Best personal loans of December 2023

Publish date: 2024-08-27
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If you’re struggling with credit card debt or need to borrow for a cash infusion, a personal loan might come in handy. It can help you streamline the payoff process and get your finances back under control. 

Here’s everything you need to know about personal loans:

What is a personal loan?

A personal loan combines multiple unsecured debts, like credit cards and medical bills into a single loan with one fixed monthly payment. As long as you lock in a lower interest rate than the rates you’re currently paying on your other debts, you’ll save money. Plus you can potentially pay off your debt faster. 

How to apply for a personal loan

Before you apply for a personal loan, you’ll want to take the following steps:

Determine how much you need

First, think about how much money you need to borrow based on your goals. While it may be tempting to apply for more, doing so can make it harder to get approved. It can also steer you into a cycle of debt. 

Check your credit score

It’s important to know where you stand credit-wise. This way you’ll have an idea of what types of loans you might be eligible for. 

You can usually check your FICO score for free through your bank, credit union, or a free credit monitoring site. Another option is to pull your credit reports for free from AnnualCreditReport.com. If you notice any errors, dispute them with the appropriate bureau. 

Get prequalified

By prequalifying, you can find out if you’re likely to qualify for a personal loan, and what interest rates and repayment terms you might be offered. Prequalify with at least a few lenders so you can easily compare your options. Note that doing so won’t hurt your credit as most lenders do soft pulls during this stage, rather than hard inquiries. 

Compare rates and loan terms

Once you’ve prequalified, it’s time to explore all your options. Compare rates, terms, fees, and unique features. This way you can find the right loan for your unique budget and needs. 

Complete the application process

When you find a lender that works for you, you can move forward with the application process. In most cases, you can apply online in just a few minutes. Be prepared to provide basic information like your name, address, and Social Security number. You might also have to submit documents such as your pay stubs and tax forms to verify your income.

18 best personal loan lenders

1. Avant

Avant is an online lender that strives to improve the borrowing experience for the middle class. The lender has provided funding to more than 2 million borrowers. Avant’s personal loans are accessible to borrowers with lower credit scores and, if approved, funds can be deposited into your account as quickly as the next business day.

Avant might be a solid choice if you need to cover a small expense, with loan amounts that start at $2,000 in most states. You can also manage your loan using Avant’s mobile app. However, Avant charges fees, and it may not be available in your state.

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2. Axos Bank

Axos Bank offers may be right for you if you need to borrow a large amount of money. The lender also offers flexibility — you can move your monthly payment due date by up to 10 days if you need to.

You can use an Axos Bank loan for nearly any purpose, though the lender prohibits the use of funds for investing, post-secondary education, and short-term real estate bridge financing. You’ll also need a high credit score to qualify — 700 or above — and at least four years of good credit history. 

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3. Best Egg

Best Egg offers unsecured and secured personal loans that are accessible to borrowers with fair credit. If you qualify, you can receive funds as soon as the next business day. The direct lender might be a fit if you need to consolidate debt — if you allow Best Egg to send funds directly to your creditors, you may qualify for a lower rate.

However, loans for Best Egg aren’t available in all states. The direct lender also charges an origination fee that can be high, and Best Egg has limited options for repayment terms.

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4. Discover

Discover offers personal loans for borrowers with fair to excellent credit. Loan amounts range from $2,500 to $40,000, and the lender has flexible repayment terms.

Discover doesn’t charge origination or prepayment fees, which can make a loan more affordable. In addition, Discover offers free access to your FICO credit score and other credit report information.

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5. Achieve (formerly FreedomPlus)

Achieve has loaned more than $7.5 billion to over 400,000 borrowers. With a minimum credit score of 620 for personal loans, Achieve is an accessible option if you have fair credit. The lender may be a good choice if you prefer working with a loan consultant who can customize your loan, though Achieve also allows you to complete the loan application process online.

Achieve also offers unique rate discounts — you may qualify for a lower rate if you apply with a co-borrower, show proof of retirement funds, or allow Achieve to pay your creditors directly when you consolidate debt. However, the lender has a high minimum loan amount, so it’s not ideal if you only need a small loan. In addition, Achieve doesn’t offer personal loans in every state, and it charges an origination fee.

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6. Happy Money

Happy Money offers a personal loan specifically designed to help you repay credit card debt. You can apply for what it calls the The Payoff Loan — once you’re approved, you can either have the money deposited into your bank account or applied directly to your credit cards.

The Payoff Loan comes in amounts ranging from $5,000 to $40,000, with terms spanning two to five years. You may qualify with fair credit, depending on your debt-to-income ratio and your credit history.

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7. LendingClub

LendingClub could be a worthy option if you want to apply for a personal loan with a co-borrower. Adding a co-borrower to your application can improve your chances of approval, especially if you don’t have the best credit.

LendingClub also offers a grace period for late payments — you have 15 days to make your payment before being charged a late fee. On the downside, funding may take a bit longer with LendingClub, as it can take up to a week to receive your loan funds after you’ve been approved.

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8. LendingPoint

LendingPoint has provided over $8 billion in loans since 2015. The lender considers other factors beyond your credit score when determining whether you qualify. LendingPoint’s mobile app also has free tools like credit score monitoring and budget tracking.

However, LendingPoint may take up to three business days to approve your application, and it doesn’t offer loans to borrowers in Nevada and West Virginia.

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9. LightStream

LightStream is an online platform that offers loans to individuals with good-to-excellent credit profiles. Unlike some lenders, LightStream offers benefits like an autopay discount. When you sign up for automatic payments prior to loan funding, you can qualify for a 0.50 percentage point discount on your interest rates.

In addition, LightStream has a convenient mobile app that makes it easy to check your loan balance and make payments. However, the lender has a high minimum loan amount, so if you only need a small loan, you’ll need to look elsewhere.

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10. Marcus by Goldman Sachs

Marcus by Goldman Sachs offers personal loans of up to $40,000 with budget-friendly repayment options. With Marcus, you can enjoy competitive rates and no fees.

11. OneMain Financial

With over 100 years of industry experience, OneMain Financial is an established source for personal loans. Its loan process typically only takes one day, though this varies based on when you submit your application and other factors.

If you’re looking for a more personal touch, OneMain also offers the option to speak to one of its loan specialists over the phone or at a local branch. It also offers a low minimum loan amount, which is ideal if you’re looking for a small loan. On the downside, its interest rates aren’t competitive for borrowers with good credit.

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12. PenFed Federal Credit Union

Because PenFed is a nonprofit credit union, it’s able to offer lower interest rates than some lenders.

You don’t need to be a member to apply for a loan at PenFed. However, once you decide to go ahead with a loan, you’ll need to become a member. This is a simple process that only takes a few minutes.

PenFed can be a great option if you need a small loan, since its minimum loan amount is just $600. However, the lender doesn’t disclose many of its eligibility requirements online, which can make it difficult to determine if you’ll qualify for a loan before applying.

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13. Prosper

Prosper is a peer-to-peer lending platform that matches investors to borrowers. If you need money fast, Prosper can usually fund your loan within one business day after verification and final approval of your loan.

While you need a credit score of at least 600 to qualify, you can apply with a co-applicant to increase your chances of approval. On the downside, the lender charges an origination fee, and you may run into other fees for making late payments, paying with a check, and more.

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14. Reach Financial 

Reach offers personal loans for debt consolidation and credit card refinancing, and has helped borrowers pay off $1 billion in debt to date. The lender offers appealing perks, including the ability to customize your monthly payment amount, and free access to your monthly credit score. In addition, Reach doesn’t have a  minimum credit score requirement, meaning you may qualify even with bad credit.

Reach offers flexible repayment terms up to five years. The lender also allows you to use autopay, which can help you avoid late fees. However, Reach does charge an origination fee — and since it can be up to 8% of the loan amount, it can be steep. 

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15. SoFi

SoFi offers personal loans up to $100,000, making it a worthwhile option for borrowers who need large loan amounts for home improvement projects, wedding costs, or other needs. SoFi can also fund your loan the same day you’re approved.

SoFi’s website states that you can check your rate online in just 60 seconds, with no impact on your credit score. And you don’t have to worry about how you’ll repay your loan if you’re laid off; if you’re approved for SoFi’s Unemployment Protection, the lender will modify your payments for up to 12 months and will help you find a new job, too.

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16. Universal Credit

Universal Credit offers fixed-rate loans between $1,000 and $50,000. The company enjoys high ratings on Trustpilot (4.8 stars) and Better Business Bureau (4.81 stars) as of May 2023. 

Universal Credit also offers fast funding — personal loans can be funded in as little as one day after you clear the company’s verifications. However, Universal Credit does charge an expensive origination fee, and it has just two repayment term options.

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17. Upgrade

Upgrade should be on your radar if you’re looking for fast funding. You might be able to get your money within a day.

18. Upstart

At Upstart, borrowers with poor credit or no credit at all can still qualify for a personal loan to meet their needs. Upstart’s lending model uses factors beyond your credit score — like your education and employment history — when determining loan approval.

With loan amounts as low as $1,000 and as high as $50,000, Upstart’s personal loans can help you consolidate your debt, cover unexpected medical bills, or finance home upgrades and repairs.

According to Upstart’s website, it only takes five minutes to check your rate. However, you won’t be able to apply with a cosigner, and your loan may come with an origination fee of up to 12% of the loan amount.

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Methodology

To find the “best companies,” Credible looked at loan and lender data points from 10 categories to give you a well-rounded perspective on each of our partner lenders. Here’s what we considered:

How to choose the best lender

As you shop around for personal loans, these factors can help you pick the best lender for your particular situation. 

Approval requirements

Approval requirements vary greatly from lender to lender. Some lenders look for good to excellent credit. Others are more lenient and open to offering loans for borrowers with fair credit or poor credit. Look for lenders whose eligibility criteria you met.

Interest rates

The interest rate you pay will determine how much your total loan will cost you in the end. If you have strong credit, you’ll find it easier to land a lower interest rate than someone with below average credit. A lower rate can save you hundreds or even thousands of dollars.

Loan amounts

Typically, personal loans range from $1,000 to $50,000. But some lenders on the Credible marketplace offer personal loans of up to $100,000 to qualified borrowers. You’ll need excellent credit to get approved for large amounts.

Repayment options

Repayment terms for personal loans usually range from one to seven years. A longer term means smaller monthly payments, but you’ll pay more interest over the life of the loan. You can lower your interest costs with a shorter term, even though your payments will be larger. 

Unique features

Some personal loan lenders offer unique perks to their borrowers. This includes interest rate discounts if you sign up for autopay, free credit score monitoring, and the chance to skip a payment after you’ve made a certain amount of on-time payments consecutively. 

Customer service

Since most personal loans come with longer terms of at least a few years, customer service is key. Ideally, you’d choose a lender with high customer service ratings. You should be able to contact them via phone, email, and/or online chat whenever you have a question or concern. 

Average personal loan interest rates by credit rating

Credit score rangeAverage interest rate
Excellent-credit loans10.3% to 12.5%
Good-credit loans13.5% to 15.5%
Fair-credit loans17.8% to 19.9%
Bad-credit loans28.5% to 32.0%

Pros and cons of personal loans

Just like any other financial product, personal loans come with benefits and drawbacks you should keep in mind.

Pros of personal loans

Cons of personal loans

Types of personal loans and their uses

Personal loans can be used for virtually any expense. Here’s a look at some of the most common types of personal loans. 

Debt consolidation

Debt consolidation loans let you consolidate high-interest debt, like credit card debt into a single loan. Instead of multiple debts with various due dates, you’ll have a single loan with one due date to keep track of. Plus, you might be able to save on interest if you can lock in a lower rate than the rates you have on your current debts.

Emergency expenses

An emergency expense can pop up when you least expect it. Your car might break down. Or you may face a sudden illness and require an expensive procedure. In these situations, a personal loan can be a real lifesaver, especially if you don’t want to drain your savings or max out your credit cards. 

Home renovations

Many home improvement projects may increase your home value and improve your quality of life. But they don’t come cheap. You can use a home improvement loan to cover the cost of a kitchen remodel, deck addition, or any other home improvement you have in mind. Best of all, you won’t have to risk losing your home, like you would with a home equity loan or home equity line of credit (HELOC). 

Major purchases or events

If you don’t have the cash to fund a major purchase, like furniture or an event, such as a wedding, a personal loan is ideal. You’ll receive the funds you need to cover your expenses with ease. 

Personal loan FAQs

Below you’ll find answers to some of the most frequently asked questions about personal loans. 

What is APR?

The annual percentage rate or APR on a personal loan refers to its total yearly cost and is usually expressed as a percentage. It includes fees in addition to interest. As you shop for personal loans, it’s important to compare APRs so you can choose an option that is right for your budget. 

What’s the difference between a secured loan and an unsecured loan?

A secured personal loan is tied to collateral, or an asset you own. This may be your house, car, or savings account. If you default on a secured loan, the lender will be able to seize your collateral. 

An unsecured loan, on the other hand, doesn’t involve collateral and is therefore more difficult to qualify for.

What documents are required for personal loans?

Most personal loan lenders will ask you to submit some documents to prove your identity and income. In addition to a completed loan application, you may need:

How much will a personal loan cost?

There are a number of factors that determine how much you’ll pay for a personal loan. These include the lender you choose as well as your interest rate and repayment term. You may want to use a personal loan calculator to get an idea of personal loan costs.

Where can I get a personal loan?

Personal loans are offered by banks, credit unions, and online lenders. Online lenders tend to offer low rates and fast funding. Banks and credit unions might be a good option if you’re already a customer and are able to score a discount or competitive rate.

What can you use a personal loan for?

You can use a personal loan to cover just about any expenses. Personal loans are often put toward debt consolidation, unexpected medical bills, major life events, and home improvement projects. A personal loan may even help you start a business.

How much can you borrow with a personal loan?

In general, personal loans range from $1,000 to $50,000. But you may find lenders who offer loans of up to $100,000. The amount you’ll qualify for will depend on factors like your credit, income, and existing debt. Keep in mind that larger loan amounts typically come with more stringent requirements. 

How do you calculate your debt-to-income ratio?

Your debt-to-income (DTI) ratio is the amount you owe in monthly debt payments compared to your income. Many lenders use it to decide whether to approve you for a loan. 

To calculate your DTI, add up your total debt payments and calculate your monthly gross income, which is your monthly pay before taxes and other deductions. Divide your total monthly debt payments by this number, then multiply by 100. A DTI of no more than 36% is ideal.

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