you may pay in a year.
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Choose a lender:
Once you have compared lenders that accept people with your credit level, choose one that offers the best rates, affordable repayment terms and loans in the amount you need.
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Gather documents:
You’ll need to submit several documents when you apply for a personal loan, including a valid government-issued ID card, proof of address, bank statements, pay stubs, W-2s and others.
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Submit your application:
Fill out the application and submit your documents.
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Receive your funds:
Many online lenders offer funding within the same or the next business day by directly depositing your bank account.
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Best personal loan rates
Company
Best for
APR
Minimum credit score
Loan amount
Loan term
CashNetUSA
Emergency expenses; bad credit
229% to 299%
None
$100 to $3,000
Line of Credit
CCFLOW
Emergencies; bad credit
279%-399%
None
$500 to $3,500
Line of Credit
CreditFresh
Bad credit
None; Billing cycle fee from 10% to 15% of balance
$500 to $5,000
Line of credit
Elevate
Bad credit
100%
585
$300 to $5,000
Installments - Four to 26 months
Fig Loans
Emergencies; bad credit
190%
None
$50 to $800
Installments - One to six months
Happy Money
High-interest debt consolidation
4.95% to 35.95%
640
$200 to $10,000
65 days to 84 months
MoneyKey
Unexpected expenses; bad credit
Up to 295%
None
$200 to $2,500
Installments - Five to 12 months
NetCredit
Bad credit
34.99% to 99.99%
None
$2,000 to $10,000
Installments - Six to 60 months
OneMain Financial
People with no or little credit
18% to 35.99%
None
$1,500 to $20,000
Installments - Two to six years
OppLoans
Bad credit
160% to 179%
None
$500 to $4,000
Nine to 18 months
Reach Financial
Debt consolidation; people with good credit
5.99% to 35.99%
$3,500 to $40,000
Installments - 24 to 60 months
Regional Finance
Household purposes
24% to 35.99%
580
$2,501 to $12,000
24 to 60 months
Reprise
High-interest debt consolidation
9.99% to 35.99%
Not disclosed
$2,500 to $25,000
Installments - 36 to 60 months
SoFi
High-interest debt consolidation; people with good credit
8.99% to 29.99%
680
$5,000 to $100,000
Installments - Two to seven years
Universal Credit
Pay off credit cards
11.69% to 35.99%
560
$1,000 to $50,000
Installments - 36 to 60 months
Upgrade
Debt consolidation
8.49% to 35.99%
580
$1,000 to $50,000
Installments - Three to five years
Reasons to get a personal loan
Here are a few reasons to consider getting a personal loan.
Debt consolidation
You can use a personal loan to consolidate debts to free up funds and have a single payment instead of multiple payments.
Home renovation
Personal loans can be used to complete renovations in your home without using your home as collateral. You can use the money to upgrade your kitchen, purchase and install flooring, buy a new roof or complete other renovations.
Vacation or wedding
You can use a personal loan to pay for a planned vacation and make payments over time. Many people also take out personal loans to pay for their weddings.
Emergency expenses
If your family experiences an emergency such as an auto accident, unexpected illness or layoff, a personal loan can help you make ends meet until you get through the rough time.
Pay off high-interest credit cards
If you have several high-interest credit cards and can qualify for a lower rate with a personal loan, using one to pay off your credit cards in exchange for a single, lower payment and a lower interest rate makes sense.
Who should get a personal loan?
A personal loan may be a good idea for people who want to pay off high-interest debt, consolidate debts, pay for medical expenses or pay for emergencies. Those with a good credit history will benefit from the lowest rates, but there are personal loans for bad credit.
Those who want a personal loan to pay for higher education expenses, gambling or investments should not apply. A personal loan should not be used for these types of purposes. Federal student loans generally come with lower interest rates than personal loans, and using funds to invest or gamble exposes you to significant risk.
Alternatives to getting a personal loan
Some alternatives to getting a personal loan include:
Credit cards
Qualifying for a credit card might be easier than a personal loan. However, even some of the best credit cards can charge higher interest and have variable rates. If you choose to get a credit card, try making more than the minimum monthly payment and keep your balance low.
Personal line of credit
A personal line of credit is similar to a credit card. You will be approved for a maximum amount but do not have to take all of it at once. Instead, you can take out only what you need. As you repay what you borrow, your credit line will be replenished. A personal line of credit carries a variable interest rate, making your payments less predictable.
Home equity line of credit
If you own your home and have built up equity in it, you might be able to take out a home equity line of credit. This financial product uses your home as collateral but carries a much lower interest rate than personal loans, personal lines of credit or credit cards. If you take out a HELOC, keep up with your payments to avoid putting your home at risk.
Payday loans
Payday loans provide short-term funds that must be repaid by the borrower’s next pay date. Most borrowers can’t afford to pay them off and must pay to renew them. Payday loans charge astronomical APRs of up to 499%, so it’s best to avoid them and choose a personal loan if you have bad credit.
FAQ: Best Personal Loans
What is APR, and how is it determined?
The annual percentage rate (APR) is the yearly cost of borrowing money from a lender and takes into account the monthly interest and fees you’ll pay.
Where can I get a personal loan from?
You can get a personal loan from a bank, credit union, online lender or a brick-and-mortar personal finance lender.
What are the minimum and maximum amounts I can borrow with a personal loan?
The minimum and maximum amounts you can borrow depend on your finances, credit, income and needs. The lenders on our list offer loans for as little as $50 from Fig Money up to a maximum of $100,000 through SoFi.
What fees do personal loans have that I should look out for?
Some personal loan lenders charge origination fees that can reduce how much you receive. Others might charge late fees or prepayment penalties. Ensure you carefully review disclosures and understand a lender’s fees before taking out a personal loan.
Do I need to have good credit to get a loan?
No, you can qualify for a personal loan with bad credit. Some lenders work with borrowers at all credit levels and even offer loans if you have no credit.
Christy Montour is a seasoned finance writer with extensive experience in explaining a wide range of investment types, retirement accounts, and insurance products. With a background in taxation from law school, Christy possesses a deep knowledge of tax strategies and the tax code.
Christy has written thousands of blogs for clients on finance and investment topics. She covers a wide range of subjects, from the Offshore Voluntary Disclosure Program to IRS installment plans, offers-in-compromise, tax liens, levies, and criminal tax issues such as tax evasion and fraud. Christy’s expertise allows her to break down complex financial topics into clear, accessible content for her readers.
Blake Esken has over 15 years of experience in product management and has been a member of the Los Angeles Times staff for over five years.
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