Best Personal Loans in 2023
The best personal loans will have lower interest rates. Your credit score will be an important factor in determining your personal loan interest rates, term length, and loan maximum, and unsecured personal loans tend to be associated with higher interest rates when compared to secured personal loans. The best personal loan lenders will vary from person to person since different lenders cater to the needs of different people.
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UPDATED: Jul 1, 2022
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- The best personal loans can vary depending on your credit score, loan amount, and more
- Personal loan rates are currently between 2.49% and 34.99% depending on the company and your credit score
- Secured personal loans are often more affordable than unsecured personal loans
Whether you’re looking to overcome old debt or invest in your future, you could benefit from learning about the best personal loans. Personal loans can be used for different expenses, new or old.
Comparing loans and lenders can be tedious, but this guide expedites the process by breaking down the types of personal loans, the best personal loan rates, and tips for choosing the best personal loan.
Ready to start comparing the best personal loan rates? Enter your ZIP code above to get free personal loan quotes from the top loan providers in your area.
What are the best personal loans?
Finding the right personal loan could save you a small fortune in the long run. One of the biggest tips for comparing personal loans is to go in with an accurate idea of your current credit score.
|Lenders||Fixed APR Ranges||Minimum Credit Scores|
|Avant||9.95% - 35.99% APR||550|
|Best Egg||5.99% - 29.99% APR||600|
|LendingPoint||15.49% - 35.99% APR||580|
|Lightstream||2.49% - 19.99% APR||660|
|Prosper||6.95% - 35.99% APR||640|
|SoFi||5.99% - 18.83% APR||N/A|
|Upstart||8.27% - 35.99% APR||580|
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Your credit score will affect your loan eligibility from company to company. Personal loans for bad credit are available but tend to come with a higher interest rate.
You may notice that a Lightstream personal loan has the best APR of the top personal loan lenders. This low APR is correlated with one of the highest minimum credit scores.
What are the best personal loan interest rates?
If you’re looking for low-interest personal loans, this will depend largely on your credit score. Again, the best place to get a personal loan will depend on many factors, but your credit score is going to be the most important.
|Credit Score Range||Average APR|
|Less than 560||113.62%|
Above, you’ll see some sample personal loan interest rates by credit score. With these, you can see that your credit score drastically impacts your interest rates.
For those with a credit score in the 500s, you could be paying nearly double your original loan amount due to accrued interest.
This is a good example of a time when you might want to avoid taking out a loan despite the fact that you may qualify for a personal loan.
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What is a personal loan?
A personal loan is a lump sum of money that is loaned to a person from a bank, credit union, or related company. Personal loans are supplied for many reasons and are typically paid back in monthly installments with added interest.
The interest and payment term can vary due to many different factors, such as credit score, borrowing history, loan use, and even location. Since there are a handful of different pricing factors, there are different rates and benefits for different buyers.
What types of personal loans are there?
There are two primary types of personal loans, secured personal loans and unsecured personal loans. Whether your loan is secured or unsecured, you could have variable or fixed payment structures.
How is a secured loan different from an unsecured loan? A secured personal loan is provided once the recipient provides some sort of notable collateral. Many secured loans will be provided as long as the lender is given a title (IE vehicle) or something of value.
For example, a home equity loan is a type of secured loan since your home’s value is considered collateral in a sense.
What are high-risk unsecured personal loans? An unsecured loan is provided without any notable collateral required from the lender.
In most cases, an unsecured loan is associated with higher interest rates than a secured loan since there isn’t any guarantee of the lender being repaid.
Which is the best personal loan? This will depend on your personal situation. A secured loan will usually offer a better interest rate, however, if you aren’t certain that you can repay the loan, you wouldn’t want to put up anything valuable which could be repossessed.
For example, if you were approved for a secured loan and used your vehicle title to secure it, the lender could keep your title and basically own your vehicle, making it nearly impossible to sell when the time comes.
What are the pros and cons of personal loans?
Before you learn how to apply for a personal loan, it’s important to know whether or not it will be a wise decision. Personal loans can certainly be helpful, but they could also be financially damning.
- May offer cheaper interest rates than other loans
- May have flexible terms if you need to extend the period of a loan
- Are typically available for any credit score
- Could have higher interest rates depending on credit score
- May be more expensive if you can’t get a secured personal loan
- Could damage credit score if you are unable to pay on time
Overall, each situation will be different for someone looking to get a personal loan. If you want to expedite the process of paying off other expenses, a personal loan might be a desirable option.
When should I get a personal loan?
There are a handful of situations in which you might want to consider getting a personal loan. In most cases, you’ll want to get a personal loan to pay for something that does or would have a higher interest rate.
For example, if you are currently in credit card debt with a balance of under $1,500, it could help to get a personal loan to pay off your debts with a lower interest rate or APR.
You might also need a personal loan for emergency situations like vehicle repairs, home repairs, or even medical expenses. If you aren’t eligible for a low-interest credit card, a personal loan could be a viable option.
However, it’s beneficial to hold off on getting a personal loan while you improve your credit. Low credit scores can affect your ability to find affordable personal loans, insurance, and more.
How to Choose the Best Personal Loan
Choosing the best personal loan can get a little complicated because there are so many variables that affect pricing. At the end of the day, most people will want to find the most affordable personal loan, but that will depend on how much you need, what your credit history is, and more.
The best personal loans might change from person to person. Your credit score, loan amount, and necessary term length can all play factors in the interest rates you’ll earn. Don’t forget to inquire about secured vs. unsecured personal loans to compare rates.
Ready to compare the best personal loans for you? Enter your ZIP code below to get free loan quotes from top lenders near you.