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A personal loan is an unsecured installment loan. If you qualify, you'll receive a lump sum of cash, which you can use for just about any purpose, from home improvements to medical expenses. You'll repay it over time (usually several years), with fixed monthly payments. It's a versatile financial tool, and often cheaper than alternatives like credit cards or short-term, emergency loans.
SoFi is our choice for the best overall personal loan lender due to its low cost, high customer satisfaction ratings, and excellent benefits package. Our decision is based on hundreds of hours of research, including a survey of, and interviews with, recent personal loan borrowers.
As you review our personal loan picks below, keep a few things in mind:
- Your credit score
- How much money you need
- An APR you can afford
- The loan features and services you need
When you've found a match, click the link and get pre-qualified.
10 Best Personal Loans for July 2024: Rates Starting at 7.80%
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- Best Overall: SoFi
- Best for Debt Consolidation: Discover
- Best for Emergency/Quick Funding: Upgrade
- Best for Bad Credit: Upstart
- Best for Excellent Credit: PenFed Credit Union
- Best With No Credit Check: OppLoans
- Best Big Bank: U.S. Bank
- Best for Small Loan Amounts: Lake Michigan Credit Union
- Best for Military Members: Navy Federal Credit Union
- Best Credit Union: Patelco Credit Union
| Company | APR | Credit Score est. | Loan Amount | More Details | |
|---|---|---|---|---|---|
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Best Overall : SoFi
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- APR Range: 8.99% - 29.49%
- Loan Amount: $5,000 - $100,000
- Loan Terms: 24 months - 84 months
While lower-rate personal loans do exist, SoFi is the most affordable lender offering a good blend of options plus some nice extras. SoFi is one of the few lenders to offer a comprehensive benefits package with all of its loans, including free financial planning from an advisor and career counseling and support.
Borrowers seem to approve of this approach, rating SoFi as the fourth-best in J.D. Power’s annual survey of customer satisfaction among personal loan lenders. The biggest downside of borrowing with SoFi is that with a minimum loan amount of $5,000, borrowers looking for a smaller loan are left out. And while you can apply with a co-borrower, SoFi doesn’t offer the option to apply with a co-signer or use collateral if you’re not able to be approved otherwise.
SoFi was founded in 2011 and is based in San Francisco, California. It has funded more than $73 billion in loans of various types, including student loans and personal loans.
Co-borrowers are jointly responsible from the beginning to repay the loan with you. Co-signers only repay the loan if you default, making it an easier sell to get someone on board with your loan.
Zero fees charged
Same-day funding available
Access to SoFi membership benefits
No secured loan options
Can’t apply with a co-signer, but co-borrowers are accepted
High minimum loan amounts
- Available in all U.S. states and Washington, D.C.
- Must be at least 18 years old in most U.S. states
- Must have income or a job offer starting within 90 days
- Must be a U.S. citizen, permanent resident, or non-permanent resident
- Loans can’t be used for real estate, investments, businesses, or college financing.
Best for Debt Consolidation : Discover
- APR Range: 7.99% - 24.99%
- Loan Amount: $2,500 - $40,000
- Loan Terms: 36 months - 84 months
As long as you’re not looking to consolidate any debt from a Discover card, a Discover personal loan is an excellent choice for debt consolidation. It offers a fast funding time with a next-business-day deposit into your bank account if everything goes smoothly, and its low rates with zero origination fees make it easier to pay back. It was ranked as the third-best personal loan option in 2023 by J.D. Power.
The downside is that you can only apply as a solo applicant, although you are able to use your household income on your application, so a partner or other family member can still help you out in this area. You can’t apply with a co-signer or co-borrower or use collateral for a Discover loan, however, meaning you’ll need to qualify on your own credit merits. It’s always a good idea to pay on time to avoid damaging your credit, but in this case, it’s especially important given that Discover charges an especially high late payment fee of $39.
Discover was founded in 1986 as a subsidiary of Sears, Roebuck & Company offering credit card services. It is headquartered in Riverwood, Illinois and has funded more than $10 billion in personal loans.
No origination fee
Excellent customer satisfaction ratings
Can send payment to creditors directly
Only accepts individual applications
Can’t use collateral for a secured loan
Can’t consolidate debt from a Discover credit card
- Must be at least 18 years old
- $25,000 minimum annual household income
- Must be a U.S. citizen or permanent resident
- Available in all U.S. states and Washington, D.C
- Must have an email address, physical address, and a smartphone or computer
- Loans can’t be used to consolidate debt from a mortgage, auto loan, or Discover credit card.
Best for Emergency/Quick Funding : Upgrade
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- APR Range: 8.49% - 35.99%
- Loan Amount: $1,000 - $50,000
- Loan Terms: 24 months - 84 months
Upgrade accepts applicants with fair credit scores, and if you still don’t qualify or want lower rates, you can apply with three backup options: pledging a car for collateral, applying with a co-borrower, or applying with a co-signer. If you’re approved, you can receive your loan funds as soon as the next business day.
You do pay a price for that convenience, however: Each personal loan comes with an origination fee ranging from 1.85% to 9.99%, an expensive fee considering many lenders don’t charge anything at all. On the other hand, Upgrade does offer rate discounts if you sign up for autopay or a debt consolidation loan, and it offers a $200 sign-up bonus if you open and use a new Upgrade checking account when you take out your loan.
Upgrade is headquartered in San Francisco, California. It has provided more than $24 billion in loans and credit in the past five years.
Multiple discount options
$200 checking account bonus offer
Allows collateral, co-borrowers, and co-signers
Expensive origination fee
Poor customer satisfaction ratings
High interest rate for some applicants
- Available in all U.S. states and Washington, D.C.
- Must be at least 18 years old in most U.S. states
- Must have an email address and a bank account
- Must be a U.S. citizen, permanent resident, or non-permanent alien with a valid visa
- Loans can’t be used for college expenses, illegal activities, investments, or gambling.
Best for Bad Credit : Upstart
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- APR Range: 7.80% - 35.99%
- Loan Amount: $1,000 - $50,000
- Loan Terms: 36 months - 60 months
For borrowers with credit scores in the "bad" or "poor" range—between 300 and 579—finding a loan is not easy. Loans those borrowers do find usually come with APRs in the high double- or triple-digits.
Upstart has the lowest minimum credit score of any lender on our list; they will consider applicants who don't even have sufficient credit history to produce a score. For those who do have a score, different Upstart partners have different minimums, offering credit access to the full spectrum of credit profiles. You can borrow up to $50,000, and, if approved, your loan funds can be disbursed in as little as one day. Rates won't go higher than 35.99%.
Even if you have no credit history at all, you can still be eligible for a loan if you are enrolled in or graduated from a degree program.
Upstart has made available to borrowers more than $35 billion in loans of various types, including personal loans. It is headquartered in San Mateo, California and was founded in 2012.
Low minimum credit score
Fast funding
Good loan amount flexibility
High origination fee
High APRs
Fewer loan term options than others
- Full range of credit scores are considered, including those with no score
- You must be 18 years old.
- An email, verifiable name, verifiable date of birth, and social security number
- U.S. bank account with routing number
- Minimum annual income of $12,000
- Have a job or one starting within six months
- Meet partner lenders' credit requirements
Best for Excellent Credit : PenFed Credit Union
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- APR Range: 8.99% - 17.99%
- Loan Amount: $600 - $50,000
- Loan Terms: 12 months - 60 months
Pentagon Federal Credit Union—or PenFed for short—is one of the largest credit unions in the country, with nearly three million members. It’s also one of the easiest to join, with no special requirements to meet other than popping $5 into a savings account to get your membership started. You can apply for a loan without joining to see your options, but if you decide to accept PenFed’s loan offer, you’ll need to join the credit union to receive your loan funds.
You’ll also need good credit in order to be approved. If you don’t have that on your own, you may be able to apply with a co-borrower or use collateral to secure your loan, although PenFed doesn’t provide any details on how this works. In addition to offering excellent rates on a wide range of loan amounts, PenFed also has a robust discount program offering savings on H&R Block tax preparation, college planning services, insurance, and more.
PenFed is one of the nation’s largest credit unions. It was founded in 1935 and is headquartered in McLean, Virginia.
No origination fee
Excellent range of loan options
Easy membership requirements
Doesn’t allow co-signers, but they do allow co-borrowers
Doesn't offer longer loan terms
Doesn’t offer direct payment to creditors
- Available in all U.S. states and Washington, D.C.
- Must join the credit union by depositing $5 in a savings account
Best With No Credit Check : OppLoans
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- APR Range: 160.00% - 179.00%
- Loan Amount: $500 - $4,000
- Loan Terms: 9 months - 18 months
Borrowers with poor, or no, credit who cannot qualify for a personal loan from most other lenders may be able to qualify for a loan from OppLoans. Unlike most lenders, OppLoans doesn’t rely on a borrower’s credit score or credit history to make a lending decision. Borrowers also won’t pay origination fees and can access loan funds the same day. OppLoans provides a wealth of personal finance resources and tools on its website, and it has gotten strong reviews on third-party customer review sites like Trustpilot.
But it’s important to note that this accessibility comes at a high cost. Interest rates on OppLoans’s loans are considerably higher than traditional personal loans—you’ll pay an APR of 160% for your loan. Additionally, repayment plans are significantly shorter, just nine to 18 months, and you can only borrow up to $4,000.
OppLoans was founded in 2012 and is headquartered in Chicago, Illinois. It has extended loans to more than a million borrowers since its founding.
No minimum credit score requirement
Strong customer service
Same-day funding available
Very high interest rates
Short repayment terms
Not available in all U.S. states
- Be at least 18 years of age
- Have a bank account
- Have a verifiable source of income
- Receive income through direct deposit
- Available in 37 states; not available in: Colorado, Connecticut, Georgia, Iowa, Maryland, Massachusetts, Nevada, New Hampshire, New York, Pennsylvania, South Dakota, Vermont, West Virginia.
Best Big Bank : U.S. Bank
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- APR Range: 8.74% - 24.99%
- Loan Amount: $1,000 - $50,000
- Loan Terms: 12 months - 84 months
Working with a large bank offers the added advantage of being able to walk into a branch and talk to someone about your loan. U.S. Bank is the fifth-largest bank in the country, with over 2,300 branches in about half of U.S. states. Current customers of U.S. Bank will benefit the most, with reduced credit requirements and increased maximum loan amounts.
If you’re not a current customer, however, you’ll be limited to a smaller loan of $25,000 or less. U.S. Bank also used to have a better reputation, ranking as high as the second-best option for personal loans in 2022 by J.D. Power. However, it was severely demoted down to below-average status in the 2023 iteration of the survey.
U.S. Bank was founded in 1863 and is headquartered in Minneapolis, Minnesota.
No origination fee
In-branch service available
Autopay discount
Poor customer satisfaction ratings
Only available in about half of U.S. states
Restrictions for non-current customers
- Only available in 27 U.S. states
Best for Small Loan Amounts : Lake Michigan Credit Union
- APR Range: 9.99% - 18.00%
- Loan Amount: $250 - $25,000
- Loan Terms: 24 months - 60 months
Lake Michigan Credit Union (LMCU) earns the nod for best small loan lender because it offers personal loans as small as $250—the smallest in our database with reasonable rates and terms. Many competitors have loan amounts starting between $500 and $2,000, and a few offer loans under $500, so you have some options, depending on the size of your need.
LMCU also offers competitive APRs and doesn’t charge origination fees, helping to keep your borrowing costs down. Its minimum required credit score of 620 makes its loans accessible to borrowers with fair credit.
Be aware that its max loan limit is low (if a larger loan is in your future), and its terms are not as flexible as other lenders we evaluated. It also doesn’t offer pre-qualification, which means you can’t see your rate and term without completing a formal application (with a slight downward nudge to your credit score). And because it’s a credit union, you’ll need to become a member before borrowing, although membership is easy to get.
Today, LMCU has over $12 billion in assets, and it's the largest financial institution headquartered in West Michigan. It is the 17th largest credit union in the nation, based on asset size.
Small loan amounts
Low minimum credit score of 620 required
No pre-qualification
Membership required
- Available in all U.S. states and Washington, D.C.
- You must have a minimum credit score of 620 to qualify for a personal loan with LMCU.
- To become a member, you must live, work, or go to church in Florida or Michigan’s lower peninsula, be a U.S. citizen with an immediate family member who is an LMCU member, or be a U.S. citizen and contribute $5 to the Amyotrophic Lateral Sclerosis Fund.
Best for Military Members : Navy Federal Credit Union
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- APR Range: 8.99% - 18.00%
- Loan Amount: $250 - $50,000
- Loan Terms: 6 months - 180 months
Navy Federal has a lot going for it. Aside from its wide range of term lengths and loan amounts to choose from, there are no origination fees and even a 0.25% rate discount on top of the already fantastic rates if you use autopay. It also received the highest satisfaction score for personal loans in J.D. Power’s 2023 study (unofficially, as it does not meet all of J.D Power's requirements for inclusion), far surpassing any other lender.
However, as the name implies, the biggest barrier for most people in accessing these loans is its military-only (or military-adjacent) membership requirement. Furthermore, assuming you’re even eligible to join, it’s a clunky process to apply if you’re not already a member. The credit union doesn’t offer a way to pre-qualify for its personal loans, meaning you’ll need to first join the credit union in order to see your options at all, even if you don’t end up selecting Navy Federal as your lender.
Navy Federal Credit Union is the nation’s largest credit union. It was founded in 1933 and is headquartered in Vienna, Virginia.
Same-day funding
Autopay discount
Highest J.D. Power customer satisfaction ratings
Doesn’t allow co-signers
Not available to most civilians
Doesn’t offer loan pre-qualification
- Available in all U.S. states and Washington, D.C.
- Must join the credit union by depositing $5 in a savings account to establish membership
- Membership open to active-duty military members, veterans, Department of Defense contractors, and their families
Best Credit Union : Patelco Credit Union
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- APR Range: 9.30% - 17.90%
- Loan Amount: $300 - $100,000
- Loan Terms: 6 months - 84 months
Patelco’s personal loan program is a bit more intricate than most lenders, but that works to your advantage. You’ll be able to choose from a broad range of loan amounts and term lengths to suit just about any need you might have. Patelco also offers two discounts. The first is a 0.10% rate reduction if you meet Commitment Household Membership by using more of the credit union’s services. The second discount is 0.50% off your interest rate for paying on time for 12 months straight. This discount is given up to three times for a total of 1.50% off your interest rate for the rest of the loan's life. It'll pay the first year of your membership requirement, unlike most credit unions.
Patelco is a relatively recent addition to our list of serious competitors for the best personal loans. So it may not be surprising that there’s not many reviews out there from actual customers. In addition, its checking accounts may come with monthly fees and its savings accounts don’t always offer good rates unless you have a high balance, making this a better option for people looking more for low loan rates than for high deposit account rates.
Patelco Credit Union was founded in 1936 by employees of the Pacific Telephone & Telegraph company. Its headquarters are in Dublin, California and it boasts more than $9 billion in assets.
No origination fees
Many discounts available
Wide range of loan options
Scarcity of customer reviews
Uninspiring checking and savings accounts
- Available in all U.S. states and Washington, D.C.
- Must become a credit union member
- If you don't qualify to become a member for free, you can join the Financial Fitness Association; Patelco will pay for the first year.
Compare the 10 Best Personal Loans for July 2024: Rates Starting at 7.80%
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The Bottom Line
If you're looking for a lender with great customer service and competitive rates SoFi is a good pick. It offers the best all-around blend of good things to look for in a personal loan, like reasonable rates, quick funding, and membership benefits. Navy Federal Credit Union is our go-to recommendation for military members due to its especially customer-friendly policies and outstanding reputation. Discover, PenFed Credit Union, and Lake Michigan Credit Union round out the top options for the borrower-friendly loans available today.
What Is a Personal Loan and How Does It Work?
An unsecured personal loan is a general-purpose installment loan. Unlike auto loans or mortgages, a personal loan can be used for just about anything. A personal loan is paid out in one lump sum after your application is approved, typically via a bank deposit or a check mailed to your address. Once your personal loan funds are disbursed, you’ll make the same fixed monthly payment for the life of the loan, usually a few years in length.
Use our personal loan calculator to zero in on a loan amount and term that fits your credit, your financial history, and your budget. You can see how long it'll take you to pay down your loan—and your loan's total cost—with different amounts, rates, and credit levels.
Most personal loans are unsecured, which means they’re not backed by collateral. If you have assets such as a car or cash savings, some lenders allow you to pledge them toward a secured personal loan in order to get lower rates or a better chance at approval. If you default, your lender can claim ownership of your collateral to repay your debt.
Personal loans may be solo, or you can have a co-signer or a co-borrower on your loan. A co-borrower is often someone such as a spouse or partner who agrees to share responsibility with you for paying off the loan from the start. A co-signer, on the other hand, only agrees to repay the loan if you default, giving the lender more peace of mind—which can sway them into approving your application.
Who Has the Lowest Personal Loan Interest Rates?
Among the the 70 lenders we evaluated to create this list, American Express offers the lowest advertised rate, currently 5.91%. But not everyone is eligible for that rate. For one thing, American Express only lends to existing customers that it invites to apply. For another, the lowest advertised rates are only offered to borrowers with the strongest credit profiles (high credit scores, low debt-to-income ratios), and generally for loans with shorter terms.
This means that lenders will offer most borrowers a rate other than the lowest advertised one. And for some borrowers, that might be a rate closer to the advertised maximum.
The average rate in the chart below is the average rate offered by 19 of our lender partners to borrowers who submit applications through their systems. It includes loan offers made to people with the strongest credit profiles and to those with the weakest.
The rate you might be offered may be better or worse than the average (hopefully it's better), but ultimately that will depend on the strength of your credit profile.
Where to Get a Personal Loan
You'll find personal loans in most places where you already do your banking. Different types of lenders may offer personal loans with contrasting features or benefits.
- Banks: Personal loans aren’t the main attraction at most banks, although most do offer them. Banks tend to charge a higher interest rate on a personal loan and usually have stricter credit score requirements.
- Credit unions: You’ll need to meet membership requirements to join, but once in, credit unions are generally more flexible than banks in offering affordable personal loans to members.
- Online lenders: You can find many more online lenders than local credit unions and banks, expanding your options significantly. Online lenders generally have the easiest-to-meet personal loan requirements of all.
Note that some banks offer lower rates than many credit unions do, for example, and some online lenders may be pickier about your credit score than other lenders.
Reasons to Apply For a Personal Loan
One of the reasons why personal loans are so popular is because they can be used for just about anything. People commonly use personal loans to pay for:
- Surprise emergency expenses
- Veterinary or medical bills
- Consolidating higher-interest debt
- Taking a vacation or getting married
- Home improvement projects and repairs
Most lenders don’t allow personal loans to be used for college tuition, business expenses, gambling, house down payments, or illegal activities.
Debt consolidation is the most popular reason for getting a personal loan, according to Investopedia's 2023 Personal Loan Borrower Survey. Home improvements and large purchases were the next two most common reasons cited for seeking a loan. The best debt consolidation loans are ones with low interest rates and flexible repayment terms.
Pros and Cons of Personal Loans
As with any financial tool, it’s important to weigh the benefits against the drawbacks if you’re looking to borrow money.
Quick funding times
Predictable monthly payments
Cheaper than using credit cards
Use for a wide range of expenses
Builds credit with on-time payments
Unsecured loans are more expensive than secured loans
Harms credit if you miss payments or default
May lose collateral if you default on secured loan
Requires good to excellent credit for the best rates
Tips for Picking the Best Personal Loan for You
When you're shopping for a loan, here are some of the factors you should evaluate:
- Interest rates: This is the biggest expense associated with a loan, so it should be at the top of your comparison list. Look for a lender’s annual percentage rate (APR), which includes fees (like origination fees) and your personal loan's interest, so you’re comparing apples to apples.
- Origination fees: Some lenders charge an origination fee to open the loan. Usually, this cost is subtracted from the total amount borrowed, so be sure you account for that in your planning.
- Loan amounts and term lengths: Some lenders may not offer loans in the amounts and repayment times you want or need.
- Prepayment penalties: These are fees the lender charges if you pay off the debt before the end of the term. These are rare with personal loans (none of the 70 lenders in our database charge them), but it’s worth looking out for.
- Minimum credit score and income requirements: Not all lenders share their qualification requirements upfront, but many do. If your credit is lower or your income is, you may have a difficult time securing a loan you can afford.
- Option to use a co-signer or co-borrower: Many lenders allow you to apply with a co-signer or co-borrower, which can help you qualify.
- Option to use collateral: Personal loans are generally unsecured, which means they don’t require collateral. Some lenders do offer secured personal loans (with cars, CD or savings accounts, or even your home’s fixtures as collateral). This can make it easier to qualify and often results in lower APRs.
- Direct payment to old creditors: For debt consolidation loans, many lenders will pay your creditors directly. This is convenient for you and offers a bit of risk reduction for the bank.
- Loan use restrictions: Make sure the lender you are interested in borrowing from doesn’t have restrictions against how you intend to use the funds. Nearly all lenders prohibit using personal loans for gambling or investing, school expenses like tuition, or business funding. Some may have tighter restrictions.
- Customer reviews and ratings: Finally, read a few reviews of potential lenders on financial product and service educational sites, as well as customer experience sites like Trustpilot to get as broad a view as possible.
How to Qualify For a Personal Loan
Personal loans are usually easy to qualify for, although it can be hard to get a loan with bad credit, and some borrowers face difficulties in getting approved. Each lender has specific requirements you’ll need to meet, but in general, your chances of qualifying with any given lender increase if you have good to excellent credit, a consistently high income, and low existing debt payments. A healthy debt-to-income ratio will improve your odds of approval and getting a better rate. It may be easier to qualify for smaller loan amounts with shorter term lengths as well.
Average APR by Credit Score
Before You Apply for a Personal Loan
Before you apply for a personal loan, take a hard look at your finances.
- Review your credit: Higher credit scores get the best rates and most options to choose from. Knowing your credit score from the start will help you understand your options, and why you receive the offers you do.
- Review your budget: Can you make changes to your budget that save you money and perhaps allow you to skip the loan altogether? Regardless, you'll need to know how much room you have in your budget to cover a monthly loan payment.
- Consider alternatives: Below you'll find a long list of alternatives to a personal loan, from credit card balance transfers to borrowing from friends. Is a personal loan your best option?
- Gather financial details: Some of this will have come up during your budget review, but collect the key details of your financial life: monthly income, monthly expenses (particularly debt expense). Also calculate your debt to income ratio (DTI), which is your gross, before tax income divided by your monthly debt payments (like home loans, car loans, and credit card payments). Lenders will use your DTI as they consider your loan application. Lower DTIs are better than higher ones. If your DTI is already high and debt payments already crimping your budget, think carefully before adding more debt (and more monthly debt payments).
- Gather important documents: You'll need a government-issued ID and Social Security number, and very likely recent paystubs and bank statements to prove your income. Gather them before you start for a smoother application process.
How to Apply for a Personal Loan, Step-by-Step
Most lenders allow you to apply for a personal loan online, although you may be able to apply in person or over the phone, especially if you're dealing with a bank or credit union.
- Get pre-qualified: The personal loan application process usually starts by getting pre-qualified. You’ll provide a few basic details about yourself, such as your name, contact information, income, and Social Security number, to your potential lender. Most lenders offer pre-qualification, but not all. Pre-qualification doesn't usually involve a hard credit check, so you won't have to worry about too many credit inquiries hurting your credit score.
- Review options: The lender will do a soft credit check, which won’t affect your credit score. If the lender deems you likely to be approved, they’ll respond with a personal loan offer outlining your options, interest rates, and loan costs. You can use this to compare rates and terms and other features among several lenders.
- Complete an application: Once you find the best personal loan option, you’ll complete a full loan application with that lender. You’ll typically need to provide copies of documents proving your identity (government-issued identity photo I.D.), income (recent pay stubs, tax returns, or W-2s), and finances (recent bank statements). At this stage the lender will perform a hard credit check.
- Receive funds: If you’re approved, your lender will disburse your loan funds to your bank account or by check, depending on its policies.
Alternatives to Personal Loans
Personal loans are not your only option if you need a flexible way to borrow money. Depending on your circumstances, here are a few other good options to consider:
- 401(k) loan: Not an option to consider lightly, but in some circumstances, taking a loan from your 401(k) retirement account can be a cost-effective way to borrow.
- Crowdfunding: If you need to borrow money for a compelling and share-worthy reason, you may be able to raise the funds on a crowdfunding platform with no debt needed.
- Grants or charity: Many government and nonprofit programs offer assistance for things you’d use a personal loan for, like catching up on home repairs. If you need help finding options, 211.org offers free personal assistance.
- 0% APR credit card: If you can qualify for a 0% APR credit card, you may be able to make a big purchase or transfer existing credit card debt with a long runway to pay it off.
- Personal line of credit: Some banks and credit unions offer personal lines of credit that you can draw against as needed, a particularly good option if you need frequent small loans.
- Loans from family or friends: Ask around your social support network if someone would be willing to lend you money in exchange for writing a promissory note or loan agreement with interest.
- Home equity loan or HELOCs: Homeowners with at least 20% equity in their home may be able to use a home equity loan or line of credit to borrow money, a particularly good option for home improvements and repairs.
Watch out for deferred-interest store credit cards or financing offers, which are marketed similarly to true 0% APR credit cards at many retailers. The fine print reveals that you’ll need to pay off the card or amount financed in full by the end of the interest-free period; otherwise, all of those interest charges will be added back to your account.
Frequently Asked Questions
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What Is the Best Bank for a Personal Loan?
U.S. Bank offers the best personal loans among big banks, according to our research. It features affordable rates with no origination fees and is available to roughly half of U.S. states. If you’re willing to work with an online lender, SoFi is our best all-around choice, featuring similar rates to U.S. Bank but offering an additional benefits package with free access to financial advisors and career counseling, among other benefits.
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What Personal Loan Is the Easiest to Get Approved For?
If you don’t have good credit or a high income on your own, it may be easier to get approved if you have a creditworthy co-signer or co-borrower. Some lenders also allow you to use collateral to better qualify for a loan or receive lower rates. Finally, a personal loan from an institution you already have a relationship with, like a bank or credit union you have a checking or savings account with, may provide a more streamlined approval process.
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What Credit Score Is Needed for a Personal Loan?
The average personal loan borrower had a credit score of 685 during the final quarter of 2022. This can vary quite a bit, though; some lenders, such as Upstart, have no minimum credit score requirement. Others, require a credit score over 700. Banks and credit unions tend to have higher credit score requirements, while fintech lenders generally accept lower credit scores.
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How Much Money Can You Borrow With a Personal Loan?
Some lenders, such as SoFi, offer personal loans up to $100,000. However, that doesn’t mean you’ll necessarily qualify for that much. Each lender assesses your financial situation—including your monthly income and debt payments—when deciding the maximum loan amount you can borrow after you submit a loan application.
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Are Personal Loans Taxable?
A personal loan from a bank or other lender is not considered income by the IRS, and is not taxable. However, if you were run into financial trouble and worked out an agreement with your lender to forgive the loan, the amount forgiven would be considered income, and would be taxable. In some cases the lender might send you a form (1099-C, Cancellation of Debt), which will note the amount you must report on your tax return. Regardless if your lender sends you the form, you must report the forgiven debt as income on your return.
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How Much Would a $5,000 Personal Loan Cost a Month?
The monthly cost of a personal loan, of whatever amount, will depend on the loan amount, the loan term (or the number of monthly payments), and the interest rate. The easiest way to calculate a monthly payment is to use a personal loan calculator. A $5,000 loan, paid over 24 months (or two years), with an interest rate of 12.49% (the current average rate charged on two-year personal loans, according to the Federal Reserve) would result in a monthly payment of $236.51.
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What Is the Best Personal Loan Out There?
According to Investopedia's research, SoFi offers the best personal loans when you consider rates, fees, amounts and term, and additional factors like customer experience. Some lenders offer loans for lower interest rates or accept borrowers with weaker credit profiles or offer longer terms. But overall, we rate SoFi the highest.
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What Company Is Best for a Personal Loan?
According to our research, SoFi is the best overall personal loan lender based on it's combination of competitive rates, large loan amounts, and wide range of repayment terms. Where it really shines is with customer service and experience, offering a bevy helpful services to its customers, from a well-regarded mobile app to financial hardship assistance.
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Companies We Reviewed
We researched and reviewed 70 lenders to find the 10 lenders you see above on this list. While we write individual reviews for most companies, we do not always write reviews for companies we would not recommend. Below are the companies we researched along with links to individual company reviews to help you learn more before making a decision:
Achieve, Affinity Federal Credit Union, Alliant Credit Union, American Express, Avant, Axos Bank, Bankers Healthcare Group, Best Egg, Bethpage Federal Credit Union, Blue Federal Credit Union, Boatloan.com, Boeing Employees' Credit Union, CapexMD, Citibank, Connexus Credit Union, Discover, Dividend Finance, ENT Credit Union, Fig Loans, First Tech Federal Credit Union, Future Family, GoodLeap, Greenstate Credit Union, Happy Money, Hiway Credit Union, Lake Michigan Credit Union, Laurel Road, LendingClub, LendingPoint, LendingUSA, Liberty Federal Credit Union, LightStream, Lyon Financial, Mariner, Money Key, Mountain America Credit Union, NASA Federal Credit Union, Navy Federal Credit Union, Netcredit, Old National Bank, OneMain Financial, OppLoans, Patelco Credit Union, PenFed, Personify Financial, PNC Bank, Prosper, Reach Financial, Regions, Reprise, Rocket Loans, Santander, Service Federal Credit Union, SoFi, Southeast Financial, Summit Credit Union, SunPower, TD Bank, Teachers Federal Credit Union, Trident Funding, Truist, U.S. Bank, Universal Credit, Upgrade, Upstart, USAA, Vantage Recreational Finance, Wells Fargo.
How We Picked the Best Personal Loans
To evaluate and rank personal loan providers we collected hundreds of data points across 70 lenders, including traditional banks, credit unions, fintechs, and special interest finance companies. We researched and evaluated APRs, loan amounts and terms, fees, customer experience, and much more. To rank the lenders in our database and to generate star ratings, we weighted the data we collected, based in part on what consumers told us were the most important features of a personal loan and lender in a survey we conducted. We grouped those factors into four broad areas:
- Loan costs (advertised APR, fees, and six other factors): 29.25%
- Loan terms (loan amount, repayment term, and three other factors): 22.25%
- Borrowing requirements (credit score, membership requirement, and six other factors): 28.5%
- Additional features (online application, pre-qualification, and eight other factors): 20%
Learn more about how we evaluated personal loans in our complete methodology.
Guide to Personal Loans
Learn more about personal loans:
- What is a personal loan?
- How do personal loans work?
- When are personal loans a good idea?
- How to get a personal loan
- How to apply for a personal loan
- How to use a personal loan
- Where to get a personal loan
- Personal loans vs credit cards
- Alternatives to personal loans
- Personal loan calculator
- Personal loans methodology
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Investopedia / Alice Morgan
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