FROM OUR PARTNERS

Best Personal Loans of 2022

Racheal Vazquez

Personal loans are popular among consumers as they offer to cover expenses, such as medical, travel, and weddings. These loans generally have fixed annual rates that vary widely and can be a safe and least costly way of closing any financial issues. Each lender has different features from no fees and soft credit checks.  We’ve evaluated the best personal loans based on rates, terms, loan options, customer reviews, and overall quality.

Upstart Personal Loans

5.40% - 35.99%

Est. APR

300

Min. Credit Score

$1,000 - $50,000

Loan Amount

Overview

Upstart uses leading artificial intelligence techniques to make lending decisions based on additional variables such as income, education, and employment.

What we like

  • Loan disbursement within one business day
  • Fast application process
  • Rate check with a soft credit inquiry
  • Low minimum credit score requirement
  • No prepayment fees

What we don't

  • Limited loan terms
  • Origination fee
  • Late payment fee
  • Co-signer not allowed

Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Minimum loan amounts vary by state: GA ($3,100), HI ($2,100), MA ($7,000), NM ($5,100), OH ($6,000).

The full range of available rates varies by state. The average 5-year loan offered across all lenders using the Upstart platform will have an APR of 24.74% and 60 monthly payments of $26.35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $15,808 including a $591 origination fee. APR is calculated based on 5-year rates offered in April 2022. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will be approved.

While most loans through Upstart are unsecured, certain lenders may place a lien on other accounts you hold with the same institution. It is important to review your promissory note for these details before accepting your loan.

Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.

If you accept your loan by 5pm EST (not including weekends or holidays), you will receive your funds the next business day. Loans used to fund education related expenses are subject to a 3 business day wait period between loan acceptance and funding in accordance with federal law.

SoFi Personal Loans

7.99% - 22.73%

Est. APR

680

Min. Credit Score

$5,000 - $100,000

Loan Amount

Overview

SoFi offers online personal loans that are ideal for people who want to borrow money at a low cost. You can use the loan for personal, family or household needs. Borrowers can't use the loan for real estate, business purposes, investments, purchase of securities, postsecondary education, or short-term bridge financing.

What we like

  • No prepayment fees, no origination fees, no late fees
  • High loan limits
  • Offers co-sign and joint loan options
  • Offers unemployment protection
  • Free career coaching and financing advice

What we don't

  • No borrowing below $5,000
  • No refinancing option
  • No secured loan option

Fixed rates from 7.99% APR to 22.73% APR APR reflect the 0.25% autopay discount and a 0.25% direct deposit discount. SoFi rate ranges are current as of 8/1/22 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. Lowest rates reserved for the most creditworthy borrowers. 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, income, and other factors. See APR examples and terms. 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.

Upgrade Personal Loans

6.95% - 35.97%

Est. APR

620

Min. Credit Score

$1,000 - $50,000

Loan Amount

Overview

Upgrade personal loan features include minimal fees and multiple usages, including refinancing credit cards, debt consolidation, home improvement, and major purchases. However, you can’t use it for post-secondary education expenses, investment gambling, or illegal activities.

What we like

  • Flexible loan amount between $1,000 - $50,000
  • Faster funding compared to banks
  • Min. credit score of 620
  • Allows secured, co-signed, and joint loans

What we don't

  • Origination fees
  • Only two loan terms, 3 or 5 years

* Personal loans made through Upgrade feature Annual Percentage Rates (APRs) of 6.55%-35.97%. All personal loans have a 2.9% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. Loans feature repayment terms of 24 to 84 months. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early.

Marcus by Goldman Sachs Personal Loans

6.99% - 24.99%

Est. APR

720

Min. Credit Score

$3,500 - $40,000

Loan Amount

Overview

Marcus by Goldman Sachs offers personal loans with no fees and payment deferral when you make 12 consecutive payments in full each month.

What we like

  • Simple application process
  • Payment deferral after conditions met
  • No late fees or prepayment fees
  • Customizable payment due date
  • AutoPay discount of up to 0.25%

What we don't

  • Joint applications not accepted
  • Low maximum loan amount

Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. Rates range from 6.99% to 24.99% APR, and loan terms range from 36 to 72 months. For NY residents, rates range from 6.99%-24.74%. Only the most creditworthy applicants qualify for the lowest rates and longest loan terms. Rates will generally be higher for longer-term loans. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. The availability of a loan offer and the terms of your actual offer will vary due to a number of factors, including your loan purpose and our evaluation of your creditworthiness. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans). Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions. Receive a 0.25% APR reduction when you enroll in AutoPay. This reduction will not be applied if AutoPay is not in effect. When enrolled, a larger portion of your monthly payment will be applied to your principal loan amount and less interest will accrue on your loan, which may result in a smaller final payment. See loan agreement for details.

What can personal loans be used for?

Personal loans are also flexible, meaning you can use them for almost anything you want, even if it isn’t related to paying off debt. Here are some of the most common uses for personal loans:

  • To cover medical expenses: Medical expenses can be costly; sometimes, it can take months for your health insurance to cover the cost of treatment. A personal loan can help cover the gap between your insurance payments and the total cost of treatment, so you don’t have to worry about being unable to pay for medical bills that are not covered by your insurance plan.
  • To cover home renovations: Home renovations can be expensive but add value to your home when it comes time to sell it. A personal loan can help pay for renovations such as new bathrooms or kitchen upgrades while also increasing your property’s resale value.
  • To fix or maintain a vehicle: A car is one of our most important assets, but like anything else, it must be maintained and looked after. You can use a personal loan when you need to fix your car or keep it.
  • To take a vacation: Vacations are great for relaxing and enjoying time with friends and family. If you want to go on vacation but don’t have enough money, then a personal loan can help you take time off from work and travel far away from home.

What are the requirements for getting personal loans?

The requirements for getting personal loans are different from one lender to another. However, there are some general requirements that most lenders follow. These include:

  • Credit score and history: The lender will verify your credit report, which includes a record of how you’ve handled your credit over the past seven years and how you’ve paid off any debts. A high credit score indicates a good history of handling your debts responsibly. A low score could indicate that you are more likely to default on the loan, which can worry lenders about lending to you.
  • Income: The lender will verify your income by requesting pay stubs, tax returns, and bank statements. The lender wants to see that you have enough money to repay the loan with interest.
  • Personal documents: To apply for a personal loan, you must submit various documents such as identification cards, bank statements, employment contracts, and other documents related to your financial situation and residence status.
  • Collateral: For secured personal loans, you will have to provide some sort of collateral against the loan you are taking. If you fail to pay back the principal amount and interest, your property will be used as security for the loan. The bank or lender can sell your property and recover the outstanding amount from you.
  • Origination fee: The origination fee is the amount charged for processing your application and verifying the information you provide. The fee can vary from lender to lender and is typically stated as a percentage of your total loan amount, ranging from 1% to 5% of the loan amount.

Types of personal loans

Here’s a rundown of the most common types of personal loans:

  • Unsecured personal loans: These are the most common type of loan available. These types of loans don’t require collateral, meaning you can borrow money without having to pledge any assets as collateral for repayment.
  • Secured loans: If you have something valuable you can use as collateral, then you may be able to secure your loan with that asset instead of a bank guarantee. If you don’t pay back the loan, the lender can take your collateral property away from you and sell it to recoup its losses.
  • Personal line of credit: Personal lines of credit operate like revolving credit cards — they’re suitable for ongoing spending needs or emergencies where you need quick access to cash. Unlike a credit card, though, personal lines of credit offer lower interest rates because they’re tied to a specific amount of money rather than an open-ended balance.
  • Debt consolidation loans: A debt consolidation loan is designed to help you get out of under-interest credit card debt by consolidating it into a single loan with a lower interest rate. This makes it easier to pay off your debts without getting deeper into debt because you’ll have one lower monthly payment.
  • Fixed-rate loans: A fixed-rate personal loan allows you to lock in an interest rate for the life of the loan (so long as it’s less than five years). If rates go up after you get approved for your loan, they won’t affect your monthly payments. Variable-rate loans have rates that change over time — sometimes daily — based on market conditions and other factors beyond your control.
  • Variable-rate loans: A variable-rate personal loan has an adjustable interest rate that may change over time with market conditions and other factors beyond your control, including changes in federal funds rates.

What are the pros and cons of a personal loan?

Pros

  • Help borrowers build credit: Borrowers with a personal loan can improve their credit score and build a positive payment history. This is important because it can help you get better rates on future loans, such as mortgages and auto loans.
  • Make it easy to consolidate debt: A personal loan can help you pay off multiple debt accounts, including credit cards and student loans, with one fixed monthly payment that’s easier to manage than multiple ones.
  • Fast Access to Cash: A personal loan can be the perfect solution if you need cash quickly. Personal loans can be approved within 24 hours, and your money is deposited into your account in as little as one business day.
  • Be used for almost anything: Personal loans are incredibly flexible, so you can use them to do almost anything. Whether you want to pay off debt, consolidate your credit card bills, or make a big purchase, a personal loan can help you get the money you need.

Cons:

  • Accrue high-interest charges: The interest charges on a personal loan can be very high. This is because personal loans have a fixed interest rate, unlike other types of loans with lower interest charges.
  • Lead to credit damage: When you borrow money from a lender and fail to pay it back on time, it can result in a bad credit rating. This means you will have difficulty getting loans from other lenders and financial institutions such as banks, credit unions, etc.
  • Result in unnecessary debt: A personal loan is used for any purpose, including paying bills, medical expenses, buying new furniture etcetera but when used irresponsibly or taken without proper planning, it can lead to unnecessary debt, which can take years to get rid of.

What are the fees associated with personal loans?

Here’s what you can expect to pay:

  • Application fee: Most lenders charge an application fee of $0 to $75, but some lenders allow you to skip the fee if you choose not to apply for a loan.
  • Origination fee: The origination fee covers the lender’s costs associated with processing your loan application and preparing your loan for funding. The origination fee is often set at 1% or 2% of your loan amount, but it can be higher or lower depending on the lender.
  • Prepayment penalty: A prepayment penalty is a fee charged by some lenders if you pay off your loan early — usually before the term ends or within six months of disbursement if you borrowed less than $10,000. You may also have to pay an additional interest rate adjustment if you refinance before the end of your term or pay off your loan early.
  • Late payment fee: Most lenders don’t charge late fees until after several days past due, but some do charge them immediately after they’re due, which can be as much as $35 per month (or more).

How to choose the best personal loans

Here are some tips to help you choose the best personal loan.

  • Evaluate the Interest rates: The interest rate on your loan will depend on the amount you borrow and the duration of the loan. You should go with a lender who offers lower interest rates and check out various offers before deciding.
  • Consider the eligibility criteria: Several factors affect eligibility when it comes to personal loans. One such factor is income, which may be checked by an income verification process or through other means like past tax returns or pay slips submitted by employers. You may also be required to provide proof of residence and identification documents like a driving license, passport, etc.
  • Enquire about additional fees: Any other expenses charged by lenders should be clarified before signing up for any deal. These could add up quickly and make your loan unaffordable in no time!
  • Ensure repayment flexibility: If you have trouble making your monthly payments, make sure your lender offers flexible repayment options. Repayment flexibility is essential if you plan to take out a large loan and pay it back over several years. If your circumstances change, it’s nice to know that you won’t be stuck with a high monthly payment that makes it hard for you to keep up with payments later.