Ratings Methodologies for Personal Loans

NerdWallet’s overall ratings for personal loans are weighted averages of ratings in five major categories:
  • Affordability.
  • Underwriting and eligibility.
  • Loan flexibility.
  • Customer experience.
  • Transparency.

Breakdown of overall rating

Data collection and review process

We survey more than 35 technology companies and financial institutions that offer personal loans in more than one state. These lenders include:
  • The largest national banks based on asset volume.
  • The largest credit unions based on search volume.
  • The largest digital lenders and lending platforms based on search volume.
  • The largest high-interest installment lenders based on search volume.

Data accuracy

Personal loan reviews are thoroughly reassessed annually. Writers and editors also make updates to data such as rate changes, new features and star ratings throughout the year as necessary. We establish and maintain contact with providers’ primary point people to ensure current information.

The review team

The personal loans review team is made up of reporters, writers and editors who cover traditional and high-interest personal loans as well as credit products such as paycheck advance and "buy now, pay later" apps. Each team member adheres to NerdWallet’s strict guidelines for editorial integrity.

Our writers’ bylines have appeared in The New York Times, The Associated Press, USA Today, MSN, MarketWatch, Yahoo Finance and other national and regional media outlets in addition to NerdWallet. External media frequently tap our personal loans experts for input on industry trends and developments that impact consumers.

Methodology, broken down by category

We assess five categories and 22 subcategories for all lenders. Here’s how we weigh these categories.

Affordability (30%)

We review lenders’ annual percentage rate offerings at least twice per year and the competitiveness of each lenders’ APR range. We also assess fees the lender charges, such as an origination or late fee, and whether the lender offers opportunities for borrowers to receive a rate discount.

Underwriting and eligibility (25%)

We consider the rigorousness of each lender’s underwriting practices, including whether they do a hard credit check before providing a loan, offer pre-qualification to all borrowers and whether they provide loans to a wide range of borrowers.

Loan flexibility (20%)

We assess how flexible lenders can be with borrowers, including whether they offer multiple loan types, how widely available the loans are, whether borrowers can choose and change payment due dates and whether they offer a refinancing option.

Consumer experience (15%)

We consider the experience of the consumer trying to manage a personal loan, which means accessibility of customer service representatives for assistance and a borrower’s ability to manage the loan in repayment.

Transparency (10%)

We review lenders’ websites and practices to determine whether it’s possible for borrowers to reasonably assess whether the loan is the right option for them, and how easy it would be to do so. This includes whether information like the loan’s rate, fees and terms are easily accessible. It also includes transparency in terms of credit reporting and which major credit bureaus the lender reports payments to.

Discretionary (not weighted)

A lender’s rating may be lowered if it has faced governmental regulatory action in the past three years or been accused of predatory practices by a reputable source. A lender that offers a unique, consumer-friendly feature (outside of the scored categories above) that few others offer may earn a higher score.
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