If you’re starting to put your financial house in order, one of the first things to tackle is your credit card debt. Sometimes the best way to take care of the credit card debt is to consolidate it to a low-interest personal loan.
Personal loans may also be useful for helping you scale up your small business or to take care of major repairs that your home or car need.
Looking for a personal loan? Here are six companies that allow you to find the right loan product from your house. See how these companies compare to our full list of the best personal loan companies.
Best For: Lowest Interest Rates and Fees
LightStream consistently offers some of the lowest interest rates for personal loans. Right now, rates on the loans range from 4.99%-19.99% w/AutoPay (rates as of 4/7/2022) with terms ranging from 2 to 20 years depending on loan type. However, most loans are only 2 to 7 years. Only home improvement loans are offered up to 20 years, and boat/RV/aircraft loans are offered up to 12 years.
To get LightStream’s best interest rate, you’ll need excellent credit and a strong income. Borrowers can take out up to $100,000 in an unsecured personal loan through LightStream.
The real reason we love LightStream is its complete lack of fees. You won’t pay an origination fee, an application fee, or even a late fee. Read our full review of LightStream here.
2. Marcus by Goldman Sachs
Best For: Flexibility in Borrowing
Marcus by Goldman Sachs also offers unsecured personal loans. Borrowers can take out up to $40,000 with interest rates ranging from 5.99% to 28.99%.
While interest rates on Marcus loans aren’t as good as those at LightStream, it offers some unique advantages. For example, if you make 12 consecutive on-time payments, you qualify for a 1-month loan deferral where you can skip your loan payment and tack it onto the end.
Interest continues to accrue during deferral, but it’s nice to know you can skip a payment if you face a huge expense one month.
Best For: Borrower Perks
It’s rare that you think of perks when you think of borrowing. But when you take out a loan through SoFi, you become a SoFi member.
As a SoFi member, you’re entitled to a variety of perks including career coaching, local networking events, and even the option to pitch to become part of a class of entrepreneurs. Plus, SoFi’s loans have unemployment protection where borrowers can stop payments for a few months if they’ve lost their job.
Interest rates on SoFi’s personal loans range from 5.99% to 16.24%, and terms range from 2 to 7 years. You can borrow up to $100,000 through SoFi.
Read our full SoFi review.
Best For: Borrowing With A Co-Signer
Generally, we don’t recommend co-signing any type of loan with the possible exception of a mortgage. However, if you and your spouse share finances, you may qualify for a great interest rate if you co-sign a loan.
The best place to co-sign a loan may be LendingClub. The site’s online application makes it easy to apply for a loan together.
Rates on LendingClub’s loans range from 6.95% to 35.89% APR which includes the origination fee of 1% to 6%. You can borrow up to $40,000 from the site with repayment terms of 36 or 60 months. Learn more about LendingClub here.
Best For: Borrowers with fair credit
Avant offers loans with rates ranging from 9.95% to 35.99% APR (this includes the origination fee). While the interest rates are much higher than LightStream’s and other lenders’ rates, Avant isn’t targeting the same customers. Instead, Avant specializes in lending to people with fair credit.
If your credit score is in the mid- to upper-600s to low-700s, Avant may be the right lender for you. Read the full review here.
Best For: Rebuilding credit
Upstart is a lender that focuses on people with borderline credit. Its average borrower has a credit score of 688 which qualifies as fair. However, plenty of borrowers will have worse credit scores than that. The lender’s rates range from 8.89% to 35.99%, but the average interest rate is around 20%.
Now, 20% is a high interest rate — even higher than some credit cards. That said, Upstart is a lender for people who might not otherwise qualify for a personal loan. Terms for Upstart’s loans range from three to five years, and you can borrow up to $50,000. Read the full review here.
Before You Borrow: A Checklist
Taking out a personal loan might be the right financial decision for your situation, but before you wander into debt, it’s important to consider whether it’s the right thing for you. This checklist can help you decide whether a personal loan should help you out of your financial situation, or if it will just make your problems worse.
- Am I using the loan for a need or a want?
- If I’m using the loan to pay off debt, have I addressed any overspending issues?
- Do I have any options for earning extra money rather than taking on debt?
- What is my plan to pay back the debt?
- Do I qualify for credit card balance transfers or other low-interest debt?
Once you answer these questions, you may feel more confident about your decision to borrow or abstain from borrowing.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.