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Online Loans: 7 Best Lenders in 2019

Jan. 31, 2019
Loans, Personal Loans
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Traditionally, when you needed money, you visited your bank for a loan. Some banks still offer personal loans, but today you also have the option of online loans. Getting a personal loan online streamlines the process:

  • You compare rates, or pre-qualify, online.
  • You apply on a lender’s website instead of visiting a bank.
  • You get a fast approval decision, usually within minutes.
  • The lender deposits the money directly to your bank account.

Best online loans for good credit: Marcus, LightStream, SoFi

LightStream, Marcus, and SoFi are options for borrowers with good to excellent credit. These lenders feature competitive rates and low fees.

5.0 NerdWallet rating

• APR: 3.99% - 16.99% (with autopay).

• Loan amount: $5,000 - $100,000.

• Loan terms: 2 to 7 years.

• Minimum credit score: 660.

• Time to funding: As soon as the same day.

• Fees: None.

Read our review.

Check Rate Click to pre-qualify on NerdWallet.
5.0 NerdWallet rating

• APR: 5.99% - 28.99%.

• Loan amount: $3,500 - $40,000.

• Loan terms: 3 to 6 years.

• Minimum credit score: 660.

• Time to funding: Usually 2 days.

• Fees: None.

Read our review.

Check rate Click to pre-qualify on NerdWallet.

 

5.0 NerdWallet rating

• APR: 5.74% - 16.24% (with autopay)

• Loan amount: $5,000 - $100,000.

• Loan terms: 2 to 7 years.

• Minimum credit score: 680.

• Time to funding: Typically about 3 days.

• Fees: No origination fees, late fees or overdraft fees.

Read our review.

Check rate Click to pre-qualify on NerdWallet.
.

Best online loans for debt consolidation: Laurel Road, Payoff

Laurel Road and Payoff offer loans that help borrowers stay disciplined and pay off debt. 

5.0 NerdWallet rating

• APR: 8.01% - 16.30% (with autopay).

• Loan amount: $1,000 - $45,000.

• Loan terms: 3 to 5 years.

• Minimum credit score: 700.

• Time to funding: 5 business days.

• Fees: No origination fee; late fee is the lesser of 5% of payment or $28.

Read our review.

Check Rate Click to pre-qualify on NerdWallet.
4.5 NerdWallet rating

• APR: 5.99% - 24.99%.

• Loan amount: $5,000 - $35,000.

• Loan terms: 2 to 5 years.

• Minimum credit score: 640.

• Time to funding: 1 to 7 business days.

• Fees: Origination fee of 0% to 5% of loan amount. No late fee.

Read our review.

Check rate Click to pre-qualify on NerdWallet.

Best online loans for bad credit: Avant, OneMain Financial

Avant and OneMain are two options for borrowers with bad credit. Avant offers flexibility with loan repayment, while OneMain is a good choice if you need cash fast.

4.0 NerdWallet rating

• APR: 9.95% - 35.99%.

• Loan amount: $2,000 - $35,000.

• Loan terms: 2 to 5 years.

• Minimum credit score: 580.

• Time to funding: As soon as the next business day.

• Fees: Administrative fee of 4.75% of loan amount; fees for late payment and unsuccessful payment.

Read our review.

Check rate Click to pre-qualify on NerdWallet.
4.0 NerdWallet rating

• APRs: 16.05% - 35.99%.

• Loan amount: $1,500-$30,000.

• Loan terms: 2 to 5 years.

• Minimum credit score: None, but borrowers average 600 to 650.

• Time to funding: Same day.

• Fees: Origination and late fees; both vary by state.

Read our review.

Check rate Click “Check rate” to pre-qualify on NerdWallet.
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Summary of best online lenders

LenderGood forGet started
Avant
4.0 NerdWallet rating
Bad credit
at Avant
Laurel Road
5.0 NerdWallet rating
Debt consolidation
at Laurel Road
LightStream
5.0 NerdWallet rating
Good credit
at LightStream
Marcus
5.0 NerdWallet rating
Good credit
at Marcus
OneMain Financial
4.0 NerdWallet rating
Bad credit
at OneMain
Payoff
4.5 NerdWallet rating
Debt consolidation
at Payoff
SoFi
5.0 NerdWallet rating
Good credit
at SoFi
Click “Check rate” to pre-qualify on NerdWallet and receive personalized rates from multiple lenders.

The pros and cons of online personal loans

Lending experiences vary by lender and loan, but you’ll generally encounter the following pros and cons with online loans:

Pros:

  • Convenience: With online loans, you can complete the entire loan process — from pre-qualification to signing — from your computer or, in many cases, your phone. Some banks offer an online loan option, but you must visit a branch to complete the application.
  • No-risk estimates: Most online lenders allow you to pre-qualify and see estimated rates without committing to a loan or affecting your credit score. Banks and credit unions typically require a hard check for this preliminary step. (All lenders, whether online or brick-and-mortar, typically require a hard credit check before you finalize a loan.)
  • Credit plus more: Online lenders look at more than your credit score and credit report when making an approval decision — they may consider your education or occupation, or ask to scan your bank account transactions to assess your financial behavior. This can improve your chances of getting a loan if you’re new to credit or have a low score.
  • Quick, simple shopping: It’s easy to compare rates from multiple lenders: Online pre-qualification takes a few minutes, and comparison sites allow borrowers to see loan offers from multiple lenders after filling out a single application form. You can do this on NerdWallet’s lender marketplace.
  • Debt help: Some online lenders allow borrowers who take a loan to consolidate debt the option to send money directly to creditors, improving the chances of successfully paying off debt.

Cons:

  • Costlier than credit unions: On average, loans from online lenders are not as cheap as those from credit unions. Since each online lender uses its own underwriting formula, you may get different rates from each one. It’s essential to compare rates from multiple lenders before you take an online loan.
  • Sometimes not so simple: The application process for some types of personal loans — including secured and co-sign loans — can be more complex than that for unsecured personal loans, where approval is based largely on income and credit history.
  • Large loans only: Loans under $500 may be hard to find at rates below 36%. Most online lenders have loan minimums of $2,000. A local credit union, while not as immediate, is usually the best place to look for small loans.
  • Predators lurk: Reputable online lenders compete alongside predatory online lenders. Reputable lenders check your credit and ability to repay the loan, with annual percentage rates that top out at 36%. Predatory lenders advertise that they don’t look at credit. You pay the cost of this added risk, in the form of APRs that can top 400%.

How much will it cost?

Use our personal loan calculator to see estimated rates and monthly payments.

How to shop for an online personal loan

Here are a few questions to ask as you search for online loans:

How’s your credit? Many online lenders consider additional factors, such as your education history or profession, but in conjunction with your credit score and credit history. If your score is average or poor, it’s worth taking steps to build your credit.

» MORE: Preview your credit score for free

Is the APR below 36%? The sum of the interest rate and all fees is known as the annual percentage rate, and the APR you receive largely depends on your credit. Financial experts and consumer advocates agree that 36% APR is the acceptable limit for a loan to be affordable to a borrower. If an online lender offers rates above 36%, that’s a sign the loan is unaffordable, even if the monthly payment fits your budget.

» MORE: What’s a good rate on a personal loan?

Is your documentation ready? You can easily get rate quotes by providing your name, date of birth, the last four digits of your Social Security number and other information you enter from memory, but once you decide to move forward with an application, lenders will require documentation, including a form of identification and proof of income, such as a pay stub or W-2. You’ll upload the documentation electronically; many lenders accept screenshots or phone photos in addition to scanned documents or PDFs.

» MORE: Where to get a personal loan

Recap: Best online loans

About the authors