Content of the material
- Best for Fast Funding & Below-average Credit
- Other Options For Personal Loans
- Unsecured Personal Loans
- Credit Cards
- Family and Friends
- What Credit Unions Offer Personal Loans?
- What Are the Pros and Cons of Getting a Small Personal Loan?
- A personal loan to pay off debt
- Best online personal loan: Discover
- Best for people who are self-employed: Upgrade
- Tips for speeding up the process
- Low rates
- Compare Your Options
Best for Fast Funding & Below-average Credit
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Other Options For Personal Loans
If you have poor credit or don’t think you can receive an affordable loan from a bank or credit union, don’t worry. There are other options for personal loans, beyond your bank or credit union. Some of your other options include:
Unsecured Personal Loans
Unsecured personal loans can provide a path towards your financing needs if you lack the collateral needed for a secured loan from a bank.
Since you aren’t putting up a savings account, CD, or purchase as collateral, you’ll find different terms with an unsecured loan.
Due to the enhanced risk the lender takes on, unsecured loans come with higher interest rates and steeper credit score requirements. You can also expect to find short loan terms and smaller amounts of funding available.
If you have a solid credit score and only need a small amount for a short period of time and either lack the means to or prefer to hold off on putting up your possessions and investments as collateral, an unsecured personal loan could be a viable alternative to a secured one.
Once again, LendingTree can unlock all of your options, presenting you with a comparison of your top options for unsecured personal loans.
Another option to check out is LendingPoint.
Many of us don’t think of credit cards as loans, but, in reality, your credit card constitutes a personal loan. If you have good credit, and you are hoping for a larger limit, you can apply for a new credit card. You can boost your available credit, and then draw on that for your personal use.
However, credit cards usually have relatively high interest rates, and if you carry a balance, you could wind up paying quite a bit. Try to get a new card with an introductory period, and you will have an interest-free personal loan.
Here are some of the best credit cards you can get with a 0% introductory rate for either purchases or balance transfers:
- Chase Freedom®
- 0% APR on purchases and balance transfers for 15 months
- Earn 1x points on all purchases, plus 5x points on the first $1,500 spent in categories that rotate every quarter
- Earn a $150 signup bonus when you use your card for just $500 in purchases during the first 90 days
- No annual fee
- Citi Diamond Preferred® Card
- 0% APR on purchases and balance transfers for the first 21 months
- No annual fee
- Access to Citi® Private Pass® travel program
- Worldwide Travel Accident Insurance
- Travel & Emergency Assistance
Family and Friends
If you have family members or friends who can help you out with the personal loan you need, you can often get the best loan terms.
However, you want to make sure that you are positive that you can repay the loan; you don’t want to risk your relationship. Have a contract so that you are accountable, and so that your friend or relative knows that you are serious. Be sure to include the loan term and the interest rate in the contract.
While I wouldn’t recommend using friends or family for a loan, sometimes it’s the best (or only) option.
Editor’s note: We generally don’t recommend borrowing from family or friends as it can lead to unnecessary tensions and complications.
What Credit Unions Offer Personal Loans?
Your best bet for very low-dollar loans is going to a credit union, a non-profit type of financial cooperative that provides traditional banking services. While you might need to join to qualify for a personal loan—credit unions are member-owned organizations—this is relatively easy and cheap to do; and once you're a member, you’ll be able to borrow what you need with a low APR.
What Are the Pros and Cons of Getting a Small Personal Loan?
- Lower interest rates than credit cards
- Better terms than payday loans
- Can be used for almost any purpose
- No grace period
- Rates are generally better with higher borrowing amounts
- Higher monthly payments than credit cards
A personal loan to pay off debt
Taking out a personal loan can also be a way to consolidate debt. This is the idea of putting all your debts together. If you have several different debts and find it hard to keep track of them, combining them into a personal loan can make it easier to focus on sending out just one payment.
You might also be able to get a lower interest rate if you consolidate debt with a personal loan. If you have credit card debt on a few different cards that have a high interest rate, you could get an installment loan to pay off the credit card debt. Instead of paying off several debts with high interest rates, you can work toward paying off one personal loan to pay less overall.
To get a deeper dive into how installment loans work, consider these two scenarios.
1. Using a personal loan to get back on track
Sue’s daughter recently broke her leg. While her daughter’s feeling much better, the incident left Sue with a few extra medical bills she wasn’t expecting.
For this reason, Sue is looking for help to get the medical bills paid. She decides to see if a personal loan might be the solution. After researching how to apply for a personal loan, Sue learns she can take one out through a bank or online lender.
Since she doesn’t need collateral for this type of loan, Sue feels comfortable taking out a loan for $5,000 with an 8% interest rate. By taking out a personal loan, Sue can be better able to handle this unexpected expense without it being a huge financial blow.
2. Using a personal loan to consolidate debt
Jack had very little savings when he started his food truck business. To pay for supplies, he used his credit cards. He now has balances of $5,000 on two cards, and one card with a balance of $10,000. That’s $20,000 of debt that needs to be paid off.
Jack researches his options and finds out he can get a $20,000 personal loan to pay off his debt. Jack’s credit cards have high interest rates, ranging from 10% to 20% on the balances. Instead of paying hundreds of dollars on interest, he can save by putting the amounts together in a personal loan to focus on paying off the lump sum of $20,000. And since his loan has an interest rate of just 8%, this lowers the amount he’ll pay overall on the debt.
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 best lenders based on the weighting assigned to each category:
- Loan cost: 35%
- Loan details: 20%
- 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.
Best online personal loan: Discover
Why Discover stands out: Discover’s application process can be completed entirely online. You’ll get a loan decision the same day you apply, in most cases, and you’ll receive your loan proceeds as soon as the next business day after accepting the loan terms. Loans from Discover come with a 30-day money-back guarantee and access to view your FICO® score for free.
- Loan details — Discover offers loans ranging from $2,500 to $35,000 with repayment terms of 36 to 84 months.
- Fees — Discover doesn’t charge origination or prepayment fees, but you’ll have to pay a late fee if you miss a payment.
- Ability to prequalify — Checking your estimated rate and loan term won’t affect your credit scores. If you submit a formal loan application and are approved, your rate and term may be different from what you saw during the prequalification process.
- Direct debt payments — If you plan to use your loan funds to pay off debt, you can choose to have Discover pay your creditors directly.
Best for people who are self-employed: Upgrade
Why Upgrade stands out: Getting a personal loan when you’re self-employed is possible, but you need to be able to show the lender you can repay what you borrow. To apply for a personal loan with Upgrade, you must provide your two most recent years of tax returns, tax transcripts from the IRS and bank statements for the last 40 days. Upgrade may request additional documentation after reviewing your application.
- Loan details — Upgrade offers loan amounts ranging from $1,000 to $50,000 with term lengths of 24 months to 84 months.
- Fees — Upgrade charges an origination fee of 2.9% to 8%, which is deducted from your loan proceeds at the time of funding. The company charges nonsufficient funds fees and late payment fees of up to $10, but there’s no prepayment penalty if you want to repay your loan early.
- Interest rates — Upgrade’s starting annual percentage rate, or APR, is in line with what other personal loan lenders charge. To qualify for the company’s lowest rates, you must sign up for autopay.
- Ability to prequalify — You can check your estimated rate and loan term before submitting a formal application — without affecting your credit scores. Keep in mind that if you apply and are approved, your rate and term may differ from what you saw during prequalification.
Upgrade doesn’t offer loans in all states. Check with the lender before you apply.
Read reviews of Upgrade to learn more.
Tips for speeding up the process
If you’re looking for a personal loan, you likely want to get your hands on the money as soon as you can. These tips can help you avoid delays when applying for a personal loan”
- Check your credit report before applying. Know where your credit stands before shopping around for personal loans. Good credit can make it easier to qualify for a personal loan at a lower interest rate. Furthermore, spotting and correcting errors immediately is a simple way to avoid issues later on when you’re applying for a loan. Pay off debt. If you have debt and you don’t need the loan funds urgently, paying some debt off can raise your credit score and lower your DTI ratio, which can increase your chances of approval.
- Talk to your existing financial institution. Banks and credit unions might be more willing to consider a personal loan application from a customer with whom it’s had a positive, long-standing relationship.
- Get prequalified. Some lenders have a prequalification process that you can undergo without a hard credit check. You can also get an idea of what your loan rates and terms may be before you apply to determine if moving forward with the lender is worthwhile.
- Consider online lenders. Many online lenders offer next-day loan decisions, and funds may be deposited into your bank account within a few days after applying if you are approved.
- Pick loan funds up in person. If your lender has a brick-and-mortar location, ask if there is an option to pick funds up at the branch so you can get the money faster.
Low ratesWith Personal Loan rates as low as 5.74% APR, now may be a great time to take care of your finances. Get started by checking your rates. Apply when you’re ready.
Compare Your Options
If a personal loan seems like your best option, make sure your credit is in the best shape possible to qualify for a low interest rate and good terms. You can check your credit score and report for free with Experian. You can also save yourself some time when researching possible lenders by using Experian CreditMatch™ to compare personal loans personalized to your credit profile.