The Best Personal Loans of May 2022

A personal loan could be a good choice to cover the cost of something like a medical bill or a home improvement project.

With a personal loan, you apply to take out a specific amount of money. The lender will show you available offers depending on financial factors such as your

credit score

, debt-to-income ratio, and ability to repay the loan. You’ll repay your loan in fixed monthly installments at a set rate.  

The best personal loan for you often depends on your credit score, as one lender may offer a better deal than another. We’ve rounded up the best lenders for people with a range of credit scores, with a particular emphasis on finding companies that offer low APRs. 

Lightstream

SunTrust Bank created Lightstream for online loans, and the bank offers personal loans for things like home remodels, medical debt, and debt consolidation. Lightstream is the best option for those with excellent credit because its lowest APR is lower than any other lender on our list — even though SoFi has a higher minimum credit score requirement.

Look out for: High credit score requirements. Lightstream’s minimum credit requirement for a personal loan is 660, so this lender might not be right for all credit types.  

Read Insider’s full review of Lightstream.

SoFi

SoFi’s personal loans have a minimum credit score requirement of 680, at the lower end of what’s considered a

good credit

score. People with a good credit score will likely be able to get a good rate with SoFi, but borrowers with an excellent credit score may be able to snag a lower rate with Lightstream. 

Interest rates on these loans range by about 13 percentage points, making for a smaller range than offered by other companies. This means interest rates for borrowers with relatively lower credit scores can only go so high.

Look out for: A relatively high minimum income for approval. According to loan comparison site Credible, less than 1% of borrowers approved for personal loans through SoFi have an income of less than $50,000 per year, and a majority make more than $100,000. 

Read Insider’s full review of SoFi.

Wells Fargo

Wells Fargo’s personal loans offer low interest rates, smaller minimum borrowing amounts, and shorter terms than others. Wells Fargo offers loans between $3,000 and $100,000, for payoff terms as short as 12 months. Borrowers who want to get their debt under control quickly might find that Wells Fargo’s personal loans are flexible enough to tackle debt consolidation. 

Look out for: It’s worth noting Wells Fargo’s history with data security and compliance. The bank has faced several federal penalties for improper customer referrals to lending and insurance products, and security issues associated with creating fake accounts several years ago. 

Read Insider’s full review of Wells Fargo.

Avant

Personal loans are generally offered to those with better credit scores, but online lender Avant offers personal loan options for borrowers with credit scores as low as 600. It has a lower limit than other lenders, with $35,000 as the maximum loan amount.

Look out for: Administrative fees. Avant’s personal loans carry a fee of up to 4.75% of your loan’s value. Considering that many of the other loans on this list don’t carry administrative fees, prepayment fees, or origination fees, Avant’s fee is high. 

It’s also worth noting that interest rates are high from this lender. While this is a good option for anyone with credit scores in the lower 600s, those with better credit could find better rates elsewhere. 

Read Insider’s full review of Avant.

PenFed Credit Union

For borrowers looking to take out a small amount of money, PenFed offers loans as small as $600. This could make the credit union an attractive alternative to a payday loan. 

Look out for: Membership requirements. You don’t need to be a member of the credit union to apply for a personal loan, but you’ll have to be a member to get your loan. If you’ve served in the military or work at qualifying associations or organizations, you’ll qualify.

However, you have a pretty easy workaround if that doesn’t apply. You can join by opening a savings account with a $5 minimum deposit.

Read Insider’s full review of PenFed Credit Union.

Service Credit Union

Service Credit Union has excellent customer support, available 24 hours a day, seven days a week. The approval process takes about 24 hours, and after your loan application is accepted, you may even be able to get your money the same day. 

Look out for: Membership requirements. Much like with most

credit unions

, you’ll need to meet certain requirements to be eligible. If you’ve served in the military or Department of Defense or work at qualifying associations or organizations, you’ll qualify. If that doesn’t apply to you, you can join the American Consumer Council for free with a promo code. 

Read Insider’s full review of Service Credit Union. 

Upstart

One of Upstart’s main separators is its underwriting process, which is how the lender decides who gets a loan and how much to charge in interest. Like any lender, Upstart considers credit scores as part of the process. But it also considers employment history and education history, such as where you went to school and your area of study.

Look out for: Potentially high origination fees. Upstart’s personal loans can have origination fees up to 8%. This can take a significant portion out of your overall loan proceeds. 

Read Insider’s full review of Upstart. 

Marcus by Goldman Sachs

Marcus doesn’t have any fees on its loans, so if you can qualify for a personal loan with Marcus, it may be a great choice.

Additionally, Marcus offers an “on-time payment reward.” You can skip a month of payments if you pay your loan on time and in full every month for one year, and you won’t rack up interest during that period. Your loan will then be extended by one month.

Look out for: No ability to add a coborrower to your application.If you need a cosigner to improve your chances of getting a loan or to help you repay your loan, you won’t be able to add one with Marcus. 

Read Insider’s full review of Marcus by Goldman Sachs. 

Personal loan credit score requirements

Credit scores play a big role in your ability to get a personal loan, and how much you’ll pay to borrow the money. The better your credit score, the lower your interest rate is likely to be, and the less you’ll pay in interest over the life of the loan.

You can find your credit report for free on annualcreditreport.com from any of the three major credit bureaus weekly through April 20, 2022. While this report won’t give you your credit score, it will show you information about your credit and payment history, which lenders use to decide whether to give you a loan. Reviewing your credit report can help you know what you need to improve. 

You can get your score at no cost on your credit card statement or online account. You can also pay for it from a credit reporting agency. 

Credit scores fall into five categories in a range of 300 to 850, according to FICO:

• Very poor: below 579
• Fair: between 580 and 669
• Good: between 670 and 739
• Very good: between 740 and 799
• Exceptional: above 800

While credit does have an impact on your interest rate, it’s worth noting that interest rates can also change on their own, fluctuating based on the bank’s cost of borrowing called the federal funds rate. While there are alternatives to borrow money, like 0% APR credit cards and home equity loans, they don’t always work for every person or situation. 

Other personal loans we considered

• Discover: Discover’s loans are similar to Marcus’, with the same 660 minimum credit score requirements and starting 6.99% APR. But borrowers with good credit could get lower interest rates elsewhere. 
• LendingClub: This online lending marketplace has an accessible 600 minimum credit score requirement. But, it charges an average origination fee of 5.2%, which can make the cost of borrowing add up. Read Insider’s full review of LendingClub.
• Prosper: Fees keep Prosper from being a top choice. While it only requires a minimum credit score of 640, it also requires an origination fee between 2.4% and 5%. Read Insider’s full review of Prosper.

Which lender is the most trustworthy?

The Better Business Bureau, a non-profit organization focused on consumer protection and trust, evaluates businesses using factors like their responsiveness to consumer complaints, honesty in advertising, and clarity about business practices. Here is each company’s score:

All of our top picks, minus Wells Fargo, are rated A or higher by the BBB. Keep in mind that a high BBB score does not ensure a positive relationship with a lender, and that you should keep doing research and talking to others who have used the company to get the most comprehensive information possible. 

The BBB doesn’t have a rating for Wells Fargo as the business is in the process of responding to previously closed complaints. Previously, the organization gave Wells Fargo an F rating. In the past few years:

• The bank paid the city of Philadelphia $10 million as a result of the city’s claims that Wells Fargo was involved in predatory mortgage lending to racial minorities (2019).

If this history makes you uncomfortable, you may consider using one of the other personal loan lenders on our list.

How did we choose the best personal loans?

Insider combed through the fine print of personal loans and compared our findings to those of personal finance sites including NerdWallet, MagnifyMoney, and ValuePenguin. The research included personal loans at all different credit levels. We considered factors like:

• APR range: We considered interest rates, or what it costs to borrow. However, APRs are variable, and could change in the future. 
• Variety of term lengths: We looked for banks that offered variety in loan terms, or the length of time it will take to repay the loan. The longer a loan is, the more likely it is to cost more.
• Fees: Early payoff, origination, and administrative fees can increase the cost of borrowing. Where possible, we looked for loans without fees. 
• Nationwide availability: Loans considered were available in most US states, if not all 50. 

How do I choose the best personal loan for me?

To pick the best personal loan for you, take stock of the factors that are most important to you. Many borrowers zero in the lowest interest rate, but also look at any fees, the minimum credit score needed, and the accessibility of the lender’s customer service.

Also look at the different types of lenders you may borrow with. Some people may feel comfortable with an online lender, while others may prefer a credit union or bank. You’ll also want to make sure you’re able to select a term length that works for you and that your loan’s purpose is allowed by the lender you choose.

Guides like this one will help you compare multiple lenders in the same place to weigh their pros and cons. Keep in mind that you should also read individual reviews of any lenders you’re considering. 

Frequently asked questions

Why trust our recommendations?

Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We understand that “best” is often subjective, so in addition to highlighting the clear benefits of a financial product, we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don’t have to.

Where else can personal loans be found?

If you’re a member of a local credit union or have one nearby to join, it could be worth checking on rates for a personal loan there. Oftentimes, smaller lenders like credit unions can offer much lower interest rates than bigger banks and lenders. They also tend to be more flexible about credit requirements. It might be worth checking on their rates and terms as part of your research. 

What questions should you ask yourself?

Why do I need a personal loan?

Whether you want a personal loan for a medical expense or home improvement project, understand why you’re taking out the money before you choose to borrow. Otherwise, you could be saddled with paying interest on debt you took out before really thinking through the decision. 

Am I eligible for a personal loan?

Depending on your age, credit score, and other aspects of your financial situation, you may not qualify for a personal loan. Read through the lender’s terms and conditions to see if you have any disqualifying factors and look for a lender that fits your needs. 

Is a personal loan right for me?

Personal loans aren’t right for every situation, nor every person. Often, personal loans can be difficult to qualify for, with high credit score requirements. They can also carry high interest rates, which could mean there are better options out there. 

Personal loans have higher interest rates than you’d see on a car loan or a student loan. For larger purchases that won’t fit within a credit limit, a personal loan might be the right option. It’s worth calculating the interest you’ll pay, and carefully considering options like a secured loan to bring down the interest rate. However, personal loans should be used wisely, as they have high interest rates and could be risky when there’s collateral involved. 

What are other alternatives to a personal loan?

For small amounts, you might find that a 0% APR credit card would be a better fit — they can be especially useful for consolidating credit card debt or making purchases that you’d like to pay off over time. Generally, these cards have 0% APRs for the first 12 to 16 months from opening. Pay off the card in full before the introductory period is up, and you won’t pay interest on your purchase. 

Homeowners sometimes find that home equity lines of credit are better to fund major repairs or renovations with lower interest rates.

What questions should you ask your lender?

What are the terms of my personal loan?

Before signing on the dotted line, make sure you’re crystal clear on the terms of your loan. Know what your interest rate is, how long you’ll have to repay the loan, any associated fees, and any unique perks the company might have. In Insider’s personal loan reviews, we break down these terms for you so you don’t have to dig through them yourself.

What credit score do I need to get a personal loan from your company?

Many lenders don’t disclose a minimum credit score, but they may be able to give you a general sense of your approval chances when you offer them your financial information. If your score is too low to qualify, take steps to improve it by reviewing your credit report and lowering your credit utilization ratio (the percentage of your credit limit you’re currently using).

I was offered a better rate from a different lender. Can you match or beat it?

Some lenders, like Lightstream, advertise a rate match program on their personal loans, but other lenders may also offer a similar deal that isn’t made public. After shopping around and comparing different loan terms, it never hurts to try and leverage the offers you have to get the best deal possible. 

What options do I have if I am struggling financially and can’t repay my loan?

Before you take out a loan, understand what protections your lender offers in case you run into financial emergency, such as a job loss. For instance, SoFi offers forbearance in case you lose your job during your loan repayment. Interest will still accrue when your payments are paused, but you’ll get temporary financial relief during a stressful time.