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13 Best Personal Loan Companies of 2021
Back in the day, getting a personal loan meant schlepping to your local bank branch (or multiple banks, if you wanted to shop around), meeting with a loan officer, and – assuming they didn’t reject your request outright – consenting to an opaque, invasive, weeks-long process that temporarily lowered your credit score and offered no guarantee of success.
Things are different now. Some online lenders originate and fund competitive personal loans in 24 hours or less. If you’re well-qualified and diligent, you can start your application this afternoon and have funds in hand by end of day tomorrow, without even speaking with a loan officer.
If you’re in the market for a personal loan, here’s a roundup of the most competitive online personal loan providers and referral services for three main types of borrowers:
- Prime and super-prime borrowers with good to excellent credit
- Near- and subprime borrowers with fair or impaired credit
- Borrowers seeking fast funding
Unless otherwise noted, these lenders provide unsecured personal loans for a variety of stated purposes, including:
Although you’ll invariably be asked to specify a loan purpose when you apply, know that lenders can’t control what you do with your unsecured loan’s principal. While we aren’t recommending it, you’re free to use an ostensible debt consolidation loan to, say, bankroll a wedding or international vacation.
Finally, since personal loan rates change regularly in response to lender policy and prevailing benchmark rates, specific rates and rate ranges are not included in the rankings below. For up-to-date, lender-specific rate information – and to check your own rates – refer to this table:
Best Personal Loan Companies for Prime Borrowers
These providers are among the best in the business for prime borrowers, or those with FICO credit scores above 640 to 680, depending on the lender.
Prime and super-prime borrowers generally enjoy lower rates than sub- and near-prime borrowers, often at or near the bottom of lenders’ stated rate ranges. Actual loan rates are subject to change based on borrower risk and prevailing benchmark rates.
1. LightStream
LightStream is one of the few online-only lenders backed by a major brick-and-mortar bank – Atlanta-based SunTrust Bank, to be precise. This backing empowers LightStream to offer the widest borrowing range and lowest rates of any lender on this list.
- Borrowing Range (Principal): $5,000 to $100,000
- Term Options: 24 months to 144 months
- Origination Fees: None
- Prepayment Penalty: None
- Credit Requirements: Good to excellent. LightStream is vague about its precise underwriting criteria but advises that qualified borrowers have multiple years of credit history, few adverse credit marks, sufficient income, and sufficient liquid assets.
Advantages
- Unusually Wide Repayment Term Option Range. LightStream’s repayment term range is the widest of any lender on this list: 24 months to 144 months. Not all applicants qualify for all terms, but it’s certainly nice to have so many choices.
- No Origination Fees. LightStream never charges origination fees, meaning APRs hew closely to baseline interest rates.
- Low Rate Range. LightStream’s rates are subject to change with prevailing benchmarks, and individual loan rates depend on borrower-specific factors. However, the low end of LightStream’s published rate range is lower than any other lender on this list.
- 0.50% Autopay Discount. LightStream’s autopay discount is unusually generous. Most competing lenders knock just 0.25% off the APR, if they discount automatic monthly payments at all.
Disadvantages
- No Pre-Approval. LightStream doesn’t have a pre-approval process. Borrowers can’t peek at their rates without submitting to a hard credit pull that may temporarily lower their credit scores.
- Borrowers With Middling Credit Are Unlikely to Qualify at All. LightStream’s ideal borrower has good credit or better. If your FICO credit score is much below 680, you’re unlikely to qualify for a loan with them.
2. Lending Club
Lending Club is among the United States’ top personal loan providers. For years, Lenging Club followed a “P2P” model, with loans funded with dozens or hundreds of discrete investments per loan from retail and institutional investors.
Now, Lending Club follows a more traditional financing scheme. However, origination remains a bit lengthier and pricier than some competitors’. Rates, funding amounts, and repayment terms are competitive.
- Borrowing Range: $1,000 to $40,000
- Term Options: 36 months or 60 months
- Origination Fees: 2% to 6%
- Prepayment Penalty: None
- Credit Requirements. Poor to excellent. LendingClub underwrites loans for borrowers across the credit spectrum, from subprime to super-prime. Extremely well-qualified borrowers – those with credit scores above 740 and incomes above $100,000 – qualify for the lowest interest rates.
Advantages
- Low Rates for Qualified Borrowers. For well-qualified borrowers – those graded “A” under LendingClub’s proprietary risk model – rates are competitive with other prime lenders’.
- Low Minimum Loan Size. LendingClub originates loans as small as $1,000, making it a great alternative to credit card balance transfers (another option to pay down credit card debt).
Disadvantages
- Long Origination Process. An origination process that stretches an average of four business days under normal circumstances, and possibly longer should complications arise, is an unavoidable consequence of LendingClub’s P2P model. If you need fast funding, look elsewhere.
- Unavoidable Origination Fees. Every LendingClub borrower pays an origination fee. For less-qualified borrowers, this fee ranges up to 6% of principal, or $60 for every $1,000.
For more information, check out our LendingClub review.
3. Prosper
Prosper is a popular P2P lender whose offerings are very similar to LendingClub’s, as is its borrower experience, though its geographical coverage is slightly less comprehensive.
- Borrowing Range: $2,000 to $40,000
- Term Options: 36 months or 60 months (three to five years)
- Origination Fees: Up to 5%
- Prepayment Penalty: None
- Credit Requirements: Poor to excellent. Prosper has relatively lax minimum borrowing requirements: income greater than $0, at least three open credit report trades (records of activity on a credit account), a debt-to-income ratio below 50%, no bankruptcy within the past 12 months, and fewer than five credit inquiries within the last six months. The best rates and terms are reserved for borrowers with credit scores well above 700 and incomes above $100,000.
Advantages
- Low Rates for Qualified Borrowers. Like LendingClub, Prosper offers competitive rates for borrowers with excellent credit, nearly on par with segment leaders like LightStream.
- Options for Borrowers With Impaired Credit. Prosper underwrites loans for borrowers with impaired credit – those with FICO scores at or below 600, in some cases. Such borrowers can expect high rates and less favorable terms, however.
Disadvantages
- Fees for Check Payments. Prosper charges the lesser of $5 or 5% of the payment for payments made by check. If you prefer to make installment loan payments manually, look elsewhere.
- Long Origination Process. Like LendingClub, Prosper’s origination process can stretch up to seven business days under normal circumstances. There’s also a chance that loans won’t attract sufficient investor commitment to complete origination, though this is increasingly uncommon.
- Unavoidable Origination Fees. All Prosper borrowers must pay origination fees; the minimum is 2.4% of principal, or $24 per $1,000 borrowed.
For more information, check out our Prosper review.
4. Marcus by Goldman Sachs
Marcus by Goldman Sachs is another traditional bank-backed lender with competitive rates and terms. The lack of origination fees is a major boon for applicants able to overcome stringent underwriting standards. High-yield savings account applicants needn’t worry about underwriting.
- Borrowing Range: $3,500 to $40,000
- Term Options: 36 months to 72 months
- Origination Fees: None
- Prepayment Penalty: None
- Credit Requirements: Good to excellent. Marcus caters to prime borrowers and reserves the lowest rates and longest terms for the best-qualified applicants
Advantages
- No Origination Fees. Marcus by Goldman Sachs does not charge for origination. Its lending model is built exclusively on interest charges, greatly simplifying cost calculations for borrowers.
- FDIC-Insured Savings Products Available. Marcus by Goldman Sachs offers FDIC-insured bank accounts with attractive yields, including high-yield savings accounts and CDs. If you don’t need to use your loan proceeds all at once, this is a good place to park them.
- Repayment Terms Up to 72 Months. Repayment terms are on the long side – up to 72 months, or six years, for well-qualified borrowers.
- Low Rates for Well-Qualified Borrowers. Despite waiving origination fees, Marcus by Goldman Sachs has competitive rates for well-qualified borrowers.
Disadvantages
- Not Suitable for Borrowers With Fair to Poor Credit. Marcus by Goldman Sachs has relatively strict underwriting requirements. If your credit isn’t where you’d like it to be, look to a more forgiving provider.
For more information, check out our Marcus by Goldman Sachs review.
5. SoFi
SoFi got its start in the student loan refinancing business. Now, it’s a fairly diversified fintech player with mortgage, personal loan, and wealth management verticals, among others. Come for the personal loans, stay for everything else.
For a limited time, get up to $360 when your new personal loan is funded. Check your rate by Jan. 31, 2021, to get $10 by gift card; get your loan funded by Feb. 15, 2021, to claim another $350.
- Borrowing Range: $5,000 to $100,000
- Term Options: 24 to 84 months
- Origination Fees: None
- Prepayment Penalty: None
- Credit Requirements: Excellent. SoFi’s underwriting requirements are among the strictest in the business.
Advantages
- No Origination Fees. SoFi doesn’t charge origination fees.
- Low Rates for Well-Qualified Borrowers. SoFi’s low-end rates are competitive with other lenders’ in this category.
- 0.25% Autopay Discount. Borrowers who opt into SoFi’s autopay program automatically qualify for a 0.25% rate reduction.
- Other Loan Types Available. SoFi offers student loan refinancing, graduate and professional loans, and other niche credit products.
- Generous Referral Program. SoFi’s industry-leading referral program pays $300 per successful referral, for up to $6,000 total for prolific referrers.
- Unemployment Protection Available. SoFi’s unemployment protection program allows you to defer payments for up to 12 months total over the life of your loan if you become unemployed through no fault of your own.
Disadvantages
- Not Suitable for Borrowers With Fair to Poor Credit. SoFi’s underwriting requirements are among the strictest in the business. If your credit is impaired, don’t bother applying here.
For more information, check out our SoFi review.
6. Earnest
Earnest partners with Fiona, a personal loan search engine, to deliver “low-interest loans” for “high-potential people.” Its lenders’ underwriting processes can go well beyond applicant credit scores to assess risk by other factors, such as future employment and earning potential.
While loans available through Earnest aren’t exclusively for highly qualified borrowers, the best rates and eligibility terms are likely reserved for those with excellent credit.
- Borrowing Range: $1,000 to $100,000
- Term Options: Variable
- Origination Fees: Variable
- Prepayment Penalty: Variable
- Credit Requirements: Subprime to excellent. Earnest and Fiona canvass many different lenders, which is good news for applicants with less-than-perfect credit.
Advantages
- High Borrowing Limits. Loans available through Earnest carry principals as high as $100,000, though only the most attractive borrowers are likely to qualify for the maximum.
- Loans Available With No Origination Fees. Some loans available through Earnest waive origination fees, though your mileage may vary.
- Other Loan Types Available. Earnest offers other types of loans, including student loan refinancing products.
- Noncredit Factors Play a Big Role in Underwriting. Earnest’s underwriting process is atypical, with a heavy emphasis on noncredit factors such as savings rates. If you’re a younger, upwardly mobile borrower whose credit score doesn’t accurately reflect your borrower risk profile, you’ll make out well here.
Disadvantages
- Loan Terms Aren’t Guaranteed to Be Favorable. Applicants with less-than-perfect credit won’t have their pick of the litter here. This is an important distinction between Earnest and lenders that specialize in personal loans for subprime borrowers.
Best Personal Loan Companies for Subprime Borrowers
These are among the best personal loan companies for subprime borrowers, or those with FICO scores below 640, on average.
Some use a wider variety of noncredit factors, such as education and career path, to evaluate borrower risk. Others have more lenient credit underwriting standards. Subprime borrowers should expect higher interest rates than prime borrowers, usually above 15% APR.
7. OneMain Financial
OneMain Financial follows a hybrid model. Applications begin online, then transition to one of the company’s 1,600-plus branch offices after initial approval. Borrowers with limited credit history or impaired credit may qualify for lower rates on secured loans, which require collateral.
- Borrowing Range: $1,500 to $20,000
- Term Options: 24 months to 60 months
- Origination Fees: Variable
- Prepayment Penalty: None
- Credit Requirements: Poor to excellent. Borrowers with excellent credit and strong finances are likely to qualify for loans with longer terms, higher principals, and lower rates. Borrowers with iffy credit and weak finances may need to put up collateral to secure their loans. Acceptable collateral includes cars, trucks, motorcycles, boats, and recreational vehicles.
Advantages
- Appropriate for Borrowers With Impaired Credit. OneMain Financial is designed with credit-impaired borrowers in mind. If you’ve been turned away elsewhere, don’t cease your search until checking in with OneMain.
- Secured Option Available. Less-qualified borrowers can take advantage of OneMain’s secured loan option. While secured loans have significant drawbacks, they’re critical stepping stones for borrowers in the process of rebuilding credit.
Disadvantages
- Potential for High Fees. OneMain Financial’s fee schedule is on the heavy side; this is not the place for borrowers averse to origination fees.
- Opaque Pricing. OneMain Financial relies heavily on its human staff to craft loan offers. That makes for a less-transparent origination process; you won’t know exactly how much your loan costs until you’re in a OneMain branch, face-to-face with a trained salesperson.
- Relatively High Rate Range. OneMain Financial’s loans cost more than those from prime-only lenders like SoFi and Marcus by Goldman Sachs. If you have excellent credit, you can do better elsewhere.
For more information, check out our OneMain Financial review.
8. Upstart
Upstart is an offer aggregator, or a loan referral service that connects applicants with partner lenders. Loan selection varies based on a variety of borrower-specific factors, but rates and terms are competitive, and Upstart works with multiple partners that cater to borrowers with fair or impaired credit.
- Borrowing Range: $1,000 to $50,000
- Term Options: 36 months or 60 months
- Origination Fees: Up to 8%
- Prepayment Penalty: None
- Credit Requirements: Fair to excellent. For most borrowers, the minimum FICO score to apply is 620. For California borrowers only, the minimum FICO score is 580. For applicants at the lower end of the accepted credit range, Upstart considers a range of noncredit factors, such as your education, field of study, and job history to date. And Upstart does consider borrowers with insufficient credit data.
Advantages
- Relatively High Borrowing Limit. Upstart’s loan maximum is $50,000, higher than many competitors’.
- Appropriate for Borrowers With Fair Credit. In most of the United States, Upstart’s minimum FICO credit score is 620; in California, the minimum is 580. That’s great news for credit-impaired borrowers in one of the country’s largest states.
- Underwriting Emphasizes Noncredit Factors. Like Earnest, Upstart takes a forward-looking approach to underwriting, with a heavy emphasis on noncredit factors such as education, field of study, and work history.
- Potential for Rapid Funding. Depending on the lending partner you’re paired with, your Upstart-powered loan could fund within a business day. However, this isn’t reliable enough to earn Upstart a place on the “Best Loan Companies for Rapid Funding” list.
Disadvantages
- Potential for High Fees. Upstart-powered loans can be expensive. Less-qualified borrowers can expect to pay origination fees as high as 8%, well above what’s charged by most other lenders on this list.
- Loan Selection May Vary Widely. Since Upstart aggregates loans from multiple partners, selection varies widely by borrower and isn’t easy to predict.
9. LendingPoint
LendingPoint caters to applicants with credit scores as low as 585 – not truly impaired, but far lower than prime lenders’ minimums. Given the focus on fair-credit borrowers, rates and fees are on the high side.
- Borrowing Range: $2,000 to $25,000
- Term Options: 24 months to 48 months
- Origination Fees: Up to 6%
- Prepayment Penalty: None
- Credit Requirements: Poor to excellent. LendingPoint is designed for borrowers with weak credit but happily lends to borrowers of all scores. Well-qualified borrowers can likely find better rates and longer terms elsewhere, however.
Advantages
- Appropriate for Borrowers With Impaired Credit. LendingPoint’s underwriting process is unusually lenient. Borrowers discharged from bankruptcy as recently as 12 months prior are welcome to apply, though there’s no guarantee of approval.
- Loan Offers May Be Higher Than Your Initial Request. LendingPoint is one of the few lenders that actively touts its penchant for funding loans at amounts above borrowers’ initial requests.
Disadvantages
- Relatively Low Borrowing Cap. LendingPoint’s maximum loan size is $25,000, on the low end for its category.
- Relatively Short Maximum Term. LendingPoint’s 48-month maximum repayment term is on the short side.
- High Interest Rate Range. As might be expected from a lender that caters to borrowers with impaired credit, LendingPoint’s interest rate range is far higher than prime competitors’.
- Potential for High Fees. LendingPoint’s origination fees range up to 6%.
- Pushy Sales Tactics. Of all the lenders I’ve researched, LendingPoint is by far the pushiest. I continued to field sales calls weeks after submitting my first and only rate quote request.
Best Personal Loan Companies for Rapid Funding
These personal loan companies deserve callouts for quick application approval and quick loan funding. Though every origination period is unique, well-qualified borrowers can expect to sail from initial approval to funding in as little as 24 hours with these providers.
10. Avant
Avant funds loans in as little as 24 hours. Rates and terms are competitive with lenders catering to sub- and near-prime borrowers; Avant isn’t ideal for applicants with excellent creditworthiness or co-signers, who’ll likely find better rates elsewhere.
Separately, Avant offers low-limit credit cards for applicants with bad credit, though these can actually increase credit card debt if not used responsibly.
- Borrowing Range: $2,000 to $35,000
- Term Options: 24 months to 60 months
- Origination Fees: Up to 4.75%
- Prepayment Penalty: None
- Credit Requirements: Poor to excellent. Avant has relatively loose underwriting requirements; most successful applicants have FICO scores under 700, according to the company’s website.
Advantages
- Relatively Wide Repayment Term Range. For a lender specializing in loans to people with fair credit, Avant has a relatively wide repayment term range – up to 60 months.
- Limited Late Fee Forgiveness. Under some circumstances, Avant may forgive late fees, a nice perk for strapped borrowers.
- Appropriate for Borrowers With Fair Credit. Avant’s ideal borrower has a FICO score between 600 and 700. That’s good news for borrowers who aren’t truly impaired, but who probably won’t qualify for a SoFi loan on their preferred terms.
- No Hard Credit Pull. Avant doesn’t require a hard credit pull during the initial application process, another unusually borrower-friendly move.
Disadvantages
- Potential for High Origination Fees. Avant’s origination fees approach 5% at the high end of the spectrum. Borrowers at the lower end of its accepted credit score range can expect to pay the maximum.
- Rates Aren’t Competitive for Well-Qualified Borrowers. Well-qualified borrowers can do better elsewhere; if your credit score is well above 700, consider skipping Avant altogether.
11. Upgrade
Upgrade also funds loans in as little as 24 hours. Headline rates and funding amounts are competitive with prime lenders’, though relatively high and unavoidable origination fees erode the advantage.
- Borrowing Range: $1,000 to $50,000
- Term Options: 36 months or 60 months
- Origination Fees: 2.9% to 8%
- Prepayment Penalty: None
- Credit Requirements: Upgrade is cagey about its requirements for borrowers, beyond stating that it considers a range of credit and noncredit factors in underwriting.
Advantages
- Credit Lines Available. Upgrade is one of the few lenders on this list to offer unsecured personal credit lines on top of personal loans.
- Nice Borrowing Range. Upgrade’s maximum loan size tops out at $50,000, a decent range.
- Complimentary Credit Health Tools. Upgrade has a suite of complimentary credit health tools that come in handy for those looking for credit-building help.
Disadvantages
- Unavoidable Origination Fees. The minimum origination fee here is 1.5%. Even the best-qualified borrowers don’t get off scot-free.
12. FreedomPlus
FreedomPlus offers same-day underwriting; assuming no unexpected curveballs, you can apply in the morning and receive a final funding decision by day’s end. Under normal circumstances, actual loan funding takes up to 48 hours.
- Borrowing Range: $7,500 to $40,000
- Term Options: 24 months to 60 months
- Origination Fees: Up to 5%
- Prepayment Penalty: None
- Credit Requirements: Poor to excellent. FreedomPlus lends to a wide range of borrowers. On top of standard credit factors, FreedomPlus favors borrowers who commit to using at least 85% of their loan proceeds for debt consolidation.
Advantages
- Novel Factors Considered in Underwriting. FreedomPlus considers novel noncredit factors in underwriting. For instance, borrowers who commit to putting at least 85% of their loan principal toward debt consolidation do better in FreedomPlus’s proprietary scoring model.
- Appropriate for Applicants With Impaired Credit. FreedomPlus caters to borrowers with impaired credit.
- Decent Repayment Term Range. For a near-prime lender, FreedomPlus has a decent range of repayment terms, up to 60 months.
Disadvantages
- High Minimum Loan Amount. Under normal circumstances, the minimum FreedomPlus loan offer is $7,500. That may be too high for borrowers with modest spending needs.
- Potential for High Fees. FreedomPlus’s origination fees range up to 5% for less-qualified borrowers.
13. Best Egg
About 50% of Best Egg borrowers get their money within one business day. The rest wait no longer than three business days, under normal circumstances. Rates, terms, and borrowing amounts are competitive with other prime lenders’, but the $50,000 minimum annual income requirement is on the high side.
- Borrowing Range: $2,000 to $35,000 for regular applicants; up to $50,000 for well-qualified borrowers who receive special offer codes
- Term Options: 36 months to 60 months for regular applicants; potentially longer than 60 months for well-qualified applicants
- Origination Fees: 0.99% to 5.99%
- Prepayment Penalty: None
- Credit Requirements: Fair to excellent. Although Best Egg is cagey about its underwriting requirements, there’s nothing to indicate that it won’t accept applications from applicants without ironclad credit. However, Best Egg’s website makes it clear that its best rates and longest repayment terms – including special repayment terms longer than 60 months – are available only to borrowers with incomes above $100,000 and FICO credit scores above 700.
Advantages
- Special Treatment for Well-Qualified Borrowers. Best Egg appears to give very well-qualified borrowers special treatment, with longer repayment terms and higher borrowing amounts.
- Appropriate for Borrowers With Less-Than-Perfect Credit. Best Egg caters to borrowers with decent credit, though borrowers with FICO scores north of 700 make out better.
Disadvantages
- Unavoidable Origination Fees. Even the best-qualified Best Egg borrowers pay origination fees of about 1%.
Final Word
Traditional banks and credit unions no longer dominate the market for unsecured personal loans. Amid a frenzied proliferation of low-overhead, online-only lenders with which they simply can’t compete on pricing or risk acceptance, some have exited the unsecured personal loan segment altogether.
But banks and credit unions aren’t completely out of the personal loan game. Some risk-averse traditional lenders are more than happy to originate secured personal loans for credit-impaired borrowers struggling to secure favorable rates and terms on unsecured alternatives.
Although it comes with significant risks – namely, potential collateral loss – a secured personal loan may be your best or only shot at affordable financing for whatever you’ve got planned.
In that case, you may need to schlep down to your local bank branch after all.
Published at Fri, 29 Jan 2021 18:00:42 +0000
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