Updated October 12, 2018
Personal loans allow borrowers to have access to a fixed amount of money at a fixed interest rate, with a fixed monthly payment and you know when you’ll have completely paid off the loan. They are a great resource for someone looking to refinance debt and can’t use a balance transfer. If you need cash, personal loans are usually the best way to borrow. Personal loans tend to be much cheaper and simpler than a credit card.
How to get a personal loan?
Step 1: Check and see if you can get a loan with an Internet-only lender.
Ideally, you should start your shopping with a site like LendingTree, which lets you shop at dozens of lenders with just one simple online form (described below).
Step 2: Go to your local credit union and see if they can match or beat your P2P loan
Step 3: Take the loan with the lower interest rate
If you aren’t eligible for a P2P loan from an Internet-only lender then try your local credit union.
Internet-only lenders
The rise of technology allowed a new wave of lenders to offer an alternative to traditional bank loans. Peer-to-Peer lending (or P2P for short) allows borrowers to receive loans from “peers” often in the form of individual investors or hedge funds, endowments and pension funds.
Peer-to-peer loans are interesting because they were developed specifically for the digital environment. This makes them accessible with a few clicks on a computer and a relatively simple application process. Companies like Prosper, LendingClub and Upstart facilitate matching borrowers with investors. There is no need to visit a bank branch. The aim of P2P lending is to give a borrower lower interest rates while giving investors higher returns.
Interestingly, some big banks have acquired or built their own online lenders which are offering consumers even better rates. SunTrust has done that with the acquisition of LightStream, and Goldman Sachs Bank USA has recently invested in building Marcus.
At LendingTree, you can shop for a loan at dozens of lenders with just one online form (that takes less than 5 minutes to complete). LendingTree will perform a soft credit pull (with no impact to your score), and you can get real offers – including how much you can borrow and the interest rate. We think this is one of the best places to start your personal loan shopping journey.
Minimum Credit Score
months
LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by lenders without impacting your credit score. LendingTree is not a lender.
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Minimum Credit Score
months
LendingClub is a great tool for borrowers that can offer competitive interest rates and approvals for people with credit scores as low as 600.… Read More
People with minimal credit history can turn to Upstart for an opportunity to be eligible for a personal loan.
Upstart evaluates where you went to school, your area of study, your grades and employment history to determine your eligibility for a loan and your interest rate.
Minimum Credit Score
months
Upstart is an online lender created by ex-Googlers.… Read More
Credit unions are not-for-profit organizations that offer alternatives to traditional banks. They have more of an emphasis on serving their community than worrying about a corporation’s bottom line. Unlike banks, credit union members own the credit unions.
Credit unions do offer loans, but first you must become a member of the credit union. Some credit unions are closed. But others (like PenFed) will let you join if you make a $15 donation to a charity.
Pros
Cons
PenFed offers a 6.49% interest rate with no upfront fee for a term of 60 months. However, you will need to have a 700+ credit score to be competitive for this personal loan.
OneMain is a non-bank lender owned by Citigroup. You will have to physically visit a branch to get approved. But, the process usually takes less than 30 minutes. Borrowers with high credit scores should first explore the P2P space and credit unions before turning to OneMain, because it will be a more expensive form of borrowing.
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Minimum Credit Score
months
If you have a credit score below 600, OneMain Financial is one of the few lenders that you can use to get a personal loan.… Read More
Loan approval and actual loan terms depend on your ability to meet our standard credit criteria (including credit history, income and debts) and the availability of collateral. Loan amounts subject to state specific minimum or maximum size restrictions. Collateral offered must meet our criteria. Active duty military, their spouse or dependents covered by the Military Lending Act may not pledge any vehicle as collateral. CA minimum loan amount is $3,000. GA minimum loan amount is $1,500 for present customers and $3,100 for others.
Personal loans can be valuable tools to help pay down debt, reduce interest rates and save you hundreds to thousands of dollars. But remember; don’t rush into a personal loan just because it seems like a good deal. Take the time to do your research, shop around and ensure your getting the absolute best interest rate you can. Even the difference of .01 can make a difference in the long run.
Read where to find the best personal loan rates online here.
Disclaimer
5.99% To 35.99% APR
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Advertiser Disclosure
6.99% To 14.99% APR
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Advertiser Disclosure
6.99% To 24.99% APR
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Advertiser Disclosure
3.34% To 16.99% APR
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By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.
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