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10 Best Personal Loans for April 2024

After hundreds of hours of research, including a survey of, and interviews with, recent personal loan borrowers, SoFi is our choice for the best overall personal loan lender due to its low cost, high customer satisfaction ratings, and excellent benefits package.

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.

The lenders in our list offer loans as small as $300 and as large as $100,000, so you’ll find a lender that fits your needs, whether that’s to pay for an emergency car repair or to consolidate debt. Our list does not include some of the familiar, big name banks you may know. That’s because many of those banks don’t offer unsecured personal loans, or if they do, don’t offer the best rates, terms, benefits, or customer experience.

10 Best Personal Loans for April 2024: Rates Starting at 7.80%

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Credit Score–   ≤ 620   ≤ 660   ≤ 720   720 +

Loan Amount Reset FiltersAPPLY FILTERS

CompanyAPRCredit Score est.Loan AmountMore Details
BEST OVERALLSoFiAPR With Autopay Discount8.99% – 29.49%Not DisclosedThis lender does not disclose its minimum credit score requirements.$5,000 – $100,000See DetailsCheck Rates
BEST FOR DEBT CONSOLIDATIONDiscoverAPR Range7.99% – 24.99%660This lender does not disclose its minimum credit score requirements.$2,500 – $40,000See DetailsCheck Rates
BEST FOR EMERGENCY/QUICK FUNDINGUpgradeAPR With Autopay Discount8.49% – 35.99%620This lender does not disclose its minimum credit score requirements.$1,000 – $50,000See DetailsCheck Rates
BEST FOR BAD CREDITUpstartAPR Range7.80% – 35.99%300This lender does not disclose its minimum credit score requirements.$1,000 – $50,000See DetailsCheck Rates
BEST FOR EXCELLENT CREDITPenFed Credit UnionAPR Range7.99% – 17.99%700This lender does not disclose its minimum credit score requirements.$600 – $50,000See DetailsCheck Rates
BEST WITH NO CREDIT CHECKOppLoansAPR Range160.00% – 179.00%Not DisclosedThis lender does not disclose its minimum credit score requirements.$500 – $4,000See DetailsCheck Rates
BEST BIG BANKU.S. BankAPR With Autopay Discount8.74% – 24.99%660This lender does not disclose its minimum credit score requirements.$1,000 – $50,000See DetailsCheck Rates
BEST FOR SMALL LOAN AMOUNTSLake Michigan Credit UnionAPR Range9.99% – 18.00%620This lender does not disclose its minimum credit score requirements.$250 – $25,000See DetailsCheck Rates
BEST FOR MILITARY MEMBERSNavy Federal Credit UnionAPR Range8.99% – 18.00%Not DisclosedThis lender does not disclose its minimum credit score requirements.$250 – $50,000See DetailsCheck Rates
BEST CREDIT UNIONPatelco Credit UnionAPR Range9.30% – 17.90%640This lender does not disclose its minimum credit score requirements.$300 – $100,000See DetailsCheck Rates

BEST OVERALLSoFi

Investopedia’s Rating

4.8


SoFi
  • APR Range: 8.99% – 29.49%
  • Loan Amount: $5,000 – $100,000
  • Loan Terms: 24 months – 84 months

CHECK RATES

Why We Chose It

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.1 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.2 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.

Pros & Cons

Pros

  • Zero fees charged
  • Same-day funding available
  • Access to SoFi membership benefits

Cons

  • No secured loan options
  • Can’t apply with a co-signer, but co-borrowers are accepted
  • High minimum loan amounts

Qualifications

  • 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.

Read the Full SoFi Personal Loans Review 2024

BEST FOR DEBT CONSOLIDATIONDiscover

Investopedia’s Rating

4.5


Discover Personal Loans
  • APR Range: 7.99% – 24.99%
  • Loan Amount: $2,500 – $40,000
  • Loan Terms: 36 months – 84 months

CHECK RATES

Why We Chose It

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.1

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 $39.3

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.

Pros & Cons

Pros

  • No origination fee
  • Excellent customer satisfaction ratings
  • Can send payment to creditors directly

Cons

  • Only accepts individual applications
  • Can’t use collateral for a secured loan
  • Can’t consolidate debt from a Discover credit card

Qualifications

  • 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 computer4
  • Loans can’t be used to consolidate debt from a mortgage, auto loan, or Discover credit card.

Read the Full Discover Personal Loans Review 2024

BEST FOR EMERGENCY/QUICK FUNDINGUpgrade

Investopedia’s Rating

4.6


Upgrade Logo
  • APR Range: 8.49% – 35.99%
  • Loan Amount: $1,000 – $50,000
  • Loan Terms: 24 months – 84 months

CHECK RATES

Why We Chose It

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.5

Upgrade is headquartered in San Francisco, California. It has provided more than $24 billion in loans and credit in the past five years.

Pros & Cons

Pros

  • Multiple discount options
  • $200 checking account bonus offer
  • Allows collateral, co-borrowers, and co-signers

Cons

  • Expensive origination fee
  • Poor customer satisfaction ratings
  • High interest rate for some applicants

Qualifications

  • 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.

Read the Full Upgrade Personal Loans Review 2024

BEST FOR BAD CREDITUpstart

Investopedia’s Rating

4.1


Upstart logo
  • APR Range: 7.80% – 35.99%
  • Loan Amount: $1,000 – $50,000
  • Loan Terms: 36 months – 60 months

CHECK RATES

Why We Chose It

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%.6

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.

Pros & Cons

Pros

  • Low minimum credit score
  • Fast funding
  • Good loan amount flexibility

Cons

  • High origination fee
  • High APRs
  • Fewer loan term options than others

Qualifications

  • 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 months7
  • Meet partner lenders’ credit requirements8

Read the Full Upstart Personal Loans Review 2024

BEST FOR EXCELLENT CREDITPenFed Credit Union

Investopedia’s Rating

4.5


PenFed Credit Union
  • APR Range: 7.99% – 17.99%
  • Loan Amount: $600 – $50,000
  • Loan Terms: 12 months – 60 months

CHECK RATES

Why We Chose It

Pentagon Federal Credit Union—or PenFed for short—is one of the largest credit unions in the country, with nearly three million members.9 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.

Pros & Cons

Pros

  • No origination fee
  • Excellent range of loan options
  • Easy membership requirements

Cons

  • Doesn’t allow co-signers, but they do allow co-borrowers
  • Doesn’t offer longer loan terms
  • Doesn’t offer direct payment to creditors

Qualifications

  • Available in all U.S. states and Washington, D.C.
  • Must join the credit union by depositing $5 in a savings account

Read the Full PenFed Credit Union Personal Loans Review 2024

BEST WITH NO CREDIT CHECKOppLoans

Investopedia’s Rating

2.9


OppLoans logo
  • APR Range: 160.00% – 179.00%
  • Loan Amount: $500 – $4,000
  • Loan Terms: 9 months – 18 months

CHECK RATES

Why We Chose It

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.10

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 $4,000.11

OppLoans was founded in 2012 and is headquartered in Chicago, Illinois. It has extended loans to more than a million borrowers since its founding.

Pros & Cons

Pros

  • No minimum credit score requirement
  • Strong customer service
  • Same-day funding available

Cons

  • Very high interest rates
  • Short repayment terms
  • Not available in all U.S. states

Qualifications

  • 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.12

Read the Full OppLoans Personal Loans Review for 2024

BEST BIG BANKU.S. Bank

Investopedia’s Rating

4.7


U.S. Bank logo
  • APR Range: 8.74% – 24.99%
  • Loan Amount: $1,000 – $50,000
  • Loan Terms: 12 months – 84 months

CHECK RATES

Why We Chose It

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.13 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.14 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.15 However, it was severely demoted down to below-average status in the 2023 iteration of the survey.16

U.S. Bank was founded in 1863 and is headquartered in Minneapolis, Minnesota.

Pros & Cons

Pros

  • No origination fee
  • In-branch service available
  • Autopay discount

Cons

  • Poor customer satisfaction ratings
  • Only available in about half of U.S. states
  • Restrictions for non-current customers

Qualifications

  • Only available in 27 U.S. states17

Read the Full U.S. Bank Personal Loans Review 2024

BEST FOR SMALL LOAN AMOUNTSLake Michigan Credit Union

Investopedia’s Rating

4.2


Lake Michigan Credit Union logo
  • APR Range: 9.99% – 18.00%
  • Loan Amount: $250 – $25,000
  • Loan Terms: 24 months – 60 months

CHECK RATES

Why We Chose It

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.18 It is the 17th largest credit union in the nation, based on asset size.19 

Pros & Cons

Pros

  • Small loan amounts
  • Low minimum credit score of 620 required

Cons

  • No pre-qualification
  • Membership required

Qualifications

  • 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.

Read the Full Lake Michigan Credit Union Personal Loans Review 2024

BEST FOR MILITARY MEMBERSNavy Federal Credit Union

Investopedia’s Rating

4.4


Navy Federal Credit Union logo
  • APR Range: 8.99% – 18.00%
  • Loan Amount: $250 – $50,000
  • Loan Terms: 6 months – 180 months

CHECK RATES

Why We Chose It

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.20 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.1

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.

Pros & Cons

Pros

  • Same-day funding
  • Autopay discount
  • Highest J.D. Power customer satisfaction ratings

Cons

  • Doesn’t allow co-signers
  • Not available to most civilians
  • Doesn’t offer loan pre-qualification

Qualifications

  • 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 families21

Read the Full Navy Federal Personal Loans Review 2024

BEST CREDIT UNIONPatelco Credit Union

Investopedia’s Rating

4.7


Patelco Credit Union
  • APR Range: 9.30% – 17.90%
  • Loan Amount: $300 – $100,000
  • Loan Terms: 6 months – 84 months

CHECK RATES

Why We Chose It

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.22 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.23 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.

Pros & Cons

Pros

  • No origination fees
  • Many discounts available
  • Wide range of loan options

Cons

  • Scarcity of customer reviews
  • Uninspiring checking and savings accounts

Qualifications

  • 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.22

Read the Full Patelco Credit Union Personal Loans Review 2024

Compare the 10 Best Personal Loans for April 2024: Rates Starting at 7.80%

Best ForAPR RangeAverage Origination FeeLate FeeTime to Receive LoanLoan AmountLatest RepaymentReset All
SoFiBest Overall8.99% – 29.49%0.00%$0.000 days$5,000 – $100,00084 monthsCheck RatesHide, not for me
DiscoverBest for Debt Consolidation7.99% – 24.99%0.00%$39.001 day$2,500 – $40,00084 monthsCheck RatesHide, not for me
UpgradeBest for Emergency/Quick Funding8.49% – 35.99%1.85%–9.99%$10.001 day$1,000 – $50,00084 monthsCheck RatesHide, not for me
UpstartBest for Bad Credit7.80% – 35.99%0.00%–12.00%5% of the late payment amount or $15, whichever is greater1 days$1,000 – $50,00060 monthsCheck RatesHide, not for me
PenFed Credit UnionBest for Excellent Credit7.99% – 17.99%0.00%$29.001 day$600 – $50,00060 monthsCheck RatesHide, not for me
OppLoansBest With No Credit Check160.00% – 179.00%0.00%$00 days$500 – $4,00018 monthsCheck RatesHide, not for me
U.S. BankBest Big Bank8.74% – 24.99%0.00%$25.000 days$1,000 – $50,00084 monthsCheck RatesHide, not for me
Lake Michigan Credit UnionBest for Small Loan Amounts9.99% – 18.00%0.00%4% of the balance that is due0 days$250 – $25,00060 monthsCheck RatesHide, not for me
Navy Federal Credit UnionBest for Military Members8.99% – 18.00%0.00%$29.000 days$250 – $50,000180 monthsCheck RatesHide, not for me
Patelco Credit UnionBest Credit Union9.30% – 17.90%0.00%3% of loan payment or $5, whichever is higher0 days$300 – $100,00084 monthsCheck RatesHide, not for me

*APR ranges for some companies include a discount for automatic payments or existing bank customers.

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.

https://datawrapper.dwcdn.net/qShKV/2

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.

Pros

  • Quick funding times
  • Predictable monthly payments
  • Cheaper than using credit cards
  • Use for a wide range of expenses
  • Builds credit with on-time payments

Cons

  • 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

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. 

  1. 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.
  2. 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.
  3. 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.
  4. 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.24Office of Rural Development. “Single Family Housing Repair Loans & Grants.” 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.25 

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.26 

Frequently Asked Questions

  • What Is the Best Bank for a Personal Loan?
  • What Personal Loan Is the Easiest to Get Approved For?
  • What Credit Score Is Needed for a Personal Loan?
  • How Much Money Can You Borrow With a Personal Loan?
  • Are Personal Loans Taxable?
  • How Much Would a $5,000 Personal Loan Cost a Month?
  • What Is the Best Personal Loan Out There?
  • What Company Is Best for a Personal Loan?
  • Companies We Reviewed

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%

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