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6 Best Personal Loans of January 2022

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Best-2021-Personal-Loans

  1. Best Variety of Loan Options

    LightStream

    Our Partner

    • Company Highlight

      Offers some of the longest loan terms in the market. If you're not satisfied after closing, you get $100.

    • Loan Amounts

      $5,000 - $100,000

    • Loan Terms

      24 to 144 months

    • APR

      2.49% - 19.99%

    • Minimum Credit Score

      700+

    Check Price

  2. Best Marketplace

    Credible

    Our Partner

    • Company Highlight

      Compare quotes from multiple lenders. Get $200 if you find a better rate elsewhere.

    • Loan Amounts

      $600 - $100,000

    • Loan Terms

      12 to 84 months

    • APR

      2.49% - 35.99%

    • Minimum Credit Score

      Undisclosed

    Check Price

  3. Best Online Lender

    SoFi

    Our Partner

    • Company Highlight

      Loans for up to $100k. Apply entirely online for a streamlined process. Offers unemployment protection.

    • Loan Amounts

      24 to 84 months

    • Loan Terms

      $5,000 - $100,000

    • APR

      4.99% - 20.25%(with AutoPay)

    • Minimum Credit Score

      680

    Check Price

  4. Best Peer-to-Peer Lender

    Upstart

    Our Partner

    • Company Highlight

      Only P2P lender that accepts applicants with short credit history. Unemployed individuals are not excluded.

    • Loan Amounts

      36 months and 60 months

    • Loan Terms

      $1,000 - $50,000

    • APR

      5.31% - 35.99%

    • Minimum Credit Score

      620

    Check Price

  5. Best Credit Union

    PenFed

    Our Partner

    • Company Highlight

      Offers a lower APR than most credit unions and allows non-military consumers to apply.

    • Loan Amounts

      Up to 60 months

    • Loan Terms

      Up to $50,000

    • APR

      As low as 5.99%

    • Minimum Credit Score

      650

    Check Price


Whether you’re looking to consolidate debt, finance a big purchase, or make home renovations, a personal loan could be the right tool to help you get there.

Get started with our list of the best personal loans of 2022. Reviews include credit score requirements, available terms, loan amounts and annual percentage rates.

Our Top Picks for the Best Personal Loans


If you're struggling to make ends meet, a Personal Loan can help.

Were you less than prepared for extraordinary events? If you need funds to cover unexpected costs, a Personal Loan is a solution. Click on your state to learn more.

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*Advertised APRs and credit scores are valid as of April 2021. For more details, visit each personal loan lender’s website.


Best Variety of Loan Options: LightStream

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Our Partner



Pros

  • Online application
  • Autopay discount
  • Better rate guarantee
  • No origination fees
  • No prepayment penalties

Cons

  • Qualifying applicants need good or excellent credit
  • No pre-approvals


HIGHLIGHTS

Term Lengths
24 to 144 months
Loan amounts
$5,000 - $100,000
APR*
2.49% - 19.99%
Minimum credit score required*
700+

LightStream, a subsidiary of SunTrust Bank (now Trust), has a wide range of loan options and some of the longest terms available in the market. You can take out a personal loan for home improvements, medical bills, vacations, big purchases, K-12 education, recreational vehicles, family planning, and even horses for those in the equine industry.

Lightstream’s starting APR is 3% lower than the industry average. Borrowers benefit from an additional 0.50% APR discount if they sign up for AutoPay, and a 0.10% discount may apply as well if they get a lower APR offer from a competing lender.

LightStream ranked top in J.D. Power’s 2020 U.S. Consumer Lending Satisfaction Study. As a customer satisfaction guarantee, LightStream will pay you $100 if you’re not satisfied with your experience after closing the loan.


Best Marketplace: Credible

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Our Partner



Pros

  • Free marketplace and comparison service
  • Access to pre-qualification and quotes from multiple lenders
  • Best rate guarantee

Cons

  • Not a loan servicer


HIGHLIGHTS

Term Lengths
12 to 84 months
Loan Amounts
$600 - $100,000
APR*
2.49% - 35.99%
Minimum Credit Score Required*
Depends on lender

Credible’s free lending platform lets you compare quotes from multiple lenders in as little as two minutes — without making a dent in your credit score. They feature an excellent network of lenders, like SoFi, Lightstream, PenFed and others.

Using this marketplace can save you time and money by narrowing your choices by location, loan amount, desired APR and loan purpose.

If you find and close a personal loan with the lowest rate on a competing website within eight days of applying at Credible, the company will give you $200.

The company welcomes applicants with both good and poor credit, but applicants with excellent credit histories tend to see more loan offers, more flexible repayment terms and lower interest rates.

NOTE: Since Credible doesn’t service its loans, the numbers listed above are subject to your location and the lenders’ offers.


Best Online Lender: SoFi

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Our Partner



Pros

  • Online loan application
  • No origination fee
  • No prepayment penalty
  • No late fee
  • 0.25% AutoPay discount
  • Option to add co-borrower

Cons

  • Qualifying applicants need good credit
  • Disbursement of funds can take a few business days


HIGHLIGHTS

Term Lengths
24 to 84 months
Loan Amounts
$5,000 - $100,000
APR*
4.99% - 20.25% (with AutoPay)
Minimum Credit Score Required*
680

Initially a student loan lender, SoFi now offers personal loans up to $100,000, one of the highest loan limits on the list. It is also one of the first lenders to offer up to 1% of the total loan amount in crypto perks.

You’d need a good credit score to qualify, but there’s a lot to like about SoFi personal loans. Unlike many other lenders, SoFi considers alternative credit data — like free cash flow, professional history and history of financial responsibility — while still offering competitive interest rates.

With pre-approval, you can check your rate before applying without hurting your credit score. The application process is entirely online and can be completed in a matter of minutes.

SoFi also offers unemployment protection if you lose your job, temporarily suspending your monthly payments for up to 12 months and providing you with free tools, like career coaching and financial advice, to help you get back on track.


Best Peer-to-Peer Lender: Upstart

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Our Partner



Pros

  • Accepts applicants with fair credit
  • Accepts applicants with short credit history
  • Considers alternative data
  • No prepayment penalty

Cons

  • High personal loan interest rates
  • Charges origination fee
  • Charges a late payment fee


HIGHLIGHTS

Term Lengths
36 and 60 months
Loan Amounts
$1,000 - $50,000
APR*
5.31% - 35.99%
Minimum Credit Score Required*
620

Upstart’s peer-to-peer model is simple: instead of getting the money from a traditional financial institution, you get it from investors. Upstart’s alternative loan application model considers job history, highest level of education you’veachieved andr area of study to determine eligibility.

Upstart is the only peer-to-peer lender that accepts applicants with a fair credit score (620) and short credit histories. Even unemployed individuals may apply as long as they have an employment offer with a starting date that isn’t more than 60 days away from the date of application.

You can check your rate before applying, and loan funds can be disbursed as early as the next business day after you close on the loan.


Best Credit Union: PenFed

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Our Partner



Pros

  • Nationwide branches
  • Flexible repayment terms
  • No prepayment penalties or origination fees

Cons

  • Membership fee


HIGHLIGHTS

Term Lengths
6 to 60 months
Loan Amounts
$500 - $20,000
APR*
6.49% - 17.99%
Minimum Credit Score Required*
Not disclosed

PenFed is our top credit union for personal loans because of its flexible repayment terms, low loan amounts and the absence of loan origination or prepayment penalties.

They offer a lower APR range than other credit unions, and candidates can apply individually or with a co-borrower. Non-members can apply for a personal loan and only need to join if they choose to accept the loan offer.

Membership was previously limited to the military, certain government agencies, and residents of eligible locations, but as of 2019, PenFed makes it easy for others to join. All you have to do is select “None of the above” in the membership application’s eligibility section and open a savings account with the required $5 membership fee.

Lastly, PenFed members can benefit from its Financial Hardship Center, dedicated to helping borrowers who may be in a tight financial spot.


Best Bank : US Bank

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Pros

  • Competitive annual percentage rates
  • No origination fees or prepayment penalty
  • Fast funding
  • Online loan application

Cons

  • Must already have a bank account with U.S. Bank


HIGHLIGHTS

Term Lengths
12 to 60 months
Loan Amounts
$1,000 - $50,000
APR*
5.99% - 18.49%
Minimum Credit Score Required*
660

U.S. Bank has a starting APR that competes with the best loan rates in the industry. Its maximum personal loan APR caps out at 16.49%, much lower than those of other big banks like Citi and Wells Fargo, which cap their APRs at around 24%.

U.S. Bank also has an emergency Simple Loan available for minor, short-term expenses with a minimum loan amount that starts at $100 and goes up to $1,000. While the Simple Loan has a $6 monthly fee for every $100 you borrow, it’s an excellent alternative if you need a smaller amount quickly and want to avoid payday loans.

We also liked U.S. Bank’s open-ended loan purpose policy. That means they don’t restrict personal loans by purpose.

However, if you’re not already a U.S. Bank customer, you will be subject to stricter credit score requirements and may only borrow up to $25,000.

Other personal loans we considered

Marcus by Goldman Sachs Personal Loans


Pros

  • No service fees
  • Customizable due dates
  • One-time deferral bonus for consecutive, on-time payments
  • 0.25% APR AutoPay discount
  • Highly ranked in J.D. Power's 2020 U.S Consumer Lending Satisfaction Study

Cons

  • No cosigners or co-borrowers

Marcus by Goldman Sachs specializes in debt consolidation loans and has many worthy features like no service fees and customizable due dates. However, they don’t allow cosigners or co-borrowers so they didn’t make our main list.

Best Egg Personal Loans


Pros

  • Fast online loan approval
  • Minimum credit score of 600 - 700 for best rates
  • Funding in as little as one business day

Cons

  • Origination fees vary from 0.99% to 5.99%
  • $50,000 loan maximum across multiple loans

Best Egg also specializes in debt consolidation loans and features quick one-day funding and online approval. However, customers may only have a maximum balance of $50,000 across multiple loans and origination fees are fairly high.

Prosper Personal Loans


Pros

  • Accepts lower than average credit scores
  • No prepayment fees
  • Pre-approval available

Cons

  • Alternative credit data not considered
  • A high number of complaints registered against it with the (CFPB)

Prosper is a peer-to-peer lending marketplace offering loans funded by other individuals and investors. The high number of complaints lodged against the company with the Consumer Financial Protection Bureau (CFPB) knocked it off our main list.

LendingClub Personal Loans


Pros

  • Pre-approval available
  • No prepayment fee
  • Option to apply with a cosigner

Cons

  • Loan amounts up to $40,000
  • 3% - 6% origination fee

LendingClub is yet another peer-to-peer lending marketplace. We didn’t include it on our list because of its high origination fees and low maximum loan amount.

USAA Personal Loans


Pros

  • Variety of personal loan options
  • Few CFPB complaints

Cons

  • Limited membership: active duty or retired U.S. military, or qualifying family members
  • No data available on loan terms, amounts, APRs or fees

USAA services loans only for active duty or retired military members and their relatives. Since only members of the armed forces may have access to loan details, we can’t review this company.

LendingTree Personal Loans


Pros

  • Reputable lender options: Marcus, LightStream, SoFi, OneMain Financial and others
  • Online tools: credit and debit analyzers, calculators and FAQ's

Cons

  • Higher number of CFPB complaints than other marketplaces
  • Maximum loan amounts and credit score requirements are not as competitive

LendingTree is a loan marketplace where borrowers can compare rates from multiple high-rated lenders. Unfortunately, a high number of CFPB complaints have been lodged against LendingTree, which disqualified it from our main list.

Wells Fargo Personal Loans


Pros

  • Lower minimum APR than similar banks
  • Fair credit scores accepted
  • Extensive online tools
  • Over 8,000 physical branches

Cons

  • High number of complaints with the CFPB when compared to similar lenders

Wells Fargo is one of the largest and oldest banks in America. The high number of complaints registered against it with the CFPB disqualified it from our list.

Avant Personal Loans


Pros

  • Lenient underwriting
  • Fair credit scores accepted

Cons

  • High loan origination fees
  • Administration fees
  • APR range from 9.95% to 35.99%

Avant uses a proprietary algorithm to determine borrowers’ creditworthiness, and its underwriting is more lenient and lower credit scores are accepted when compared to other lenders. However, it charges high origination and administrative fees and has less competitive rates, which kept Avant out of our main list.

Discover Personal Loans


Pros

  • No prepayment penalty
  • 3-, 5- and 7-year repayment term options
  • Next-day fund disbursement

Cons

  • $39 late payment fee
  • $25,000 minimum household income required
  • No cosigner option

Credit card issuer Discover also originates loans, but it was its minimum income requirement and the fact that it doesn’t allow cosigners on loans that disqualified it from our main list.


You never know when you might find yourself financially strapped - the good news is you have options.

A Personal Loan can help you mitigate losses and get back on track. Click here to explore your options!

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Personal Loans Guide

The following guide outlines everything you need to know about personal loans, including how they work and what you need to qualify for one.

How do personal loans work

Personal loans are one of the most convenient alternatives available to people who need cash for emergencies.

You can request personal loans from banks, credit unions or other financial institutions. While the name alludes to personal expenses, these types of loans can be used for a variety of purposes such as paying off debt, home remodeling, medical bills, vacations, etc.

Similar to other types of loans, personal loans are repaid in monthly installments. Annual percentage rates on these loans will also depend on your credit score, credit history, income and loan term, among others. Lastly, loan terms can range from 12 to 72 months or more.

Secured vs. unsecured loans

Personal loans can be either secured or unsecured. Here are the differences between these two types of loans:

Secured LoansUnsecured Loans
A secured loan can have lower interest rates, but you’ll be required to put up collateral.On the other hand, an unsecured personal loan does not require collateral.
This collateral, whether it’s a savings account or another financial asset, backs up your loan.Since the debt is not protected, your credit will be negatively affected if you default on the loan.
If you default on your payments, the lender can claim the asset.Typically, unsecured loans have higher interest rates.

Online lenders vs. banks vs. credit unions

You can get personal loans from brick-and-mortar banks or credit unions or from online lenders such as the ones featured on our list.

These are some of the differences between lenders:

BanksCredit UnionsOnline Lenders
Ideal if you prefer in-person consultations.Credit unions that are NCUA-insured cap their APRs at 18%.Online lenders offer the convenience of comparing multiple offers side by side.
The process may be more streamlined if you already have an account at the bank.May offer smaller loans amounts of around $1,000.Lower overhead costs allow them to waive most, if not all, fees and penalties.
May require borrowers to pay an origination fee.Potential borrowers must become members before applying.Not the best for borrowers with low credit scores.

Additional considerations

  • Loan purpose: Can directly affect the loan’s APR, to the point that you may even benefit more from another loan type entirely.
  • Your credit: To improve your eligibility, you must have a credit score of at least 660, the minimum required by most lenders.
  • Your debt load: The debt-to-income ratio is a deciding factor for lenders, as it determines your ability to repay the loan.
  • Annual percentage rate: The APR includes the interest rate plus other lender fees and represents the loan’s actual cost.
  • Loan term: Longer terms directly correlate with a lower monthly payment, but you’ll end up paying more interest over the life of the loan.
  • Fees and penalties: Lenders usually charge origination fees and missed or late missed payment fees, along with prepayment penalties.

How to get a personal loan

  • Improve your credit: Improving your credit can help you qualify for a better rate. If need be, give your credit a boost by getting your credit usage below 30% or hiring the services of a credit repair company.
  • Figure out your loan amount: This will depend on your particular needs. Do the numbers and figure out how much before applying.
  • Shop around: Research and find the most favorable terms and rates for your specific situation. Compare offers before deciding.
  • Apply: Once you settle on a lender that fits your needs, submit an application and await a response.

Alternatives to personal loans

Personal loans aren’t the only alternative available for managing high-interest debt, covering emergency expenses, or consolidating credit cards.

If you need cash to do repairs or remodel your home, you might be interested in home improvement loans, which are secured by your home and tend to feature lower interest rates than personal loans.

Other alternatives to personal loans include:

ProsCons
Credit card• Transfer the balance from a high-interest card to a card with 0% promotional APR
• Most promos give you 12–18 months of no interest
• Once the promotional APR ends, the card may have a very high interest rate, leaving you where you started
Personal line of credit• Lower APR than credit cards on average
• Borrow against it when you need cash
• Great credit needed to qualify
• Some lenders charge a fee for keeping the line active
Home equity loan• Borrow against your home’s equity
• Lower APR than personal loans
• Higher loan limit
• You pay closing costs
• The loan is secured by your house, so failure to pay could mean you lose the property
Cash-out refinance• Borrow excess to refinance your home and keep the difference
• Get a lower APR on your mortgage
• Must pay closing costs
• The mortgage is secured by your house so you could lose it if you default on the loan
401k loan• Borrow against your own retirement funds
• Pay interest to yourself
• Not all employers offer this option
• The amount you borrow is taxed twice

Payday lenders secure their money by demanding a postdated check or direct access to your checking account to withdraw the funds by your next paycheck. Failing to settle either of these loans in time traps borrowers in an endless debt cycle, where they have to renew or roll the loan over to a further date, stacking up higher interest rates and fees.

Title loans lenders use your vehicle title as collateral, so they can repossess and resell your car or motorcycle if you don’t pay it back in time.

We do not advise these loans and stress that you consider alternative options. If you are limited by bad credit, credit cards and personal loans are designed specifically for that. If it is a time-sensitive issue, many reputable online lenders guarantee fast funding, with same-day or next business day disbursement.


Best Personal Loans FAQ

What is an unsecured personal loan?

An unsecured personal loan does not require you to put down any kind of collateral. Since the debt is not protected, the lender cannot demand collateral as payment should you default on your loan.

However, should you fail to repay the loan, your credit will take a hit, hindering your ability to get another loan in the future.

What is a personal loan?

Personal loans are a type of installment debt, and they can be secured or unsecured. Secured loans, such as mortgages, require collateral in the form of an asset (like a home in the case of a mortgage). Unsecured loans don't require collateral and a riskier for lenders.

Unlike other types of loans, personal loans may feature shorter repayment terms and fixed interest rates and can be used for any purpose. Common uses for personal loans are debt consolidation, home improvement projects, medical expenses and financing big purchases, events or vacations.

How many personal loans can you have at once?

From a technical standpoint, there is no limit to the number of personal loans you can have at once. That said, some financial institutions place limits on the number of loans they're willing to give any one borrower at a time. These policies may vary depending on your particular circumstances.

Can you use a personal loan for anything?

Taking out a loan on behalf of someone else or using it for any form of gambling -- including investing -- is a complete no-go with any type of personal loan. Some lenders restrict loans a bit more than others and prohibit using funds for refinancing existing debt, paying for college or contributing to retirement plans, among others.

Should I apply for a personal loan or a balance transfer card to consolidate credit card debt?

Personal loans are a safer bet than a balance transfer card when it comes to credit card debt consolidation. Since they're considered installment debt, personal loans feature low interest rates compared to credit cards, with terms lasting up to 60 months. Lenders may even offer loans with no fees.

Balance transfer credit cards have lower interest rates than traditional credit cards, and most offer an introductory 0% APR. However, these offers typically last between 12-18 months, after which your APR will be based on your creditworthiness and market conditions. Transfer fees of up to 5% of the transferred amount may apply as well.

Can I get a personal loan while unemployed?

While it's not impossible to get a loan while unemployed, it will be difficult without a job offer or another source of income. Some lenders may still extend you a loan offer, but keep in mind that interest rates will likely be high, as you'll pose a higher risk.


How We Chose the Best Personal Loans

Financial stability

We looked at the 2020 Largest 50 Institutions By Consolidated Banking Assets report by the Federal Deposit Insurance Corporation (FDIC). Also, we took into account the top unsecured personal loan companies from the growing fintech market.

Consumer satisfaction

We referenced J.D. Power’s 2020 U.S Consumer Lending Satisfaction Study to measure consumer satisfaction, favoring companies with the highest ratings. As an additional metric, we considered the number of complaints each had with the Consumer Financial Protection Bureau (CFPB).

Affordability

We wanted lenders that cater to both consumers with excellent credit and those who are just getting started or have less-than-stellar credit scores. We looked at each lender’s minimum credit requirements and noted those which included alternative credit data.

Finally, we checked the lenders’ APRs, selecting those with the lowest starting APRs.

Overall Lending Offer

We ranked the companies based on what they offer for: loan options, APR range, available terms, credit score requirements, fees, and prepayment fees.

We also looked at service or interest rate guarantees, funding times, fund disbursement options, ways to apply, state availability, discounts, and customer support.

Summary of Money’s Best Personal Loans of January 2022

© Copyright 2021 Ad Practitioners, LLC. All Rights Reserved.

This article originally appeared on Money.com and may contain affiliate links for which Money receives compensation. Opinions expressed in this article are the author's alone, not those of a third-party entity, and have not been reviewed, approved, or otherwise endorsed. Offers may be subject to change without notice. For more information, read Money’s full disclaimer.

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