Get Personal Loan Rates
Some of the best places for you to get a personal loan
Banks, credit unions and online lenders are all potential sources for low-interest personal loans. The table below can help you evaluate which may be your best option when applying for a personal loan.
|Bank||Good if you have great credit history and/or an existing bank account||Borrowers with poor credit will have trouble qualifying|
|Credit union||Lower interest rates than banks, willing to work with applicants with low credit scores||May require membership and/or visit to a credit union branch to apply|
|Competitive rates, especially for average- to fair-credit borrowers||Funding can take up to a week or more|
|Online lender||Competitive rates, relaxed credit requirements and quick funding||May need to shop around to get the best rate|
Both national and regional banks offer personal loans with a variety of loan amounts, terms and rates. While banks are known for issuing larger personal loans of up to $100,000, they generally look for borrowers with good- to excellent-credit history. Your relationship at the bank can also be important; some banks, such as U.S. Bank and Wells Fargo, only permit current customers to apply for personal loans.
Many larger banks now offer online applications, so you don’t even need to stop by a branch to apply.
The below options could be a starting point in your search for the best personal loans. We’ll later discuss how to shop lenders:
3 personal loans offered by banks
|Marcus by Goldman Sachs®||6.99% - 19.99%||$3,500 - $40,000||3 to 6 years|
|Santander Bank, N.A||6.99% - 16.99% with ePay||$5,000 - $50,000||2 to 5 years|
|Wells Fargo Bank||5.74% - 19.99%*||$3,000 - $100,000||1 to 7 years|
Annual percentage rate (APR) is a measure of your cost of borrowing and includes the interest rate plus other fees. Available APRs may differ based on your location.
Est. APRs shown may include an autopay discount and/or relationship discount.
Unlike big banks, many credit unions work with borrowers who have limited credit history or below-average credit scores. Relationships are also important with credit unions, as you’ll need to be a member to apply in most cases.
Thankfully, you should be able to find a credit union that you’re eligible to join — some only require that you live or work in the area they serve. You may be eligible for membership in other credit unions after making a small donation to a charity they partner with, or by volunteering with charitable organizations affiliated with the credit union.
Many credit unions can offer lower rates than banks because they operate as member-owned nonprofit organizations, so they can be a better choice if you have good credit.
Depending on the credit union, you may have to make a branch visit to apply for low interest loans.
3 personal loans offered by credit unions
|PenFed Credit Union||5.49% - 17.99%||Up to $50,000||Up to 5 years|
|Wright-Patt Credit Union||Starting at 7.99%||$500 - $40,000||Up to years|
|Affinity Federal Credit Union||Starting at 9.75%||Varies based on application||Up to 5 years|
Taking out a loan from an online lender may not initially seem like a good idea, but many online lenders can offer quick funding and competitive rates and terms because they have lower operating costs than brick-and-mortar institutions.
Look for lenders that offer APRs under 36% and terms of at least one to three years for repayment. Beware of lenders that have APRs higher than 36% or don’t show their APRs at all.
Many online lenders don’t require perfect credit to apply. Instead, lenders consider other factors, such as your work and educational history, your ability to save and income level.
If you apply for a loan from an online lender, you can also expect to receive funds within one to three days.
3 personal loans offered by online lenders*
|LightStream||2.49% - 19.99%||$5,000 - $100,000||2 to 12 years|
|Rocket Loans||7.161% - 29.99%||$2,000 - $35,000||3 or 5 years|
|Upgrade||6.94% - 35.97%||$1,000 - $50,000||3 or 5 years|
Peer-to-peer loan marketplaces
Instead of receiving a loan from a bank or lender directly, peer-to-peer investors fund your loan offer through a marketplace. Because many individuals will fund your loan, the risk is more spread out, meaning rates can be just as competitive as those offered by a bank or credit union.
Terms with peer-to-peer personal loans tend to be shorter, which can be good if you want to pay back your loan quickly. Credit requirements also tend to be more relaxed. However, funding will take a little longer, on average, since multiple investors will need to fund your loan.
3 personal loans offered by peer-to-peer marketplaces
|LendingClub||8.05% - 35.89%||$1,000 - $40,000||3 or 5 years|
|Prosper||6.95% - 35.99%||$2,000 - $40,000||3 or 5 years|
|Upstart||4.37% - 35.99%||$1,000 - $50,000||3 or 5 years|
How to choose the best place for a personal loan
As you’ve seen, there are a number of ways to get the best personal loans you need. But which option is best for you? Here’s a format you can use to make the right decision for your situation.
- Assess your financial situation. Before you apply for a personal loan, look through your current finances. Are you in a position to pay back your debt before the repayment terms are up? Or will an additional source of income, such as a second job, get you the money you need without taking on a personal loan?
- Decide how much money you need. Once you’ve established that you could use a financial supplement, figure out how much money you need. The more you borrow, the higher your monthly payments will be. But if your personal loan can pay off another high-interest debt, the application could be worth it.
- Know your credit score. Your credit score is an important factor in the interest rates you’ll be quoted. Some banks offer free credit score checks for their customers, or you could use a third-party site, such as annualcreditreport.com or creditkarma.com.
- Choose your lender type. You can fund your loan through traditional banks, credit unions, online lenders or peer-to-peer networks. Your credit history, how quickly you need your money, the interest rates you can repay and your ability to apply online or in person should all be factored into your decision.
- Pull together prequalification documents. As with any loan, you will need to show lenders your full financial situation. Gather any paperwork such as identification, recent bank statements, any mortgage or existing loan documents, such as car repayments and credit card statements, to speed up your loan application.
- Compare the best interest rates. Once you’ve determined your lender type, use online calculators and/or set up prequalification meetings with different lenders. Present your loan amount and the payment terms you want so lenders can quote you their best interest rates.
- Check pros and cons. Once you’ve checked potential rates with several lenders, you may want to put together a list of pros and cons outside of interest rates. Some lenders offer interest-free months for consistent payments, or allow you to make direct deposit payments straight from your bank.
- Apply for your loan. Once you’ve chosen your lender, you’ll need to formally apply for your loan. In addition to your prequalification documents, your lender will have an application form or process for you to complete.
- Receive your loan funds. After your loan is approved, you’ll get your money. Make sure you’ve sent over the correct account and routing numbers for the bank account in which you want to accept your funding.
- Begin making payments. Many lenders offer incentives for borrowers who set up automated payments to cover their monthly installments. If you’re in a position to set up autopay, you’ll also feel better knowing that you don’t have to worry each month about overlooking a payment.
What if you have bad credit?
The process for finding the best personal loans for bad credit is slightly different. Borrowers with poor credit may need to watch out for high interest rates. They may also find themselves ineligible for many loans that would be available for borrowers with higher credit scores.
But not all is lost. Some lenders consider financial factors outside of credit score alone. You may also seek out lenders that will consider cosigners or guarantors who can vouch for your loan repayment.
Personal loan alternatives to consider
Sometimes borrowing against your retirement savings or house can make sense. But you need to think twice before you commit to these collateral options, as these loans can have pretty dire consequences if you can’t repay your debt.
You might not need a personal loan to get the money you need. Here are some alternatives that can get you through a tight financial time. Below, you’ll see a table of your options, as well as longer summaries for how to utilize each alternative.
|0% intro APR or balance transfer credit card||Interest-free period up to 24 months||Tempting to spend on the card without paying down debt, borrowers with low credit scores will not qualify|
|Borrow from 401(k)||Borrowing from yourself with interest||Jeopardizing retirement savings and not all employers participate|
|Home equity line of credit (HELOC)||Low variable interest rates||High upfront fees, house is collateral|
0% introductory APR credit card
If you have a credit score of at least 700, you should consider a credit card with a 0% introductory APR. These offers typically last for 12 or more months, and some don’t charge any balance transfer fees if you transfer a balance within the first 45 to 60 days of getting the card. This can be a great way to pay down existing debt without racking up any more in interest.
Of course, you’ll want to be sure to pay off your balance before the 0%-interest period runs out. Many credit cards will charge you the full amount of your deferred interest if you cannot pay off your debt at the end of your introductory period.
Most of these cards will offer points or cashback on purchases, but you should pay down your debt before spending money beyond what you need to pay off your expenses. Chase, Citi and Barclays all offer excellent balance transfer credit cards.
If you have an eligible 401(k), you can borrow up to $50,000 or half of the amount you have, whichever is smaller, to use for almost any purpose. However, these loans are not without their risks.
Because you are borrowing funds from your retirement plan, you will be missing out on some of interest you would have gained on your investments and setting yourself back on your retirement goals. While you will pay yourself back with interest, it’s usually lower than what you could earn through the market.
In general, you’ll need to pay the loan back within five years. Not all plan sponsors allow employees to borrow from their 401(k)s. And if you leave your job before your 401(k) loan is repaid, you may have to pay back the full balance right away — with an exception for people who use the loan to pay off a primary mortgage.
Home equity loan or home equity line of credit
If you have equity in a home, you can apply for a home equity line of credit (HELOC) or a home equity loan. The two loans share some similarities, but also have distinct differences.
Sometimes called a second mortgage, a home equity loan is a fixed-term, fixed interest-rate loan based on the equity you’ve built on your home. Home equity loan borrowers apply for a set amount of money, and receive the full amount requested in one lump sum if the loan is approved.
Home equity loans can be a good option for homeowners looking to make improvements in their home, or to consolidate their debts under a lower interest rate. However, it’s important to pay off your loan on time, because you could potentially lose your home if you default on your loan.
HELOCs work similarly to credit cards, with a variable interest rate and a line of credit that you can continually draw from.
HELOCs normally come with very low interest rates, making them an attractive option. However, because the line of credit is given to you using your home as collateral, you may be forced to sell your house if you can’t pay back the loan. This is obviously a huge risk to taking out a HELOC, as with a home equity loan.
HELOCs also come with high upfront fees and costs, such as home appraisal costs, application fees and annual fees.
Personal loan alternatives to avoid
If you’re planning on taking out a personal loan, there are definitely lenders and loans to avoid. Below, we list some of the loans you shouldn’t take out.
Why to Avoid
|Credit card cash advance||High APRs and fees, interest begins accruing immediately|
|Payday loans||High APRs in excess of 400%, short payback times and hidden fees|
|No credit check loans||High APRs in excess of 300%, hidden fees|
|Car title loans||High APRs in excess of 200%, car as collateral|
Credit card cash advances
Getting a cash advance on your credit card can be very risky. Cash advances begin accruing interest immediately, come with high fees and have very high interest rates.
Additional considerations to keep in mind: credit card cash advances don’t give grace periods, can strongly impact your credit utilization ratio, and quickly impact your credit score if you carry a high balance.
That being said, a borrower with bad credit may find a credit card cash advance to be preferable to a loan from an online lender, which may charge even higher interest rates than credit cards.
When people think of predatory lending, they normally think of payday loans — and for good reason. Payday loans charge exorbitant fees and interest rates, with APRs regularly topping 300% to 400%. They also have short payback terms of only a few weeks, making it all too easy to fall into a debt cycle. In fact, payday loan borrowers are more likely to declare bankruptcy.
Because of this, some states have moved to ban or significantly limit payday loans.
If you have poor credit, it can be tempting to get a loan that doesn’t require a credit check. However, no-credit-check loans come with many of the same downsides as payday loans, including extremely high APRs.
While they are amortized and have longer terms, you’ll still be paying through the nose on interest. For example, on a $5,000 two-year loan with a 396% APR, you’d repay over $35,000.
Car title loans
With a car title loan, the lender will use your car to secure the loan. Similar to payday and no credit check loans, title loans have APRs exceeding 100% to 200%.
In some ways, these loans are even worse than payday and no-credit-check loans, because the lender charges you high rates and can repossess your car if you don’t pay. In fact, according to the Consumer Finance Protection Bureau, one in five title loan borrowers will have their cars repossessed.