A personal loan could let you access cash for any purpose. They’re great for credit card debt consolidation, home improvement projects, major car repairs, or any other cash heavy project.
The best personal loans charge low fees and low fixed interest rates, have flexible loan amounts and terms, and have no prepayment penalties.
Since personal loans are unsecured, you’ll need an excellent credit score to get the best deal. But even borrowers with average credit can get approved for some loans.
In this post we’ve compiled the best of the best personal loan companies. Read on to see how they compare and make an informed decision as you shop for personal loans.
12 Best Personal Loans of 2020
Here are the 12 best personal loan companies you can check out today:
- Lending Tree
- Marcus by Goldman Sachs
- Lending Club
- Federal Trust
LendingTree is one of the market’s premier lending platforms with a full array of financial tools and resources.
Instead of funding loans, LendingTree connects borrowers with lenders through its online marketplace. Shoppers can find private student loans, auto loans, business loans, mortgages, and personal loans.
At LendingTree’s website, you’ll select the type of loan and loan purpose. Then you’ll click through an interactive application process that asks basic questions.
Based on your answers, you’ll be matched with up to five of the best personal loan offers your credit history qualifies you for — all in a span of minutes.
LendingTree offers a great place to start your personal loan search, so I’ve listed it first on this list.
And as a bonus, when you sign up for a free LendingTree account, you get access to your credit report and pointers to improve your score. After working on your credit score for a few months you may qualify for personal loans with lower interest rates and monthly payments.
Learn More: Read our full LendingTree Personal Loans Review.
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Credible is basically a search engine for loans. This platform boasts prequalification for top loan offers in two minutes’ time.
Credible also offers a Best Rate Guarantee, which promises (within terms and conditions) to pay you $200 if you find a better rate elsewhere. This shows Credible is confident its platform will include the best offer for good credit borrowers.
Credible clearly features its partners across its website, including Prosper and Lending Club, both of which are featured in my best-of list below.
Like LendingTree, Credible is free to use and won’t harm your credit score. It also comes with resources like a savings calculator that show you how much money you could be saving by consolidating your credit card debt with a personal loan.
And if you’re in the market to take out or refinance a student loan, Credible could be your one-stop-shop for comparing student loan and personal loan rates.
Learn More: Read our full Credible Personal Loan Review.
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LightStream is fast becoming a go-to option for personal loans of all types, especially for borrowers with an excellent credit history who need a large loan amount.
A subsidiary of SunTrust Bank (now known as Truist), LightStream brings the stability of traditional banking to online lending.
You could borrow as much as $100,000 with loan terms stretching out to seven years. The most qualified borrowers could get an interest rate as low as 3%.
LightStream does not have a pre-approval process so if you’re not sure whether your credit score qualifies you for a loan, don’t apply. The application process will create a hard credit inquiry which could lower your credit score.
If you can qualify, you can get competitive rates and repayment terms with a fast turnaround. You can also borrow for just about any purpose: education, home improvement, debt consolidation, recreation, and even secured auto loans.
With all-online applying and underwriting, you’d likely have your funds within a couple business days.
4. Marcus by Goldman Sachs
Here’s another legacy name in the personal finance arena that now offers personal loans. Like LightStream, Marcus by Goldman Sachs also works best if you have no credit problems.
But unlike LightStream, Marcus by Goldman Sachs has eliminated its lender’s fees. Most other lenders charge an upfront loan origination fee of at least 1% of the loan amount. Marcus has waived this fee, along with late fees and prepayment fees.
Marcus can also run a soft inquiry to check your creditworthiness before you apply. So if you’re not sure whether you’d get approved, you could find out without hurting your credit.
Marcus by Goldman Sachs does not offer the wide array of loan products LightStream can boast, and its largest loans cap at $40,000 with 72 months to repay compared to LighStream’s $100,000 maximum.
And, the most qualified borrowers with excellent credit could probably get a better rate with LightStream. Borrowers with good credit could save with Marcus’s fee-free loans.
If you have fair credit or bad credit, Marcus won’t approve your application even with a co-signer.
Much like Credible, SoFi’s roots are in the student loan industry. This online lender now provides mortgages, personal loans with large loan amounts, and wealth management services as well.
SoFi offers personal loan amounts ranging from $5,000 all the way up to $100,000 with terms between 3 and 7 years.
These loans have low-interest rates, offering both fixed and variable rates. When you enroll in autopay, you can get rates as low as 5.99%
Like Marcus, SoFi is also completely fee-free, with no origination fees, pre-payment penalties, or late payment fees.
But SoFi stands out most for its job loss protection. If you lose your job during the life of your loan, SoFi will press pause on your payments and even help with the job search.
Consider partnering with SoFi as your personal loan lender if you’re a young borrower looking for student loan resources in addition to competitive personal loans with unique perks.
Learn More: Read our full SoFi Personal Loan Review.
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6. Lending Club
Lending Club takes a different approach to personal loans than the companies above. The top-notch personal loan platform is a peer-to-peer marketplace.
Instead of getting your funds directly from Lending Club, the loan is funded by individual investors. Lending Club can offer relatively competitive interest rates, depending on your credit score, for loan amounts up to $40,000.
Lending Club is a good option for borrowers with lower credit scores who wouldn’t qualify elsewhere, with some loans for applicants with a FICO score of 600.
While you may face an origination fee up to 6% of the total amount of the loan, you can get approved with a lower credit score — assuming Lending Club members decide to fund your loan.
Lending Club is quick, too, giving you access to funds in as little as three business days after your application is submitted.
Learn More: Read our full LendingClub Personal Loans Review.
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If you want to be sure you’re getting the best loan available to you without having to compare quotes yourself, you’ll love Fiona.
Fiona has re-imagined the personal loan marketplace concept we’ve all become familiar with over the past decade.
Like Credible, Lending Tree, and other platforms, Fiona combs through top lenders’ offers to see what interest rates and loan terms you qualify for.
But instead of giving you several options to choose from, Fiona narrows your choices down to one, pinpointing the single best loan for your needs.
Fiona could match you with loans up to $100,000 with APR as low as 3.84%. This is a great option if you want to take the guesswork out of personal loan shopping.
Learn More: Read our full Fiona Loan Review.
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A division of the FinTech company Quint Group, Monevo is yet another marketplace that lets you compare your best personal loan options.
Like its competitors, Monevo brings you quick rates from top lenders after you provide a few personal details. The website claims to give you quotes in 60 seconds.
Your credit score won’t be harmed by the initial application, and you’ll get offers from lenders like Lending Club, Prosper, and SoFi.
Monevo is an excellent tool, especially for borrowers with poor or average credit scores who might struggle to find loans on their own.
Though it’s a newer platform, Monevo is BBB-accredited with an A rating and positive customer reviews.
Learn More: Read our full Monevo Personal Loans Review.
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9. Federal Trust
Federal Trust is another comparison platform that could help applicants get unsecured personal loans even if they don’t have stellar credit.
Federal Trust curates loan options with amounts between $1,000 and $100,000 and terms ranging from 24 to 48 months. Borrowers with the best credit eligibility can get competitive interest rates.
Like its competitors, Federal Trust requires you to fill out a quick form online to gain access to offers you’re eligible for.
Federal Trust is less upfront on its website about its partner lenders and their minimum credit scores. This is something to keep in mind as you shop.
However, the site is secure, and so is your information. Federal Trust is a great marketplace to add to the list as you shop for rates, with no harm done to your credit.
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Most of what you read about Lending Club above applies to Prosper. Another peer-to-peer marketplace, Prosper comes with comparable rates, fees, and terms.
When you apply, you’ll undergo a soft credit check, which won’t harm your credit score like a traditional loan application could.
Prosper’s loan limits are slightly lower than Lending Club’s, topping off at $35,000, but so are its fees
Prosper’s loan origination fees could reach 5% compared to Lending Club’s 6% max. While 1 percentage point might seem insignificant, it adds up on a five-year, $35,000 loan.
Be sure to factor both the fees and the rates in as you decide on a loan. In some cases, borrowers with excellent credit can get the loan fee reduced to less than 1%, making Prosper a great alternative to a traditionally funded personal loan.
This blog is about improving your credit so I have to include a way for credit-challenged borrowers to build a better credit history.
Upstart, as its name implies, can help, even if your FICO score is as low as 580.
Of course, you’ll have fewer loan options. Loan terms won’t exceed 60 months, and this lender sets limits at $50,000.
But you could get your loan funded within one business day, and Upstart reports to all three credit bureaus which means your credit score can start climbing if you make regular, on-time payments.
Speaking of on-time payments, Upstart’s fees for late-payments and missed payments are higher than most, so make sure you stay on schedule. Also, Upstart doesn’t offer an autopay discount.
Of course, you’ll also pay higher interest rates with Upstart. Annual percentage rates could reach as high as 36%. This is far from ideal for well-qualified borrowers.
But credit builders can use Upstart to find a much-needed loan approval and access to loan funds on the same or the next business day.
By paying this loan off on time, you could qualify for a lower APR next time you need an unsecured personal loan.
And, it’s a better option than storefront lenders like OneMain Financial. If you like Upstart, check out Avant Personal Loans, too. Avant can also approve fair credit borrowers for short-term personal loans.
Discover Personal Loans, provided by the same financial institution that backs Discover credit cards, offers a great loan for people who want to pay off high-interest credit card debt.
You’d need a FICO score of 660 to apply, but Discover charges no origination fee and it can pay off your credit cards directly — saving you this extra step after you close your debt consolidation loan.
Discover doesn’t offer loans larger than $35,000, but you’ll find a wide range of repayment periods ranging from 12 to 72 months.
You could save a lot on loan payments by spreading out your repayment over the full 72 months. However, you’d also pay more interest over the life of the loan.
Discover charges only one fee — a $39 late payment fee — so if you make on-time payments you can save on fees compared to most other lenders.
Which Personal Loan Company Works Best For You?
There’s a personal lender out there for everyone, but not every lender is right for you.
A lender might be known for offering awesome personal loans, but they may not have the best personal loan interest rates you’re eligible for.
Before you sign the dotted line, take the time to shop around so you can rest assured that the loan you get offers the lowest rate you can qualify for.
Starting with the list of lenders and comparison tools above, you can be sure you’re getting the best terms possible on your personal loan.
In the next five minutes, you could be looking at personal loan offers tailored to meet your needs. You’re only a few clicks away!
Online Lenders vs In-Person Lenders
Online lenders like the 12 I’ve listed above can save most borrowers money on personal loan interest rates.
This is true because online lenders do not have brick-and-mortar bank branches to maintain.
However, your shopping process should also include local banks and credit unions in your area.
Credit unions, especially, can compete with online lenders because they don’t earn a profit. Instead, profits go back to the credit union’s members.
Getting a personal loan from the same place where you already have a bank account can also offer some extra convenience.
However, for most borrowers, online lenders offer the best rates on personal loans.
Loan Purpose Can Make a Difference
When a lender asks about your loan’s purpose, your answer could help determine how much you pay in interest.
A loan for home improvement projects or to consolidate medical bills tends to have a lower APR than a loan you’re getting for a vacation or a used car.
That being said, if you can get a secured loan for an automobile, you’ll save a lot in interest charges.
A secured loan uses the vehicle (or boat or other property) as collateral which means the bank takes less risk.
Always tell the truth about your loan purpose, even if you think it will increase your APR.
Qualifying for the Best Personal Loans
Since they’re unsecured loans, personal loans tend to have higher interest rates unless you have excellent credit.
When you apply, your lender will ask for your Social Security number. This allows the lender to check your credit and determine your eligibility and interest rates.
Borrowers with the best credit scores pay less interest and qualify for bigger loans. They pay lower monthly payments and lower upfront fees.
To boost your credit score in the months before you apply for an unsecured personal loan, follow these steps:
- Make sure you’re monitoring your credit score. Credit reporting errors can lower your score in the short-term which raises borrowing costs throughout the life of the loan. You can check your credit reports at no charge by visiting annualcreditreport.com. If you see inaccuracies, dispute them immediately.
- Make on-time payments on all your loans since payment history makes up 35% of your FICO score.
- Pay down your other loans and credit cards. This will lower your credit utilization ratio which comprises 30% of your FICO score. It will also lower your debt-to-income ratio which some lenders check by measuring your debt against your monthly or annual income.
- Look for COVID-19 relief options on your lender’s website if you’re struggling to make monthly payments during the pandemic. Covid relief measures are typically easy to qualify for, and they can preserve your credit history during a rough stretch.
This post has been about the best personal loans in the marketplace today. If you’d like to see my post about the best personal loans for borrowers with bad credit, check it out here.