Personal loans are useful for people who need a loan with fewer strings attached.
By design, the application process is fast and easy. You may be provided with more flexible terms, and your loan can be used for a wide variety personal, family, or household needs
What’s more, many people don’t know that personal loans can also be good for your credit rating if you pay it off on time.
If you are already looking into loans, then you know that there are a lot of terms, lending partners, and rules involved in the procedure.
- Which lending partners should you borrow from?
- What kind of a loan is right for you?
- How can you avoid the most common loan faux pas?
- What are APRs, credit scores, and how important is transparency?
But before we break down the list of what’s most important to look for in a lending partners and a loan, let’s dive right into a list of the best personal loans on the market this month.
Best Personal Loans of February 2019
There are a lot of excellent lending partners, which is great news if you require a big injection of cash. These lenders provide a variety of offerings that can meet a borrower’s specific needs.
Our partner, Even Financial, scours the best lending partners on the market and presents you with the most relevant loan for your needs, with the best terms. This list is segmented by credit score (we’ll talk more about your credit score later).
Here’s a full list of the best personal loans of the month. Insert your personal information and loan requirements to find the lending partners that suits you best:
What is a personal loan?
As mentioned, a personal loan is a cash advance given to the borrower without any requirements dictating how to use the money.
This means you can use your loan for whatever you want, unlike a mortgage which has to be used to buy a house, for example.
Additionally, most personal loans do not require the borrower to put down any collateral to secure the loan, in which case they’re called “unsecured loans”.
This aspect of lending makes it much easier for many people who don’t have anything to use as collateral to receive a loan.
Personal loans are not exclusively delegated to those drowning in debt, either.
In fact, often people with good credit and financial stability will take out a personal loan to help build their credit.
When you take out and pay back a loan responsibly, this reflects well on your credit rating, boosting your score, and giving you more leverage for the future.
We’ll look at why this is true below in the credit score section.
Using your personal loan
A personal loan can be used for almost anything you need it for. Common uses include:
- Making a large event such as a wedding, ceremony, or fundraiser
- Making a large purchase such as a horse (we’re not kidding, you can get a loan specifically to buy a horse!)
- Helping consolidate credit card debt
- Paying off other debt such as student loans
- Making purchases that require a large cash payout up front
- Unexpected expenses such as medical emergencies
- World travel or vacation
Because this type of loan is easier to get than most, many people take advantage of the flexible terms and easy access to finance these expenditures.
Getting a good personal loan with bad credit
If you’ve been delving into personal loans, then you have no doubt heard the term credit score non-stop.
A person’s credit score is one (but not the only) factor that lending partners use to determine whether or not the borrower is granted a loan and what terms to offer them.
Credit scores range between 300 and 850, and they systematically categorize people according to several elements including spending behavior, past and present debt, repayment history, length of credit history, what type of credit you’ve used, and new credit.
Each aspect weighs in a little differently, with payment history being the most prominent determinant.
While there are several credit score agencies, one of the most widely relied upon is FICO. 90% of top lending partners us FICO scores to help them determine credit worthiness and set loan terms. In general, scores fall into these categories:
|300 - 599||600 - 699||700 - 749||750 - 850|
If you’re not sure what your credit score is, take a quick detour and use our free Credit Estimator tool to get a rough idea.
Whether or not you will be approved for a loan based on your current credit score is dependent on the terms that the individual lending partners set out.
Obviously, the higher your credit score, the more options for lending partners and the more flexible your terms will be. Even those with low credit scores shouldn’t despair.
There are plenty of solid companies that will lend to borrowers with fair or poor scores such as Prosper, LendingClub, and GuidetoLenders.
Because repayment history and new credit acquisitions factor into your credit score, many people opt to take out a low-interest personal loan to help them build up their credit and put a positive payment history onto their record.
How much can you afford to borrow? Use our loan payoff calculator to see your monthly payment or how log it will take you to repay your loan.
Personal loan features
Personal loans come with a range of features and terms that might not be clear to the average person applying for these loans. Here is a simple guide to understanding loan jargon:
Easily one of the most important factors when discussing a personal loan, the APR will determine how much money you are actually paying for your loan.
It stands for annual percentage rate and it is a tally of all interest costs and additional fees that you’ll be paying to give you a round sum of how much it will cost you to borrow money under these terms for a single year.
This is not the same thing as the interest rates. In fact, the interest rate is one of the factors that the APR aggregates to give you the total. So, a high APR tells you that you’ll be paying more for the same loan with a lower APR. Look for a lending partners that offers lower APRs.
While personal loans can be a true godsend to someone in need of the money, borrowers should be careful not to overlook the various fees and charges.
Some fees are normal and come along with any transaction of this sort.
But, there are companies that will take advantage of borrowers, tacking on exorbitant charges that cancel out any benefits that come from taking out the loan in the first place. Fees can include:
- Origination fee
- Late payment fee
- Prepayment fee
- Transaction fee
In general, look to see how much these fees come to at the end of the day to get an idea of whether or not this lending partner is dealing ethically with you. Look for lending partners with no or low fees to save yourself this expense. SoFi is a well-known lending partner that waives all fees, making your loan that much more manageable.
This refers to how much money you are able to get from your lending partner. Some establishments have a minimum amount you can take out, while others only make an upward cap.
Your credit score and other factors will also determine your loan limits.
You want to find a lending partner that will not limit your loan too low so you are able to take out the money you need, like LightStream which offers loans up to $100,000. (A word of caution: Limits are healthy though, and you should avoid taking out more money than you are able to responsibly pay back.)
Loan terms are simply the terms of the loan you’re taking out including interest rates, repayment length, and any additional charges.
These will be set out by the lending partner, but will need to be approved by the borrower (you) for the loan to go through.
Various lending partners will have a range of terms, but the best ones will give you plenty of flexibility to make approval and repayment of the loan as comfortable as possible.
SoFi has the most flexibility, offering 7-year repayment plans, but plenty of others like PayOff, Prosper, and Upstart have 5-year loans as well.
Look to see what areas a lending partner is able to service. Because of taxes, regulations, and simple reach, some lending partners are limited as to how far they can extend their services. Of course, you don’t need a lending partner that works all over the world; just make sure it services your specific area before you get into an in-depth discussion.
Transparency and reputation
As with anything in life, you want to look for a lending partner with a solid reputation for quality service.
Read reviews online, ask friends, and go on social media. Remember that there will always be somebody ready with a complaint even about the most reliable businesses, so take reviews with a grain of salt.
At the same time, read several reviews to give you a general picture of a company’s trustworthiness.
Transparency is how honest the company is being with customers.
Does this brand hide important information and loan caveats in fine print within its terms and conditions or is everything clearly spelled out on the website?
Are you required to hand over private information before accessing basic information?
How upfront and transparent a brand is will tell you a lot about the overall experience you’re going to have with it.
Autopay is a seldom-discussed feature of personal loans that can actually save borrowers significant amounts of money.
This feature lets you set up payments, so that once a month (or whatever your loan terms are) a payment is made automatically to your lending partner.
This helps you save money in two ways: 1) You won’t be charged late fees for not making a payment on time 2) Many lending partners will offer you lower interest rates for setting up autopay. They prefer to work with the reassurance of a steady, consistent payment system and are willing to reward borrowers for this action.
Best lending partners for personal loans
Prosper is one of the best options for debt consolidation.
A peer-to-peer lending marketplace, Prosper provides loans for people with good credit, but will also work with individuals holding a score as low as 640. There are no minimum income requirements for this company either, making it easier for the average Joe to receive a loan.
APRs range from 6.95%-35.99% and have flexible repayment plans up to five years.
One of the best features of Prosper loans is that there are no prepayment penalties.
A prepayment penalty is a fee you are charged if you pay off part of or all of your debt earlier than the contract date.
lending partners charge this fee because they are losing out on the interest you would be paying if your loan stretched out longer. Prosper does not charge this fee, making it even more financially beneficial for you.
For example, a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR. You would receive $9,500 and make 60 scheduled monthly payments of $204.64. Origination fees vary between 2.41%-5%. APRs through Prosper range from 6.95% (AA) to 35.99% (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All loans made by WebBank, member FDIC.
SoFi, short for social finance, is known as the go getter’s lending partner.
This company loves backing enthusiastic, driven individuals, and it gives out high limit loans (up to $100,000) with incredible terms (variable APRs range from 5.74 -14.60 percent variable).
SoFi is also a well-reputed brand because it goes above and beyond what traditional lending partners do for its borrowers, setting up events for users to socialize, offering financial and career education and assistance, and hosting networking meetings to advance people’s career opportunities.
SoFi has some unique features that make it stand out.
One of the most comforting features of these loans is the unemployment protection that SoFi offers.
This feature puts a loan on hold in the event that you are fired or are out of work for some other reason.
Additionally, SoFi offers both fixed rate and variable rate loans, so you can decide which is more advantageous for you.
Find out more about SoFi and what it can do for you.
All rates, member figures, estimates, terms, state availability, and savings calculations are current at the time this article was written. All of the above may update in the future. For the most up-to-date information, visit SoFi.com.
Fixed rates from 5.990% APR to 16.490% APR (with AutoPay). Variable rates from 5.74% APR to 14.60% APR (with AutoPay). SoFi rate ranges are current as of February 15, 2019 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.74% APR assumes current 1-month LIBOR rate of 2.51% plus 4.28% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
A part of the SunTrust Bank corporation, LightStream is a well-backed and well-liked company by those who have great credit scores.
Like SoFi, it offers up to $100,000 personal loans, will deliver the funds often on the same day or within 24 hours, and charges no origination fee.
Where LightStream really shines, though, is the significantly lower APRs that it offers.
With the right combination of credit score, credit history, and good credentials, a borrower could land an APR as low as 3.99 percent with autopay (rates as of 1/15/2019).
LightStream is one of the few lending partners that appreciates the responsibility and convenience of autopay.
That’s why it offers a lower APR to its borrowers who opt for setting up autopay loans.
An interesting aspect of LightStream’s unsecured loans is that it tailors your terms based on what you are using the money for. It doesn’t limit you as to what you can purchase with the loan, but it does adjust the rates accordingly.
LightStream is the only online lending partner to do this.
Credible offers personal loans with rates starting at 4.99% APR.
Plus, searching your rate options through Credible is completely free, with no hidden fees.
Credible’s one simple form is about as easy as it gets when it comes to applying for a personal loan. It takes just two minutes to complete, and Credible promises that their application process is incredibly secure.
With a low fixed APR range of 3.89 percent – 7.89 percent (with autopay), no origination fee, and an upward cap of $50,000, Earnest is a great option for borrowers with good credit.
Additionally, this is a good lending partner to turn to for paying off or consolidating debt because Earnest favors these types of borrowers over others.
Earnest is well known as one of the top student loan lending partners on the market.
The real selling point for Earnest, though, is the short credit history requirements.
Someone with a short credit history may have a hard time being approved for a loan even if the credit score is overall a high one.
Earnest looks at thousands of data points to determine risk, so credit history is significantly downplayed with this company.
People who are just starting to build their credit would do well to look into Earnest.
You can get a Barclays Personal Loan for up to $35,000. Rates start as low as 5.74% APR, putting them in the mid-range of personal loan APRs.
With Barclays Personal Loans, there are no fees of any kind—making them stand out among the competition. That, paired with the long loan terms (up to 60 months), make Barclays a top personal loan lender.
OppLoans is an excellent choice for people who want to borrow small amounts of money.
With loan amounts ranging from $1,000-$10,000, borrowers can get the money they need right now and easily pay off their debt without the process dragging out for years.
OppLoans has been in business for almost ten years, carries an A+ rating from the Better Business Bureau (BBB), and has positive customer experiences. So, it’s definitely an option you want to check out.
PayOff is a good lending partner for those with decent credit and at least three years of credit history.
It requires a 50% or less debt to income ratio, not bad for the industry, and no minimum income requirements.
One of the most useful tools PayOff provides is “member advocates.”
These qualified financial experts walk you through your entire loan’s lifespan, offering advice and helping you stay on target for healthier financial stability.
Having the benefit of a financial expert keeping an eye on your finances and helping you tweak your spending habits is a huge deal for most people and can change the way you save/spend money forever.
GuidetoLenders is a well-known name in the lending industry.
It has been around for a long time and connects borrowers with a lot of lending partners at once, saving you time.
Additionally, GuidetoLenders has flexible repayment terms, with contracts as long as 84 months (or as little as 24 months).
The company has fast response times, within minutes usually, and very low requirements, making it easier for almost anyone to receive a loan.
GuidetoLenders is a good choice for anyone who wants to get a lot of offers and do comparisons based on their offers.
Being connected to loads of lending partners will help borrowers get the most competitive rates out there.
Upstart, as it sounds, is a tech-friendly, fresh new lending partner that favors startups and other talented individuals.
This is especially promising for young professionals who don’t have a lot of credit history to show for themselves.
Upstart weighs factors such as education and current employment, and will give money to borrowers who have no credit history whatsoever.
Something really unique about Upstart is its dedication to the enhancement of programming skills.
This company teams up with a selection of code academies and will cover the entire tuition for qualifying candidates to earn a full degree in computer coding under these auspices.
LendingClub is one of the original lending marketplaces, which means they were the first on the scene to offer borrowers a wide array of loans in a single area.
This is highly beneficial because it means borrowers can fill out one application form and instantly receive several offers, saving time and aggravation from the signup process.
LendingClub is also good for borrowers with credit scores as low as 600.
The LendingClub works with the largest network of lending partners and has lent out more than $28 billion dollars in its ten years of business.
Many people use LendingClub for debt consolidation because according to the terms of their loans, borrowers must use 80% of the loan money towards consolidating their debt.
This ensures that the money goes where it’s needed and doesn’t get lost along the way.
Lending Club Disclaimer:
Similar to OppLoans, NetCredit is a great option for borrowers looking for small loans.
Unlike OppLoans, though, NetCredit services all 50 states, a major plus.
NetCredit charges no origination or processing fees and makes receiving a loan simple and fast. This is a good choice for people looking to build up their credit as well.
Best of all, NetCredit works with people who have poor credit.
Average lending partners can have scores as low as 580, but the company is even willing to work with lower scores in some cases.
Monevo is a completely free personal loan rate comparison site. With Monevo, you can compare all your personal loan rates in one place.
Monevo is great for anyone who wants to compare their loan options before applying. They’ll only do a soft pull on your credit, meaning your score won’t go down when you check your rates.
This one’s a bit different. Even Financial is not actually a loan provider, but an aggregator of sorts.
They’ll find you the best personal loan available based on your individual specifications.
You enter your credit score, amount needed, identification, and some other information, and they’ll optimize your loan for you.
They’ve got an expansive list of providers, so you can be sure you’re getting the best available loan.
If you have great credit and manage to get all of the discounts FreedomPlus offers, this lending partner can offer you some of the lowest interest rates on the market.
You can get your cash in as little as three days. With many personal loan companies, it may take a week or longer.
FreedomPlus also has an 87% positive customer review rating with the Better Business Bureau.