Best Personal Loans of January 2023

A personal loan allows you to borrow money to consolidate high-interest debt, finance a large purchase or cover emergency expenses. If you have strong credit and a steady income, finding the best personal loan for your needs, especially if you can secure a low interest rate, could save you thousands. Here’s what you need to know about choosing a personal lender and getting approved.

Happy Money

APR 8.99% to 29.99%
Max. Loan Amount $40,000
Min. Credit Score Not disclosed

Upgrade

APR 7.96% to 35.97%
Max. Loan Amount $50,000
Min. Credit Score 600

SoFi

APR 7.99% to 23.43%
Max. Loan Amount $100,000
Min. Credit Score Not disclosed

Upstart

APR 6.50% to 35.99%
Max. Loan Amount $50,000
Min. Credit Score 300

LightStream

APR 7.99% to 23.99%
Max. Loan Amount $100,000
Min. Credit Score Not disclosed

LendingClub

APR 8.05% to 36.00%
Max. Loan Amount $40,000
Min. Credit Score Not disclosed

FreedomPlus

APR 7.99% to 29.99%
Max. Loan Amount $50,000
Min. Credit Score 600

Best Egg

APR 8.99% to 35.99%
Max. Loan Amount $50,000
Min. Credit Score Not disclosed

Avant

APR 9.95% to 35.95%
Max. Loan Amount $35,000
Min. Credit Score Not disclosed
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Max. Loan Amount
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Max. Loan Amount
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Max. Loan Amount
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APR
Max. Loan Amount
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Lender

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APR

Max. Loan Amount

Min. Credit Score

8.99% to 29.99% $40,000 Not disclosed

7.96% to 35.97% $50,000 600

7.99% to 23.43% $100,000 Not disclosed

6.50% to 35.99% $50,000 300

7.99% to 23.99% $100,000 Not disclosed

7.74% to 17.99% $50,000 650

8.05% to 36.00% $40,000 Not disclosed

7.99% to 29.99% $50,000 600

8.99% to 35.99% $50,000 Not disclosed

9.95% to 35.95% $35,000 Not disclosed

Happy Money offers Payoff personal loans designed to consolidate credit card debt. It operates in all but two states and provides loans of up to $40,000. Happy Money is not a bank and instead works with lending partners that originate the loans. The California-based financial wellness company takes a psychological approach to money matters.

Upgrade offers access to personal loans, the Upgrade card with a personal line of credit, rewards checking, and credit monitoring and educational tools. Founded in 2017 in San Francisco, the firm also has operations offices in Chicago, Phoenix and Montreal.

SoFi, short for Social Finance, offers personal loans of up to $100,000 to borrowers with very good to excellent credit. The nationwide lender was founded in 2011 and is known for offering loans with no fees. In addition to personal loans, SoFi offers student loans, auto and student loan refinancing, home loans, and small-business financing.

Upstart is a lending platform that uses artificial intelligence to improve access to affordable credit. Based in California and founded by former Google employees in 2012, Upstart also applies AI to reduce lending risks and costs for its bank partners. The lending intermediary provides unsecured personal loans from $1,000 to $50,000 to borrowers anywhere in the U.S. except West Virginia or Iowa.

LightStream is the online consumer lending division of Truist, which formed in 2019 from the merger of BB&T and SunTrust. SunTrust acquired the assets of online lender FirstAgain in 2012 and relaunched the business as LightStream. LightStream’s online personal loans range from $5,000 to $100,000 and can be used for nearly any reason. Personal loans are available to borrowers nationwide with good to excellent credit.

Although PenFed Credit Union – officially Pentagon Federal Credit Union – serves members of the armed forces, military associations, veterans and retirees, and their families, a military connection is not required to become a member. The credit union offers personal loans for eligible members and eligible co-borrowers in all 50 states, as well as in Guam, Puerto Rico and Okinawa, Japan.

LendingClub connects borrowers and investors through its online marketplace. LendingClub originated on Facebook and evolved into an extensive peer-to-peer lender, though it no longer offers peer-to-peer loans. Borrowers in all U.S. states can apply for $1,000 to $40,000 loans with LendingClub.

FreedomPlus is an online lender affiliated with Freedom Financial Network offering personal loans from $5,000 to $50,000 and promising quick approval and disbursal. A prospective borrower can apply online and talk with a loan consultant. All loans available through FreedomPlus are made by New Jersey-based Cross River Bank.

Best Egg is an online lender founded in 2014 that financial technology company Marlette Holdings Inc. owns and operates. Best Egg offers personal loans starting at $2,000 that can be used to cover medical bills, home remodeling and a variety of other expenses. Cross River Bank in New Jersey issues Best Egg loans, which can be funded in as little as one business day.

Chicago-based Avant has lent more than $6.5 billion to borrowers since its 2012 founding. In partnership with WebBank, Avant offers secured and unsecured personal loans and a credit card. The online lender helps borrowers with fair to excellent credit, or average scores from 600 to 800.

Personal loan interest rates rose this week, trending higher for three-year and five-year loan terms. Here are the average personal loan rates offered to well-qualified applicants with a credit score of 720 or greater, as of Jan. 9:

  • Three-year personal loan term: 17.23% (down from 19.05% a week ago).
  • Five-year personal loan term: 18.64% (down from 20.9% a week ago).

Personal loan rates vary widely based on creditworthiness. Borrowers with very good or excellent credit scores will see much lower interest rates than those with fair or poor credit, as seen in the chart below:

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A personal loan is a lump sum you can borrow from a bank, a credit union or an online lender and repay over a fixed amount of time, unlike a credit card or line of credit.

Personal loans are typically unsecured, which means they are supported by your creditworthiness rather than collateral. Collateral is an asset, such as a car or house, a lender may use to recoup its losses if you default on a secured loan. However, some lenders offer secured personal loans that are backed by collateral like a savings account or certificate of deposit.

You can get a personal loan from different types of lenders, including traditional brick-and-mortar banks and online lenders. They serve borrowers with varying credit scores, income levels and other requirements.

  • Depending on the lender, borrowers can potentially receive funds for personal loans in as little as one business day.
  • Personal loans can help borrowers consolidate high-interest credit card debt and pay it off faster at a lower interest rate.
  • Personal loans are delivered as a lump sum that can be used as you see fit.
  • Personal loans are typically unsecured, so the borrower doesn’t have to use collateral.

  • Depending on the lender, borrowers may have to pay origination fees, or even prepayment penalties.
  • A personal loan may have a higher APR than other options, such as a 0% credit card or a home equity loan, depending on creditworthiness and other factors.
  • Personal loans may be difficult for consumers with fair credit or below to obtain.

Lenders often set minimum requirements and will likely look at your credit score, payment history, income and debt-to-income ratio.

If you’re furloughed or unemployed, the lender may ask you for documentation that indicates when you’ll return to work, such as your furlough letter or a job offer.

Age eligibility requirements can vary by lender or by state and territory laws. Generally, consumers must be 18 to apply, but some states may require borrowers to be 19 or 21.

If you’re applying for a secured loan, the lender will also consider your collateral.

Find the Personal Loan That’s Right for You

You’ll want to consider a number of factors when choosing the best personal loan lender.

  • What interest rate can I qualify for? The lower your personal loan rate, the less you’ll pay in financing charges over time. You’ll want to shop around to find the lowest possible APR for your financial situation.
  • What loan amounts does the lender offer? Many lenders offer minimum and maximum loan amounts, so it’s worth noting before applying for a personal loan. After all, if a lender’s maximum amount is $40,000, you don’t want to waste your time if you need to borrow more.
  • What terms can I expect? Not only will you want to secure the best interest rate, but you’ll also need to make sure to get the loan repayment length you need. Use these factors to calculate your monthly payment to make certain you can afford it.
  • What fees does the lender charge? Many lenders charge an origination fee that can vary from 1% to 10% of the loan amount. Because this can greatly affect the payout you actually receive, be sure to note this and any other fees the lender may charge.
  • How is the lender’s customer service? Check online reviews, such as the Better Business Bureau, Trustpilot or the Consumer Financial Protection Bureau. If the lender is a financial institution, you might reach out to family and friends about their experience.

Follow these steps to apply for a personal loan:

1. Get prequalified. Most – but not all – personal loan companies let you see your estimated interest rate with a soft credit inquiry, which won’t impact your credit score. When you request a rate quote, you’ll provide your personal information, such as your address, income and Social Security number, on the lender’s secure website. You’ll indicate the amount you want to borrow, the reason for borrowing and the repayment term length you prefer.

Once you give these details, you’ll be informed of rates and how to formally apply for a loan. However, prequalification doesn’t necessarily guarantee your loan application will be approved.

2. Compare offers. Research different lenders to find the best personal loan interest rate. You should also consider factors like loan origination fees, the monthly payment, repayment terms and customer service.

3. Formally apply through the lender of your choice. You’ll complete your loan application, which will trigger a hard credit inquiry on your credit report. Keep in mind that even with good credit, you won’t be guaranteed approval or a particular interest rate.

There may be other ways to get the funds you need, so consider these alternatives before you commit to a personal loan.

  • Make a payment arrangement. Costs such as unpaid medical expenses can significantly impact your credit score, but always attempt a payment arrangement with the medical provider before taking out a personal loan. The same goes for utility providers like electricity or water companies.
  • Look at other types of loans. A home equity loan or line of credit could be your option for home repairs, and an auto loan for a new or used car purchase. Compare other types of loans and their terms to see if they offer a better rate.
  • Consider using a low-interest credit card. If your expense or purchase can be paid with a credit card that has a zero-interest promotional period, consider that first. But be sure that you can repay the balance on a reasonable time frame to avoid accruing high-interest, revolving debt.
  • Borrow from a family member. Asking for help may be difficult, but if someone is in a position to loan you money, then it may be better than a personal loan. It’s up to you to weigh the pros and cons of borrowing from friends or family.

Personal loans are available from:

Brick-and-mortar banks.
Credit unions.
Online lenders.
P2P lenders.

A bank or credit union could offer personal service, especially if a location is nearby. But online lenders sometimes offer more convenience, especially for consumers who prefer to apply, manage and close personal loans online. Online peer-to-peer lending platforms allow users to borrow funds from an investor, rather than from a traditional bank. These platforms may have more flexible credit requirements than traditional banks and could be a good option if you might not otherwise qualify for a personal loan.

You can prequalify for loan offers by providing some basic information so the lender can run a soft credit check. After you’ve compared loan terms, amounts, fees, personal loan interest rates and other factors from multiple lenders, you can formally apply for a loan, which requires a hard credit check. If you’re approved, you may receive your personal loan quickly from an online lender – in some cases, as soon as the following business day after approval.

Strive to obtain preapprovals from a variety of lenders so you can compare rates, terms and other factors for different types of personal loans.

Although they won’t work for everyone, personal loan might make sense in certain situations. You may consider applying for a personal loan if you have an emergency expense, need to make a large purchase or want to consolidate some of your high-interest debts.
There are times when a personal loan might not be the best option, though. While personal loans can be used as home improvement loans, for example, you may want to consider a home equity loan instead if you don’t mind using your home as collateral. And for some types of special purchases, such as a wedding or a vacation, it’s best to plan and save so you can pay cash rather than take out a personal loan.

Personal loan interest rates ranges are typically from about 6% to 36%, depending on creditworthiness and other factors. Generally, the higher your credit score, the better your personal loan interest rate.

Also, the higher your credit score, the greater choice of personal loans you’ll have with favorable terms. Companies want to work with people who have good or excellent credit scores and are more likely to offer personal loans with better terms to these consumers.

“Realistically, you probably need a credit score of 680 to 700 or higher” to qualify for a personal loan, says Joseph A. Carbone Jr., certified financial planner and founder of financial planning firm Focus Planning Group. “If you are in a range of 620 to 680, you might need a co-signer to secure the line.”

U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.

To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. Personal loan companies are evaluated based on customer service ratings, interest rates, maximum loan term, minimum and maximum loan amounts, minimum FICO score, online features, and origination fees.
The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.

To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.

To recap, here are the picks:

Best Personal Loans of January 2023

LendingPoint is an online lender specializing in unsecured personal loans from $2,000 to $36,500 for borrowers with fair credit. The Georgia-based lender issues loans with annual percentage rates of 7.99% to 35.99% and repayment terms of two to six years to people in every state but Nevada or West Virginia. Funds may be available as soon as the next business day after the lender approves the loan and receives all documents.

LendingUSA was founded in 2015 to be a lending solution for merchants. LendingUSA provides point-of-sale customer financing through more than 10,000 merchant partners in various sectors including medical services, pet services, funeral services and consumer services.

Axos Bank is a digital bank founded in July 2000 with one product, a basic checking account. The San Diego-based bank has since focused on providing innovative products and solutions, including personal loans, to customers nationwide. Potential borrowers can prequalify online with no credit damage and obtain personalized loan options and rates.

If you need money fast, Alliant Credit Union typically makes same-day online personal loans between $1,000 and $50,000. The $14 billion Chicago-based credit union, founded in 1935, is one of the biggest in the nation, with 600,000 members. In addition to personal loans, Alliant offers home and auto loans, credit cards, checking and savings accounts, individual retirement accounts, trust accounts, and insurance policies.

Discover is a digital bank and payment services company known for its credit cards. But Discover also offers other products, including fixed-rate personal loans of up to $35,000 to borrowers nationwide. The lender charges no fees as long as you pay on time.

U.S. Bank has physical locations in more than 25 states and offers both short- and long-term personal loans with fixed annual percentage rates. Current customers may qualify to borrow up to $50,000 with a credit score of 660 or above, and options are available for noncustomers willing to open a checking or savings account.

PNC Bank can trace its history back to 1852 and the Pittsburgh Trust and Savings Co. Today, PNC Bank is the seventh-largest bank in the U.S., and it features a wide range of consumer and business banking services. Among its suite of products, PNC offers personal, unsecured installment loans up to $35,000. Applicants are considered based on satisfactory credit history, ability to repay and income.

Rocket Loans offers personal loans to qualified borrowers in all 50 states. These loans are designed for people with fair to excellent credit who need to borrow up to $45,000 for debt consolidation, home improvements, medical expenses and business or other expenses.

Founded in 2005 and based in San Carlos, California, Oportun originates unsecured personal loans of up to $12,000 in 11 states. Loans are available in 30 additional states through Oportun’s partnership with Pathward, formerly known as MetaBank. The lender has no credit history requirement, making its loans an option for consumers with no credit or limited credit. In addition to unsecured personal loans, the lender offers secured personal loans to borrowers in Arizona, California, Florida, New Jersey and Texas.

Advertising Disclosure: Some of the loan offers on this site are from companies
who are advertising clients of U.S. News. Advertising considerations may impact
where offers appear on the site but do not affect any editorial decisions,
such as which loan products we write about and how we evaluate them. This site
does not include all loan companies or all loan offers available in the marketplace.


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