Best Personal Loan Lenders of May 2024

On this page

• Best place to get a personal loan

• How to compare the best personal loan lenders

• Personal loan interest rates and fees

• Pros and cons of personal loans

• How to get a personal loan

• Frequently asked questions

• Next step: Pre-qualify for a personal loan

Best place to get a personal loan

You can get a personal loan from online lenders, banks and credit unions. The best option is one where you can get the rate, terms and features that fit your financial situation.

Online lenders

With an online lender, the process of getting a loan — from application to funding — can be completed on your own schedule without having to leave home. Online lenders typically provide the fastest funding times. Some even have same- or next-day funding.

» MORE: Best online loans

Loans from banks

Some banks provide rate discounts and perks to existing customers. These lenders typically require borrowers to have good to excellent credit (scores of 690 or higher) to qualify for personal loans.

» MORE: Best bank loans

Loans from credit unions

To get a personal loan from a credit union, you must first be a member. Credit unions are usually more willing to lend to borrowers who have fair or bad credit (scores below 690), and federal credit unions cap interest rates at 18%.

» MORE: Online vs. in person loan: Which is better?

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How to compare the best personal loan lenders

Here are things to consider as you shop for a personal loan.

Pre-qualification. Many lenders let you pre-qualify online to check your estimated interest rate and loan terms. This process involves a soft credit check, which won’t affect your credit score. It pays to pre-qualify for a loan with multiple lenders and compare offers and loan features.

Annual percentage rates. Because APRs include interest rates and fees, they offer an apples-to-apples cost comparison for borrowers deciding between personal loan offers. Use our personal loan calculator to see how APR affects monthly payments and total loan costs.

Funding time. The time it takes to get a personal loan can depend on the type of lender. Many online lenders will approve your application and send funds the same or next day after you apply. Banks and credit unions may take up to a week.

Repayment terms. Lenders may offer repayment terms from two to seven years. A shorter-term loan means you’ll pay less interest while a longer term gives you lower monthly payments. Based on your budget, one may make more financial sense than the other.

Loan amount. Most lenders offer small to midsize loan amounts of $2,000 to $50,000, but some provide up to $100,000. Determining the amount you need will help you compare and decide.

Special features. See if the lender you’re considering offers any perks that could help you reach your financial goals. You may benefit from features like rate discounts for setting up autopay, financial planning or hardship assistance programs.

» MORE: Compare personal loan features

Explore the top personal loans and lenders in each of these categories:

• Personal loans for good credit.

• Bad credit loans.

• Best debt consolidation loans.

• Fast personal loans.

• Small personal loans.

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Personal loan interest rates and fees

Personal loan interest rates differ by lender, and the rate you receive depends on factors like your credit score, income and debt-to-income ratio (DTI). Here’s what interest rates on personal loans look like, on average:

» MORE: Current average personal loan interest rates

Some lenders charge origination fees to cover the cost of processing the loan. Lenders typically deduct the fee before sending you the funds. This one-time fee is included in the loan’s annual percentage rate, so consider this when comparing costs between lenders.

Lenders may also charge late fees and nonsufficient funds fees, which are charged when you don’t have enough in your bank account to cover the loan’s monthly payment.

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Pros and cons of personal loans

Depending on your financial situation and the loan’s purpose, a personal loan can be the right move or one you should sidestep.

» MORE: Pros and cons of personal loans

Pros

Lower starting APRs than credit cards. For borrowers with strong credit, personal loans typically have lower APRs than credit cards. While some credit cards offer 0% interest during an introductory period, regular credit card APRs are often above 18%.

» MORE: Personal loans vs. credit cards: What’s the difference?

Fixed rates and monthly payments. Personal loans have fixed rates and monthly payments over a set term, so you always know what you owe and for how long. Other financing options like home equity lines of credit have variable rates, meaning the monthly payments fluctuate.

Flexible loan amounts. Depending on the lender and your creditworthiness, you may have access to personal loan amounts of $1,000 to $100,000. A personal loan can cover a wide array of expenses, from small emergencies to large home improvement projects.

No collateral. Unlike home equity loans that require you to secure the loan with your house, unsecured personal loans don’t require collateral. You risk hurting your credit if you can’t repay, but you won't lose any assets.

Cons

Maximum APRs can be high. If you have a low credit score, APRs on personal loans can reach nearly 36%, which ishigher than maximum credit card APRs.

Possible fees. Borrowers may have to pay fees — like origination or late fees — along with their loan payments.

Increase in debt. Taking a personal loan adds debt to your budget, so it's important to factor in the additional obligation and feel comfortable about paying it off.

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How to get a personal loan

1. Check your credit. Your credit score is a primary factor in whether you qualify for a personal loan and the rate you receive. Resolve any errors that might be hurting your score and, if you can, pay down debts to reduce your DTI. Get a free credit report with NerdWallet or at AnnualCreditReport.com.

2. Pre-qualify with multiple lenders. Pre-qualifying gives you an idea of the rate and terms you can expect. Compare pre-qualified offers to find the lowest APR and monthly payments that fit your budget.

3. Apply. The formal application process requires documents to verify your identity and income. Once approved, you’ll typically receive your loan funds within a week.

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Frequently asked questions

• What are lenders’ requirements for personal loans?

  Personal loan requirements vary between lenders, but your credit profile, income and outstanding debts are major factors on an application. You’ll typically need to submit proof of your identity and financial information, which can include documents such as a driver’s license, Social Security number, pay stubs, tax returns and bank statements.

• Do lenders need to know how I plan to use the loan?

  Most lenders ask why you're borrowing, but you can use a personal loan for almost any reason. A lender may have restrictions on using the money for specific purposes, like higher education or investing.

• How do I choose the best personal loan lender?

  Pre-qualify with multiple lenders and use APR for the best apples-to-apples comparison of the cost of the loan. Typically, the lender that offers the lowest APR is the best one. Other factors to consider include loan amount, repayment terms, funding times and special features, such as a mobile app.

• How long do lenders take to approve and fund a personal loan?

  Once you’ve submitted the application, lenders can usually make an approval decision within one to two days. Most lenders can fund a personal loan within a week, and many offer same- or next-day funding.

  » MORE: How long does it take to get a personal loan?

• Are there personal loan lenders that work with bad-credit borrowers?

  Credit score requirements vary among lenders. Some lenders accept borrowers with good or excellent credit only; others provide loans to bad-credit borrowers.

  » MORE: Learn how to get a loan with bad credit.

• Are there personal loan lenders that work with low-income borrowers?

  Borrowers with low incomes may qualify with lenders that have soft income requirements. Some lenders don’t have minimum income requirements at all. Include all sources of income — child support, alimony or Social Security payments — on your application to improve your chance of qualifying for a loan.

  » MORE: Low-income loans: What they are and where to get one

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Next step: Pre-qualify for a personal loan

You can pre-qualify on NerdWallet and see rates from lenders that partner with us. Pre-qualifying triggers a soft credit check, which doesn't impact your score.