If you need extra cash to pay for a home improvement project or consolidate high-interest credit card debt, taking out a personal loan may be a good option. This type of loan is ideal for creditworthy borrowers with a consistent income.
Most people choose to take out a personal loan through an online lender, bank, or credit union. This article will look at all three options so you can determine which is the best choice for you.
Best Online Lenders for Personal Loans
Online lenders continue to grow in popularity because of the easy loan application process and more flexible lending solutions. You will always qualify for the best terms if you have a high credit score, but many online lenders are willing to lend money to borrowers with bad credit.
If you’re considering taking out a personal loan through an online lender, here are five options you can consider.
LendingClub offers peer-to-peer loans to borrowers with a strong credit history. They offer unsecured loans between $1,000 and $40,000, with an APR range between 6.95% and 35.89%. To get approved with LendingClub, you will need to have a great credit score, but they will accept cosigned applications as well.
The only downside to taking out a personal loan from LendingClub is that the company charges origination fees between 1% and 6%. Depending on the original loan amount, the origination fee could end up being quite substantial.
But the company is very flexible and willing to work with borrowers who are having financial difficulties. If you’re experiencing financial problems, the company will put you on a three-month plan where you only pay for interest.
Prosper is another online lending marketplace that caters to borrowers with good to excellent credit scores. The company offers personal loans between $2,000 and $40,000, with an APR range between 6.95% and 35.99%. The amount of the loan offered depends on your ability to repay it.
Unlike some of the other lenders on this list, Prosper won’t let you choose your repayment terms. And they do charge origination, late fees, and insufficient funds fees.
If you’re a newer borrower looking to take out a personal loan, Upstart could be a good choice for you. They offer personal loans between $1,000 and $50,000, with an APR range between 7.69% and 35.99%. You can use an Upstart personal loan for any expense you choose.
The company is geared toward younger applicants or applicants with limited credit history. However, you do need to have a high earning potential to qualify. Upstart consider factors like your college degree and job history when reviewing your application.
Upstart does charge origination fees between 0.0% and 8.0%, so this can add up fast. And the company also charges late fees, so you want to make sure you don’t miss a payment.
SoFi is geared toward high-income borrowers with good to excellent credit. The company offers loans between $5,000 and $100,000, with an APR range between 5.99% and 17.67%. You can choose between a fixed or a variable interest rate.
There are a lot of advantages to taking out a loan through SoFi. When you become a SoFi borrower, it’s kind of like joining an exclusive club. You have access to member events, online forums, and free resources.
Plus, SoFi is pretty flexible in how it deals with its borrowers. They don’t charge fees for missed payments. But you will need to have high earning potential in order to qualify.
Sometimes, borrowers only need access to small, short-term loans. In this scenario, OppLoans is a good choice. They offer personal loans between $500 and $3,000, so you can cover a short-term financial emergency.
And the company doesn’t run credit checks, so this could be a good option if you want to borrow money with bad credit. However, you will pay substantially for this kind of convenience. The company charges interest rates between 59.00% and 199.00%.
For that reason, OppLoans should be reserved for financial emergencies when you just don’t have any other options.
Best Banks For Personal Loans
Many people still prefer a more traditional approach to banking and lending. Large banks usually have more stringent borrowing requirements and often have less flexible terms. But they typically offer borrowers a number of free tools and features.
If you’re considering taking out a personal loan through a bank, here are five banks you can consider.
1. Marcus by Goldman Sachs
Marcus is known for offering superior banking and lending products to consumers. They offer loans between $3,500 and $40,000, with an APR range between 6.99% and 28.99%.
Marcus doesn’t charge any fees, and they offer flexible terms. After 12 months of on-time payments, you have the option to defer one payment. However, there is no option to apply with a co-signer.
Discover offers loans between $2,500 and $35,000, with an APR range between 6.99% and 24.99%. There are no origination fees, and the bank offers flexible terms.
One of the unique things about Discover is that new borrowers have the option to return their loan within the first 30 days without being charged interest. The bank also provides its borrowers with a variety of helpful resources, including online tools and free credit monitoring access.
LightStream is another option for creditworthy borrowers that are looking for low-cost personal loans. They offer loans between $5,000 and $100,000, with an APR range between 5.49% and 17.29%.
There are no fees to sign up, and LightStream offers the option to apply with a co-signer. Plus, you have the option to earn a reduced interest rate if you enroll in autopay.
Citibank provides personal loans between $2,000 and $50,000, with an APR range between 7.99% and 17.99%. They give borrowers the option of applying with a co-signer.
However, when you apply, the bank will conduct a hard pull on your credit. This will lower your credit slightly. And their repayment options are somewhat less flexible than other lenders on this list.
5. Wells Fargo
Wells Fargo offers personal loans between $3,000 and $100,000, with an APR range between 5.24% and 18.74%. However, you must be an existing Wells Fargo customer to qualify.
You’ll need a good credit score to qualify for a personal loan, but Wells Fargo does offer a co-signer option. The bank also offers free credit score monitoring.
Personal loans from Credit Unions
If you have fair or bad credit, your local credit union may be the best choice for you. They are often willing to work with people who have bad credit. Of course, you can also find some credit unions and other lenders online that offer bad credit loans.
To apply for a loan at a credit union, you must first become a member. They usually allow membership to those who live, work, study, or worship in a particular area.
When you’re looking for a lender, it’s important that you do your homework first. Consider multiple lenders and look for the one that will offer you the best terms. You should consider the loan amount, APR, repayment terms, and any other features they offer.