Finance

10 Best Personal Loan You can Apply for with Low Interest Rates

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In this article, you will find the Best Personal Loans of 2022/2023. You can carefully choose from the best loan companies offering personal loans for debt consolidation, emergency expenses and more. But first, what is a personal loan? A personal loan is financial assistance plan that allows you to borrow money to consolidate high-interest debt. You can also use it to finance a large purchase or cover emergency expenses for your family.

Now, if you have strong credit score plus a steady income from your place of work, finding the best personal loan for your needs, could save you thousands. This is possible, especially if you can secure a low interest rate. The more the merrier. With that in mind, I have provided for free the information you need to know about choosing a personal lender and getting approved ASAP.

What Is the Best Interest Rate on a Personal Loan?

From experience, I know that by shop around for the best personal loan rate, you can save more. All you have to do is to carefully compare personal loan offers with other national average personal loan trends. From there, you will know whether you’ve found a competitive interest rate or not.

Cardholders could pay a higher interest rate or a lower one, depending on your financial credit score. Presently, the average personal loan rate is 9.54%. Sometime last week’s average rate was 9.54%, last month is also different.*

*Rate as of Aug. 16, 2022. Note that this rate changes from time to time.

Best Personal Loan Finder

First step is to select your desired loan amount as well as the loan purpose. The check your credit score range, together with your state to see estimated annual percentage rates, loan terms & conditions .

What is a Personal Loan?

In simple words, a personal loan is a reserve fund you can borrow from a bank, a credit union or an online lender and later repay it over a fixed amount of time. It is not completely like a credit card or line of credit.

From experience, we have seen that personal loans are typically unsecured. This means they are supported by your creditworthiness rather than the collateral you don’t have. Well, by definition, collateral is an asset, such as a car or house or equipment, a lender may use to recover its losses if you default (late payment / refusal to pay) on a secured loan.

If you need money for an emergency or mortgage, you can get a personal loan from different types of lenders. These includes traditional brick-and-mortar banks and online lenders. They can serve borrowers with varying credit scores, income levels and other requirements.

Pros and Cons of Personal Loans

Pros of Personal Loan

  • One advantage of personal loan is that borrowers can potentially receive funds for personal loans in as little as one business day. However, this depending on the lender.
  • Secondly, personal loans can help borrowers to easily consolidate high-interest credit card debt. This will go a long way to help them pay it off faster at a lower interest rate.
  • Thirdly, personal loans are delivered as a lump sum. That is a bulk money.
  • Lastly, personal loans are typically unsecured, so the borrower wont have needs to use collateral.

Cons of Personal Loan

  1. Fees of different types comes into play. That is to say borrowers may have to pay origination fees, or even prepayment fees. Well this solely depending on the lender.
  2. Another disadvantage of personal loan is that a personal loan may have a higher APR than other options. It may be a 0% credit card or a home equity loan, depending on creditworthiness and other factors.
  3. In some cases, personal loans may be difficult for clients with fair credit or below to obtain.

Who Qualifies to Get a Personal Loan?

  1. Who can get a personal loan in this country? Anyone can but lenders often set minimum requirements. They will also look at your credit score, payment history, income and debt-to-income ratio.
  2. If you were previously discharge from duty (dismissal, layoff, redundancy or unemployed), there might be some issues. The lender may ask you for documentation that indicates when you’ll return to work, such as your furlough letter or a job offer.
  3. Most times, age eligibility requirements can vary depending on the lender or by state and territory laws. But in general terms, consumers must be 18 to apply, but some states may require borrowers to be 19 or 21.
  4. Lastly, if you’re applying for a secured loan, the lender will also consider the quality of your collateral.

Find the Personal Loan That’s Right for You

IF YOU ARE:CONSIDER:
Trying to streamline your finances and pay off debtsBest Debt Consolidation Loans
Looking for competitive interest ratesBest Low-Interest Personal Loans
Emergency? Seeking quick approvalBest Emergency Loans for Bad-Credit Borrowers
Choosing a personal loan and have great creditBest Personal Loans for Excellent Credit
Choosing a personal loan and have good creditBest Personal Loans for Good Credit
Comparing fair-credit lendersBest Personal Loans for Fair Credit
Shopping for a loan but have bad creditBest Bad Credit Loans
Hoping to finance a medical procedure/surgeryBest Medical Loans for Financing Medical Expenses
Exploring loans to consolidate credit card debtsBest Personal Loans for Credit Card Refinance
Attending college and need a personal loanBest Personal Loans for Students
Facing a financial hardship and you’re a veteranBest Personal Loans for Veterans
Focusing your search on online lendersBest Online Loans
Researching options for less-than-perfect creditBest Instalmental payment Loans
If you are Considering alternatives to traditional financial institutionsBest Peer-to-Peer Lending

Make a Decision: Should You Get a Personal Loan?

Even though personal loan may not won’t work for everyone, it might make sense in some cases. As an individual, you may consider applying for a personal loan if you have an emergency expense. If you need to make a large purchase or want to consolidate some of your high-interest debts, you can opt in for it.

Honestly, there might be times when a personal loan might not be the best option for anyone. For example, you may want to consider a home equity loan instead of personal loans for home improvement purposes. This can help you use your home as collateral (that is if you don’t mind). But for some types of special purchases, such as a wedding plans or a travel/vacation, it’s best to plan and save so you can pay cash rather than taking a personal loan to finance it.

How to Choose the Best Personal Loan Lender for You

Choosing a good personal loan lender determines how the process will go. Also, you’ll want to strictly consider a number of factors when choosing the best personal loan lender around you.

1. What loan amounts does the lender offer?

For security reasons, many money lenders offer minimum and maximum loan amounts. You have to note this down this before applying for a personal loan. If a financial lender’s maximum amount is $25,000 for instance, you don’t want to waste your time applying if you need to borrow more. Thats the bottom line.

2. What terms can I expect?

Terms and conditions of a loan depends on the lender. Therefore, you’ll want to secure your best interest rate at heart. Secondly, you’ll also have to make sure to get the loan repayment length time you can meet up with. Make sure to use these factors to calculate your monthly payment to make certain you can manage it.

3. What fees does the lender charge?

Fees are of many types. Many lenders charge an origination fee that can vary from 1% to 10% of the loan amount. Some can even charge an annual fee. Look at this critically because this can greatly affect the payout you actually receive. So, please make sure to note this plus any other fees the lender may charge.

4. How is the lender’s customer service?

Go online and check reviews of the loan company. This is is to help you see how they treat their previous customers. It will give you a picture of what people are enjoying or complaining about. Goto websites like the Better Business Bureau, Trustpilot or the Consumer Financial Protection Bureau. On the whole, if the lender is a financial institution, you might reach out to family and friends about their personal experience with them.

How to Apply for a Personal Loan

Follow these steps to apply for a personal loan in US, UK, Canada, Nigeria, South Africa:

1. Make sure you get pre-approved rates. It is your sole responsibility to ensure that the lenders you’re requesting rates from will obtain them using a soft credit inquiry. If you want to request a rate quote, make available your personal information, such as your address, income.

Your Social Security number, BVN might be requested for on the lender’s secure website. (Make sure to use only the official lenders website so that you biodata and other details don’t fail into a wrong hands). In the application form, you’ll indicate the amount you want to borrow. The reason for borrowing and the repayment term length you prefer must also appear in your application. You can look up the Best Ways to Prevent Fraud on Credit Card with Identity Theft Detection.

Immediately you provide all these personal details, you’ll be informed by the financial institution of rates and how to formally apply for a loan.

2. Always Compare offers. Take some time to go online and research different lenders to find the best personal loan interest rate.

3. Carefully Choose your top one or two lenders. After taking all these precautionary steps above, you can now formally complete your loan application. Now, will trigger a hard credit inquiry on your credit report. Bear in mind that there’s not 100% guarantee that you will get the loan. Sometimes, even with good credit, you won’t be guaranteed approval or a particular interest rate.

Where Is the Best Place to Get a Personal Loan?

Personal loans are available from:

  1. Brick-and-mortar banks.
  2. Credit unions.
  3. Online lenders.
  4. P2P lenders.

A bank or credit union could offer personal service, especially if a location is nearby. But online lenders sometimes offer more convenience, especially for consumers who prefer to apply, manage and close personal loans online. Online peer-to-peer lending platforms allow users to borrow funds from an investor, rather than from a traditional bank. These platforms may have more flexible credit requirements than traditional banks and could be a good option if you might not otherwise qualify for a personal loan. Browse through these similar posts below for more guidance;

You can prequalify for loan offers by providing some basic information so the lender can run a soft credit check. After you’ve compared loan terms, amounts, fees, interest rates and other factors from multiple lenders, you can formally apply for a loan, which requires a hard credit check. If you’re approved, you may receive your personal loan quickly from an online lender – in some cases, as soon as the following business day after approval.

Strive to obtain preapprovals from a variety of lenders so you can compare rates, terms and other factors for different types of personal loans.

What Are the Best Personal Loan Companies?

The best personal loan companies offer low interest rates, favorable loan terms and flexible payment options. Because each lender has distinct terms and conditions, you should know what you want in a personal loan before you start comparison shopping.

“Consumers can choose the best personal loan by doing their research, shopping around between multiple lenders, reading the fine print and only selecting a loan that they know they can afford to repay,” says Jared Kaplan, former CEO of OppFi, a financial technology company that offers bad credit loans.

An easy place to begin is to check that a lender is licensed in your state. Make sure each lender can offer personal loans where you live. Then, you can compare these other key factors to help you choose the right lender.

Loan Terms

Each lender sets its own terms, such as:

  • Minimum and maximum loan amounts. Every lender has a minimum and maximum loan amount. If you’re looking for a small personal loan of less than $2,000, for example, you’ll need to find a lender offering loans at that amount.
  • Minimum and maximum term lengths. Lenders also have minimum and maximum term lengths, which vary among lenders. It’s not uncommon for borrowers to have 60 months to pay off their personal loans, but some lenders offer term lengths of up to 144 months. The longer your loan period is, the lower your payments will be, but you might pay more in interest. If you can afford a higher monthly payment, go with the shorter loan period to save on interest.
  • Loan use restrictions. Some lenders have restrictions on how you can use your loan. These vary by lender. Don’t lie about how you’re going to use the money. Lying on your loan application can be deemed loan fraud and result in extra charges.
  • Disbursement times. Lenders also have their own time frames for how quickly you’ll receive your personal loan funds. Some lenders offer funding as soon as the next business day after approval. Usually, funds are distributed within a few business days, and most lenders will disburse them electronically.

Lender Loan Fees and Penalties

One of the most important aspects to compare before choosing the best personal loan is what each lender charges in fees. Fees can significantly increase the cost of a personal loan.

Lenders commonly charge origination fees to cover the costs of processing your loan, though not always. These fees are typically between 1% and 8% of the loan amount.

Because most lenders enforce late fees, you should always pay your loan on time. Some lenders waive late fees, including Marcus by Goldman Sachs and SoFi, but you should still expect interest to accrue if you pay late.

If you don’t have enough money in your account, most lenders will charge a minimal fee for returned payments.

Though rare, prepayment penalties may apply when you repay your loan ahead of schedule.

Repayment Options

Choices vary by lender, so make sure your lender has options that work best for you.

Most lenders offer flexible payment options, including autopay, check by mail or online, and even a chance to change your payment date.

Some lenders, such as Upgrade and U.S. Bank, provide an autopay discount, which can reduce your rate if you enroll.

Researching Personal Loan Companies

Before you move forward with a lender, be sure to read personal loan reviews so you know what to expect – or when to avoid a lender.

Kaplan recommends researching lenders on the Better Business Bureau website to check for negative marks or complaints.

You can also research lenders using the Consumer Financial Protection Bureau’s Consumer Complaint Database.

Additional Lender Offers

Some lenders offer loans with additional features that make them a better fit for certain borrowers.

Discover, for example, lets you return personal loan funds within 30 days, with no interest or other charges, if you change your mind after the loan has been finalized. And SoFi has an unemployment protection program that allows you to temporarily suspend payments and receive personalized help with finding a job if you lose yours through no fault of your own.

What is the Best Personal Loan Rate?

Basically, personal loan interest ranges are typically from about 6% to 36%, depending on creditworthiness and other factors. Over all, the higher your credit score, the better your personal loan interest rate. We have full details on the Best Low Interest Rate Credit Cards for 6 to 24 months. You can scan through it before you continue.

Additionally, the higher your credit score, the greater choice of personal loans you’ll have with favorable terms and conditions. No one wants stress or disappointment. So, financial companies want to work with people who have good or excellent credit scores. They prefer customers who are more likely to offer personal loans with better terms to these consumers.

Joseph A. Carbone Jr., a certified financial planner and founder of financial planning firm Focus Planning Group has this to say: “Realistically, you probably need a credit score of 680 to 700 or higher” to qualify for a personal loan, say . So, if you are in a range of 620 to 680, you might need a co-signer to secure the line.”

On the long run, your credit score is not the only factor lenders consider when determining whether to approve you or what interest rate to offer. Financial institutions will request information about your job, your minimum annual income, how stable your income is, your savings and more. All these determines if you can pay back. Truthfully, your answers can determine your eligibility.

In what other Ways Can You Use Personal Loans as an Individual?

  • Personal loans for medical bill or expenses: Emergency to save life cannot be over emphasized. So, if you are struggling to come up with the cash to pay for medical bills for yourself or family member, you might consider applying for a personal loan. 
  • Personal loans for debt consolidation: This type of personal loan allows the borrower to combine some high-interest debts, such as from credit cards, medical bills or other loans, and make one low-interest payment each month.
  • Personal loans for pet expenses: This is for people who do not have pet insurance and are faced with a large emergency vet bill you can opt in for this. Because, a pet loan can help finance major expenses such as surgery or cancer treatment for an animal in your family. Advice: Don’t keep a pet if you cannot care for it.

Personal Loan Alternatives

What Are the Alternatives to Getting a Personal Loan? This is a very important question. There may be other ways to get the funds you need, so we advise you to consider these alternatives before you commit to a personal loan.

  • Make a payment arrangement. Costs such as unpaid medical expenses can significantly impact your credit score. The solution is to always attempt a payment arrangement with the medical provider before taking out a personal loan.
  • Look at other types of loans. home equity loan or a home equity line of credit could be your option for home repairs. If you want a car that you afford in few months, an auto loan for a new or used car purchase will be ideal. But you have to carefully compare other types of loans and their terms to see if they offer a better rate.
  • You can Consider using a credit card. This is for credit cardholders who qualify. If your expense or purchase can be paid with a credit card, consider that first. Even if you can’t pay the balance right away, your interest rate may be lower than a personal loan.
  • Borrow from a family member who can give you. Asking for help may be difficult, but if someone is in a position to loan you money, then it may be better than a personal loan. It’s up to you to weigh the pros and cons of borrowing from friends or family. make sure you pay pack the loan from family because you might need help again sometime.

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Guide to Personal Loans Methodology

Our team at Tecophobia.com selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.

How did we do the math? Now, to calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. Personal loan companies are evaluated based on customer service ratings, interest rates, maximum loan term, minimum and maximum loan amounts. Furthermore, minimum FICO score, online features, and origination fees. are also put into consideration. Look at it this way; the weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.

In fact, to receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. You can get more updates by reading these similar guide below;

10 Best Personal Loan Companies

1. Alliant Credit Union

If you need money fast, Alliant Credit Union typically makes same-day online personal loans between $1,000 and $50,000. The $14 billion Chicago-based credit union, founded in 1935, is one of the biggest in the nation, with 600,000 members. In addition to personal loans, Alliant offers home and auto loans, credit cards, checking and savings accounts, individual retirement accounts, trust accounts, and insurance policies.

Before you apply, note the following;

  • APR: 6.24% to 10.24%
  • Minimum FICO Credit Score: Not disclosed
  • BBB Rating: A+

Best Features:

  • Loans range from $1,000 to $50,000.
  • Funds are often deposited the same day.
  • No prepayment penalties apply if you pay off all or part of a loan early.

Drawbacks:

  • You must be a member to qualify.

2. PenFed Credit Union

Overview

  • APR: 6.74% to 17.99%
  • Minimum FICO Credit Score: 650
  • BBB Rating: NR

Best Features

  • Terms extend up to 60 months.
  • There are no origination fees.
  • Borrowers get funds in one or two days upon approval.

Drawbacks

  • Membership to the credit union is required.
  • Qualification requirements aren’t disclosed.

3. Discover

Overview

Discover is a digital bank and payment services company known for its credit cards. But Discover also offers other products, including fixed-rate personal loans of up to $35,000 to borrowers nationwide. The lender charges no fees as long as you pay on time.

  • APR: 5.99% to 24.99%
  • Minimum FICO Credit Score: 660
  • BBB Rating: A+

Best Features

  • Discover has no closing costs or origination fees.
  • The lender offers loan terms from 36 to 84 months.
  • Borrowers get free access to a credit scorecard that includes their FICO credit score.

Drawbacks

  • Co-signers are not accepted.
  • Discover personal loans require a minimum credit score of 660, which is at the high end of fair credit.

4. LightStream

LightStream is the online consumer lending division of Truist, which formed in 2019 from the merger of BB&T and SunTrust. SunTrust acquired the assets of online lender FirstAgain in 2012 and relaunched the business as LightStream. LightStream’s online personal loans range from $5,000 to $100,000 and can be used for nearly any reason. Personal loans are available to borrowers nationwide with good to excellent credit.

  • APR: 3.99% to 19.99%
  • Minimum FICO Credit Score: 670
  • BBB Rating: A+

Best Features

  • Find loans for more than 30 different purposes, from buying a car to financing a horse.
  • Borrow from $5,000 to $100,000.
  • Pay no origination, prepayment or late fees.

Drawbacks

  • Online preapproval is not available.
  • Business loans are not offered.
  • Borrowers can access only fixed-rate loans.

5. SoFi

SoFi, short for Social Finance, offers personal loans of up to $100,000 to borrowers with very good to excellent credit. The nationwide lender was founded in 2011 and is known for offering loans with no fees. In addition to personal loans, SoFi offers student loans, auto and student loan refinancing, home loans, and small-business financing.

  • APR: 6.99% to 22.23%
  • Minimum FICO Credit Score: Not disclosed
  • BBB Rating: A+

Best Features

  • SoFi doesn’t charge late fees.
  • You can borrow up to $100,000.
  • Co-borrowers are accepted.
  • Borrowers become members and get special benefits.

Drawbacks

  • Borrowers with less than stellar credit may not qualify.
  • Loans of less than $5,000 aren’t available.

6. Marcus by Goldman Sachs

Marcus is the consumer bank and lending arm of investment bank Goldman Sachs. Established in 2016, the lender offers personal loans of up to $40,000.

  • APR: 6.99% to 19.99%
  • Minimum FICO Credit Score: 660
  • BBB Rating: A+

Best Features

  • Marcus does not charge any fees on its personal loans.
  • Enroll in autopay and receive a 0.25-point APR reduction.
  • Skip a payment after making 12 monthly payment in full and on time.

Drawbacks

  • Co-signers are not accepted.
  • Qualifying criteria are not disclosed upfront.
  • Borrowers are limited as to how they can use loan funds.

7. Upstart

Upstart is a lending platform that uses artificial intelligence to improve access to affordable credit. Based in California and founded by former Google employees in 2012, Upstart also applies AI to reduce lending risks and costs for its bank partners. The lending intermediary provides unsecured personal loans from $1,000 to $50,000 to borrowers anywhere in the U.S. except West Virginia or Iowa.

  • APR: Not disclosed
  • Minimum FICO Credit Score: Not disclosed
  • BBB Rating: A+

Best Features

  • Next-day funding: Upstart says 99% of applicants who accept their loans by 5 p.m. Eastern Time Monday through Friday will get their money in one business day. The exception is loans for education expenses, which are subject to a waiting period of three business days, according to federal law.
  • No credit history required: Upstart offers loans to borrowers with no credit scores, which traditional lenders may not do. However, if you have little or poor credit history, your loan will likely be more expensive.
  • No prepayment penalty: You can repay all or part of your loan anytime without being charged a fee.

Drawbacks

  • Origination fees: Upstart will deduct a one-time, nonrefundable origination fee of up to 8% from your loan proceeds before you receive them.
  • No co-signers: Upstart does not accept co-signers and only takes the borrower’s personal information into account during the application process.

8. Happy Money

Happy Money offers Payoff personal loans designed to consolidate credit card debt. It operates in all but two states and provides loans of up to $40,000. Happy Money is not a bank and instead works with lending partners that originate the loans. The California-based financial wellness company takes a psychological approach to money matters.

  • APR: 5.99% to 24.99%
  • Minimum FICO Credit Score: 600
  • BBB Rating: A+

Best Features

  • Borrowers don’t face prepayment or late fees.
  • Applicants can get pre-approved with no hard credit check.
  • Some borrowers with fair credit may be eligible.

Drawbacks

  • Personal loans are available only for credit card debt consolidation.
  • Borrower could pay an origination fee of up to 5% of the loan amount.
  • Payoff loans aren’t available in all states.

9. Best Egg

Best Egg is an online lender founded in 2014 that financial technology company Marlette Holdings Inc. owns and operates. This company offers personal loans starting at $2,000 that can be used to cover medical bills, home remodeling and a variety of other expenses. Cross River Bank in New Jersey issues Best Egg loans, which can be funded in as little as one business day.

  • APR: 5.99% to 35.99%
  • Minimum FICO Credit Score: 640
  • BBB Rating: A+

Best Features

  • Loan funding typically takes one to three business days.
  • The minimum loan amount is $2,000 in most states.
  • Borrowers incur no prepayment penalty.

Drawbacks

  • Best Egg charges an origination fee between 0.99% and 5.99%.
  • Borrowers need a minimum credit score of 700 and $100,000 in annual income to qualify for the lowest annual percentage rate.
  • No joint personal loans are available.

10. U.S. Bank

U.S. Bank has physical locations in more than 25 states and offers both short- and long-term personal loans with fixed annual percentage rates. Current customers may qualify to borrow up to $50,000 with a credit score of 660 or above, and options are available for noncustomers willing to open a checking or savings account.

  • APR: 6.99% to 19.49%
  • Minimum FICO Credit Score: 660
  • BBB Rating: NR

Best Features

  • U.S. Bank pays out loan funds relatively quickly following approval.
  • Co-signers are accepted.
  • U.S. Bank doesn’t charge an origination fee or prepayment penalty.

Drawbacks

  • Loans are available only to current U.S. Bank customers and those willing to open an account.
  • Full qualifying criteria are undisclosed, and pre-qualification is unavailable.