How To Compare Online Personal Loans Using LendingTree
A personal loan offer shows you what rates and terms you could qualify for based on self-reported information and a soft credit inquiry. A personal loan offer is also called personal loan prequalification, and it doesn’t hurt your credit score.
To find the online loan that best meets your needs and has the lowest rate, it’s essential to compare prequalified offers. You could ask for offers from lenders one by one. Another option is to use a loan marketplace, which lets you shop an entire network of lenders at once.
From understanding what an offer is to finding the best deal, here’s your full guide to comparing online personal loans.
- A personal loan offer (prequalification) is an estimate of rates and terms. Final terms may change when you formally apply and the lender runs a hard credit inquiry.
- You can request loan offers by prequalifying directly with individual lenders or by using a loan marketplace.
- LendingTree is an online loan marketplace that matches borrowers with up to five partner lenders.
What it really means to compare personal loan offers
Comparing online personal loan offers means reviewing rates, fees and terms from multiple lenders before choosing a loan. It’s a lot like shopping for car insurance. Most people don’t go with the first quote they see. They compare a few options to find the best price.
Loan offers work the same way: Different lenders can offer different annual percentage rates (APRs), fees and terms, even for the same borrower. Each lender has its own eligibility criteria, like minimum credit score and income. A borrower considered a good risk for one lender could get declined by another.
What is a personal loan offer?
A personal loan offer is a prequalified estimate of rates and terms based on information you give the lender, as well as a soft credit inquiry. It’s not a price guarantee — that only happens when you formally apply. Instead, a personal loan offer gives you an idea of your loan eligibility and what rates you could qualify for based on a soft credit inquiry.
Requesting a personal loan offer — otherwise known as prequalifying for a loan — is typically a quick process, taking seconds to minutes with many online lenders. Unlike a formal loan application, prequalification doesn’t require intensive paperwork or a contract, and it doesn’t hurt your credit score.
Two ways to compare loan options online
There are two main ways to request and compare personal loan offers online — by applying directly with a lender or by loan shopping through an online loan marketplace.
Applying to individual lenders
Applying directly with a lender may be a better fit if you prefer to work with one company and limit communication, even if it means you won’t easily know whether a lower offer is available elsewhere.
Pros
- Will work one-on-one with a lender from the start
- Could get a rate discount if you have an existing relationship
- Typically receive fewer emails and calls
Cons
- Might accept a higher rate without realizing lower ones may be available
- Comparing lenders can take more time and research
- Could have limited loan options, depending on the lender
Prequalifying directly with a lender keeps the shopping experience between you and that lender. To use this method, you’ll go straight to the lender’s website and prequalify for a loan there. If you pass prequalification, any personal loan offers you get will be from that lender only.
Some people prefer shopping directly with lenders because it can reduce the number of phone calls and emails they receive. Working directly with a lender may also be worth considering if your current bank offers online loans and rate discounts or perks for current clients.
Applying individually to lenders doesn’t mean that you can’t compare offers, but it can make the process more involved. You must prequalify separately for each lender you shop with. Comparing offers across lenders can also be trickier since each has its own way of displaying rates and terms.
Using a loan marketplace like LendingTree
Using a loan marketplace may be a better fit if you want to compare offers from multiple lenders in one place and see side-by-side rates and terms.
Pros
- Can shop with multiple lenders with one form
- Using a single platform to review offers can make comparison more straightforward
- May have access to more lender and loan options by working with a marketplace
Cons
- Potential for phone calls and emails from multiple lenders
- Still need to apply directly with the lender you choose
- May not receive offers if you don’t meet participating lenders’ criteria
A loan marketplace helps you shop personal loan offers from a network of partner lenders. The marketplace doesn’t make or fund loans. Instead, it connects you with lenders that may offer you a loan. If you move forward, the lender handles approval and funding.
Many find it easier to compare offers using a loan marketplace, as each offer is in the same format and on the same platform. Marketplaces also let you explore loan options that you may not have known existed, like secured loans or online loans for bad credit.
Marketplaces aren’t for everyone, though — especially not those who want to avoid being contacted by phone, text or email. And while marketplaces may help you cast a wider net, you still won’t receive offers if you don’t meet any of the partner lenders’ eligibility criteria.
How LendingTree works
LendingTree is a loan marketplace, not a lender itself. It connects borrowers with a network of partner lenders, helping them shop and compare loans.
According to a 2024 LendingTree study, using our marketplace to compare offers can save borrowers an average of $1,659 in total interest over the life of a three-year personal loan. Here’s how the process works:
- You share your loan needs. You provide basic information about yourself and the loan you’re seeking, such as loan amount, purpose, income and estimated credit profile.
- Lenders review your request and may send offers. Participating lenders review your request to determine whether they want to present a prequalified offer. LendingTree does not make lending decisions.
- LendingTree helps you compare offers. If lenders choose to send offers, you can review estimated APRs, loan terms, monthly payments and fees in one place.
- You choose and finalize your loan. If you decide to move forward, you complete the application directly with the lender. The lender verifies your information, makes the final approval decision and funds the loan.
Questions to expect when requesting an online loan offer
The process varies by lender and whether you’re applying directly with the lender or through a loan marketplace, but generally speaking, here’s what to expect when checking rates on an online personal loan.
| Application question | Why it’s asked |
|---|---|
| Personal information and contact details | Needed to verify identity, run a soft credit inquiry and communicate next steps |
| Estimated credit score and annual income | Helps estimate rates and/or identify lenders you may qualify with |
| Loan purpose and amount | Used to determine eligibility and/or find offers that fit your intended loan use |
| Co-borrower or collateral information | Impacts estimated rates and eligibility on joint and secured loans |
| Homeowner or renter status | Opens more secured loan options with some lenders |
| Car ownership status | Determines if you may be a candidate for a loan that uses your car as collateral |
Understanding your offer: What to compare
Getting multiple loan offers may not be helpful if you aren’t sure what they mean. Use this cheat sheet to better understand what to look for and compare.
- Annual percentage rate (APR): An APR measures the cost of a loan over a year’s time, including interest and fees. The lower the APR, the lower the cost of borrowing.
- Loan term: A loan term is the length of time you have to pay off your loan. Longer loan terms result in lower monthly payments but more total interest. Shorter loan terms mean higher monthly payments but less total interest.
- Loan amount: Your loan amount is how much you’re approved to borrow. Online loans come as a lump sum of money, usually by direct deposit.
- Origination fee: Some lenders charge an origination fee, typically a percentage of your loan amount. Lenders usually deduct origination fees from the loan before disbursing the funds.
- Collateral: Some offers (secured loans) may require collateral. Collateral can help you get a lower rate and/or a bigger loan. It can also help you get approved if you have bad credit. However, the lender can repossess your collateral if you fall behind.
Average online loan rates on LendingTree
Below are average online personal loan APRs users are offered through the LendingTree personal loan marketplace. Rates vary by credit profile and lender, but credit score and income typically have the greatest impact on the APR you’re offered.
Use this data along with a personal loan calculator to get an idea of how much it may cost you to borrow.
| Credit tier | Average APR |
|---|---|
| Excellent (800 and above) | 15.75% |
| Very good (740-799) | 17.89% |
| Good (670-739) | 23.27% |
| Fair (580-669) | 27.79% |
| Poor (under 580) | 30.25% |
Common mistakes to avoid when comparing loan offers
A few small missteps can make a loan look cheaper than it really is. Here are the biggest ones to avoid.
- Focusing only on the monthly payment: The monthly payment is important, but so is the total amount of interest you’ll pay over the life of your loan.
- Not comparing apples-to-apples: Make sure offers have the same loan terms and loan amounts to get a truly fair comparison.
- Overlooking fees: Offers may come with an origination fee. Most lenders deduct this from your loan, meaning you get less money than you were approved for.
- Choosing the longest loan term to lower payments: Longer loan terms mean lower monthly payments, but the overall interest may not be worth it.
- Assuming prequalified offers are final: Until you’ve chosen a lender and formally applied, keep your options open. Prequalified offers can change once the lender fully underwrites your application and runs a hard credit check.
Check out I Shopped for a Personal Loan 15 Times: What I Learned (Even as a Pro). Written by LendingTree writer and expert Lauren Clifford, this article gives a candid, first-person account of the personal loan application experience, including comparing offers.
Frequently asked questions
Checking personal loan rates typically requires a soft credit inquiry. Soft credit inquiries don’t impact your credit score.
When you request offers through LendingTree, a soft credit inquiry is used to match you with participating lenders. If you move forward with a loan, the lender you choose will likely run a hard credit inquiry. A hard credit inquiry impacts a FICO Score by about five points, on average.
LendingTree may partner you with up to five lenders, depending on your credit profile and needs. You may be contacted by the lender(s) you matched with by phone and email. Lenders can only call for up to 30 days, and LendingTree itself will not call you regarding your matches.
No, you are not required to accept an offer when you prequalify for a personal loan. Prequalification is a shopping tool and not a contract. It’s a low-risk way to check your estimated rate on a loan without hurting your credit.
Yes, you can compare online loan offers even if you have bad credit. LendingTree partners with a wide network of lenders that accept less-than-perfect credit. Still, not every borrower will qualify for an offer, typically due to credit history or loan purpose.
Yes, comparing offers can be worth it, no matter what kind of credit you have. You can’t tell if a loan offer is competitive if you don’t have another offer (ideally, several) to compare it to. Every lender has a different way of calculating rates. Offers can vary widely from lender to lender, even if your information hasn’t changed.
There are a variety of reasons why you may not have received any loan offers. You may not have met lenders’ general eligibility requirements, like age or permitted loan use. Lack of loan offers may also be due to your credit score, credit history or other financial factors.
If you were denied due to poor credit, the best way to improve your odds of an offer is to boost your credit and reduce lenders’ risk. Risk to a lender means the potential to lose money if a borrower stops paying their loan.
Outside of improving your credit score, you can boost your odds of qualifying for online loan offers by:
- Adding a co-borrower: Getting a joint loan with a family member or friend can help you get offers, especially if your co-borrower has good credit. However, responsibility for the loan will be shared between you and the co-borrower.
- Choosing a secured loan: Offering collateral helps reduce lenders’ risk since they can recoup some of their losses through repossession. That also means securing a loan with collateral puts a valuable piece of your property at risk.
- Requesting a smaller, shorter loan: The less money you borrow, the less the lender stands to lose. Shorter loan terms also leave less room for you to fall behind on payment.
Get personal loan offers from up to 5 lenders in minutes