Best Personal Loan Rates for 2020

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The Best Personal Loans for Your Financial Situation And Needs

If you’re considering a personal loan, it can be overwhelming sifting through all your options. To help you research loans, we’ve determined the best personal loan offers on the MagnifyMoney personal loan marketplace depending on your credit profile or use for a loan. (Click here to see our methodology.)

We included a range of lenders and lending platforms best suited to borrowers with excellent, good and fair or bad credit. Here are your best options for taking out a personal loan:

 

 

 

Best personal loans for excellent or good credit

LightStream
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Payoff
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Best Egg
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APR 3.49% – 19.99% 5.99% – 24.99% 5.99% – 29.99% fixed
Terms 24 to 144 months 24 and 60 months 36 or 60 months
Loan amount $5,000 to $100,000 $5,000 to $35,000 $2,000 to $35,000
Origination fee No origination fee Is up to 5.00% 0.99% - 6.99%
Credit score requirement Borrowers with “excellent” credit 640 Minimum 700 and $100,000+ income for the lowest APRs

 

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LightStream

Of the top three options we’ve identified for borrowers with excellent or good credit, LightStream personal loans offer the lowest APR and the longest maximum terms to pay them off. You must borrow a minimum of $5,000 to be eligible, however. Other online lending platforms like Best Egg have much lower minimum borrowing amounts.

On the flipside, this lender has an unmatched maximum borrowing amount of $100,000. Its lack of origination fees is a great perk as this could save you money in the long run.

Payoff

While Payoff has comparatively good APRs and standard loan terms of 24 and 60 months, its loan offering is specifically aimed at borrowers who want to pay off or lower their credit card debt. Depending on your circumstances, the origination fee is up to 5.00%.

In addition to having a minimum credit score of 640, to be eligible for this loan you must also demonstrate at least three years of good credit, a debt-to-income ratio no higher than 50% and no more than one installment loan within the last 12 months.

Best Egg

Offers up to $50,000 may be available. Residents of Massachusetts have a minimum loan amount of $6,500; New Mexico and Ohio, $5,000; and Georgia, $3,000. For a second Best Egg loan, your total existing Best Egg loan balances cannot exceed $50,000.

It also has the most stringent eligibility requirements for the lowest APRs; to qualify for a 5.99% APR, you must demonstrate a minimum 700 credit score and at least $100,000 in income.

Best personal loans for fair or bad credit

Payoff
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Peerform
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Upstart
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APR 5.99% to 24.99% 5.99% to 29.99% 4.66% to 35.99%
Terms 24 and 60 months 36 or 60 months 36 or 60 months
Loan amount $5,000 to $35,000 $4,000 to $25,000 $1,000 to $50,000
Origination fee Is up to 5.00% 1.00% - 5.00% Up to 8.00%
Credit score requirement 640 600 600

 

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Payoff

Payoff personal loans feature the lowest maximum APR rate and the lowest minimum terms, at 24 months. Their loans are designed specifically for credit card debt consolidation and are aimed at getting borrowers out of debt and improving their financial health. However, its 640 credit score requirement may put this lender out of reach for some borrowers.

Peerform

Peerform is a peer-to-peer lending platform, meaning that after selecting your loan terms, your personal loan will be listed in a marketplace to be funded by investors. Getting your loan funded can take up to two weeks and is not guaranteed.

But if you have time to wait, using Peerform may be a viable option. That’s because borrowers with credit scores as low as 600 might qualify for a personal loan through Peerform. This is the lowest credit score requirement among the three options we included.

As with Upstart, you only get to choose between repayment terms of 36 or 60 months. However like Payoff, the minimum loan amount is high. Further, Peerform is not available in Connecticut, North Dakota, Vermont, West Virginia, Wyoming or Washington D.C. You must also have a debt-to-income ratio below 40% to be eligible.

Upstart

Upstart has the highest minimum and maximum APR rates of the three options listed here, as well as the highest maximum origination fee. However, it also offers the largest range of loan amounts to eligible borrowers, from $1,000 to $50,000.

An upside to using this lender, especially if you struggle with poor credit: Upstart takes into account your education, area of study and job history when assessing your application.

Best personal loans for debt consolidation

LendingClub
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Marcus by Goldman Sachs®
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Discover Bank
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APR 10.68% to 35.89% 6.99% to 19.99% 6.99% to 24.99%
Terms 36 or 60 months 36 to 72 months 36 to 84 months
Loan amount $1,000 to $40,000 $3,500 to $40,000 $2,500 to $35,000
Origination fee 2.00% - 6.00% No origination fee No origination fee
Credit score requirement Not specified Not specified Not specified

 

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LendingClub

This lender offers a slightly lower minimum APR rate compared to its counterparts, though repayment terms are restrictive, with only two options. You could borrow as little as $1,000. An origination fee from LendingClub does add to your cost of borrowing, however, so you’ll want to take that into account when comparing your options.

On average, the entire process to pay off your old debt – from application to approval and financing – could take about seven business days.

Marcus by Goldman Sachs®

Marcus by Goldman Sachs® charges absolutely zero fees, which could save you money over the other options covered here. According to the lender, a credit score of 660 or higher might land you a debt consolidation loan with a lower interest rate than you’d find on a credit card.

If you’re approved for a debt consolidation loan, your old debt could be paid off within five days.

Discover Bank

The upside of using Discover is it has the lowest maximum APR among the options we included above. This could work in your favor if you have a lower credit score that still qualifies you for a loan.

Discover also has a high maximum repayment term. A longer term would lower your monthly payments, though you’d pay more in interest charges over time.

Once approved for a debt consolidation loan, Discover can pay off your creditors as soon as the next business day.

Best personal loans for home improvement

LightStream
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Upstart
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Upgrade
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APR 3.49% –
19.99%
4.66% –
35.99%
7.99% –
35.97%
Terms 24 to 144 months 36 or 60 months 36 or 60 months
Loan amount $5,000 –
$100,000
$1,000 –
$50,000
$1,000 –
$35,000
Origination fee No origination fee Up to 8.00% 2.90% - 8.00%
Credit score requirement Borrowers with “excellent” credit 600 Not specified

 

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LightStream

Sometimes home renovations can take much longer than you ever could have imagined. If you’re planning significant upgrades, you might want to apply for your home improvement loan from LightStream, since this lender allows you the longest period of time to pay it back.

Another potential benefit of this lender is its maximum borrowing limit is quite sizeable at $100,000, far higher than the maximum offered by the two other lenders shown here. No origination fee from LightStream also means a potentially lower cost of borrowing compared to Upstart and Upgrade.

Upstart

You could borrow as little as $1,000 by choosing this lender, which allows you to pay for smaller home projects. Borrowers could get their funds as soon as the next business day after receiving loan approval.

The downside is that if you live in West Virginia or Iowa, you can’t get a loan with this lender. And if you live in Georgia, Massachusetts, Ohio, New Mexico, your minimum loan amounts are much higher, up to $7,000.

Upgrade

You can borrow as little as $1,000 from this lender to make improvements around your home. You could also get the funds deposited directly into your account within a day of being approved.

However, you will pay the highest minimum APR rate out of all the lenders above and will be charged an origination fee.

Choosing the best personal loan for you

    • Look for a competitive APR. This affects the total amount you’ll have to pay back over the life of your loan. While your credit score may have a direct effect on the interest rate you’ll be charged, some lenders could consider other eligibility criteria such as your debt-to-income ratio and income.

 

  • Research each lender’s fee structure to determine which may be your most affordable option. Consider, for example, payment processing charges, origination fees and prepayment penalties.
    • Consider how long you’ll realistically need to pay back the loan. A shorter loan term means you’ll be paying less interest. While it may ultimately cost you less to repay, ensure you can actually afford the higher monthly payments before signing the dotted line.

 

  • Find out how long each lender would take to fund your loan. If you need a fast personal loan, you’ll want to find lenders that fund loans as soon as one day after approval.

What it takes to qualify for a personal loan

As the tables shown earlier in the article demonstrate, lenders have differing standards about what credit score is necessary in order to qualify for a personal loan. Also, credit score is just part of the picture that lenders look at when deciding whether or not you are likely to meet your loan obligations.

In addition to credit score, here are some other things lenders may look at in deciding whether you qualify:

    • • Income level
    • • Other debts
    • • Assets
    • • Employment history
    • • Availability of a cosigner

 

The lending market is in a period of change. The emergence of peer-to-peer lenders, other nonbank lenders and online loan platforms has introduced some nontraditional underwriting methods into the market. Some examples:

    • • Education level
    • • Career progress
    • • Career potential
    • • Savings patterns
    • • Retirement assets

 

Some of these nontraditional methods might work in favor of would-be borrowers who have limited or less-than-ideal credit histories. In particular, if you have run into a brick wall trying to get a loan from a traditional bank, you may want to look for a lender that uses a range of metrics beyond your credit score.

How to get the lowest rate

Given all of the above, the following are some steps for getting the lowest personal loan rate:

1. Check your credit history. Mistakes or other problems with your credit report can cost you in the form of higher personal loan interest rates, and could possibly prevent you from getting a loan. Check your credit history early in the process, so you can have time to correct any errors or address any other issues in your credit report.

2. Hold off on changing jobs. Employment continuity is an issue with some lenders, so if it’s avoidable it would be best not to have a recent job change when you are applying for a loan.

3. Know what you are looking for.Understand what size and length of loan you are looking for before you start to shop, and also know what your credit score is. These factors all affect the personal loan rates you will be offered, so you can’t do any serious shopping before you know these details.

4. Shop around. Once you have a handle on your needs and circumstances, shop around rather than jumping at the first loan offer you find. The extra time spent can pay off for years to come in the form of lower interest rates.

5. Compare APRs, not just interest rates. Cost factors on personal loans include both the interest rate and any origination fees. Looking at APR (the annual percentage rate including all costs) will help you put both rates and fees into the right perspective.

  • 6. Consider a cosigner. If you can get a cosigner with good credit, it might help you get a better rate on your loan, and then if you handle the subsequent repayment well it can improve your credit history.

Methodology

Our selection of the best personal loan lenders was based on offers listed on MagnifyMoney’s personal loan marketplace. Lenders were chosen on Dec. 10, 2019 assuming:

    • • Credit score of excellent (720-850), good (680-719), fair (640-679) or bad (below 640)
    • • Loan amount of $5,000
    • • ZIP code 11220

Lenders were chosen based on APR ranges for each of the above credit score ranges. Ties were broken by assessing: 1) Origination fees 2) Flexibility of term lengths. Lenders who do not specify credit score requirements on their website were excluded when assessing lenders for borrowers with fair or bad credit.

To select the best personal loans for debt consolidation, we assumed borrowers have an excellent credit score (720-850) and only considered lenders who directly pay off creditors and have a minimum borrowing limit of $2,300 or less. (The median credit card debt in the U.S. is $2,300, according to ValuePenguin, a LendingTree subsidiary.) We included lenders who do not specify credit score requirements and selected lenders with the lowest minimum APR. Ties were broken using the above criteria.

To select the best personal loans for home improvement, we assumed borrowers have an excellent credit score (720-850). We only considered lenders that have a maximum borrowing limit of or over $46,285, the national average cost for a room remodel, according to HomeAdvisor. We included lenders who do not specify credit score requirements and selected lenders with the lowest minimum APR. Ties were broken using the above criteria.

LendingTree owns MagnifyMoney and ValuePenguin.