Best Personal Loans for 2019

Our experts have vetted and ranked the best personal loan providers to bring you a list of standouts below. Read on to view our top picks and learn more about whether a personal loan is right for you.

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.

Here are The Ascent's picks of the best personal loan companies for 2019:

  • SoFi - Low APR for borrowers with high income
  • Barclays - Low APR for borrowers with good to excellent credit scores
  • Freedom Plus - Borrowers with good to excellent credit scores
  • Payoff - Reducing high-interest credit card debt
  • Lending Point - Borrowers with poor credit scores
  • Upstart - Little to no credit history
  • LendingClub - Low APR for borrowers with good to excellent credit scores
  • Avant - Borrowers with poor credit scores
  • Marcus - Low overall fees
Lending Partner Best For Min. Credit Score Loan Amounts APR Range Next Steps

Freedom Plus

Best For:

Borrowers with good to excellent credit scores

Min. Credit Score:

640

Loan Amounts:

$10k - $40k

APR Range:

4.99 - 29.99%

Check Rate

SoFi

Best For:

Low APR for borrowers with high income

Min. Credit Score:

660

Loan Amounts:

$5k - $100k

APR Range:

5.74-16.49%

Check Rate

Payoff

Best For:

Reducing high-interest credit card debt

Min. Credit Score:

640

Loan Amounts:

$5k - $35k

APR Range:

5.99 - 24.99%

Check Rate

Upstart

Best For:

Little to no credit history

Min. Credit Score:

620

Loan Amounts:

$1k - $50k

APR Range:

8.85 - 29.99%

Check Rate

LendingClub

Best For:

Low APR for borrowers with good to excellent credit scores

Min. Credit Score:

600

Loan Amounts:

$1k - $40k

APR Range:

6.95 - 35.89%

Check Rate

Avant

Best For:

Borrowers with poor credit scores

Min. Credit Score:

580

Loan Amounts:

$2k - $35k

APR Range:

9.95 - 35.99%

Barclays

Best For:

Low APR for borrowers with good to excellent credit scores

Min. Credit Score:

700

Loan Amounts:

$5k - $35k

APR Range:

5.74 - 20.99%

Marcus

Best For:

Low overall APR

Min. Credit Score:

660

Loan Amounts:

$3.5k - $40k

APR Range:

5.99 - 28.99%

SoFi

Minimum credit score: 660

One of the top lenders for those with good credit scores and high income, SoFi stands out on our list for having by far the lowest APR ceiling and the highest potential loan amount. This is because they're very selective with who they approve - average borrowers have over 700 credit score and over $100k in income. On top of its low APR rates, we like that SoFi has no origination fees and features a fast online application process. Combine all this and you get one of the top lenders in the industry, for those that can get approved at least. Read our SoFi review to learn more.


Barclays

Minimum credit score: 700

With low APRs and no fees, Barclays is a solid option for those with good to excellent credit. While Barclays doesn't have an explicit minimum credit score needed for approval, to get a loan funded you'll likely need a credit score above 700. We like that Barclays charges no origination fees or late fees (though you will continue racking up interest if you're late with payments). Overall, Barclays is a great option for consolidating debt or financing a large purchase, for those that can get approved. Read our Barclays personal loan review for more information.


Freedom Plus

Minimum credit score: 640

Known for their fast application process, Freedom Plus will let you know quickly whether you're approved or not. While they do look at factors beyond just credit score, Freedom plus still plays it close to the vest with an average borrower credit score of 720. But if you get approved, their quick funding times and no hidden fees are certainly a plus. Read our Freedom Plus review to learn more.


Payoff

Minimum credit score: 640

Payoff is a peer-to-peer lender that issues loans for people looking to get out of credit card debt. A unique feature is their personalized recommendation service that helps encourage you on your journey out of debt. Additionally, Payoff stands out for offering payment flexibility during events such as a job loss. Instead of charging a late fee, Payoff will work with you on a new payment schedule. This may be a good option for you if you have high-interest credit card debt and have exhausted balance transfer credit card options. Read our Payoff review to learn more.


Upstart

Minimum credit score: 620

Started in 2012 by former Google employees, Upstart stands out with a unique underwriting process that is not solely dependent on credit score. Young people with little credit history but strong future earning potential can be particularly helped by Upstart's innovative approach. As always, we at The Ascent encourage you to shop around and find the best rates and terms for you. Read our Upstart review to learn more.


LendingClub

LendingClub, a pioneer of the peer-to-peer lending space, is a strong overall option for those in the market for a personal loan. LendingClub features some of the looser credit standards in this space, though to earn an APR near 6.95% you'll need to have a strong credit profile. If you're looking for a small personal loan, LendingClub is one of the few lenders on our list that offers loans as low as $1,000. Another nice perk is the ability to apply for a loan with a cosigner, or if you want a joint account. That's not an option for many other competitors.


Avant

Minimum credit score: 580

Featuring the lowest minimum credit score on our list, Avant is an option for borrowers that might struggle to be approved at other lenders. Avant sports a fast approval process, getting most borrowers an answer within 15 minutes of submitting their application. We're also fans of Avant's late fee forgiveness policy - if you miss one payment but then make the next three, you get your $25 late fee back. Overall, this can be a solid option for those with poor to fair credit. Read our Avant review to learn more.


Marcus

Minimum credit score: 660 (FICO)

With a minimum FICO score of 660, Marcus (a division of Goldman Sachs) targets its products to those with good credit scores and those that have credit histories. Marcus offers a best-in-class fee structure which features no prepayment, origination, or late fees. Add flexible loan terms on top of that, and it's easy to see that Marcus is a great option. Read our Marcus review to learn more.


Your Definitive Guide to Personal Loans

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.

Why you can trust me

I’m a Certified Financial Planner with extensive experience reviewing personal finance products and making recommendations to clients, friends, and family. I’m not just a reviewer in this case -- I’ve also used a personal loan myself. I have firsthand experience with these products and the application process.

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.

What is a personal loan?

A personal loan is a loan made to an individual for virtually any purpose besides buying a home, financing a car, or paying for school.

To be clear, personal loans can be used for practically any expense. They’re often used for paying off credit card debt, financing home renovations, and paying for medical expenses. Homes, cars, and college expenses are often better financed with other types of loans.

Personal loans have two defining characteristics:

  1. First, personal loans are unsecured loans. This means that they aren’t backed by an asset. When you get an auto loan, the car backs the loan -- if you stop paying the loan, the lender can repossess the car. A personal loan isn’t asset-backed. If you buy a boat with a personal loan and stop paying, the lender can send your loan to a collection agency or even sue you. But they won’t show up at your house to haul the boat away.
  2. Second, personal loans are installment loans. This means you make payments for a specified length of time. At the end of that time, the loan’s balance will be zero. This is in contrast to a revolving loan, like a credit card or home equity line of credit.

How do I apply for a personal loan?

The first step toward getting a personal loan is to research your options. Our list of the best personal loans is a good place to start, but there are dozens of companies that offer personal loans. There’s a lot of variety among lenders -- they offer different interest rates, loan limits, repayment terms, and other features.

Once you’ve narrowed down a list of personal lenders that could meet your needs, we suggest getting pre-approved with all of them. Virtually all personal lenders allow you to check APRs and loan offers without a hard credit pull. That means getting pre-approved won’t affect your credit score.

Rates and fees can vary dramatically between lenders, even for the same borrower. Applying to several lenders instead of one or two can save you hundreds or thousands of dollars.

After the pre-approval process, choose the lender that offers the best terms on a loan that meets your needs. Then it’s time to go beyond the pre-approval process and formally apply for the loan.

What can you use a personal loan for?

You can use a personal loan to pay for just about anything. Personal loans typically aren’t made for a specific purpose. Your lender might ask you how you’ll use your loan, but once you have the money, you can spend it however you want. If you apply for a loan for credit card consolidation, your lender isn’t going to follow up to make sure you used it for that purpose.

This doesn’t mean that personal loans are the best way to borrow for every expense. Three cases when it makes sense to look elsewhere are buying a home, buying a car, and paying for educational expenses.

Since personal loans are unsecured, they generally come with higher interest rates than secured forms of borrowing like mortgages and auto loans. If you don’t pay your mortgage, the lender can foreclose on the home and sell it to recoup its money. That means the loan is a relatively low risk to the lender. A personal loan isn’t secured by a specific asset, even if it’s used to buy one.

What determines personal loan rates?

There are several factors that determine the interest rate on a personal loan. These are the most common:

  • The lender: Most personal lenders have a published range of interest rates or APRs they give borrowers.
  • Credit score: Most lenders use the FICO score, and higher scores translate to lower rates.
  • Income: A higher income will get you a larger loan amount. A lower debt-to-income ratio can result in a lower interest rate.
  • Employment: A steady employment history can result in more favorable loan terms.
  • Education: Some lenders give borrowers with college degrees preferential terms.

Are personal loan interest rates fixed or variable?

Most personal loans come with fixed interest rates. There are two basic interest rate structures for loans -- fixed-rate and variable-rate. With a fixed-rate loan, your interest rate stays the same throughout the entire term of the loan. With a variable rate, the loan’s interest rate can change periodically; usually once per year.

Many of the top personal lenders don’t even offer variable-rate loans, although a few do. A fixed-rate personal loan is the better choice for most borrowers. Market interest rates are still low, so there’s more risk in accepting a variable rate.

When should I get a personal loan?

There are hundreds of situations where a personal loan could make sense for you. Here are some of the most common:

  • Consolidating high-interest debts: Borrowers with strong credit histories can generally get lower interest rates with personal loans. By using a personal loan to repay credit card debt, you can save lots of money.
  • Financing large purchases: Home renovations and other big expenses are easier to pay for without taking on high-interest credit card debt.
  • Getting startup cash for a business: It can be difficult for new businesses to find funding. While there could be better borrowing options after you’ve established your business, a personal loan can help get you started.

How personal loans affect your credit

Initially, a personal loan could cause your credit score to drop, though any change will likely be mild. Over the long term, however, making on-time personal loan payments can give your credit score a big boost. If you use the personal loan to pay off credit card debt, it could give you an extra increase, as installment debt is generally better than revolving debt in the FICO formula. In fact, when I got a personal loan to consolidate credit card debt, my credit score was significantly higher after just two months.

Please note that the FICO credit scoring formula is a well-guarded secret and personal loans can have different effects on borrowers’ credit.

When you apply for a new loan, a credit inquiry will appear on your credit report. That affects the “new credit” category of the FICO formula, which makes up 10% of your score. The new loan itself also affects the new credit category. And because you haven’t paid down your loan balance, it can adversely affect the “amounts you owe” category. That makes up 30% of your score.

Again, assuming you pay down your loan balance with on-time payments, you should see your credit score improve long-term.

Getting a personal loan with bad credit

There are some personal lenders who specialize in making loans to borrowers with bad credit.

However, it’s important to realize that if you get a personal loan with bad credit, you’ll probably get a significantly higher interest rate. You might pay higher fees than a good credit borrower, too. In fact, there are personal lenders whose APR ranges go as high as 35.99% as of this writing. That’s higher than most credit cards.

One possible solution is to apply for a personal loan with a cosigner. Not all personal lenders allow cosigners, but a handful of the best lenders do. A cosigner is a creditworthy person who agrees to accept legal responsibility for making the payments on your loan. They’re essentially letting you borrow their credit history for your loan qualification.

There’s a lot to know about applying with a cosigner. But the main thing is this: Doing so can help borrowers with bad credit qualify for better loan terms than they otherwise would.

Is a personal loan right for you?

It depends. Personal loans can be an excellent way for many people to borrow money. They often have reasonable and fixed interest rates, especially for borrowers with strong credit histories. And they make sense for debt consolidation and funding large purchases.

One alternative you might consider is a credit card balance transfer or 0% APR offer. There are several credit cards on the market with 0% APR periods of 18 months or longer for new cardholders. If you’re confident you can pay back the debt in that amount of time, it could be a better option.

Like any personal finance product, personal loans aren’t right for everyone. However, competition is high among personal lenders, and that means that it could be a great time to find a good deal. Explore a few of your loan options to see if it could be a smart move for you.

Credit card APR Personal loan APR Interest saved over 3 years
18% 6% $1,031
18% 8% $867
18% 10% $699
18% 12% $529

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.

Can I get a personal loan with bad credit?

Because personal loans aren't backed by any collateral, credit scores play an important role in whether or not a bank will approve you for a loan. Having bad credit will make it more difficult to get approved, but not impossible.

Here are a few tips and tricks that can make it easier for you to get a personal loan, even if your credit is far from perfect.

  • Get a shorter-term loan -- Loans that are repaid in a shorter period of time are simply safer for the lender than longer-term loans. If you have bad credit, you may find that it's easier to get approved for a 24-month loan instead of a 48-month loan, for example. A shorter loan term will increase your monthly payment, so it's doubly important to borrow only as much as will fit in your budget if you go this route.
  • Be selective with applications -- Lenders don't want to waste your time. In our comparison above, we detailed the minimum credit score requirement for our best picks in personal loans. If you have a FICO® Score of 600, it doesn't make sense to waste the time or effort applying with a service that requires a FICO® Score of 640 or better. Focus your time on lenders who specialize in online personal loans for bad credit instead.
  • Pay down small balances -- It can make sense to clean up your credit report before applying for another loan. It's often better to have one $500 balance on one credit card than to have 10 cards, each with an outstanding balance of $50. Try to keep your balances on any existing credit lines like credit cards down to 30% or less of your available credit. That means that if you have a card with a $1,000 credit limit, it would be ideal to have a balance of less than $300 on it. (Your balances are only reported to the credit bureaus once per month, so this isn't an instantaneous fix.)
  • Get a cosigner -- If you have bad credit, you'll find it's easier to get a personal loan with a cosigner. Since the cosigner is legally responsible to repay the loan if you cannot do so, a lender will often make the decision based on the cosigner's creditworthiness or income rather than yours. Of course, the consigner takes a lot of risk by putting their name on your loan, so finding a good cosigner can be hard to do. (Joint personal loans, where two people are named as borrowers, can also offer lower rates and better approval odds.)

Is a personal loan right for you?

We put together a short decision tree to help you decide if a personal loan is right for your situation. If all of the following statements apply to you, then a personal loan is likely the best way to borrow money for your financial needs.

  • You need more than a year to repay. Personal loans can be repaid over periods as long as 5 years, making them a good source of medium to long-term financing. If you don't need as much time to repay, a 0% intro APR credit card may be a better way to finance a purchase or expense.
  • A specific loan doesn’t exist for your needs. It would be silly to take out a personal loan to buy a used car, for example, since car loans have much lower rates than personal loans. But for expenses that fit the definition of a personal expenditure, a personal loan is a good fit.
  • You want to refinance high-interest debt. The single best reason to use a personal loan is to consolidate and gradually eliminate higher interest debt. Paying off a $5,000 credit card balance at an 18% with a personal loan at an 8% APR could save you about $867 in interest over a 3-year repayment period, for example. Personal loans are a great way to refinance any unsecured debts at a high interest rate. To refinance debts to repay them over a shorter period (one year or so) a balance transfer credit card with a 0% intro APR may be a better choice.
  • You aren’t borrowing to spend frivolously. Just because you can get a personal loan to buy a 100 inch TV with a $5,000 surround-sound speaker system doesn’t mean you should. A personal loan shouldn’t be used to spend beyond your means, as it’s easy to get trapped in a cycle of borrowing at high interest rates to make purchases that you couldn’t otherwise afford.
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To recap, here are the best personal loans for 2019:

Lending Partner Best For Min. Credit Score Loan Amounts APR Range Next Steps

Freedom Plus

Best For:

Borrowers with good to excellent credit scores

Min. Credit Score:

640

Loan Amounts:

$10k - $40k

APR Range:

4.99 - 29.99%

Check Rate

SoFi

Best For:

Low APR for borrowers with high income

Min. Credit Score:

660

Loan Amounts:

$5k - $100k

APR Range:

5.74-16.49%

Check Rate

Payoff

Best For:

Reducing high-interest credit card debt

Min. Credit Score:

640

Loan Amounts:

$5k - $35k

APR Range:

5.99 - 24.99%

Check Rate

Upstart

Best For:

Little to no credit history

Min. Credit Score:

620

Loan Amounts:

$1k - $50k

APR Range:

8.85 - 29.99%

Check Rate

LendingClub

Best For:

Low APR for borrowers with good to excellent credit scores

Min. Credit Score:

600

Loan Amounts:

$1k - $40k

APR Range:

6.95 - 35.89%

Check Rate

Avant

Best For:

Borrowers with poor credit scores

Min. Credit Score:

580

Loan Amounts:

$2k - $35k

APR Range:

9.95 - 35.99%

Barclays

Best For:

Low APR for borrowers with good to excellent credit scores

Min. Credit Score:

700

Loan Amounts:

$5k - $35k

APR Range:

5.74 - 20.99%

Marcus

Best For:

Low overall APR

Min. Credit Score:

660

Loan Amounts:

$3.5k - $40k

APR Range:

5.99 - 28.99%