best personal loan companies
Updated June 10, 2020

10 Best Personal Loan Companies for 2020

Personal Loans

Money Done Right does not run display ads or accept sponsorships to promote particular products or services. However, we may receive a commission if you purchase or sign up through links on this page. Here's more information about how we make money.

Personal loans are typically unsecured loans in amounts ranging from $1,000 to $100,000. You can find them through your local bank or credit union, but your options may be limited and credit requirements stringent.

For more flexibility, look into online personal loan lenders. This list of the best personal loans gives you an overview of our top-rated lenders and what to expect if you apply with each of them.

Best Personal Loans 2020, Compared

Lender Loan Amounts Loan Terms Interest Rate Range Origination Fee Min. Credit Score Visit

$1,000 – $40,000

36 or 60 months

6.95% to 35.89% APR

1% to 6%

600

$2,000 – $40,000

36 or 60 months

6.95% to 35.99% APR

2.41% to 5%

640

$5,000 – $100,000

36 to 84 months

5.99% to 20.01% APR

None

Good or excellent credit

$5,000 – $100,000

24 months to 12 years

3.99% to 16.79% APR

None

Good or excellent credit

$1,000 – $50,000

36 or 60 months

5.69% to 35.99% APR

0% to 8%

Varies by lender

$1,000 – $40,000

36 to 72 months

6.99% to 28.99%

None – not even late fees!

660

$2,000 – $35,000

24 to 60 months

9.95% to 35.99%

4.75%

600

$1,000 – $35,000

36 to 84 months

6.99% to 24.99%

None

660

$5,000 – $75,000

36 to 60  months

5.99% to 17.24%

None

680

$1,000 – $10,000

6 to 60 months

34% to 155%

5%

500

Lending Club

Lending Club is the largest independent peer-to-peer personal loan platform in the industry, having extended more than $50 billion in loans to more than 3 million customers. You can apply for a loan through the platform with fair credit, a score as low as 600.

Lending Club offers personal loans up to $40,000, business loans up to $500,000, and medical loans called Patient Solutions for up to $50,000 in out-of-pocket medical expenses.

Lending Club Loans

  • Minimum amount: $1,000
  • Maximum amount: $40,000
  • Loan terms: 36 or 60 months
  • Interest rate: 6.95% to 35.89% APR
  • Origination fee: 1% to 6%
  • Minimum credit score: 600

Prosper

Prosper was the first peer-to-peer lending platform and the major competitor to Lending Club.

If you have lots of other monthly debt payments (such as a mortgage, student loans, or credit cards), this could be your best option. Most lenders look for a debt-to-income ratio — your total monthly payments compared to your monthly income — below 43%, but Prosper allows up to 50%.

Prosper offers personal loans, auto loans, home improvement loans, bridge loans, baby and adoption loans, and green loans to add energy-efficient features to your home.

Prosper Personal Loans

  • Minimum amount: $2,000
  • Maximum amount: $40,000
  • Loan terms: 36 or 60 months
  • Interest rate: 6.95% to 35.99% APR
  • Origination fee: 2.41% to 5%
  • Minimum credit score: 640

SoFi

SoFi offers generous personal loan terms to borrowers with good or excellent credit. It’ll lend up to $100,000 with a term up to seven years, and its interest rates are generally lower than competitors, with no fees.

SoFi membership also comes with perks. If you become unemployed while repaying your loan, you can apply for up to 12 months of forbearance. And you’ll get deals on SoFi’s other financial products, which include student loan refinancing, mortgages, investment, and bank accounts.

While you could use its investment or banking products, you probably won’t be able to take out a loan with SoFi if you have below-average credit.

SoFi Personal Loans

  • Minimum amount: $5,000
  • Maximum amount: $100,000
  • Loan terms: 36 to 84 months
  • Interest rate: 5.99% to 20.01% APR
  • Origination fee: None
  • Minimum credit score: Good or excellent credit

LightStream

LightStream is the online lending arm of SunTrust Bank. Its personal loan terms are better than many competitors and include high loan amounts, long repayment terms, low interest rates, and no origination fees.

Because of these great terms, you’ll have to have good or excellent credit to qualify for a loan from LightStream.

LightStream offers loans designed for tons of special purposes, including auto and motorcycle loans, home improvement loans, solar financing, swimming pool loans, boat and RV loans, adoption loans, dental loans, IVF and fertility loans, medical financing, wedding loans, and financing for private school tuition.

LightStream Personal Loans

  • Minimum amount: $5,000
  • Maximum amount: $100,000
  • Loan terms: 24 months to 12 years
  • Interest rate: 3.99% to 16.79% APR
  • Origination fee: None
  • Minimum credit score: Good or excellent credit

Upstart

Upstart is an online loan marketplace where you can search and compare multiple lenders with a single application.

Upstart lets you search for personal loans for moving, home improvement, medical costs, debt or credit card consolidation, and wedding expenses, with funding as quickly as the next business day after approval.

The minimum required credit score depends on the lenders, but Upstart prides its technology on making credit decisions based on more than your FICO score. It’ll include things like your education and work experience to determine your creditworthiness.

Upstart Personal Loans

Terms vary by participating lender.

  • Minimum amount: $1,000
  • Maximum amount: $50,000
  • Loan terms: 36 and 60 months
  • Interest rate: 5.69% to 35.99% APR
  • Origination fee: 0% to 8%
  • Minimum credit score: Depends on lender

Best For No Fees: Marcus by Goldman Sachs

Marcus by Goldman Sachs is one of the top banks for high-yield savings products. But they also provide loans, including personal loans.

You can complete the entire application process online, and not only can the funds be used for just about any purpose, but there are no fees charged. That means no origination fee, no application fee, and no prepayment penalty.

In fact, you won’t even be charged a late fee if you miss a payment or pay less than the full amount. That’s a true no-fee lender!

Goldman Sachs offers something else that’s unique in the personal loan space.

Make 12 consecutive monthly payments on time and in-full, and you can defer one monthly payment for one month. And you can do it without accruing additional interest or fees.

If Marcus personal loans have a drawback, it’s that they don’t accept joint loan applications. You can only apply for a personal loan on an individual basis.

Best for Fair/Poor Credit: Avant

Avant makes personal loans on terms similar to other personal loan lenders on this list. But they tend to be more accommodating of those with fair credit.

They indicate a typical credit score range of between 600 and 700, but that doesn’t exclude the possibility they’ll go below 600.

Some of the other benefits with Avant are the availability of live customer service, auto payment capability with the Avant mobile app, and funding as soon as the next business day after approval.

Even though they advertise a low-end APR of 9.95%, you’re likely to pay much closer to the maximum if you have fair credit. One benefit however is that the administrative fee of 4.75% is below the 6% to 8% origination fee charged by other personal loan lenders for borrowers with lower credit scores.

Best for Home Improvement Financing: Discover Personal Loans

One of the world’s leading providers of top-of-the-line credit cards also provides personal loans. As a direct lender, you can expect to see some the lowest interest rates among personal loan lenders.

Discover also has first-rate customer service, which is available seven days per week.

Loan proceeds can be made for any purpose, but the company has a special emphasis on using them for home remodeling purposes.

Two major advantages with Discover Personal loans is that 1) there is no origination fee, and 2) their loan terms extend out to 84 months. Most other personal loan lenders have a maximum loan term of just 60 months.

One thing to be careful of is that the “Estimated Payments” input box allows you to check Fair (580 – 669) or Poor credit. But if you enter either credit level, you’ll get a notification that they don’t accept applications with credit scores below 660.

And if you’re looking for a generous cash back rewards credit card, Discover can help you with that as well.

Best Personal Loans for Excellent Credit: Earnest

Perhaps best known for student loans, Earnest offers personal loans for any purpose, including refinancing high-interest credit cards, weddings, auto financing and home renovations. And best of all, their maximum loan amount is much higher than most of their competitors, at a lofty $75,000.

You should be aware when applying for a personal loan with Earnest that their requirements are a bit stiffer than other lenders. For example, they require a minimum credit score of 680, no bankruptcy filings within the past three years, and no open collection accounts.

You’ll be required to have enough savings to cover at least two months of normal expenses, including your house payment. They also require increasing bank balances (you routinely spend less than you earn), and you don’t carry large balances on credit cards or personal loans.

The loan application process is also longer than it is for other lenders. They indicate most personal loan applications take 5 to 10 business days.

But once your loan is approved, it will be funded in one or two business days.

In exchange for the higher level borrower requirements and application time, you’ll be richly rewarded with low interest rates and no origination fees.

Best for Poor Credit: NetCredit

If you have poor credit, and have been unable to get a personal loan elsewhere, NetCredit may be in the lender for you. They specialize in working with applicants with poor credit, but be warned that the maximum loan amounts are low ($10,000 in some states) and interest rates are seriously high.

You can use loan proceeds for any purpose, but NetCredit is not available in all states.

Also be aware that both loan amounts and interest rates vary by eligible states. For example, the maximum rate may cap out at 38% in California, but can go as high as 155% in Alabama and other states.

What Is a Personal Loan?

Personal loans are loans you can use for just about any purpose. That includes debt consolidation, home improvements, paying for a wedding — just about anything you can think of.

Unlike a mortgage or auto loan, which use your home or vehicle, respectively, as collateral in case you can’t repay the debt, personal loans are usually unsecured. That could mean you have to have great credit to receive one, or you may face higher interest rates than you would for secured loans.

Pros & Cons of Personal Loans

Personal Loan Pros

  • Borrow $1,000 to $100,000 for just about any purpose.
  • Unsecured, so you won’t risk collateral.
  • Terms and rates are fixed, so you can avoid revolving debt like credit cards.
  • Interest rates are typically lower than for credit cards.
  • Application and funding are quick and easy.
  • Depending on the purpose, a personal loan could boost your credit score.

Personal Loan Cons

  • Credit requirements are greater than for other types of financing.
  • Interest rates may be higher than secured financing, like home equity loans or lines of credit.
  • Many lenders charge origination fees as high as 8%.
  • Loan terms tend to be limited, so large loans could mean a high monthly payment.

Personal Loan FAQs

  • How Are Personal Loan Interest Rates & Fees Determined?

    Most lenders use your credit history, income, total debt, debt-to-income ratio, the amount you want to borrow, and the loan’s term to give you a credit grade that determines your interest rate.

    Credit grades are noted much like grades in school: A+ is best, and the lowest may be D- or even lower, such as E, F, or G.

    The interest rate on personal loans is usually between 5.99% and 36%.

  • Should I apply for a personal loan if I have fair or poor credit?

    It depends on your circumstances. Your interest rate will likely be higher with a lower credit score, but that’s the case with any kind of financing you apply for. In many situations, a bad-credit personal loan could be your best financing option, even with a high interest rate.

  • Can personal loans be used to pay for college?

    You cannot fund a college education with a personal loan. Under the federal Higher Education Opportunity Act, proceeds from personal loans are prohibited from being used for higher education purposes.

    Instead, you’ll need to look into federal student loans and private student loan lenders.

  • Are there any upfront fees charged with personal loans?

    Though personal loan lenders don’t usually charge application fees, origination fees are common. They typically range between 1% and 8% of the loan amount and, like interest rates, are based on your credit grade.

    You won’t have to come up with the money to cover the origination fee. Instead, it’ll be deducted from your loan proceeds at the time of funding.

  • Why do personal loan lenders charge origination fees?

    Origination fees are a source of revenue for many lenders. The fees cover administrative costs and partially offset the lender’s risk for lending unsecured loans.

  • Is it better to consolidate credits on a personal loan if the loan has a higher monthly payment?

    The major potential advantages for debt consolidation are:

    A shorter time to get out of debt.
    A reduced interest rate.
    A shorter repayment term could mean higher monthly payments, but that’ll also mean your debt will spend a lot less time accruing interest.

    If you need to refinance your debt to reduce monthly payments, you’ll have to look for a longer term, which could mean paying more in interest over time.

  • How can a personal loan improve my credit score?

    A personal loan could raise your credit score if you use it to consolidate several other loans or credit cards. You’ll use the personal loan to pay off all of those other accounts, so they’ll instantly become paid on your credit report, reducing your number of accounts with outstanding balances.

    Taking out a personal loan if you don’t have others can also improve your credit mix. Having a variety of accounts can be positive for your credit score.

    Finally, if you have no credit history — and therefore no credit score — taking out a personal loan on your own or with a cosigner can help you build a credit history to improve your score.

Should You Get a Personal Loan?

Personal loans aren’t the best answer for every financial situation, but it could make sense to borrow one if:

  • You have high-interest, revolving debt, like credit cards, you want to consolidate.
  • You have to fund a major expense, like a wedding or travel, in a short period and don’t have time to save in advance. A personal loan is a cheaper financing option than credit cards.
  • You want to make improvements that’ll raise the value of your home, but don’t want to put your home up as collateral.

Why Apply for a Personal Loan Online

Personal loans from online lenders can be a better choice if you have lower-than-average credit, because these lenders may have less stringent requirements than local institutions.

Online lenders also tend to have quicker application and approval processes, so they’re also a better choice for any borrower who wants funds fast. Plus, you can usually get a prequalified quote without a hard credit check, so your credit score won’t be affected by checking with multiple lenders.

Logan Allec, CPA

Logan is a practicing CPA, Certified Student Loan Professional, and founder of Money Done Right, which he launched in July 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.

Back to top  

0 Comments

LEAVE A COMMENT

Your email address will not be published.