Best Personal Loans of June 2023
Compare the best personal loans for good and bad credit, debt consolidation, home improvement and more.
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Personal loans are unsecured loans with fixed annual percentage rates, or APRs, generally from 6% to 36%. The loan with the lowest rate is the least expensive — and usually the best choice. Other features, including no fees, mobile apps and direct payments to creditors if you’re consolidating debt, set some loans apart.
We always recommend you know your credit score and compare personal loans from multiple loan companies before making a choice. Here are our picks for the best personal loans:
LightStream: Best for home improvement loans.
SoFi: Best for good to excellent credit.
Upgrade: Best for fair credit.
Upstart: Best for short credit history.
Universal Credit: Best for bad credit.
Happy Money: Best for credit card consolidation.
Discover: Best for debt consolidation.
Best Egg: Best for secured loans.
Why trust NerdWallet? NerdWallet's editorial team has reviewed more than 35 personal loan providers and compared them to select the best personal loans. We chose these lenders based on features like star ratings, APR ranges, loan amounts and minimum required credit scores.
Best Personal Loans
Our pick for
Personal loans for good to excellent credit
Our pick for
Home improvement loans
Our pick for
Personal loans for short credit history
Our pick for
Personal loans for fair credit
Our pick for
Personal loans for credit card consolidation
Our pick for
Secured personal loans
Our pick for
Personal loans for bad credit
Our pick for
Debt consolidation loans
What is a personal loan?
A personal loan is money borrowed from a bank, a credit union or an online lender that you repay in equal monthly installments, usually over two to seven years.
Personal loans are typically unsecured, which means they don’t require collateral. Lenders instead consider your credit profile, income and debts during the loan approval process. If you fail to repay the loan, your credit can take a hit.
How do personal loans work?
Within a few days after you’re approved for a personal loan, a lender will deposit your loan amount, minus any origination fee, into your bank account. Once you have the money, you can use it for nearly any purpose.
Repayment of your personal loan typically starts 30 days after you receive the money. You can pay the fixed monthly amount directly, or some lenders let you set up auto-pay from your bank account. Monthly payments continue until the loan term ends — or earlier if you make additional payments toward your loan.
When should I get a personal loan?
A NerdWallet survey published in October 2022 revealed that nearly one-quarter of Americans (24%) took out a personal loan within the past 12 months, borrowing on average $5,046.
Getting a personal loan makes the most sense when:
It’s the least expensive form of financing.
It’s used for something that can potentially increase your financial standing, like debt consolidation or home improvements.
You can manage the monthly payments without stressing your budget.
Reasons to get a personal loan
Personal loans can be used for almost any purpose. Some common reasons borrowers get a loan include:
Major life events.
Using a personal loan for a wedding or discretionary expenses like a vacation can be expensive. NerdWallet recommends using savings for nonessentials to avoid finance charges.
If you're borrowing for emergency or medical expenses, consider less expensive alternatives, such as community assistance or payment plans.
Personal loan interest rates and fees
Personal loan interest rates vary by lender, and the rate you receive depends on factors like your credit score, income and debt-to-income ratio.
Borrowers with high credit scores generally receive lower rates, from about 11% to 15%, while those with low credit scores may get an APR of around 25%. Here’s what interest rates on personal loans look like, on average:
How's your credit?
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified in NerdWallet’s lender marketplace from July 1, 2022, to Oct. 31, 2022. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below a 500 credit score — are unlikely to qualify. Information in this table applies only to lenders with APRs below 36%.
Some lenders charge origination fees to cover the cost of processing the loan. Lenders deduct the fee from the loan proceeds or roll it into the balance. This one-time upfront fee is included in the loan’s annual percentage rate, so consider this when comparing costs between lenders.
Other fees to watch out for include late fees and an insufficient funds fee, which is when you don’t have enough in your bank account to make the loan’s monthly payment.
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.
Lower starting APRs than credit cards. For consumers with strong credit, personal loans typically have lower APRs than credit cards. While some credit cards offer 0% interest during an introductory period, the rates are generally higher after the period ends.
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 that can mean fluctuating monthly payments.
Flexible loan amounts. Depending on the lender and your creditworthiness, you may have access to personal loan amounts of $1,000 to $100,000. This range meets a wide variety 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 damaging your credit if you can’t repay, but you won't lose any assets.
Maximum APRs can be high. If you have a low credit score, APRs on personal loans can be higher than 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.
Summary of personal loan pros and cons
Best place to get a personal loan
You can get a personal loan from online lenders, banks and credit unions. The best option depends on where you can get the rate, terms and features that fit your financial situation.
For example, if a fast and convenient loan application is important to you, then consider an online lender. On the other hand, if lower rates and in-person support matter, then a bank loan or credit union loan could be the better option.
» MORE: Where to get a personal loan
How to choose the best personal loan
Here are things to consider as you shop around and compare personal loans.
Soft credit check. Most online lenders let you check your estimated interest rate by performing a soft check of your credit during pre-qualification. This won’t affect your credit score, so it pays to take steps to pre-qualify for a loan with multiple lenders and compare rates 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 monthly payments and total costs on personal loans.
Repayment terms. Having a wide variety of repayment term options allows you to get a shorter term and pay less interest or a longer term and have a low monthly payment. Based on your budget, one may make more financial sense than the other.
Loan amount. Depending on how much money you need, one lender could be more attractive than another. Some lenders offer small to midsize loans, like $2,000 to $50,000, while others provide loans up to $100,000. Determining the amount you need will help you compare and decide.
Special features. See whether the lender you’re considering offers any perks that could help you reach your financial goals. You may benefit from features like autopay rate discounts, unemployment protection or financial coaching.
How to get a personal loan
Review 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 affecting your score, and if you can, pay down debts to reduce your DTI ratio. Get a free credit report with NerdWallet or at AnnualCreditReport.com.
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.
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.
» MORE: How to get a personal loan
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 affect your score.
Explore loans and lenders in each of these categories:
See other uses for personal loans:
Last updated on June 1, 2023
NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial institutions. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.
NerdWallet's Best Personal Loans of June 2023
- SoFi: Best for Personal loans for good to excellent credit
- LightStream: Best for Home improvement loans
- Upstart: Best for Personal loans for short credit history
- Upgrade: Best for Personal loans for fair credit
- Happy Money: Best for Personal loans for credit card consolidation
- Best Egg: Best for Secured personal loans
- Universal Credit: Best for Personal loans for bad credit
- Discover® Personal Loans: Best for Debt consolidation loans
Frequently asked questions
- What is a good interest rate on a personal loan?
Personal loan annual percentage rates range from 6% to 36%, but your rate depends on several factors, including your credit score. Borrowers with a good credit score (690 or higher) can expect an APR of around 15% or lower. If you have fair to bad credit (689 or less), APRs can start around 22%. A good rate on your loan is one that is cheaper than other available credit options.
- How much is a personal loan?
The annual percentage rate will tell you how much your loan will cost. The APR is a combination of your interest rate and fees, and it is based on multiple factors like your credit score, the loan term and the lender you choose. A personal loan calculator can show you a loan’s total cost.
- How long does it take to get a personal loan?
Once you’ve submitted your application, lenders can let you know whether you qualify usually within one to two days. You can receive your funds the same day or within a week, depending on the lender.
- What is a loan term?
The loan term is the length of time you have to repay the loan. Personal loan lenders provide the money as a lump sum at the start of the term, and borrowers typically have two to seven years for repayment.
- Where can I apply for a personal loan?
You can apply for a personal loan at a bank, a credit union or an online lender. Most offer online applications, but you can complete a physical application at some credit unions and banks.
- Can I get a personal loan with bad credit?
Credit score requirements vary among personal loan lenders. Some lenders accept borrowers with good or better credit only; others will loan to bad-credit borrowers. Learn how to get a loan with bad credit.