The Best Online Personal Loans For October 2021
|Lender||APR area||Minimum loan amount||Maximum loan amount||conditions||Recommended creditworthiness|
|LightStream Best online personal loan||2.49% -19.99% (with autopay)||$ 5,000||$ 100,000||24-144 months||660+|
|SoFi Best online loan for good credit||4.99% -19.63% (with autopay)||$ 5,000||$ 100,000||2-7 years||680+|
|upstart Best online loan for fair loans||6.76% -35.99%||$ 1,000||$ 50,000||36-60 months||580+|
|Avant Best online loan for bad credit||9.95% -35.99%||$ 2,000||$ 35,000||24-60 months||600+|
|Pay off Best Online Loans For Debt Consolidation||5.99% – 24.99%||$ 5,000||$ 40,000||24-60 months||640+|
frequently asked Questions
What are the pros and cons of personal loans?
Using a personal loan to try to get out of debt faster or add value to your home can be a smart financial move. A personal loan can also be a lifeline when you have unexpected expenses and don’t have an emergency fund to cover the costs.
However, sometimes a personal loan can hurt you financially instead of improving your situation. Before you apply for a new loan, you should think about the advantages and disadvantages.
- The interest rates on personal loans can be lower than the interest rates that lenders charge on other types of debt. For example, the Federal Reserve announces that the average rate on credit cards that had rates rated in May 2020 was 16.28%. Meanwhile, the average interest rate on a 24 month personal loan was 9.65%. Borrowers with great credit can potentially qualify for personal loan rates as low as 5% or 6%.
- Using a personal loan to consolidate revolving credit card debt can improve your credit score. Credit scoring models place great emphasis on your credit utilization – the percentage of your credit card limits that is used according to your credit reports. When you consolidate credit card debt with a personal installment loan, your credit utilization can drop, potentially increasing your credit score.
- Your monthly payments are fixed. Most personal loans are fixed-rate installment loans, so your interest rate and the amount of your monthly payment will remain constant over the life of your loan. Fixed payments can make your monthly budget more predictable.
- You are not guaranteed a permit or a lower APR. If you have credit problems, high debt to income ratios, or other red flags that lenders are on the lookout for, you may have trouble qualifying for a loan. Even if you qualify for a personal loan with bad credit or some other factor that increases your risk in the eyes of a lender, the APR that you are offered can be high. The APR on some personal loans can typically increase as much as 35.99%.
- You could run into financial problems if you don’t carefully manage your debt. For example, some people use personal loans to consolidate credit card debt, but then turn around and then top up new balances on the same credit cards. Closing your credit cards after a debt consolidation session is usually not a good idea as it could lower your credit score. However, it is important that you do not charge your credit cards more than you can afford to pay off each month.
- Fees can be high. If your credit rating is excellent, you may be able to qualify for a no fee personal loan. However, some lenders charge commitment fees – sometimes up to 8% or more – that come directly from your loan proceeds. When looking for the best personal loan, be sure to consider the cost of lenders.
How to get a personal loan online
When you are ready to borrow money and you are sure that you can afford the new debt, it is time to start your search for the right loan. Fortunately, comparing loans online is usually a faster and easier process than comparing loans from traditional financial institutions.
Before applying for a loan, it is important to check and verify your credit reports and ratings with all three credit bureaus. Next, look for lenders who offer credit to people with your creditworthiness (excellent, good, fair, bad). You should make sure that the lenders you are considering offer the type of online loan that you need (consolidation loan, home finance loan, medical loan, etc.). Finally, compare the rates and fees available and choose your top 3 lenders as you prepare to begin the application process.
How to apply for an online personal loan
- Submit a prequalification request (if available) to at least 3 lenders.
- Select the lender who gives you the best overall deal and fill out your official loan application.
- Immediately send any additional documentation the lender requests and sign your loan agreement via email.
- Wait till you get your money.
Is An Online Personal Loan Safe?
Finding secure online loan through a reputable online lender isn’t difficult. Still, it is important that you do your homework to make sure you are dealing with a legitimate lender before submitting your personal information. Look for reviews of the best online lenders. It is also helpful to check for complaints that lenders have received with various agencies such as the Consumer Financial Protection Bureau.
Can You Get An Online Personal Loan With No Credit Check?
Finding an online loan (or any type of financing) with poor credit can be tricky. If you are looking for bad credit loans, you may find lenders who advertise “No Credit Checked Loans” or “Approval Guaranteed”. Such promises should be a warning sign. According to the Federal Trade Commission, a lender who is not interested in your credit history or history may be conducting an advance loan scam.
Can I get an online personal loan with a cosigner?
In a recent interview with Linda M. Hooks, director of the Department of Economics at Washington and Lee University, she said, “A co-signer can help someone with poor credit get a loan. However, the co-signer should be aware that they are liable for the loan just as they would for their own loan. This can also affect the credit history and score of the co-signer. ”
While whether or not you can apply for a joint loan with a co-signer is up to each individual lender, there are many who will allow joint loan applications. Remember, however, that just because you are allowed to apply for a loan with a co-signer, you shouldn’t do this. Cosigning carries significant risk to your friend or loved one. As a co-signer, this person is just as liable for the debt as the main borrower.
Should something go wrong, late payments or default can cause serious damage to your finances and credit reports, not to mention your relationship. Before asking someone to sign, consider these risks carefully.
Can I get a personal loan online right away?
Many online lenders offer instant approval (if you can qualify) when you apply for funding. However, an instant loan approval is not synonymous with instant access to your loan proceeds.
Once you qualify for a loan, the lender may ask you to take a few additional steps. For example, you may need to send documents confirming your identity and income. You may also need to electronically sign your loan agreement before the money is paid out.
The bottom line
The beauty of online credit is that it is easy to find the best deal. You can compare multiple lenders and fill out prequalification applications in a single afternoon. Also, by taking the time to find the loan that best fits your situation, you can save hundreds of dollars (sometimes thousands) in interest and fees over the life of your loan.
How we picked the best online personal loans
Investopedia is committed to providing consumers with unbiased, comprehensive personal lender reviews for all credit needs. We collected over 25 data points from 50+ lenders – including interest rates, fees, loan amounts, and repayment terms – to ensure our content helps users make the right loan decision for their needs.