Best Personal Loans of 2022

If you’re buying a car, moving into your own home, or financing an education, there are specific loan structures to help you out. 

But if you want to borrow money to spend on your own terms, that’s where personal loans come into the picture. 

Personal loans can cover a wide range of expenses you might not be able to afford up front. Many people use them to finance home renovations, major life events like weddings and funerals, or even medical emergencies. 

While it can be easy to get a personal loan, there’s a lot you need to know to be an informed borrower, like: 

• How your credit score will affect your offer. 
• What’s a realistic interest rate. 
• How much money you can borrow at once. 
• When and how you’ll repay the loan. 
• What fees you might have to pay. 
• And, of course, which trustworthy lenders are the best match for your needs.

We’ll answer these questions and many more as I investigate personal loans in this piece. 

Best Personal Loans of 2022

Best for Poor Credit Scores: Fiona
Best Rate Guarantee: Credible
Best for No Fees: Marcus by Goldman Sachs
Best for Peer-to-Peer Lending: LendingClub
Best for Job Insecurity: SoFi
Best for Zero Prepayment Penalties: Prosper
Best for No Credit History: Upstart
Best for Expert Advice: Payoff
Best for Quick Turnaround: FreedomPlus
Best for Small Loans: GuideToLenders
Best Customer Service: Best Egg
Best for Easy Prequalification: Upgrade

Best for Poor Credit Scores: Fiona

Although the name might elicit images of Shrek’s wife, Fiona is no fairytale. Rather, it’s a rock-solid loan aggregator that’s especially friendly to borrowers with so-so credit. 

Key Features

• Minimum credit score: 550
• APR: 2.49% to 35.99%
• Loan amounts: $1,000 to $250,000
• Terms: 6 to 144 months

First, if you like the idea of getting estimated loan offers within seconds, not minutes, Fiona is an excellent place to start. Enter just your zip code and estimated credit score and Fiona can show you some ballpark numbers instantly. Naturally, to get precise numbers you’ll have to fill in some more info and approve a soft credit pull, but sometimes it’s nice just to get a rough quote in seconds; especially when it doesn’t involve giving any third parties your personal info. 

Second, Fiona is one of the few aggregators that welcome borrowers with poor credit. You may not get as many offers as someone with a score of 790, but at least you’re not shut out. 

Learn more about Fiona or read our full review.

Best Rate Guarantee: Credible

Loan aggregator Credible built a strong reputation helping recent grads refinance their student loans. However, the platform can also help you find personal loan offers.

Key Features

• Minimum credit score: Varies
• APR: starting at 4.99% APR (with AutoPay), See Terms*
• Loan amounts: $600 to $100,000
• Terms: Varies

In addition to low APR and a wide range of loan amounts, Credible offers two competitive advantages among loan aggregators. First, Credible is so confident in its deal-hunting abilities that every loan offer comes with a complimentary $200 Best Rate Guarantee. That means if you find a better deal after you’ve signed the papers, Credible will pay you $200. Terms apply.

Second, although Credible collects quotes from dozens of lenders, it keeps your personal info private so your inbox won’t explode with unsolicited follow-ups. So if you value privacy and a good deal, check out Credible. 

Learn more about Credible or read our full review.

Best for No Fees: Marcus by Goldman Sachs

If you are worried that the benefits of getting a personal loan will be negated by steep fees, Marcus by Goldman Sachs is the personal loan provider for you. Why? Well, their loans come with absolutely no fees. Nope, not even an origination fee. 

To save borrowers even more money, Marcus offers a 0.25% savings to those who enroll in their AutoPay & Save program. Plus, after twelve consecutive on-time, in-full, payments, you are given the option of deferring a payment without any additional interest or fees. 

Key Features

• Minimum credit score: 720+ FICO
• APR: 6.99% - 24.99%
• Loan amounts: $3,500 to $40,000
• Terms: 36 to 72 months

Through Marcus, potential borrowers can apply for up to $40,000 in loan funds through a quick, convenient, application found directly on their website. In as little as 24 hours, Marcus will make a decision and you could receive funds in as little as three days.

Borrowers can expect to pay a fixed APR (ranging from 6.99% - 24.99%) over a fixed loan term, making it easy to fit a regular payment into your budget.

Learn more about Marcus by Goldman Sachs or read our full review.

Best for Peer-to-Peer Lending: LendingClub

LendingClub is a peer-to-peer lender, meaning you’re actually borrowing from real people, not a big bank or other financial institution. Let’s say you ask for $1,000 — investors will pool their money together (say, $50 a pop to keep their risk low) and in return, they split your interest and profit. 

That’s not to say you have to plead your case to investors ala GoFundMe; LendingClub Bank automatically connects you with investors in the background, so you can get an offer in minutes just like any other lending site. 

Key Features

• Minimum credit score: 600
• APR: 5.98% to 35.89%
• Loan amounts: $1,000 to $40,000
• Terms: 3 to 5 years

Not everyone will get an offer from LendingClub, but if you do, they tend to be pretty low interest since LendingClub doesn’t take a big cut themselves (they’re not like a bank with 10,000 employees and overhead to pay). 

Learn more about LendingClub or read our full review.

Best for Job Insecurity: SoFi

SoFi stands proud of its status as a non-bank lender, having run a Super Bowl ad touting “This is the beginning of a bankless world.”

Key Features

• Minimum credit score: 680
• APR: 5.99% APR to 20.25% (with AutoPay)
• Loan amounts: $5,000 to $100,000
• Terms: 2 to 7 years

Social Finance, Inc, like others on this list, cut its chops by offering low-interest student loan refinancing. Now, it also offers highly competitive personal loans starting from 5.99% fixed APR. That isn’t the lowest on this list, but consider some of SoFi’s unique perks. First, it’s currently running a promotion where you’ll get $10 just for getting an offer. 

Second, SoFi realizes that sudden unemployment can really ruin a borrower’s day (or year) — so if you suddenly find yourself out of a job, SoFi will not only pause your payments; they’ll help you find another job. All in all, SoFi’s unique and friendly perks make them worth a look. 

Learn more about SoFi or read our full review.

Best for Zero Prepayment Penalties: Prosper

Prosper is a peer-to-peer lender mostly catering to borrowers with good or better credit (660+). As expected from a sleek modern lender, Prosper lets you see loan offers within minutes, and only takes a soft credit pull until you’re ready to commit to an offer. 

Key Features

• Minimum credit score: 640
• APR: 7.95% to 35.99%
• Loan amounts: $5,000 to $30,000
• Terms: 3 or 5 years

Two quirks make Prosper stand out. The first quirk is its curiously restrictive loan terms; you can only pay back your loan in three or five years. Those are your only two options. 

However, Prosper’s second defining quirk is a massively underrated feature of personal loans: zero prepayment penalties. Typically, lenders will charge you some or all of your remaining interest if you try to pay off your loan early. Interest is their profit margin, after all. But Prosper won’t charge you a thing, meaning you can become debt free overnight without penalty. 

Learn more about Prosper or read our full review.

Best for No Credit History: Upstart

Maybe you’re a recent grad or recent arrival in America with a solid job but little or no credit history. Naturally, you’d think that proof of monthly income would be enough to qualify you for a personal loan, but no; most lenders require several years of credit history in addition to proof of income. 

If you think that’s ridiculous, well, so did the founders of Upstart. A peer-to-peer lender, Upstart looks at factors like your income, job, even your standardized test scores to determine your qualifications for a loan. By skipping the credit score, Upstart manages to offer more loans and see fewer defaults than traditional banks. 

Key Features

• Minimum credit score: 620
• APR: 8.46% to 35.99%
• Loan amounts: $2,000 to $35,000
• Terms: 3 to 5 years

The drawback is that Upstart’s interest rates are rather high But if you have too little credit history and can’t face another rejection from a big bank, Upstart welcomes you. 

Learn more about Upstart or read our full review.

Best for Expert Advice: Payoff

Payoff is a solid choice of lender for those with decent credit (640+) and at least three years of credit history. It requires a 50% debt-to-income ratio (not bad for the industry) but has no minimum income requirement. 

This is helpful for gig workers who may have good months, bad months, and really bad months. Plus, if you’re nervous about the loan process and would like someone to talk to, Payoff offers “member advocates,” which are qualified financial experts who can help you along throughout the life of your loan. 

Key Features

• Minimum credit score: 640
• APR: 5.99% to 24.99%
• Loan amounts: $5,000 to $35,000
• Terms: 2 to 5 years

Payoff has a relatively high minimum loan amount and somewhat narrow term options, but if that’s the sweet spot for you and you value a human connection while you pay off your loan, Payoff is a solid choice of lender. 

Learn more about Payoff or read our full review.

Best for Quick Turnaround: FreedomPlus

In most ways, FreedomPlus is a middle-of-the-road lender. Their loan amounts don’t offer much variety, their terms aren’t particularly competitive either, and their APR range is ho-hum.

Key Features

• Minimum credit score: 620
• APR: 5.99% to 29.99%
• Loan amounts: $7,500 to $40,000
• Terms: 2 to 5 years

So why did they make this list? Well, FreedomPlus’ party piece is its rapid turnaround times. You can get an offer in minutes, get all of your paperwork approved in two-three hours, and have your loan amount deposited into your bank account in as little as 48 hours. That’s lightning-fast for a personal loan, some of which can take two weeks. 

Therefore, FreedomPlus is a solid choice of lender for someone in a pinch who needs money now and can’t afford to wait weeks for a different lender to fuss around with paperwork. 

Learn more about FreedomPlus.

Best for Small Loans: GuideToLenders

GuideToLenders is another loan aggregator that can actually show you quotes from many of the other lenders on this list, including Upstart and SoFi. GuideToLenders is also pretty well established, having connected over 13 million borrowers to lenders over the years. 

Most loan aggregators have crisp, modern, and easy-to-use websites, but GuideToLenders’ stands out. As a UI nerd, I appreciate how it breaks down browsing loan offers into simple steps, removing stress from what might be an unfamiliar process to most. 

Key Features

• Minimum credit score: 600
• APR: 3.49% and higher
• Loan amounts: $100 to $50,000
• Terms: Varies

Plus, GuideToLenders offers the smallest possible loan amount on this list. Hey, sometimes you just need $100 or so to make rent this month, so it’s nice that GuideToLenders can connect you to these “microloans” with low interest. 

Learn more about GuideToLenders.

Best Customer Service: Best Egg

Best Egg offers attractive loan terms to high-income borrowers with strong credit. By high income, I mean Best Egg’s minimum income requirement is $50,000, or $16,000 above America’s median wage. Plus, it requires a credit score of 660 just to qualify, and they “prefer” a score of 700 or higher. 

Key Features

• Minimum credit score: 660 (700 preferred)
• APR: 5.99% to 29.99%
• Loan amounts: $2,000 to $35,000
• Terms: 3 to 5 years

With such a high bar for entry, what does Best Egg offer in return? Well, most borrowers score an interest rate below 10%, but Best Egg’s primary appeal is its renowned customer service team. Best Egg maintains a staggering 4.88 stars out of 5 on Better Business Bureau, with 2,100+ happy borrowers citing their surprise at how friendly, quick, and thorough the customer support team was throughout the life of their loan.  

Learn more about Best Egg or read our full review.

Best for Easy Prequalification: Upgrade

Upgrade is another loan aggregator with a quick, easy application process. You can get a look at the rates you can expect before you commit. Simply answer a few questions about yourself, including the amount you want and the loan purpose, and you’ll get an answer without impacting your credit score.

If you like the rates you’re quoted, you complete a more detailed application and get an official loan offer. Once the loan has been processed, you’ll have the loans in your account within one business day.

Key Features

• Minimum credit score: 620
• APR: 5.94% to 35.97%
• Loan amounts: $1,000 to $50,000
• Terms: 3 to 5 years

You can use Upgrade loans for a variety of purposes, including consolidating credit cards, renovating your house, or making large purchases like furniture and appliances. There is a loan origination fee of 2.9% to 8%, so factor that in if you’re pricing multiple lenders.

Learn more about Upgrade.

How We Came up with This List

The lenders on this page represent a fraction of the lenders we vetted. 

In order to qualify for our “best of” list, lenders must offer a strong mix of customer service, borrower satisfaction, convenience, technology, a variety of terms and loan amounts, no hidden fees, and of course, competitive interest rates. 

Many personal lenders slipped off the list because they lured borrowers in with low APRs only to pepper them later with unfair “gotcha” fees. We believe that personal lenders should exist to serve the people first, not themselves, so we were careful to exclude lenders that got lambasted by their borrowers on sites like Trustpilot and Better Business Bureau. 

What Is a Personal Loan?

A personal loan is a loan given to the borrower without any requirements dictating how to use the money. This means you can use your loan for whatever you want, unlike a mortgage or an auto loan, which have to be used to finance your house or car, respectively. 

How Do Personal Loans Work?

Once you’re approved for a personal loan, the lender gives you an offer that you can accept or decline. The offer should include everything you need to know, like the terms, the interest rate, and any fees.

If you accept, the lender sends funds directly to your bank account. Most lenders pay you within 14 days, and may offer same-day or next-day funding.

Then you make repayments, which usually start within 30 days of when you receive the loan. In most cases you’ll pay the same amount each month. Early payments tend to go towards interest; over time, more of your payments will go towards the loan principal.

How Many Personal Loans Can You Have at Once?

There’s no official limit to how many personal loans you can have at once.

However, the more loans you take out, the more you have to pay back.

Lenders look at your debt-to-income ratio, and if your existing loan amount is high compared to your income, they may turn you down.

You may be able to take out multiple loans from the same lender, but not all lenders allow this. Those that do may have waiting periods or other restrictions before you borrow any more loans.

Most Important Features of Personal Loans

As well designed as they are, personal loan sites are still peppered with jargon a new borrower may not understand. Here’s a quick list of critical terms to keep an eye on: 

APR 

APR, or annual percentage rate, is your overall interest rate plus fees expressed as a percentage. 

Although the concept is simple, APR calculations are complex; you can’t do them in your head.

Read more: Understanding APR

Fees

Before you accept a loan offer, be sure to find out if your lender charges any of the following fees:

• Origination fee.
• Late payment fee.
• Prepayment fee.
• Transaction fee.

The most common is the prepayment fee, which charges you a flat rate or a percentage of your remaining interest if you pay your loan off early. It’s not as much of a ripoff as it sounds; interest is profit for a lender, so they’re just looking to recoup some sudden lost income from your early payment. 

Prepayment fees can be hundreds of dollars, so pay careful attention to this one. 

Loan Limits

Your loan limit is the total cash amount you’re able to get from a lender. Lenders may offer personal loans ranging from $100 all the way up to $100,000. 

Limits are a good thing, however, since they prevent borrowers from taking out more than they can comfortably pay back and burying themselves in interest. For example, the interest alone on a $100,000 personal loan with 10% APR is an eye-watering $27,482 for a 5-year term.

Loan Terms

Loan terms are the chosen lifespan of your loan. For personal loans, loan terms typically range from around six months to 84 months. 

Generally speaking, you want to choose the shortest loan term that you can afford monthly payments for. That’s because the faster you can pay off your loan, the less interest you’ll pay. Plus, paying off your loan quickly reduces the amount of time you’re vulnerable to missing a payment and dinging your credit score. 

Geography

Before going through the rigamarole of submitting info for an offer, make sure that your lender services your state or area. Simple as that. 

Customer Reputation

As mentioned, sites like Trustpilot and Better Business Bureau are excellent places to browse user reviews of banks, lenders, insurance companies, and more. It’s often here (and only here) where you can see unscrupulous lenders’ dirty laundry, such as gotcha fees and totally disengaged customer service teams. 

Even if a company has thousands of reviews, don’t trust the rating only; people often flock to the Internet to complain, and conversely, unscrupulous companies often post fake reviews. So spend a few minutes reading actual customer reviews to garner an overall vibe of the company. 

Lastly, companies are allowed to respond to published reviews, so see if their customer service team followed up with negative reviews (or simply high-fived positive ones). 

Autopay

Autopay is a massively underrated feature of lender websites and one you should look for every time you consider accepting a loan offer. 

As the name implies, autopay sets up automatic payments to your lender to ensure you never miss a payment. This removes human error or forgetfulness from the equation, saving you from late fees or worse. 

Plus, many lenders will offer a discount for setting up autopay, so look for this perk as well!

Types of Personal Loans

What Are Secured Loans?

Mortgages and auto loans are types of secured loans, meaning they’re backed by collateral (your house and car, respectively) that the lender can legally repossess if you don’t repay your loan. Right to repossession lowers a lender’s overall risk, so secured loans have lower APRs. 

Secured personal loans are backed by an asset, but unlike mortgages or auto loans they can usually be used for any purpose.

What Are Unsecured Personal Loans?

By contrast, most personal loans are unsecured loans with no collateral to back them up. If you don’t pay back your personal loan, your lender can’t just come take your stuff. They can send your debt to a collections agency and torpedo your credit score, but it’s still extremely difficult for a lender to recoup lost money on an unsecured loan. Therefore, lenders must charge more interest for unsecured loans to compensate for their increased risk. 

Read more: Unsecured vs. Secured Loans — What’s the Difference?

What Are Personal Installment Loans?

You may hear the term “installment loans” from lenders — this means that the lender gives you a lump sum at the beginning, which you repay in installments over a predetermined period of time. Most personal loans are installment loans. 

One nice feature of installment loans is that they give you a consistent timetable for repayment, so you can plan ahead.

Read more: What Is an Installment Loan?

How to Get a Personal Loan

Here’s how the personal loan application process usually looks:

1. Visit a lender’s website via one of our links above.
2. Fill out the lender’s prequalification form.
3. The lender makes a soft credit pull to verify your basic information.
4. Lender pre-qualifies you for a loan.
5. You accept the loan terms.
6. The lender gives you more paperwork and makes a hard credit pull this time.
7. The lender approves you for the loan and deposits the funds into your account.

Read more: Soft Pull vs. Hard Pull — How Each Affects Your Credit

Where to Get Personal Loans

Most lenders for personal loans fall into one of three categories. 

Online lenders. There are many legitimate, FDIC-insured online financial institutions with easy, quick loan applications. You can get pre-approval in a few minutes, and actual approval and funding within a few days. 

Banks. Traditional brick-and-mortar banks offer personal loans. Bank loans usually require good credit. If you’ve been a trustworthy customer with a certain bank for a while, you may get better terms. 

Credit unions. Credit unions tend to offer great interest rates and flexible requirements. However, you’ll typically need to join the credit union before you can take out a loan (there may be a fee).

How Do Personal Loans Affect Credit Scores?

When you first apply for a loan, your lender will make a hard credit pull which will temporarily dip your score by a few points. But if you take out a personal loan and pay it back responsibly, never missing a payment, your credit score will actually improve. 

What Can Personal Loans Be Used For?

You may consider taking out a personal loan if you need a big influx of cash and don’t mind paying interest for the convenience. 

Here are some common reasons why folks take out personal loans in America:

• Cover the expense of a home renovation or repair.
• Pay for a large event like a wedding or fundraiser.
• Make a big purchase like a car, motorcycle, or even an exotic pet.
• Consolidate credit card debt.
• Unexpected expenses such as medical emergencies.
• World travel or vacations.

Whether you should or shouldn’t take out a personal loan depends on two factors:

1. How much interest you’re willing to accept.
2. Your ability to pay back your loan.

While it’s generally recommended that you only take on debt for essentials like medical emergencies or home repairs, it’s still OK to take out a small personal loan for things that contribute to your happiness and mental health, like a vacation or a new motorcycle, as long as you’re ok with the interest. 

Does It Make a Difference What I Say My Loan Is For?

In a broader sense personal loans can be applied to anything, but each individual lender will still have its preferences. For example, a lender’s algorithm may indicate that borrowers using their loans for home repairs are 26% less likely to miss payments, so they may offer that type of borrower more favorable terms.

In short, just be honest with your prospective lender about the purpose of your loan amount.

Can I Use a Personal Loan to Pay Off Credit Card Debt?

Yes, a specific type of personal loan called a debt consolidation loan can be used to pay off credit card debt. It’s a common practice, since the APR on personal loans is often much lower than credit card debt, and paying off your personal loan can actually improve your credit.

Can I Take Out a Personal Loan to Start a Small Business?

Personal loans are primarily intended for personal purchases, such as a home reno or a wedding. If you need a cash loan to launch a business, you’re looking for a business loan. Lenders typically favor established businesses with proof of revenue for business loans, so you may need to bootstrap your way through your first year.

What Is a Good Interest Rate on a Personal Loan?

Remember that single-digit APRs on personal loans are reserved for borrowers with excellent credit, high income, and years of credit history. In short, a lender’s dream. 

If you don’t meet that high bar, here are some more realistic average APRs by credit score. And if you’re not sure what your current credit score is, check out MU30’s Credit Score Estimator. 

Once you have a ballpark idea of your APR on a personal loan, start tinkering with MU30’s Loan Calculator. There, you can identify how much total interest you’ll pay on a personal loan. 

Total interest is an important number to consider because APRs alone can obfuscate the true cost of a loan. For example, if I took out a $10,000 personal loan with a 3-year term at 10% APR to pay for a home reno, I won’t pay $1,000 in total interest; I’ll pay $1,616.

In short, you should only take out a personal loan if:

1. You’re OK with the total interest paid.
2. You’re confident you won’t miss a single monthly payment.

A “maybe” answer for either can seriously jeopardize your finances and FICO score, so be sure to take your time and plan ahead before getting a personal loan. 

Can You Still Get a Personal Loan with Bad Credit?

As you’ve probably surmised, lenders offer the most favorable terms to borrowers with healthy and extensive credit. But even those with low scores shouldn’t despair.

Some lenders have “soft” minimum credit scores, meaning you might still receive an offer with a FICO score below 620. Peer-to-peer lenders and aggregators especially are good places for borrowers with poor credit to start their search. From this list, consider Prosper, LendingClub, and GuidetoLenders.

Also, remember that paying off a personal loan is a great way to build your credit, saving you money on your next, bigger loan (like your mortgage).

Still, with poor credit, it’s critical to know exactly how much you can afford to borrow and ensure you don’t position yourself to hurt your credit further. 

How Long Does It Take to Get a Personal Loan?

Completing all six steps listed above and getting your cash can take anywhere from hours to weeks. It totally depends on the lender and their approval process. Typically, banks and credit unions are the slow movers. Presumably, there’s more red tape and/or other traffic for loan applications to pass through. Online lenders have successfully truncated the process into days, not weeks, so if you’re in a rush for cash, go online.

Summary

Personal loans let you borrow money with few strings attached so you can finance a wedding, home renovation, or other non-business purchase. 

Because the best loan terms are reserved for borrowers with excellent credit, it’s always worth beefing up your credit score before applying for a personal loan.  

Lastly, in addition to low APR and other favorable terms, make sure you borrow from a lender with a good reputation. A personal loan is a multi-year commitment, after all, so you want to ensure you’ll be well taken care of. The lenders and aggregators on this list are excellent places to start. 

Read more:

• Best Personal Loans For Bad Credit (Credit Score Under 600)
• Best Personal Loans For Fair Credit (Credit Score 600-669)
• Best Personal Loans For Good Credit (Credit Score 670-739)