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The Best Personal Loans Of 2022

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What Is a Personal Loan?

A personal loan is a type of lump-sum financing borrowers can get from a traditional bank, credit union or online lender, which they can use for a variety of expenses. Common uses include medical bills, auto repairs, home improvement projects and debt consolidation. Personal loans typically have repayment terms between two and seven years and offer interest rates as low as 3% for high-qualified borrowers.

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How Do Personal Loans Work?

Personal loans are typically available from banks, credit unions and online lenders. Prospective borrowers apply for a loan either online or in person and then wait for a decision—approval or denial. If approved, borrowers receive their funds as a lump-sum payment into their bank account, and interest starts to accrue in the first month. Personal loans require fixed monthly payments over the entire loan term, typically between one to seven years.


Average Personal Loan Interest Rates By Credit Score

Here are the average estimated interest rates for personal loans based on VantageScore risk tiers, according to Experian. Please note that interest rates are determined and set by lenders. The rates provided are estimations.

Vantage V4 credit score Average interest rate
Deep subprime (300-499) 15.30%
Subprime (500-600) 15.91%
Near prime (601-660) 15.56%
Prime (661-780) 10.93%
Super prime (781-850) 6.59%

While lenders determine and set rates, as an applicant, you can increase your chances of receiving favorable terms.

Rod Griffin, senior director of consumer education and advocacy at Experian, says, “Consumers with higher credit scores generally will qualify for lower interest rates. To increase your credit scores, make sure you make your payments on time and try to keep your balances low. Missed payments and high [credit] utilization rates, or balance-to-limit ratios, on your credit cards are the two most heavily weighed factors in determining your credit scores. If possible, I recommend checking your credit report and scores three to six months before you apply for a personal loan. This will give you time to take steps to improve your credit standing if necessary.”

Many personal loans can be used to fund common family expenses like home improvement projects, wedding expenses, vacations and, in some cases, even the purchase of land. Borrowers also turn to personal loans for debt consolidation, because interest rates are often lower for personal loans than for credit cards—especially for applicants with good to excellent credit.

These loans are available from traditional banks, credit unions and online lending platforms that make it easy to apply online—without having to visit a bank branch. What’s more, many personal loans can be funded within a few business days so you don’t have to wait to get the money you need. The best personal loans offer low interest rates for well-qualified borrowers, flexible loan amounts and repayment terms and limited fees.

Compare Personal Loan Rates


Current Personal Loan Rates

COMPANY MINIMUM CREDIT SCORE CURRENT APR RANGE LOAN AMOUNTS LEARN MORE
SoFi 650 6.99% to 22.28% (with autopay) $5,000 to $100,00 View More

LightStream 660 3.99% to 19.99% (with autopay)* $5,000 to $100,00* View More

Marcus Marcus does not disclose this information 6.74% to 19.74% (with autopay) $3,500 to $40,000 View More

LendingPoint 600 7.99% to 35.99% $2,000 to $36,500 View More

Upgrade 580 5.94% to 35.97% $1,000 to $35,000 View More

Universal Credit 560 8.93% to 35.93% $1,000 to $50,000 View More

Discover 660 5.99% to 24.99% $2,500 to $35,000 View More

Upstart 600 5.4% to 35.99% $1,000 to $50,000 View More

Avant 580 9.95% to 35.99% $2,000 to $35,000 View More

*Some APRs and loan amounts are available only for certain loan purposes.

The above personal loan rates and details are accurate as of June 1, 2022. While we update this information regularly, the annual percentage rates (APRs) and loan details may have changed since the page was last updated. Keep in mind, some lenders make specific rates and terms available only for certain loan purposes. Be sure to confirm available APR ranges and loan details, based on your desired loan purpose, with your lender before applying.


Best Personal Loans


BEST OVERALL PERSONAL LOAN

SoFi

4.0

Minimum credit score

650

APR range

6.99% to 22.28%

with autopay

Loan amounts

$5,000 to $100,000

SoFi

Learn More

Via Credible.com’s Website
Why We Picked It
Pros & Cons
Extra Details

BEST FOR LOW INTEREST RATES

LightStream

4.0

Minimum credit score

660

APR range

3.99% to 19.99%

with autopay

Loan amounts

$5,000 to $100,000

LightStream

Learn More

Via Credible.com’s Website
Why We Picked It
Pros & Cons
Extra Details

BEST FOR TERMS UP TO 72 MONTHS

Marcus

4.0

Minimum credit score

Marcus does not disclose this information

APR range

6.74% to 19.74%

with autopay

Loan amounts

$3,500 to $40,000

Marcus

Compare Rates

Via Credible.com’s Website
Why We Picked It
Pros & Cons
Extra Details

BEST FOR FAST FUNDING & BELOW-AVERAGE CREDIT

LendingPoint

4.0

Minimum credit score

600

APR range

7.99% to 35.99%

Loan amounts

$2,000 to $36,500

LendingPoint

Compare Rates

Via Credible.com’s Website
Why We Picked It
Pros & Cons
Extra Details

BEST FOR BAD CREDIT

Upgrade

3.5

Minimum credit score

560

APR range

5.94% to 35.97%

Loan amounts

$1,000 to $35,000

Upgrade

Compare Rates

Via Credible.com’s Website
Why We Picked It
Pros & Cons
Extra Details

BEST FOR COMPARING MULTIPLE OFFERS

Universal Credit

3.5

Minimum credit score

560

APR range

8.93% to 35.93%

Loan amounts

$1,000 to $50,000

Universal Credit

Compare Rates

Via Credible.com’s Website
Why We Picked It
Pros & Cons
Extra Details

BEST FOR NO INTEREST IF REPAID WITHIN 30 DAYS

Discover

3.5

Minimum credit score

660

APR range

5.99% to 24.99%

Loan amounts

$2,500 to $35,000

Discover

Compare Rates

Via Credible.com’s Website
Why We Picked It
Pros & Cons
Extra Details

BEST FOR LOANS AS LOW AS $1,000

Upstart

3.5

Minimum credit score

600

APR range

5.4% to 35.99%

Loan amounts

$1,000 to $50,000

Upstart

Compare Rates

Via Credible.com’s Website
Why We Picked It
Pros & Cons
Extra Details

BEST FOR A RANGE OF REPAYMENT TERMS

Avant

3.5

Minimum credit score

580

APR range

9.95% to 35.99%

Loan amounts

$2,000 to $35,000

Avant

Compare Rates

Via Credible.com’s Website
Why We Picked It
Pros & Cons
Extra Details

Methodology

We reviewed 29 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the 10 best lenders based on the weighting assigned to each category:

  • Loan details: 20%
  • Loan cost: 35%
  • Eligibility and accessibility: 20%
  • Customer experience: 15%
  • Application process: 10%

Within each major category, we also considered several characteristics, including available loan amounts, repayment terms, APR ranges and applicable fees. We also looked at minimum credit score requirements, whether each lender accepts co-signers or joint applications and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like prequalification options and mobile apps.

Where appropriate, we awarded partial points depending on how well a lender met each criterion.


Tips for Comparing Personal Loans

Consider these tips when comparing personal loans:

  • Where possible, prequalify. Many personal loan providers offer prospective borrowers the ability to prequalify for a loan. This means the applicant can submit details about their financing needs, income, housing situation and other relevant information to find out what kind of loan amounts, rates and repayment terms they are likely to qualify for. Even better, this process typically only requires a soft credit inquiry so you can shop around without hurting your credit score.
  • Consider the purpose of your loan. While personal loans can be used for a pretty broad range of purposes, they are limited to things like consumer debt consolidation, home improvements, vacations, weddings, funerals, large purchases and other personal expenses. For that reason, lenders often restrict the use of personal loans for postsecondary education expenses, business purposes and illegal activities, at a minimum. When considering a lender, confirm that your intended use of the loan is permissible under its borrower agreement.
  • Keep an eye out for additional fees. Some lenders offer fee-free personal loans that don’t require borrowers to pay origination fees, late payment fees, prepayment penalties or any other common loan costs. However, this is more the exception than the rule, so it’s important to ask about fees when shopping for the best loan terms. And, if a lender charges an origination fee, find out whether it’s built into the APR or taken out of the loan amount prior to funding, as this may impact the loan amount you need to request.
  • Evaluate the lender’s customer support options. If you’ve found a lender that’s prepared to offer the money you need at acceptable terms, there’s one more thing to consider before signing the loan agreement. While customer support may not seem like a big deal in the honeymoon phase of your loan, it can make a huge difference if you encounter issues with payments or face a financial hardship during your repayment period. Review the lender’s customer service resources and read reviews from past and current borrowers to make sure it’s a good fit.

Reasons to Get a Personal Loan

You can use personal loans for just about any type of personal expense. Most commonly, though, personal loans are good for:

  • Emergency expenses. If you need money right away for unexpected expenses like medical bills, funeral costs, car repairs or something else that needs immediate attention, you can use a personal loan.
  • Debt consolidation. Personal loans are a great way to consolidate high-interest debt to help save money on interest and streamline your payments.
  • Home improvements and repairs. If you have an upcoming home improvement project, you can take out a personal loan to help finance the costs. You can also use personal loans for unexpected home repairs or maintenance expenses.
  • Auto financing. While auto loans are the most common way to finance a vehicle, personal loans also can help you get the job done. Personal loans have fewer restrictions on the types of cars you can purchase, but they typically charge higher interest rates than traditional auto loans.
  • Moving costs. The cost of moving can add up quickly. If you don’t have cash on hand, personal loans can help you finance the costs.

Best Place to Get a Personal Loan

You can get personal loans from three types of institutions:

  • Online lenders. These are often technology-based non-bank companies that offer a small range of lending products, including personal loans. Online lenders typically offer low interest rates, loans that are available nationally and can provide funds within 24 to 48 hours.
  • Banks. Many local and national banks offer personal loans in addition to other financial products, such as checking and savings accounts. If you have an existing relationship with a bank, you may want to consider opening your personal loan through that bank.
  • Credit unions. These are local to your community and tend to offer applications both online and in person. Credit unions require membership, so be sure to check if you’re eligible.

The best place to get a personal loan is where you can access the most favorable terms and loan limits that fit your needs.


How to Get a Personal Loan

While the process varies by lender, follow these general steps to apply for a personal loan:

  • Check your credit score. Start by checking your credit score for free through your credit card issuer or another website that offers free scores. This will give you an understanding of your creditworthiness and your qualification chances. Aim for a score of at least 610; however, a score of at least 720 will yield the most favorable terms.
  • If necessary, take steps to improve your credit score. If your score falls below 610 or you want to boost your score to receive the best terms possible, take time to improve your score before applying, such as lowering your credit usage or paying off unpaid debts.
  • Determine how much you need to borrow. Once you check your credit score, calculate how much money you want to borrow. Remember, though, you’ll receive your money as a lump sum, and you’ll have to pay interest on the entire amount—so only borrow what you need.
  • Shop around for the best terms and interest rates. Many lenders will let you prequalify prior to submitting your application, which lets you see the terms you would receive with just a soft credit inquiry. Prequalifying lets you shop around for the best rates without hurting your credit score.
  • Submit a formal application and await a lending decision. After you find a lender that offers you the best terms for your situation, submit your application online or in person. Depending on the lender, this process can take a few hours to a few days.

Survey: Borrowing Money Improved Financial Situations

Borrowing money doesn’t always have a negative impact on your financial situation. In fact, 69% of Americans say borrowing money made their financial situation better. You, too, can experience the upside of borrowing money by following responsible practices. To avoid financial pitfalls when borrowing money, we recommend you:

  • Pay your bills on time or early to avoid hurting your credit score
  • Borrow below your means and within your budget
  • Take the time to find the lowest rates and fees to reduce overall borrowing costs
  • Improve your credit score or apply with a co-signer to increase your chances of receiving the most favorable terms
  • Don’t overspend if you’re using a credit card or line of credit
  • Set up automatic payments to never miss a payment
  • Monitor your monthly statements
  • Consolidate high-interest debts into one streamlined payment

 

These responsible practices are key for both current borrowers and the 73% of Americans who plan to borrow money in 2022.

 

Whether you plan on borrowing money in 2022 or not, you may have similar concerns as other Americans.

 

If you are preparing to borrow money or anticipate you will sometime in the future, follow these general tips to help navigate each of the above concerns:

  • Only borrow what you know you can afford to repay
  • Improve your credit score before applying
  • Consider low-interest personal loans
  • Pay on time or early
  • Research customer reviews

Survey Methodology

This online survey of 2,000 U.S. adults was commissioned by Forbes Advisor and conducted by market research company OnePoll, in accordance with the Market Research Society’s code of conduct. Data was collected between March 23 and 24, 2022. The margin of error is +/- 2.2 points with 95% confidence. This survey was overseen by the OnePoll research team, which is a member of the MRS and has corporate membership with the American Association for Public Opinion Research (AAPOR). For a complete survey methodology, including geographic and demographic sample sizes, contact [email protected]


Pros and Cons of Personal Loans

PROS CONS
Interest rates and monthly payments remain fixed throughout the life of the loan You have to repay the full amount of your loan, even if you end up not needing it all
Fewer qualification requirements than other financing methods, such as lower minimum credit score requirements Borrowers pay interest on the full loan amount
You can use personal loans for a variety of reasons Possible origination fees between 1% to 8% of the loan amount

Best Personal Loan Ratings

 

RANK COMPANY FORBES ADVISOR RATING VIEW MORE
1 SoFi 4.0
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View More

2 LightStream 4.0
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View More

3 Marcus 4.0
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View More

4 LendingPoint 4.0
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View More

6 Upgrade 3.5
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View More

7 Universal Credit 3.5
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View More

8 Discover 3.5
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View More

9 Upstart 3.5
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View More

10 Avant 3.5
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View More

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