Best Online Loans of April 2024

Compare online loans

Overview: SoFi’s online loans are a standout among competitors, thanks to a wide range of loan amounts and repayment terms. The lender also offers multiple rate discounts and same-day funding.

• Pros and cons of SoFi

  Pros	Cons
  Joint loan option. Multiple rate discounts. Hardship program for borrowers in need. Mobile app to manage loan.	No option to choose initial payment date. High minimum loan amount.

» MORE: Read NerdWallet's SoFi review

Overview: Discover’s online loans have competitive rates and no origination fees, making them a smart pick for excellent-credit borrowers. Online loans from Discover also fund quickly — you can get the money deposited in your account in one business day.

• Pros and cons of Discover

  Pros	Cons
  No origination fee. Option to pre-qualify with a soft credit check. Fast funding. Mobile app to manage loan.	May charge late fee. No co-sign or joint loan option. No rate discount.

» MORE: Read NerdWallet's Discover review

Overview: LightStream offers online loans with no fees for borrowers, including no origination fee, which is rare among online lenders, and no late fee even if you miss a payment.

• Pros and cons of LightStream

  Pros	Cons
  No fees. Rate discount for autopay. Long repayment terms. Rate Beat program and Experience Guarantee.	No option to pre-qualify on its website. No direct payment to creditors with debt consolidation loans. High minimum loan amount.

» MORE: Read NerdWallet's LightStream review

Overview: With a Best Egg online loan, good-credit borrowers can pre-qualify, choose from a wide range of loan amounts and skip the late fees. Best Egg also offers a secured loan option, meaning you can pledge collateral to help guarantee the loan, which can lead to a lower interest rate.

• Pros and cons of Best Egg

  Pros	Cons
  Option to pre-qualify with a soft credit check. Wide range of loan amounts. Secured loan options. Direct payment to creditors with debt consolidation loans. No late fees.	Origination fee. No rate discounts. No option to choose initial payment date. No mobile app to manage loan.

» MORE: Read NerdWallet's Best Egg review

Overview: Happy Money’s online loan can consolidate and help pay off credit cards, rolling multiple balances into one monthly payment at a fixed rate. It also will send the loan funds to your creditors for you.

• Pros and cons of Happy Money

  Pros	Cons
  Option to pre-qualify with a soft credit check. Offers direct payment to creditors. No late fee. Hardship program for borrowers in need.	Origination fee. No rate discount. No co-sign or joint loan option. No option to choose initial payment date.

» MORE: Read NerdWallet's Happy Money review

Overview: Upstart is unique among lenders because it accepts borrowers who have low credit scores or thin credit histories, using nontraditional data — like college education, job history and residence — to qualify you for an online loan.

• Pros and cons of Upstart

  Pros	Cons
  Accepts borrowers new to credit. Fast funding. Option to change your payment date. Option to pre-qualify with a soft credit check. Seven-day customer service availability.	May charge origination fee. No joint, co-signed or secured loans. No mobile app to manage loan. Only two repayment term options.

» MORE: Read NerdWallet's Upstart review

Overview: Upstart is unique among lenders because it accepts borrowers who have low credit scores or thin credit histories, using nontraditional data — like college education, job history and residence — to qualify you for an online loan.

• Pros and cons of Upgrade

  Pros	Cons
  Multiple rate discounts. Secured and joint loans. Mobile app to manage loan payments. Direct payment to creditors with debt consolidation loans. Long repayment terms on home improvement loans.	Origination fee. No option to choose initial payment date.

» MORE: Read NerdWallet's Upgrade review

Overview: LendingPoint offers online loans with fast funding. The lender says it can make an approval decision in seconds, and if you're approved before noon Eastern time, it can fund the loan the same day.

• Pros and cons of LendingPoint

  Pros	Cons
  Soft credit check to pre-qualify. Fast funding. Offers mobile app to manage loan payments. Option to change your payment date. Free credit score access.	May charge an origination fee. Reports payments to two of the three major credit bureaus. No joint, co-signed or secured loans. No large loans.

» MORE: Read NerdWallet's LendingPoint review

Overview: LendingClub offers joint online loans, meaning you can add a co-borrower to your application, which may help you qualify for a larger loan amount or a lower interest rate. Borrowers also have the option to pre-qualify with a soft credit check.

• Pros and cons of LendingClub

  Pros	Cons
  Joint loan option. Direct payment to creditors with debt consolidation loans. Option to pre-qualify with a soft credit check. Option to change your payment date.	Origination fee.

» MORE: Read NerdWallet's LendingClub review

What is an online loan?

An online loan is a personal loan where the entire process — from pre-qualification to signing — happens online. These loans are typically unsecured, and your credit score, income and debt determine whether you qualify. Approved borrowers receive the loan funds in a lump sum and pay back the loan in fixed monthly installments over the loan term, typically two to seven years.

Online loans can be used for almost any purpose, including emergencies, home repairs or debt consolidation. Loans are available to borrowers across the credit spectrum, but the annual percentage rate tends to be higher if you have bad credit (629 score or lower). Financial experts recommend a rate below 36% for a loan to be affordable.Some online lenders offer features like flexible payment dates or the ability to add a co-borrower. Compare loan features when shopping for an online loan.

How to get a loan online

1. Check your credit score

Before applying for an online loan, you’ll want to check your credit report. You can get your free credit report on NerdWallet or at AnnualCreditReport.com. Look for errors, such as inaccurate accounts, wrongly reported payment history or outdated credit limits, and file any disputes directly with the credit reporting company.

2. Calculate your loan payments

Once you’ve checked your credit report, consider how much you want to borrow and how long you want to be paying the loan off. Use a personal loan calculator to estimate monthly payments on personal loans with different rates and loan terms. A longer term will give you lower monthly payments, but also cost more in interest.

3. Pre-qualify and compare offers

Compare offers from multiple online lenders to find the lowest interest rate. This process, known as pre-qualification, involves a short application and soft credit check only, so it won’t hurt your credit score. You may need to supply basic personal information, including your Social Security number, and details about your desired loan.

» MORE: Compare rates with multiple online lenders for free on NerdWallet

4. Submit your application

After comparing offers from multiple lenders, pick the online loan that best fits your budget and financial needs. Apply with the lender by uploading the required documents, which may include a form of identification and proof of income such as a pay stub or W-2. Once you’ve read and understand the fine print of your loan, submit the application.

» MORE: How to apply for a personal loan

5. Get funded

Once approved, you’ll receive the loan documents to sign electronically. Funding time varies, but many online lenders can fund loans within a day or two. Once the money is in your account, make sure to add your monthly loan payment to your budget. Your first payment is typically due in 30 days, and any missed payments can hurt your credit and cause late fees.

» MORE: How to manage your personal loan

Pros and cons of online loans

It’s a good idea to weigh the pros and cons when deciding whether to go with an online lender versus an in-person lender, like a bank or credit union. Certain features may vary, but here is generally what you can expect with online loans:

Pros of online loans

• Convenience: You can complete the entire loan process from your computer or, in some cases, your phone. The best online lenders also have mobile apps you can use to manage your loan.

• No-risk estimates: Most online lenders let you pre-qualify within a few minutes and preview estimated rates without impacting your credit score. (All lenders require a hard credit check before you finalize a loan.)

• Quick and simple shopping: Though rates differ between lenders, comparison websites allow borrowers to fill out one application and see loan offers from multiple lenders. This is easier than banks or credit unions that may only service loans in person or require you to visit a branch during the application process.

• Debt help: With some online lenders, borrowers can opt to have the loan money sent directly to creditors with a debt consolidation loan, removing the burden of paying off individual credit cards yourself.

Cons of online loans

• More expensive than credit unions and some banks: On average, loans from online lenders are not as cheap as those from credit unions. And if you already have a relationship with a bank, it may offer you lower rates than online lenders. Compare rates from multiple lenders online and offline before you take out an online loan.

• No face time: Most online lenders only service loans digitally. This can be a challenge if you ever want to speak to a representative face-to-face.

• Smallest loans not available: Online loans under $500 may be hard to find at rates below 36%. Many online lenders have loan minimums from $1,000 to $2,000. Some credit unions may be able to provide smaller loans starting at $250.

• Predators lurk: Reputable online lenders compete alongside predatory online lenders. Reputable lenders check your credit and ability to repay, and they usually have APRs that top out at 36%. Predatory lenders typically don’t check credit, but you pay for the added risk with APRs well above 100%.

How to get a loan online with bad credit

Borrowers with bad credit (scores of 629 or lower) may qualify for a rate on the high end of a lender's range or be approved for a lower amount when compared to borrowers with good or excellent credit (scores above 689).

Some online lenders who offer loans to bad credit borrowers look beyond credit score when assessing a borrower’s application. They may consider factors like cash flow, employment and education history, which can help chances of approval.

» MORE: How to get a personal loan with bad credit

There are ways bad-credit borrowers can strengthen an application for an online loan:

• Joint loan. Add a co-signer or co-borrower to the loan application to boost your eligibility or get a lower rate or higher loan amount. This person is responsible for the loan amount and any fees if you fail to repay.

• Secured loan. A secured loan requires putting up collateral, like your car or a savings account, to help guarantee the loan. However, you risk losing the collateral if you default on the loan.

• Build your credit. If you don’t need the loan immediately, you can take steps to build your credit before applying.

» MORE: Boost your chances of personal loan approval

No-credit-check and online payday loans

Payday loans and no-credit-check loans don’t require credit checks and can seem like easy options for short-term cash needs. However, these loans can be predatory and expensive, with rates in the triple digits.

Online payday loans are a fast way to get loans for amounts less than $1,000, especially if you don’t have good credit. Payday lenders typically withdraw repayments directly from your bank account on the due date. These loans have APRs close to 400%, which can quickly lead borrowers to owe more in interest than the original loan.

No-credit-check loans are usually for a few thousand dollars or less and are repaid in fixed amounts over a few weeks to several months. Since they don’t check your credit score as part of the application process, lenders tend to charge sky-high interest rates for these loans.

Both no-credit-check and payday loans should be considered only as a last resort after you’ve exhausted alternatives to high-cost loans.