If you need money for any reason, a personal loan can help you get the cash you need. Personal loans offer financial flexibility because you can use them for just about anything as long as it’s legal or connected to higher education.
Most personal loans are unsecured, but some lenders also offer secured personal loans for people with bad credit. These loans typically require collateral, such as a car, to get approved.
You can get a personal loan from traditional banks, credit unions, or online lenders. But with literally hundreds of potential lenders, it can be stressful trying to find the right one.
To help you, we’ve put together our top 8 personal loans for 2018, along with details for each.
The 8 best personal loans for 2018
As you research each of the lenders we’ve included in our list, consider your top priorities and which one fits best for you.
A SoFi personal loan is a great option for people with great credit that need to finance a huge project or purchase — you can borrow up to $100,000 with the lender.
What’s more, you’ll get access to a suite of member benefits just by getting approved, including:
- An interest rate discount on future SoFi loans.
- Unemployment protection, in case you lose your job through no fault of your own.
- Career coaching to help you get matched with the right job.
- An entrepreneur program, which sets your payments on hold and helps you launch your business.
- No fees if you decide to invest with SoFi Wealth.
- Access to community events for members only.
Other key benefits include low fixed and variable APRs, no fees, and flexible repayment options.
If you have excellent credit, LendingClub offers low interest rates. But if your credit is less than stellar, you may still get approved. The lending marketplace matches you with individual lenders rather than lending you the money itself.
The biggest drawback to LendingClub is that it charges an origination fee of 1% to 6% of your loan amount. So, even if you have great credit, you’ll still get at least some money deducted from your loan disbursement for the fee.
Key benefits of the lending marketplace include fixed rate loans and joint applications.
Most personal loan companies offer high minimums on their personal loan. But if you don’t need $5,000, it doesn’t make sense to borrow that much. With Upgrade, personal loans start at $1,000. Also, you’ll get your money within a day of finishing the application and verification process.
Upgrade offers decent fixed interest rates for people with excellent, good, and fair credit. But like LendingClub, it charges an origination fee of 1% to 6% of your loan amount.
LightStream personal loans are designed for people with good and excellent credit, and you’ll be rewarded for applying. The lender offers some of the lowest fixed interest rates on the market. You’ll also get a lot of flexibility when choosing your repayment term.
The online lender offers two special benefits you’ll be hard-pressed to find anywhere else:
- If you’re not completely satisfied with the loan application experience, contact LightStream, and they’ll send you a questionnaire. Once you complete and send it back, they’ll send you $100.
- LightStream will beat any interest rate by a competing lender by 0.10% if it meets certain conditions
The lender also charges no fees.
Like LendingClub, Prosper is a lending marketplace that connects you with individual lenders. It offers decent interest rates but charges an origination fee of 1% to 5% of your loan amount.
While Prosper formerly offered an app that allowed you to check your credit score and track your daily financial activity, it no longer offers it. Instead, it recommends using an app called Clarity Money.
If you have fair credit, you may have a hard time finding a decent personal loan from most lenders. But with Upstart, you may have a better chance of getting a good rate.
Instead of focusing mostly on your credit history and score, the lender also looks at your education, area of study, and job history to determine if you’re responsible with money and have potential.
The lender’s rates are a bit higher than some of the other lenders we’ve listed, and its origination fee ranges from 0% to 8%, but those are still reasonable for someone with fair credit.
Avant has one of the lowest minimum credit score requirements of all the lenders we’ve reviewed. And while its interest rates aren’t as good as some of the other lenders on our list, they’re competitive.
Repayment terms are flexible and it doesn’t charge an origination fee. But if you have good or excellent credit, you’ll likely get a better deal somewhere else.
If you have poor credit, you likely won’t qualify for any of the other lenders on this list. But with OppLoans, you can still get the cash you need.
OppLoans charges extremely high interest rates on its loans, but the rates are significantly better than what payday loans and auto loans provide. What’s more, you’ll have a decent repayment term, whereas payday and auto title loans require repayment within a month.
So, if you’re thinking about getting a payday or auto title loan, check out OppLoans instead.
Another interesting option for people with poor to fair credit is Peerform, a marketplace for borrowers with lower scores. The rates are competitive but there is an origination fee to consider.
Understand the true cost of a personal loan
When shopping around for personal loans, the interest rate isn’t the only thing you’ll pay on your loan. Also, look into the fees the lender charges, such as origination fees, late fees, and prepayment penalty fees.
Lenders are required to state these fees before you apply, so be sure to read the fine print.
“Average rates on personal loans can vary widely,” says Joe Toms, president of online lender FreedomPlus. “An individual’s credit score will heavily determine the rates.”
To give you an idea of what interest rate you’d qualify for, here’s an average range by credit score:
What to look for in a personal loan
When evaluating personal loans, it’s important to consider several factors to make sure you get the right one for you. Here’s a quick summary of what to think about:
- Availability: Some lenders only operate in select states.
- Flexible use: Some lenders require that you use the funds for the reason specified in the loan application.
- APR: How does the APR you’re 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?
Is it a good idea to get a personal loan?
Taking out a personal loan can be easy, but that doesn’t mean it’s the best decision for you. It’s important to consider both the benefits and drawbacks of personal loans before you apply.
Here is a list of the benefits and the drawbacks to consider when applying for a personal loan.
- Typically don’t require collateral
- You’ll get the money in just a few days
- You can use the cash for just about anything
- You may get a lower interest rate than on a credit card
- Offer set repayment terms
Shop around and save
To make sure you get the best deal, avoid taking the first offer you get. Instead, use SuperMoney's loan engine to get offers from several personal loan companies at once. This will help you compare and contrast various personal loans in one place.
“It is important to find a lender that is right for you and your situation,” says Toms. “It’s much more than just a stated rate
offered.” Toms recommends asking if the lender is committed to evaluating your individual situation.
“Some will have a direct conversation with the consumer that allows the consumer to provide information and context about their credit scores and profiles, savings, and other factors that indicate they are financially responsible,” he adds.
Also, check out SuperMoney’s personal loans review page to learn more about each lender and what they have to offer, including real user reviews.