Best online personal loans for September 2021
|Lender||APR range||Minimum loan amount||Maximum loan amount||terms||Recommended credit score|
|LightStream Best personal loan online||2.49% -19.99% (with automatic payment)||$ 5,000||$ 100,000||24–144 months||660+|
|SoFi Best online loan for good credit||4.74% to 19.38% (with automatic payment)||$ 5,000||$ 100,000||2-7 years||680+|
|Reached Best online loan for fair credit||6.76% -35.99%||$ 1,000||$ 50,000||36-60 months||580+|
|Before Best Online Loan For Bad Credit||9.95% -35.99%||$ 2,000||$ 35,000||24-60 months||600+|
|To pay Best Online Debt Consolidation Loan||5.99% -24.99%||$ 5,000||$ 40,000||24-60 months||640+|
What are the advantages and disadvantages of personal loans?
Using a personal loan to try to get out of debt faster or to increase the value of your home can be a smart financial decision. A personal loan can also be a lifeline when you have unforeseen expenses and don’t have emergency funds to cover the costs.
However, sometimes a personal loan can hurt you financially instead of improving your situation. Before applying for a new loan, think about the pros and cons you might face.
- Interest rates on personal loans may be lower than the rates charged by lenders for other types of debt. For example, the Federal Reserve reveals that the average rate on credit cards valued in May 2020 was 16.28%. Meanwhile, the average rate on a 24-month personal loan was 9.65%. Borrowers with excellent credit may qualify for interest rates on personal loans as low as 5% or 6%.
- Using a personal loan to consolidate revolving credit card debt could improve your credit score. Credit scoring models focus on your credit utilization rate, which is the percentage of your credit card limits used according to your credit reports. If you consolidate your credit card debt with a personal installment loan, your credit utilization rate may drop, which could increase your credit score.
- Your monthly payments are fixed. Most personal loans are fixed rate installment loans, so your interest rate and your monthly payment amount remain constant for the duration of your loan. Fixed payments can make your monthly budget more predictable.
- You are not guaranteed approval or a low APR. If you have credit problems, a high debt-to-income ratio, or any other red flags that lenders are looking for, you might have a hard time qualifying for a loan. Even if you qualify for a personal loan with bad credit or some other factor that increases your risk in the eyes of a lender, the APR you are offered can be high. The APRs on some personal loans can typically be as high as 35.99%.
- You could face financial problems if you don’t manage your debt carefully. For example, some people use personal loans to consolidate their credit card debt and then turn around and charge new balances on those same credit cards afterwards. It is generally not a good idea to close your credit cards after debt consolidation, as it could lower your credit score. However, it’s important to avoid charging more on your credit cards than you can afford to pay each month.
- The fees can be high. If your credit is excellent, you may be eligible for a no-charge personal loan. Still, some lenders charge origination fees, sometimes up to 8% or more, which come directly from the proceeds of your loan. Be sure to factor in the cost of the lender’s fees when looking for the best personal loan.
How to get a personal loan online
If you want to borrow money and are confident that you can afford to take on new debt, now is the time to start looking for the right loan. Fortunately, comparing loans online tends to be a faster and easier process than comparing loans from traditional financial institutions.
Before applying for any type of loan, it is important to check and review your credit reports and ratings with all three credit bureaus. Next, look for lenders who offer loans to people with your credit rating (excellent, good, fair, bad). You need to make sure that the lenders you are considering offer the type of loan online that you need (consolidation loan, home improvement loan, medical loan, etc.). Finally, compare the rates and fees available and choose your top 3 lenders as you prepare to begin the application process.
How to apply for a personal loan online
- Submit a prequalification request (if available) to at least 3 lenders.
- Choose the lender who offers you the best overall offer and complete your official loan application.
- Quickly send any additional documentation requested by the lender and electronically sign your loan agreement.
- Wait to receive your funds.
Is Obtaining a Personal Loan Online Safe?
It is not difficult to find a safe online loan from a reputable online lender. Still, it’s important to do your homework to make sure you’re dealing with a legitimate lender before providing your personal information. Look for reviews of the best lenders online. It is also useful to research any complaints that lenders have received from various agencies, such as the Consumer Financial Protection Bureau.
Can You Get A Personal Loan Online Without A Credit Check?
Finding a loan online (or any type of financing) with bad credit can be difficult. If you are looking for bad credit loans, you may find lenders that advertise “No Credit Check Loans” or “Guaranteed Approval”. Such promises should be a red flag. According to the Federal Trade Commission, a lender who is not interested in your credit score or history could be in the process of committing an advance loan scam.
Can I get a personal loan online with a co-signer?
In a recent interview with Linda M. Hooks, head of the University of Washington and Lee’s economics department, she said, “Having a co-signer can help someone with a limited credit history get a loan. However, the co-signer should be aware that they are responsible for the loan in the same way they would be if it was their own loan. It can also affect the credit history and score of the co-signer. ”
While you may or may not apply for a joint loan with a co-signer, it is up to each lender, many loans allow joint loan applications. Keep in mind, however, that just because you are allowed to apply for a loan with a co-signer doesn’t mean you have to. Co-signing involves a significant risk for your friend or loved one. As a co-signer, this person will also be responsible for the debt, just as much as the primary borrower.
If something goes wrong, late payments or non-payment could cause serious damage to your finances and credit reports, not to mention your relationship. Consider these risks carefully before asking someone to co-sign.
Can I get a personal loan online instantly?
Many online lenders offer instant approval (if you can qualify) when you apply for finance. However, instant loan approval is not the same as instant access to your loan proceeds.
Once you are eligible for a loan, the lender may require you to take some additional steps. For example, you may need to send documents confirming your identity and income. You may also need to electronically sign your loan agreement before funds are disbursed.
The bottom line
The beauty of online loans is that it is easy to find the best deal. You can compare multiple lenders and complete prequalification applications in just one afternoon. By taking the time to research the loan that best suits your situation, you could also save hundreds of dollars (sometimes thousands) in interest and fees over the course of your loan.
How we choose the best personal loans online
Investopedia is committed to providing consumers with unbiased and comprehensive personal lender analysis for all borrowing needs. We’ve collected over 25 data points from over 50 lenders, including interest rates, fees, loan amounts, and repayment terms, to make sure our content helps users get it right. borrowing decision for their needs.