Best Personal Loans for September 2019

The personal loan market has exploded over the past several years. There are now dozens of companies that offer streamlined personal lending products. These loans can help borrowers pay off credit card debt, complete home renovations, and more. Here are our favorite personal loans in the market today and what you should know before you apply.

When considering a personal loan, the most important factors are finding the lowest rate and choosing a reputable lender. Our experts have identified the lenders above as top choices for factors like avoiding hidden fees and providing good customer service. Interest rates will vary for everyone based on criteria like credit score and income, so make sure you shop around to find the lowest rates for you.

Millions of Americans have used personal loans to refinance high interest credit card debt, pay off household bills, or pay down large expenses in a budget-friendly way.

A personal loan offers more flexibility than virtually any other type of loan because you can use them for just about anything, from medical bills to car repairs, making them a go-to solution for when you simply need cash to make ends meet. Here's what you need to know about personal loans, and how to pick one that fits your financial needs.

How we picked the winners

The most obvious factor when choosing a personal lender is the interest rate. So the advertised rates offered by each lender played a major role in our decisions. But that wasn’t the only thing we looked at. In addition to interest rates, we also considered these factors:

• Origination fees: An origination fee is a one-time charge paid to a lender in exchange for setting up a loan. Many personal lenders don’t charge origination fees, but a few do. They can run as much as 5% or more of the loan amount, so they’re worth paying attention to.
• Other fees: Most personal lenders don’t charge prepayment penalties, but they aren’t unheard of. Many charge late fees and these can vary significantly.
• Soft credit check: Most personal lenders allow prospective borrowers to check their loan terms without affecting their credit score. This makes it more practical to compare several different lenders.
• Other features: Personal lenders offer a variety of unique features. Some allow borrowers to see their FICO scores for free. Others offer discounts to borrowers who have other loan or banking products with the same institution. There are too many perks to list individually. The point is that we looked beyond the standard rates and fees when choosing our favorites.

Let's say you have a balance of $5,000. The below table breaks down your interest savings with a personal loan vs. a typical credit card.

As you can see, personal loans can save you a relative fortune in interest compared to the typical credit card, even on a relatively small balance of $5,000. The advantage of a lower APR is that more of your payment goes toward paying down your debt, which means you'll make more progress toward being debt-free every single month.

Here are few things you should know before you start shopping for an online personal loan:

• Origination fees matter -- Technically, an origination fee isn't interest, but it does add to the cost of the loan. An origination fee of 0% to 5% is common, which means you can expect to pay a fee of up to $250 on a $5,000 loan, which will be added to the balance, or subtracted from the loan proceeds. Luckily, the APR you see quoted for a loan includes interest and fees. So, a loan with an APR of 7% is less expensive (interest and fees included) than a loan with an APR of 8%. You may be eligible for a no-origination-fee personal loan if you have a prime credit score (720 or better).
  
• Rates vary -- The same person could apply for a personal loan from two different lenders and get two vastly different quotes. Likewise, the same bank may quote different rates for the same applicant depending on when they apply. The point is that it can pay to shop around, as lenders are constantly adjusting their rates and terms. A lender that has the lowest APR today might not have the lowest APR a month from now.
  
• It pays to shop around -- Many people fear that shopping around for rates will hurt their credit scores when the inquiries start showing up on their credit reports. But shopping for a lower rate can only help you by finding a better deal, not hurt you. As Experian explains on its website, “generally, credit scoring models will count multiple hard inquiries for the same type of credit product as a single event as long as they occur in a short window of a few weeks.” In short, if you condense your shopping into a short period of time, you won’t be penalized for it.

To recap, here are the best personal loans for 2019: