Tue. May 17th, 2022
Best personal loans for February 2022

When you need to consolidate debt, finance home improvement projects or come up with a larger stream of money quickly, a personal loan can be a more affordable alternative to a credit card. Personal loans often have lower interest rates and more flexible repayment schedules than credit cards, and can often be funded quickly (between one and four business days, on average).

We’ve evaluated the major national personal loan providers and highlighted the best personal loan options below. We’ll update this list regularly as terms change and new loan products are released.

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http://www.cnet.com/

  • APR:  3.99%-19.99%(with AutoPay)
  • Repayment terms: 2-12 years*, depending on loan purpose
  • Funding amounts: $5,000-$100,000
  • Funding timeline: As soon as same business day (conditions apply)
  • Origination fee: None
  • Other fees: None
  • Minimum credit score required: “Good credit”

LightStream delivers just about everything you want in a personal loan: flexible repayment terms, a $100,000 maximum, no fees, same-day funding (please note: it’s possible, but not guaranteed) and a low APR range — though, of course, your interest rate will reflect your specific credit profile. As such, we think it’s a great place to start your search for a personal loan. (Note that LightStream is a division of SunTrust Bank, which recently merged with BB&T to become Truist.)

Personal loans through LightStream also come with longer repayment terms. If you’re borrowing for home improvement purposes, you could receive repayment terms up to 12 years. All other personal loan repayment terms extend up to seven years. 

Folks with a checkered credit history or blemished financial profile should take note: LightStream’s credit requirements are stringent. When asked about its criteria for good credit, the company said that there’s “no single definition” — but that people who qualify for loans usually have several years of credit history with few delinquencies, a “manageable” amount of revolving credit card debt, some liquid savings and a stable and sufficient income.

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http://www.cnet.com/

  • APR: 5.99%-18.85% (with AutoPay)
  • Repayment terms: 2-7 years
  • Funding amounts:  $5,000-$100,000
  • Funding timeline: Up to 7 days
  • Origination fee: None
  • Other fees: None
  • Minimum credit score required: 680

SoFi’s personal loans feature low rates, a $100,000 maximum loan amount and no origination, administrative or late fees. It’s also one of the few lenders that is transparent about its credit score requirements — though all loan providers take into account factors such as credit history and debt-to-income ratio when determining eligibility. It’s worth noting that SoFi routinely runs promotions on its site; at the moment, the company is offering a bonus of up to $310 on some loans.

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http://www.cnet.com/

Marcus

  • APR: 6.99%-19.99%
  • Repayment terms: 3-6 years
  • Funding amounts: $3,500-$40,000
  • Funding timeline: Up to 4 business days
  • Origination fee: None
  • Other fees: None
  • Minimum credit score required: Not specified

Marcus doesn’t charge any fees such as an origination fee or loan application fee and offers a relatively low APR range, with repayment terms of up to six years. As one of the few mass-market products offered by the white-glove investment bank Goldman Sachs, it’s a bit surprising that the loan amount tops out at $40,000 — but if you’re looking for a low-cost, fee-free lender, these loans are worth a look. Be sure to also enroll in AutoPay to save up to 0.25% on your APR.

  • APR: 5.74%-24.49%
  • Repayment terms: 1-7 years
  • Funding amounts: $3,000-$100,000
  • Funding timeline: Next business day
  • Origination fee: None
  • Other fees: Rejected payment: $39; late payment: $39
  • Minimum credit score required: None

The personal loan market has come to be dominated by a fleet of online banks that, in most cases, don’t have physical branches. (With no branches to maintain, they can often offer better online personal loan terms.) But some people may feel more confident about borrowing money after an in-person conversation with an employee from a bank located in their neighborhood. Among the big national lenders, Wells Fargo offers a reasonable range of APRs, no fees, flexible repayment terms and a wide array of funding amounts. One caveat: Wells Fargo may change fees for rejected payments (also called NSF or nonsufficient funds payments) and late payments. And those can add up.

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http://www.cnet.com/

  • APR: 9.95%-35.99%
  • Repayment terms: 2-5 years
  • Funding amounts: $2,000-$35,000
  • Funding timeline: Next business day
  • Origination fee: Up to 4%
  • Other fees: Rejected payment: $15; late payment: $25
  • Minimum credit score required: 600

For those with less than excellent credit — politely referred to as “fair credit” by lenders — Avant could be a good loan option. Though the company will accept a loan application from anyone, applicants with a score of 600 or higher “have the best chance of being accepted,” according to a company rep. 

As with most financial products, those with a less stable financial standing or consistent credit card debt can expect to pay higher fees and more interest for a personal loan. Avant charges up to 4.75% in administrative fees, depending on factors including your credit history and where you live. And if your credit score is 600 or lower, you will likely end up with a higher APR. Avant’s top rate annual percentage rate is a whopping 35.99%, which could end up costing you thousands of dollars in interest over the course of a loan. Proceed with caution.

Other loans to consider

How to choose a personal loan

If you can pay off a purchase within one month, credit cards are usually best. Conversely, the loan term of a personal loan can range from 1 to 12 years and lenders will allow you to use the money for just about any loan purpose (except paying for college or  making investments). For example, you can use a personal loan as an auto loan, or you can use it as a debt consolidation loan, letting you pay off other bills more quickly at a lower interest rate. Some loans may even offer a cash advance, depending on the borrower. With most personal loans, you pay a fixed interest rate and the quicker you pay off the lender, the less you’ll spend on interest.

Though personal loan interest rates are fixed, they can vary widely — which gives you choices as the consumer. A personal loan’s annual percentage rate currently ranges from about 2% to 30%, depending on the lender and your financial profile, which includes your credit score, credit history and debt-to-income ratio. Ultimately, you want to find the least expensive personal loan option available, factoring in both fees and interest. You also want to look at the loan offer closely to be sure there’s not a prepayment penalty, which means you’ll pay a fee for paying off the loan early. Depending on your income, your loan purpose and where the loan proceeds are going, these types of fees can add up.

For example, borrowing $10,000 at a 9.99% APR paid back over five years would require 60 monthly payments of $201.81 (and would cost you $2,108.60 in total interest). Wells Fargo’s Rate and Payment calculator or SoFi’s Loan Calculator can help you get a sense of how interest rates and loan terms will impact your monthly payment and the total cost of a loan.

Best personal loans, compared

Loan issuer LightStream SoFi Marcus Avant Wells Fargo
APR 3.99%-19.99%(with autopay) 5.99%-18.85% (with autopay) 6.99%-19.99% 9.95%-35.99% 5.74%-24.49%
Repayment terms 2-12 years(depending on purpose) 2-7 years 3-6 years 2-5 years 1-7 years
Funding amounts $5,000 – $100,000 $5,000 – $100,000 $3,500 – $40,000 $2,000 – $35,000 $3,000 – $100,000
Funding timeline As soon as same day (conditions apply) 7 days 1-4 business days Next business day Next business day
Origination fee None None None Up to 4% None
Other fees None None None Rejected payment: $15; late payment: $25 Rejected payment: $39; late payment: $39
Credit requirement (estimated) 700-800 680 and up N/A 600 and up N/A

Before you apply for a loan, it’s worthwhile to shop around for the best personal loan — but do so carefully. Submitting a loan application will trigger a hard pull, which may impact your credit score — even if you don’t end up with loan approval or you choose not to go through with it. Pay special attention to any origination fee and if there is a loan application fee. You need to know what interest rate the lender is charging, the repayment term and the monthly payment annual percentage rate. 

Lenders may advertise different types of personal loan options for specific purposes such as paying for home improvements or consolidating debt. But in most cases there are only two major types of personal loans. With an unsecured personal loan, you borrow money and pay it back at regular intervals over the repayment term with a fixed rate of interest. A secured personal loan requires you to put up an asset as collateral before you can secure loan funding. And though the best personal loans don’t charge fees for “origination” or “administration” or rejected payments, borrowers with bad credit may have no choice but to pay them since they have fewer options.

You also want to take a look at the fine print — not just to look for hidden fees, but also to look for hidden perks. For instance, some loans offer an autopay discount. Another personal loan option might have a different loan rate depending on the loan purpose and lender. An online lender may have different rules from a credit union with brick-and-mortar locations. You as the borrower need to do your due diligence before making any decisions.

Frequently asked questions

What is a personal loan?

Most people take out a personal loan to consolidate debt, finance home improvements, pay for a wedding or other

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