Best Personal Loans of September 2023

Personal loans represent an agreement between a borrower and lender. Once a loan application has been accepted, the lender makes a lump sum payment to the borrower, and the borrower pays the loan back in monthly installments.

Personal loans are best for those who have planned how they will spend the money and how it will be repaid. Listed below are the best personal loans for borrowers of all kinds, from those with poor credit scores to excellent credit scores.

Jump to: Take a closer look into each of the best loans

Here's a quick list of our top personal loans:

• Our expert overall pick for the best personal loan: SoFi Personal Loans. We like it because loans are available for up to $100,000, making it ideal for large home improvement projects.
• Best personal loan for debt consolidation: Citi? Personal Loan. With the highest interest rate coming in under 20%, it represents a good way to get rid of high-interest debt.
• Best personal loan for emergency situations: Upstart. Very few lenders offer loans as small as $1,000.

Citi Personal Loan Review

Citi offers loans as small as $2,000, making it a convenient option for a borrower who only needs enough to get by and does not want to carry the debt for long. With a narrow range of interest rates, borrowers don't have to worry about being hit with a sky-high rate. However, with a loan term of up to 60 months, this could be an ideal loan for a person looking to consolidate existing debt.

Citi personal loan requirements

• Credit score of 750 or more
• Minimum annual income of $30,000
• Age 18 or older (21 or older in Puerto Rico)
• Social Security number
• Verifiable bank account
• U.S. citizen or permanent resident

SoFi Loan Review

SoFi offers loans from $5,000 - $100,000, with terms from 24 - 84 months. The lender offers flexible repayment options and unemployment protection. Once the borrower signs the loan papers, the payment can hit their bank account as early as the next day. SoFi is a particularly good option for borrowers who want to use the funds to pay off high-interest credit cards. In fact, SoFi will pay the credit card issuers directly, then reward the borrower with a rate discount for allowing direct pay. The minimum credit score required is 680.

SoFi personal loan requirements

• Have a credit score of at least 680
• Be 18 years of age or older
• Be employed or provide evidence of imminent employment
• If not employed, have a reliable source of income
• Be a U.S. citizen, permanent resident, or non-permanent resident

Upstart Personal Loan Review

Upstart provides personal loans to borrowers with credit scores as low as 300 in most states, and it's one of the few lenders that will consider a score that low. Loans of $1,000 - $50,000 are available, although Upstart does tack on an origination fee of 0% - 12%. Borrowers can choose terms of 36 or 60 months, and may receive their money one business day after signing.

Upstart lending requirements

• Be 18 years of age or older
• Have a valid Social Security number
• Have an active bank account
• Have an annual income of at least $12,000
• Be a U.S. citizen or permanent resident
• Not be a resident of Iowa or West Virginia

Lightstream Loan Review

LightStream personal loans are available from $5,000 - $100,000, with no origination fees or prepayment penalties. Applicants need a score of Good credit or greater, but LightStream does allow co-applicants. Loan terms range from 24-144 months (varies by loan purpose). If an applicant has been approved for a personal loan with the same terms by another lender, LightStream will beat that lender's rate by 0.1%.

Lightstream lending requirements

• Have a valid Social Security number
• Have a clear plan for what you want to do with the borrowed funds
• Be able to provide evidence of any available assets

Happy Money Loan Review

Happy Money is designed for those who want to pay off high-interest credit cards. What sets Happy Money apart is the focus it puts on those who hope to build their credit scores and learn more about their own financial behavior. The lender offers a free six-week email course called "Peace," intended to help customers deal with financial stress in a positive way. Loans are available from $5,000 - $40,000 in all states except Massachusetts and Nevada, and come with terms of 24 - 60 months. There is an origination fee ranging from 0% - 5%.

Happy Money loan requirements

• Be 18 years of age or older
• Have a valid Social Security number
• Have an active checking account
• Not live in Massachusetts or Nevada
• Have a credit score of 640 or higher
• Have no current account delinquencies

Avant Lending Review

Avant accepts applicants with credit scores as low as 580, significantly lower than the national average. That's the good news. The not-so-good news is that applicants may pay a high interest rate and a loan origination fee of 0% - 4.75%. Plus, Avant charges a late fee of $25 and a returned check fee of $15.

Avant lending requirements

• Have a monthly income of at least $1,200 (can include alimony, child support, or other maintenance)
• Have a credit history that includes at least one account
• Be able to apply on their own (no joint applications or co-signers are accepted)
• Live in any state except for Hawaii, Iowa, Maine, New York, Vermont, or West Virginia

Achieve Personal Loan Review

Formerly known as FreedomPlus, Achieve requires applicants to have a minimum credit score of 620. Customers can borrow between $5,000 - $50,000. Terms stretch from 24 - 60 months. Borrowers can also count on paying an origination fee of 0% - 4.99%. The low end of the interest rate is not out of line with other lenders, particularly for borrowers with good rather than excellent credit.

Achieve loan requirements

• Must be 18 years of age or older in most states; must be at least 19 in Alabama or Nebraska
• Must be a U.S. citizen or permanent resident
• Must have a Social Security number
• Must provide proof of income
• Must have a verified bank account

Best Egg Loan Review

Best Egg borrowers can apply for $2,000 to $50,000. However, the loan will not be cheap. In addition, the only applicants offered the lowest rate must have a FICO? Score of at least 700 and earn a minimum of $100,000 annually. The high end of the rate will be prohibitively expensive for many borrowers. Best Egg also charges an origination fee of 0.99% - 8.99%, another factor that can make its loans expensive. Loan terms range from 36 - 60 months.

Best Egg lending requirements

• Must have a minimum credit score of 550
• Proof of income is required
• Must have a U.S. address
• Must have a valid Social Security number
• Debt-to-income (DTI) ratio (including mortgage) must be 65% or less
• Must live in any U.S. state except: Iowa, Vermont, West Virginia, or U.S. territories

Discover Personal Loan Review

The Discover Personal Loan is available in all 50 states plus Puerto Rico. Loan amounts range from $2,500 - $40,000. While $40,000 may not be enough to complete a remodeling project, it should be more than enough to cover a 50th-anniversary party, wedding, or emergency situation. Discover charges no origination fee, saving borrowers money upfront. Currently, terms range from 36 - 84 months.

Discover loan lending requirements

• Minimum credit score of 660 is required
• Applicant must earn at least $25,000 annually
• Must be 18 years of age or older
• Must be a U.S. citizen or permanent resident

The best personal loan lenders don't charge an origination fee. Other expenses -- like prepayment and late fees -- are kept to a minimum. Another key trait of a great personal loan is that it has no fees or very low fees. Fees can be sneaky. Say a lender offers you a low interest personal loan, but piles on fees. That loan may end up costing more than a loan with a slightly higher interest rate but no fees.

To get the best rates from loan companies, follow these three steps:

1. Maintain a high credit score. A FICO? Score of at least 720 is normally enough to qualify for the lowest personal loan interest rates.
2. Get a cosigner. If your credit score is not high enough to qualify for a good interest rate, a personal loan cosigner with an excellent credit score can help you get a better interest rate.
3. Shop around for the best rate. Consider looking at traditional banks, credit unions, or even online personal loans. Do your research to find a lender that is offering the best personal loan rates. Many have an online prequalification tool that will give you a rate without hurting your credit score. In some cases, lenders will offer promotions and limited-time discounts.

If you know how you're going to spend the money and have a plan to repay it, a personal loan can be a good tool for accomplishing your goals. Most lenders don't care how you spend the money, as long as you pay it back as promised.

If you need the money quickly, make sure to check the lender's approval and funding timeline. Many lenders offer next day funding, and some even offer funding as quickly as the same day you're approved. The best loans like these can help you overcome financial roadblocks, even when you need cash fast.

Let's compare personal loan rates. Say you need to borrow $20,000 to replace the roof of your house, and you plan to get a loan with a five-year term. You're considering two options: Lender A and Lender B. Below, we've summarized these two imaginary lenders and how their interest rates would impact the cost of your loan.

Even a small percentage change can result in significant savings. It's clear that the lender offering the lower interest rate can save you money over the life of the loan. These are funds you can use in some other way, like investing for your future.

You may only pay an extra $13 per month for a loan from Lender B, but that small difference costs you $780 more over the life of the loan. For help finding low interest personal loans, check out our guide to good interest rates for personal loans.

What if I have bad credit?

You will likely pay a higher interest rate for a personal loan. If this is your situation, you have two options: You can take steps to raise your score and wait until it's in better shape before applying for a loan. The second option is to get a loan now, then refinance your personal loan later (when your credit score is higher and you can get a better rate).

While personal loans can be used for anything, the key is to use them to improve your financial well-being. Here are some of the best reasons to get a personal loan:

• Debt consolidation: Credit cards generally have higher interest rates. A personal loan can be used to consolidate your higher-interest debt to a lower-interest loan.
• Home renovations: Certain home renovations can increase the value of your home. If you have equity in your home, a home equity line of credit (HELOC) may be a better financing option.
• Career advancement: Paying for professional certifications, education, and training can boost your career prospects and opportunities for promotion or a higher-paying job.
• Unexpected expenses: People should have an emergency savings account that has three to six months of expenses. If you don't, a personal loan can help cover a family emergency or help you recover from unexpected and expensive inconveniences.

Personal loans have higher interest rates than secured loans and if not used properly, can just increase your debt payments. It may be better to cut expenses or find additional ways to increase your income rather than take out a personal loan. Here are some expenses you should not use a personal loan for.

• Extravagant vacations: A short-term trip can lead to long-term consequences. A personal loan should not be used to fund an elaborate vacation if the loan can't be paid back.
• Celebrations (weddings/birthdays/graduations): If you can't afford to pay the loan back, you shouldn't get a personal loan for events that only last a day. Celebrations generally are planned in advance, so it is better to save up for it.
• Extra spending money: Taking out a personal loan to raise your standard of living is not a good idea. You should avoid a lifestyle your current finances can't support.

No matter where you apply to get a personal loan -- a bank, credit union, or an online personal loan lender -- the application process is the same.

Here are the steps to take.

Gather documents

No matter where you apply, the lender is likely to ask for the same documents. Getting them together before you apply can streamline the process and save you a great deal of stress. Here's what you need:

• Proof of identification
• Proof of address
• List of monthly expenses
• Evidence of how much your collateral is worth (if you're applying for a secured personal loan)

Whether it's a secured personal loan or an unsecured personal loan, the lender may ask about the purpose for the funds. Some personal loans are designated for specific purposes, like those to help consolidate existing debt, but those loan types are relatively uncommon.

Shop lenders

Take the time to shop for the best lender. Lenders make loan decisions based on a "soft" credit check, which has no impact on your credit score. This soft credit check gives the personal loan lender a sense of your credit history, including credit card debt and other debt (like an outstanding installment loan). If your credit score is not quite perfect, look for lenders that specialize in personal loans for fair credit or personal loans for bad credit.

Don't leave any gaps -- fill out the entire loan application and provide the lender with all documents requested. If you do this, it should not take long to hear whether your loan has been approved. Some of the best lenders let you know within minutes if your application has been approved.

Compare loan offers

Compare loans of the same type side by side. If you have applied for unsecured loans, compare them only to other unsecured loan offers. And if you've applied for secured loans, compare them only to other secured loan offers.

Here's what to look for:

• The lowest annual percentage rate
• A repayment term that fits your budget
• Loan amounts that match your borrowing needs
• Lowest loan fees (ideally, you'll find a loan with no origination fee or prepayment penalty)
• Perks like loan deferment when you're unemployed

Commit to a lender

A lender does not run a "hard" credit check until you let them know you want to proceed with a loan. So if you applied with five banks, only the bank you choose to work with runs a hard credit check.

A hard credit check is a deeper dive into your credit history, and it helps the personal loan provider make sure a borrower meets its minimum credit score requirement and has paid bills on time. Although the hard credit check may decrease your credit score, it's typically by less than five points. After a few months of regular payments, your score should rebound to its pre-loan level.

Note: If a low credit score means you don't receive a loan offer that works for you, consider taking time to improve your credit score. Boosting your score can only help you in the long run. Small changes like reducing your credit utilization, paying bills on time, and only applying for credit when needed can help raise your FICO? Score.

Sign loan documents

Whether you're working with an online lender or a brick-and-mortar financial institution, most lenders allow you to sign documents electronically. Read through the documents thoroughly before signing. Once you've signed, you're legally committed to whatever is written inside the four corners of the contract.

Wait for loan funding

Funds usually hit your bank account one to 14 days from the time of loan approval. If you need the money quickly, ask lenders about their fund distribution times as you shop for the loan. If you can't wait, make sure to work only with a lender that promises a quick distribution of funds.

If your personal loan request is denied, the first step is to find out the reason. Typically, you will be denied if your credit score does not meet the minimum qualifications.

You may have negative items on your credit report, not enough credit history, or high credit card balances. Another reason may be that your income doesn't meet the minimum requirements or your debt-to-income ratio is too high. There are other factors that could impact loan approval, such as your employment history, cash flow history, and available assets.

If you are denied, work on improving your credit history and credit score. Making on-time payments makes up the biggest piece of your credit score. Keep your credit card balances and utilization low. Pay down your credit card debt and ask your credit card company to raise your limits to help with your utilization.

Avoiding too many hard inquiries can also improve your credit. After you have increased your credit score, you will be in a better position to qualify for a personal loan.

Personal loans are not for everyone. Depending on your circumstances -- for example, if you need money to fund a project or pay an unexpected expense -- you may want to look at other options.

Here are two alternatives to personal loans.

Credit cards

A credit card can provide fast cash in an urgent situation. If you qualify for a 0% APR credit card, you have time (typically 12 to 18 months) to pay off the debt with no interest.

Only use a credit card with a 0% transfer offer if you're confident you can pay it off in full before the promotional rate expires. At the end of the promotional period, the interest rate shoots up to its standard rate, and you could get stuck trying to pay down debt as high interest piles on top.

Secured line of credit

A secured line of credit can help you snag the best rates for personal loans. When you take out a secured line of credit or secured personal loan, you typically pay a lower interest rate because you put up something of value as collateral. This may be anything of value, such as a car, home, boat, or jewelry.

A line of credit offers greater flexibility. You can borrow up to your credit limit, depending on what you need, and you only pay interest on the amount you borrow.

Online personal loan companies rarely offer secured lines of credit, so if that's the route you choose, plan on working with a brick-and-mortar bank or credit union.

Since personal loans typically have higher interest rates, you want to pay them off as fast as you can. You will pay less interest and have more peace of mind if you don't have potentially tens of thousands of dollars to pay back. Here are some simple tips to help you pay back your personal loan faster without breaking the bank. Make sure you check with your lender to see if there are any penalties for paying off your personal loan early.

1. Make bi-weekly payments. Most loans require you to make monthly payments. Instead, make a half-payment every two weeks. By doing this, your payments will be applied to the principal more often, so you end up paying less interest over time. Also, by making payments on your personal loan every two weeks, you will be making 26 total payments per year. This translates to one whole extra payment a year. This can shorten your loan payoff by months and in some cases years.
   
2. Make an extra payment. If your lender will not allow you to split your loan payments, make an extra payment every year. Use a bonus, tax refund, or additional income for the extra payment. If the amount is too much to pay it at once, divide it by 12 and add it to your monthly payment to spread it out over time. The more money you are able to pay toward the loan, the faster you can pay it off. Consider getting a side hustle, selling things you don't need, or cutting your expenses to put extra money toward the loan.
   
3. Round up your monthly payment. Round up your loan to the nearest $50 dollars. For example, if your loan payment is $230, round up to $250. For an even bigger impact, you could round up to the nearest $100. In this case, it would be $300. The extra amount may be small enough to not impact your budget, but it would help you pay down your personal loan sooner.
   
4. Refinance your loan. If you have a high interest rate on your loan, look to refinance to get a better rate. Your credit score may have improved since you got the loan. Shop around to find the best rates.

If you look through our loan suggestions but don't find a loan that fits your needs, don't worry. No loan fits every borrower or every set of circumstances. Here are a few others to consider:

• LendingPoint: Good for people with low credit scores
• Upgrade: Good for debt consolidation and people with fair credit
• Wells Fargo Personal Loans: Good for low APRs for Wells Fargo customers

Taking out a personal loan is a big deal. You're committing to years of working with a specific financial institution and taking on new debt. Take your time to decide if you can comfortably afford a personal loan. If you decide you can, take time to find the loan that's just right for you.