Best Personal Loans for 2017

If money’s tight and a financial emergency comes up, you may consider taking out a personal loan. Maybe your car is in need of a major repair or you need to cover a medical bill, or you may want to use the funds to pay off credit card debt without spending a fortune in interest.

Traditional banks and credit unions offer secured and unsecured personal loans. But, you may want to consider online lenders as they have lower overhead. As a result, they can pass the cost-savings to you. Most online lenders also allow you to check your rate with no affect to your credit score.

Our top pick

Sofi (Social Finance Inc.)

Loan amount: $5,000 to $100,000

Loan term: Three, five or seven years

Interest annual percentage rate (APR): 5.49% to 14.24% (fixed and with autopay)

Origination fee: none

Prepayment penalty: none

Closing costs: none

Minimum credit score: 660 required, but most borrowers have credit scores over 700

Funding time: varies

SoFi offers personal loans to consumers with steady income and excellent credit. Credit newcomers also are encouraged to apply because there’s no credit history requirement. And if you’re laid off, SoFi will pause your monthly payments and assist you with finding employment. It also offers mortgage loans and student loan products.

Key benefits: Fairly low APRs, no origination fee, no prepayment penalty, forbearance and job placement assistance if you’re laid off, social events (i.e. educational events and member dinners) exclusively for borrowers

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For borrowers with excellent credit

LendingClub

Loan amount: $1,000 to $40,000

Loan term: Three to five years

Interest APR: 4.99% to 35.89%

Origination fee: 1% to 6%

Prepayment penalty: none

Minimum credit score: 600, but most most borrowers have credit scores over 699

Funding time: up to one week

LendingClub is the largest peer-to-peer online lending marketplace. Its loans are ideal for those with good or excellent credit. Even better, an APR of 4.99% is available for borrowers with excellent credit.

Key benefits: No prepayment penalties, fixed rate loans, low APR for borrowers with excellent credit, joint applicants permitted

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Light Stream

Loan amount: $5,000 to $100,000

Loan term: Two to seven years

Interest APR: 2.19% to 14.79%

Origination fee: none

Prepayment penalty: none

Minimum credit score: 680; most borrowers have credit scores over 720

Funding time: Up to 30 days (same-day funding options available)

LightStream, the personal loan division of SunTrust Bank, caters to borrowers with excellent credit. It offers loans to fund a variety of projects. Borrowers must use the loan proceeds for the reason specified on the application.

Key benefits: No prepayment penalties, minimal fees, competitive interest rates

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Prosper

Loan amount: $2,000 to $35,000

Loan term: Three or five years

Interest APR: 5.99% to 36%

Origination fee: 1% to 5%

Prepayment penalty: none

Minimum credit score: 640; the average for borrowers is 703

Funding time: Three to five business days

Prosper is another peer-to-peer lender that is ideal for borrowers with good credit. Borrowers also have access to the Prosper Daily app that lets you track account activity at various financial institutions. You can also check your credit score with the app.

Key benefits: Fixed term, no prepayment penalties, free access to Prosper Daily app

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Personal loans for borrowers with fair credit

UpStart

Loan amount: $1,000 to $50,000

Loan term: Three or five years

Interest APR: 4.69% to 29.99%

Origination fee: 1% to 6%

Prepayment penalty: none

Minimum credit score: 620; the average among borrowers is 692

Funding time: next day (three days for educational loans)

UpStart is an online marketplace that takes an unconventional approach to lending. If you have less than perfect credit, the lender takes your education, area of study and job history into consideration and so you may qualify. Credit newbies may also qualify for a personal loan with UpStart.

Key benefits: No prepayment penalties, potential earnings weighed during the decision-making process, applicants with minimal credit history considered

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Avant Credit
APR: 9.95% to 35.99%*Loan Amount: $1,000 to $35,000*
Origination Fee: 0.95% to 4.75%
Pros
Cons
Considers borrowers with less than perfect credit
Competitive rates
No prepayment penalty fees
Checking your rate will not hurt your credit
Charges an origination fee
Well-qualified borrowers may find lower rates elsewhere

For borrowers with poor credit

Opp Loans

Loan amount: $1,000 to $10,000

Loan term: Six to 36 months

Interest APR: 24% to 199%

Origination fee: none

Prepayment penalty: none

Minimum credit score: none

Funding time: next business day

Opp Loans has served more than 250,000 customers to date. It offers installment loans to those with less than perfect credit at a much lower rate than payday loans. Even better, the loans are unsecured, so you won’t be at risk for losing your asset(s) if you default on the loan.

Key benefits: Cheaper than payday loans

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LendUp

Loan amount: $100 to $250

Loan term: 30 days

Interest APR: varies by state (See LendUp’s profile for the latest rates and terms )

Origination fee: varies

Prepayment penalty: none

Minimum credit score: none

Funding time: You can get cash the next business day if approved. Loans must be submitted by 5 p.m. PT Monday-Friday (excluding holidays) to receive funds the next business day. Exact funding time may vary based on your bank’s requirements.

LendUp has branded itself as an alternative payday lender. It’s single payment loan product, is ideal for borrowers who don’t have perfect credit. Although interest rates are relatively high, borrowers have a chance to qualify for lower rates by managing their loans responsibly and moving up the LendUp ladder in certain eligible states.

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Types of personal loans

There are two types of personal loans: secured and unsecured.

Secured vs. unsecured personal loans

Secured Personal LoansUnsecured Personal Loans
  • Backed by an asset
  • Easier to qualify for than unsecured personal loan
  • Lower interest rates  because loan is protected by collateral that can be seized in the event of default
  • Payment activity reported to three credit bureaus
  • No collateral required
  • Stringent qualification criteria (based on creditworthiness and ability to pay)
  • Higher interest rates than secured personal loans
  • Payment activity reported to three credit bureaus

Should you take out a personal loan?

The answer to this question depends on your personal circumstances. Some borrowers turn to personal loans to get out of a financial crunch, while others use the money to fund the vacation of a lifetime or complete that home improvement project they’ve been dreaming about for years.

If you can qualify for a decent rate and can afford to make timely payments, it may be worth a shot. But if the payments are too steep, you should pass to avoid putting your credit score at risk.

If you’re looking for a way to consolidate debt, a balance transfer credit card may be a more viable option, especially if you have good credit.

The true cost of personal loans

Interest rate

In most instances, the lowest rates go to the borrowers with excellent credit. The lower your score, the more you’ll pay in interest.

To illustrate, let’s say you take out a $5,000 fixed-rate personal loan for 36 months. The table below demonstrates how much you’d spend on interest, based on your credit rating, over the life of the loan:

APRMonthly payment Total interest paid over life of loan
Excellent Credit5%$149.85$394.76
Fair Credit12%$166.07$978.58
Poor Credit24%$196.16$2,061.91

When evaluating personal loan options, you should also be mindful of the type of interest rate you’re being offered and is it  fixed or variable.

Fortunately, most online lenders allow you to check your rates with no affect on your credit score so you’ll know what rate you qualify for before moving forward.

Fees

You should also be mindful of the following fees:

  • Origination fee: This fee is assessed by the lender to process the loan application and distribute the funds to you. Some lenders waive the fee, while others charge  1% to 6%.
  • Prepayment penalty: Do you plan to pay off the loan early? Some lenders assess a prepayment penalty to do so.
  • Processing fee for personal checks: If you plan to remit payment by check, you may be assessed a small monthly fee.

How to evaluate personal loans

When evaluating personal loans, there are several factors you should consider.

  • Availability: Some lenders only operate in select states.
  • Flexible use: Some lenders, such as LightStream, require that you use the funds for the reason specified in the loan application. If you need more flexibility, it’s best to seek other options.
  • APR: How does the APR you’re being offered stack up against the competition? Most online lenders allow you to check your credit without affecting your credit score.
  • Minimal fees: How much is the origination fee? Do prepayment penalties apply?
  • Customer service: Is it difficult to reach a human in the customer service department? Can they answer all of your questions quickly and accurately?
  • Application process: Is the application process seamless? And how long does it take to get funding once the loan application is approved?
  • Reputation: Is the lender accredited by the Better Business Bureau? What are other customers saying?

Where to find the best personal loans

If you’re ready to get started with your search, use SuperMoney’s personal loans reviews and comparison tool. You’ll be able to view information about the loan products, read user reviews and compare loan options side-by-side.

Featured lenders for personal loans

Lending PartnerMinimum FICO scoreEstimated APR 
60015.49% – 34.99%*Apply
6802.19% – 17.49% (with AutoPay)*Apply
650Fixed:
5.49% – 14.24% APR (with AutoPay)*
Variable:
4.99% – 11.14% APR (with AutoPay)*
Apply
6605.99% – 35.89%*Apply
6204.93% – 29.99%*Apply
5809.95% – 35.99%*Apply
7005.25% – 12%*Apply