Best Personal Loans of February 2024
- SoFi – Best Overall Personal Loan
- LightStream – Best for Low Interest Rates
- LendingPoint – Best for Fast Funding & Below-Average Credit
- Upgrade – Best for Bad Credit
- Universal Credit – Best for Comparing Multiple Offers
- Discover – Best for No Interest If Repaid Within 30 Days
- Upstart – Best for Loans as Low as $1000
- Avant – Best for Range of Repayment Options
*Some APRs and loan amounts are available only for certain loan purposes.
The above personal loan rates and details are accurate as of February 23, 2024. While we update this information regularly, the annual percentage rates (APRs) and loan details may have changed since the page was last updated. Keep in mind, some lenders make specific rates and terms available only for certain loan purposes. Be sure to confirm available APR ranges and loan details, based on your desired loan purpose, with your lender before applying.
How To Compare Best Personal Loans
Pro Tip
Don’t settle for the first personal loan you come across. Shop around and compare interest rates, repayment terms, and any additional fees or charges. A slightly lower interest rate or more flexible terms can make a significant difference in the long run.
Complete Guide to Personal Loans
What Is a Personal Loan?
A personal loan is a type of lump-sum financing borrowers can get from a traditional bank, credit union or online lender, which they can use for a variety of expenses. Common uses include medical bills, auto repairs, home improvement projects and debt consolidation. Personal loans typically have repayment terms between two and seven years and offer interest rates as low as 3% for high-qualified borrowers.
Read More: What Is A Personal Loan?
How Do Personal Loans Work?
Personal loans are typically available from banks, credit unions and online lenders. Prospective borrowers apply for a loan either online or in person and then wait for a decision—approval or denial. If approved, borrowers receive their funds as a lump-sum payment into their bank account, and interest starts to accrue in the first month. Personal loans require fixed monthly payments over the entire loan term, typically between one to seven years. Many personal loans can be funded within a few business days so you don’t have to wait to get the money you need.
Reasons To Get a Personal Loan
You can use personal loans for just about any type of personal expense. Most commonly, though, personal loans are good for:
- Emergency expenses. If you need money right away for unexpected expenses like medical bills, funeral costs, car repairs or something else that needs immediate attention, you can use an emergency personal loan.
- Debt consolidation. Personal loans are a great way to consolidate high-interest debt to help save money on interest and streamline your payments.
- Home improvements and repairs. If you have an upcoming home project, you can take out a home improvement personal loan to help finance the costs. You can also use personal loans for unexpected home repairs or maintenance expenses.
- Auto financing. While auto loans are the most common way to finance a vehicle, personal loans also can help you get the job done. Personal loans have fewer restrictions on the types of cars you can purchase, but they typically charge higher interest rates than traditional auto loans.
- Moving costs. The cost of moving can add up quickly. If you don’t have cash on hand, a personal loans for moving can help you finance the costs.
Pro Tip
Using personal loans can be a convenient way to consolidate and pay off high-interest credit card debt. Interest rates on personal loans are usually fixed, which means the interest rate and payment stay the same for the entire loan term. You can also take comfort in knowing your debt will be paid off by a predetermined date as long as you make each payment as scheduled.
Who Is a Personal Loan Right For?
A personal loan is right for someone who needs cash to cover an expected expense or consolidate debt. Although personal loans can be crucial in an emergency, they can be expensive and in some cases, can become a burden once they need to be repaid.
When you take out a loan, you’ll repay the amount and any interest and fees. This means your expense will cost more than the price tag you see. For example, let’s say you have auto repairs of $2,000 and you take out a one-year loan with an interest rate of 11%. You would owe $121.16 in interest, bringing your total balance to $2,121.16.
Use a personal loan calculator to see what a personal loan could cost you, including interest. The loan calculator can also give you an idea of what your loan payments could look like as well.
What’s the Largest Personal Loan You Can Get?
The loan amount you have access to depends on your creditworthiness and what a specific lender offers. For example, personal loans typically range from $1,000 to $50,000, but some lenders offer up to $100,000. Larger loan amounts are usually reserved for highly qualified applicants because those transactions are riskier for lenders.
Because you’ll owe interest on the entire loan amount, it’s crucial to only borrow the amount you need and nothing more. We also recommend using our personal loan calculator to estimate your monthly payments and ensure you can afford your desired loan amount.
What Loan Term Length Should You Choose?
Much like your loan amount, personal loan term lengths play a key role in determining both your monthly payment and interest charges. Loans with shorter terms come with larger monthly payments but less interest overall. Longer term loans, however, offer smaller monthly payments at the cost of more interest paid over the life of your loan.
For example, if you borrow $3,000 over one year with 11% interest, you’d owe $265 per month and $182 in interest overall—a total of $3,182. Now let’s say you extend that same loan over three years. You’d owe $98 per month but $536 in total interest—or $3,536 for the full loan amount and interest. This makes it clear that you can save money by opting for shorter loan terms, but that’s only possible if you’re able to afford the higher monthly payment.
Current Average Personal Loan Interest Rates
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Average Personal Loan Interest Rates By Credit Score
Here are the average estimated interest rates for personal loans based on VantageScore risk tiers, according to Experian. Please note that interest rates are determined and set by lenders. The rates provided are estimations.
While lenders determine and set rates, as an applicant, you can increase your chances of receiving a low-interest personal loan.
“Consumers with higher credit scores generally will qualify for lower interest rates. To increase your credit scores, make sure you make your payments on time and try to keep your balances low. Missed payments and high [credit] utilization rates, or balance-to-limit ratios, on your credit cards are the two most heavily weighed factors in determining your credit scores. If possible, I recommend checking your credit report and scores three to six months before you apply for a personal loan. This will give you time to take steps to improve your credit standing if necessary.” -Rod Griffin, senior director of consumer education and advocacy at Experian
Best Personal Loans by Credit Score
Pros and Cons of Personal Loans
Pros
- Interest rates and monthly payments remain fixed throughout the life of the loan
- Fewer qualification requirements than other financing methods, such as lower minimum credit score requirements
- You can use personal loans for a variety of reasons
Cons
- You have to repay the full amount of your loan, even if you end up not needing it all
- Borrowers pay interest on the full loan amount
- Possible origination fees between 1% and 8% of the loan amount
Best Place to Get a Personal Loan
You can get personal loans from three types of institutions:
- Online lenders. These are often technology-based non-bank companies that offer a small range of lending products, including personal loans. Online lenders typically offer low interest rates, loans that are available nationally and can provide funds within 24 to 48 hours.
- Banks. Many local and national banks offer personal loans in addition to other financial products, such as checking and savings accounts. If you have an existing relationship with a bank, you may want to consider opening your personal loan through that bank.
- Credit unions. These are local to your community and tend to offer applications both online and in person. Credit unions require membership, so be sure to check if you’re eligible.
The best place to get a personal loan is where you can access the most favorable terms and loan limits that fit your needs.
Related: Where To Get A Personal Loan
How to Get a Personal Loan
While the process varies by lender, follow these general steps to apply for a personal loan:
- Check your credit score. Start by checking your credit score for free through your credit card issuer or another website that offers free scores. This will give you an understanding of your creditworthiness and your qualification chances. Aim for a score of at least 610; however, a score of at least 720 will yield the most favorable terms.
- If necessary, take steps to improve your credit score. If your score falls below 610 or you want to boost your score to receive the best terms possible, take time to improve your credit score before applying, such as lowering your credit usage or paying off unpaid debts.
- Determine how much you need to borrow. Once you check your credit score, calculate how much money you want to borrow. Remember, though, you’ll receive your money as a lump sum, and you’ll have to pay interest on the entire amount—so only borrow what you need.
- Shop around for the best terms and interest rates. Many lenders will let you prequalify prior to submitting your application, which lets you see the terms you would receive with just a soft credit inquiry. Prequalifying lets you shop around for the best rates without hurting your credit score.
- Submit a formal application and await a lending decision. After you find a lender that offers you the best terms for your situation, submit your application online or in person. Depending on the lender, this process can take a few hours to a few days.
Related: 5 Personal Loan Requirements To Know Before Applying
How To Get a Personal Loan With Bad Credit
Many lenders only offer loans to people with good credit, so it can be tougher to find an affordable loan if you have bad credit. You can increase your chances of finding a better loan by researching lenders and finding one that has flexible qualification requirements.
Also, if you have any errors on your credit report, contact the credit bureaus to get any mistakes corrected as that can positively impact your credit. Beyond that, finding a co-signer can be an effective way to qualify for a personal loan with bad credit.
Related: Best Debt Consolidation Loans for Bad Credit
Recap of the Best Personal Loans of 2024
Related: Compare Personal Loan Rates
Methodology
We reviewed 29 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the 8 best lenders based on the weighting assigned to each category:
- Loan details: 20%
- Loan cost: 35%
- Eligibility and accessibility: 20%
- Customer experience: 15%
- Application process: 10%
Within each major category, we also considered several characteristics, including available loan amounts, repayment terms, APR ranges and applicable fees. We also looked at minimum credit score requirements, whether each lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.
Frequently Asked Questions (FAQs)
What is a good interest rate on a personal loan?
A good interest rate on a personal loan is one that’s lower than the national average for borrowers with excellent credit. However, the interest rate you receive depends on several factors, and lenders frequently charge other fees that can make a loan more expensive. To minimize costs, maintain a good to excellent credit score (at least 670).
How are APRs determined for personal loans?
An annual percentage rate—or APR—is the total annual cost of a loan, over the life of the loan. Stated another way, it’s the total cost of credit based on the interest rate, fees and length of the repayment term. Some lenders include origination fees in the advertised APRs, while others take them out of the loan amount at funding. The APR of a personal loan, therefore, will vary depending on your creditworthiness, the size of the loan, how long you have to repay the loan and the lender.
What fees should I look out for when choosing a personal loan?
Common fees associated with personal loans include origination fees, late payment fees and returned check fees. Some lenders also charge a prepayment penalty to borrowers who opt to pay off their loans early. Keep in mind, however, that many lenders offer a no-fee structure that can reduce costs over the life of your loan—so it’s important to always shop around for the most favorable loan terms.
What can you use a personal loan for?
In general, personal loans are restricted to use for just that—personal uses. Lenders typically extend personal loans to borrowers who want to finance things like home improvement, travel and vacations, weddings, car-related expenses and debt consolidation. On the other hand, banks often restrict the use of personal loan funds on post secondary education costs, business purposes and illegal activities.
While most lenders ask prospective borrowers to provide the purpose of the loan in their application, some banks are more strict—requiring borrowers to use the loan on exactly what they identify in the initial loan application.
How many personal loans can you have at once?
You may have more than one personal loan with one specific lender or multiple loans with different lenders. However, some lenders may set a limit to how many loans you can have open through them, such as two loans. Plus, opening multiple loans can make you appear as a riskier borrower and lower your qualification chances.
Can you refinance a personal loan?
If you want to refinance your personal loan, you’ll need to take out a new loan and use that money to pay off your existing loan. Although you can refinance at any time, it’s best to do it when your credit scores have improved so you can qualify for a lower interest rate. Refinancing also may be a good option if you want to reduce your monthly payments by extending the loan term.
How long does it take to get a personal loan?
Typically, it doesn’t take long to get a personal loan. Some lenders offer online applications with automated approvals and same-day funding. Most lenders, however, take a few business days to a week to process your application and disburse your funds.
If the lender needs to verify any information with you, it can take longer. Once you apply for a loan, look for any communication from your lender so you can respond promptly.
What is the easiest personal loan to get?
The easiest personal loan to get is one with low, or no, credit score and income requirements. Although these loans can be enticing, they often come with high interest rates and fees, which make them expensive to borrow and difficult to repay. Before accepting one of these loans, be sure to understand any fees that come with the loan and the repayment terms.
How do I manage a personal loan?
Once you accept a personal loan, you’ll need to manage repayment to stay current with your loan. First, find your payment due date—oftentimes, it’ll be in your loan agreement. Then, set up automatic payments so you don’t miss any of your loan payments. Finally, double check that your lender is receiving your payments after the first withdrawal.
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