Best Online Personal Loans of December 2024

Best Online personal loans

Lenders description

LightStream Personal Loan

LightStream is an online lending division of SunTrust Bank. Their personal loans can be used for several purposes, ranging from debt consolidation and kitchen remodeling to boat purchases. However, they cannot be used to refinance an existing LightStream loan and for business purposes. Individuals with good credit will have a better chance of getting a loan. Although a minimum credit score is not specified, there’s a list of things on their website that define good credit. These include several years of credit history with various account types, good payment history, steady income that's enough to fulfill debt obligations, and others. The APRs are affordable, with the starting APR as low as 2.49% (with AutoPay). That rate will only be available to borrowers with excellent credit. When borrowers set up AutoPay, LightStream gives a 0.50% discount on the rate. The highest potential APR is 19.99% (21.99% without AutoPay). LightStream is an excellent choice for those interested in borrowing larger amounts since the maximum loan amount is $100,000. The minimum amount that can be borrowed is $100,000. The loan term varies from 2 - 6 years (except home remodeling with up to 12 years term). There are no fees with a LightStream loan. However, there is no pre-approval, which means you cannot check out your rates unless you apply for the loan. If you apply and get approved, you could get funding the same day. A nice feature is the Rate Beat Program – they claim to beat a competitor’s APR by 0.10% (conditions apply).

Read more about LightStream Personal Loan

Marcus by Goldman Sachs Personal Loan

Marcus is an online division of Goldman Sachs that offers online personal loans. Everyone eligible can check their loan options on the website, and their credit score will only be impacted if they decide to apply for the loan. Marcus by Goldman Sachs has a great APR range, from 7.24 - 25.24%, with terms from 3 - 6 years. Those who set up auto payments will save 0.25% on their rate. The great thing is that borrowers won't have a single fee to worry about. Also, if you've made timely payments for a year, you’ll get rewarded with one deferral 'ticket.' That means you can miss one payment, and interest won't be accrued either. Your loan will get prolonged for one extra month, which is when you'll pay interest. You can borrow an amount from $3,500 - $40,000. Once approved, you can expect to get the loan proceeds in 1 to 4 business days.

Read more about Marcus by Goldman Sachs Personal Loan

Upstart Personal Loan

What sets apart this AI lending platform is that deciding whether to approve a loan considers things beyond the credit score. Applicants need a credit score of at least 600, but those without a credit score due to insufficient credit history can also apply. Besides full-time employed individuals, those with a contract starting in the next six months and graduates looking for employment with a 4-year college degree are also eligible. Additionally, Upstart has a coding Bootcamp loan program. So, those who get accepted at one of the partners' boot camps could get funding for their tuition without fulfilling any of the previously mentioned requirements. An Upstart loan is suitable for those who want to borrow a lower amount – the starting loan amount is $1,000, and the maximum that can be borrowed is $50,000. The loan terms are not as flexible, with the only options being either 3 - 5 years. Rates start at 5.6% and can be up to 35.99%. The maximum APR is relatively high, but the good thing is - you can check out rates without affecting your credit score. An origination fee between 10% will be deducted from the loan funds. In addition, there are two other fees – a late payment fee (5% or $15, whichever is greater) and a returned check fee of $15.

Read more about Upstart Personal Loan

Payoff® Personal Loan

Some lenders may be a better choice for people with excellent credit, while some are more suitable for lower credit scores. However, Payoff® is a great option for both. The minimum credit score requirement is 600, which is considered to be fair credit. Those with higher credit scores might be eligible for the starting APR of 8.99%, one of the lowest on the market. The maximum 29.99% APR is also reasonable. The minimum rate for loans with amounts higher than $15,000 is 6.99%. Borrowers can choose an amount between $5,000 - $40,000 and a term between 2 - 5 years. Note that Payoff® personal loans can only be used for credit card debt. Borrowers will appreciate that they won't have to keep up with too many fees since Payoff® charges only an origination fee (5%). Viewing your rates won't hurt your credit score, and if approved, you'll get FICO score updates.

Read more about Payoff® Personal Loan

SoFi Personal Loan

SoFi’s unique unemployment protection benefit is what distinguishes it most from other lending platforms. If a borrower loses their job, SoFi will temporarily put payments on hold and help search for a new job. The loans are relatively affordable due to the low APRs and the fact that there are no fees. The APRs range from 8.24 - 23.68%. These rates include a 0.25% AutoPay interest reduction. The loans have repayment terms of 2 - 7 years and amounts of $5,000 - $100,000. In addition to straightforward and reasonable loan terms, SoFi has an excellent borrower/member experience too. Besides resources and events, they also offer help with financial planning, career advice, and others. Regarding eligibility criteria, SoFi requires the applicants to have a job or sufficient income from other sources. Those with a job contract starting in the next 90 days can also apply. We encourage individuals with fair credit scores to apply for a SoFi loan since even their maximum APR is relatively low compared to others on the market. In any case, you can check out your rates and see whether they work for you before applying. Finally, it's worth mentioning that they offer other types of loans, like student loans and mortgages. For any additional information about any loan, check out their website, which is very informative and user-friendly.

Read more about SoFi Personal Loan

Avant Personal Loan

Chicago-based Avant, LLC is an online lending platform where fintech investors provide loan funds. They generally offer favorable terms considering the loans are available to people with bad and average credit. The typical credit score of their customers is between 600 and 700. The loans' APR range is between 9.95 - 35.95%, with terms from 1 - 5 years. You can borrow up to $35,000, but at least $2,000. Avant, LLC online personal loans come with a few fees, too, including an administration fee (up to 4.75%), a late fee ($25), and a dishonored payment fee ($15). Checking out loan rates won't have an impact on your credit score. If you then decide to apply and get approved, Avant, LLC claims that usually, borrowers receive funds the next business day.

Read more about Avant Personal Loan

Best Egg Personal Loan

Best Egg is an online lending platform that is straightforward with its criteria for qualifying for a loan and the lowest APR. To be eligible for a personal loan, you'll need a credit score of at least 640. A minimum credit score of 700 and a $100,000 annual income are required to get the lowest APR of 7.99%. The maximum APR is 35.99%. There are two fees associated with a Best Egg loan, an origination fee (0.99 - 8.99%) and a late payment fee ($15). The longer the loan term, the higher the origination fee, so loans with terms of 4 years or more will have a fee of at least 4.99%. The terms can be from 36 - 60 months. The loan amount range is rather flexible - $2,000 - $50,000. After approval, borrowers will get their money in 1-3 business days. Best Egg claims that nearly half of their customers get the funds the next day.

Read more about Best Egg Personal Loan

What is an online loan?

Online loans allow you to complete the borrowing process entirely online, from pre-qualification to loan financing, without the need to go to the bank or the institution. That makes them very convenient.

Online loans can be offered by an online-only platform like Upstart or Social Finance, Inc, or an online bank division like LightStream or Marcus by Goldman Sachs. They all set their eligibility criteria, APRs, fees, loan terms, and amounts. The minimum credit requirements vary from lender to lender, with many of them, and pre-approval or prequalification options can be available. That means that potential borrowers can check out their rates and loan options with a soft credit inquiry only, i.e., without affecting their credit score. If you decide to proceed with the loan, a hard inquiry will be performed.

Most of the loans offered online are personal loans, although there are other types as well. A personal loan can be used for any purpose, including credit card debt payoff, car purchase, home improvement, debt consolidation, and many more. Most of these loans are unsecured. You get the loan proceeds in one lump-sum payment, and you pay back the amount plus the interest with monthly installments during the loan's term.

Differences between online lenders and banks

As the internet grew, so did e-commerce, and a lot of online lenders emerged too. Today, we have many options if we decide to get our loan online instead of the traditional way – simply going to the bank and applying on the spot. So, how should we choose? Let's look at some aspects of loans and see how online lenders and banks compare.

Application and funding

Applying for an online loan is usually an easy and convenient process. Online lenders process the application much faster, and you can do it from your couch or anywhere you want. Most of them allow you to check your rates with a soft credit inquiry, and they only make a hard inquiry once you apply for the loan. You can attach and e-sign all the documents without having to set your foot at a bank.

Online lenders are at an advantage with funding too. Getting a loan at a bank is more complicated, so it might take longer to get your funds. With online lenders, however, you could get funding in as soon as a day!

Winner: Online lenders

Eligibility criteria

Those with bad credit have a better chance for approval if they apply with an online lender. Banks are heavily regulated, and they're a lot less likely to accept someone with bad credit. Some online lenders explicitly offer their products to people with lower credit scores, like Avant, LLC or Peerform.

Winner: Online lenders

Interest rates and fees

As previously mentioned, online lenders are more willing to lend money to those with less-than-stellar credit scores. However, that comes at a cost. APRs for these individuals can be as high as 35.99%. That’s understandable, considering the high risk that lenders are taking on by lending to these consumers. On top of that, they may also charge an origination fee and other fees.

Banks might offer more favorable rates or fees to existing customers, so it'll be wise to call your bank and see if you qualify for any discount.

Winner: A tie

Customer service

Generally, banks have excellent customer service. You could stop at a local branch anytime you have a question and solve the issue in person. Online lenders don't offer you this convenience, and there's no face-to-face communication. However, they still have online services support to answer your questions via phone, e-mail, or online chat on the website or a mobile app.

Winner: Banks

Just because online lenders are a winner in more categories doesn’t mean online lending is the right choice for everyone. That’ll still depend on other things, like your preferences, credit history, how fast you need the funds, etc. We hope this comparison helps you realize your priorities when it comes to loans.

The pros and cons of online loans

Let’s look at some pros and cons of online loans you should consider before applying.

Pros

• Convenience – as we said at the beginning of the article, applying for an online loan can be done from the comfort of your home. All documents required can be scanned and attached online, and you can sign the contract with e-signature. That saves consumers a lot of time.
• Prequalification – if you're curious about what your rate will be with a particular online lender, you can have your answer in just a few minutes. Most of the lenders on our list will allow you to see your rates and loan options.
• Window shopping – having in mind the previous advantage, you can easily compare rates offered by several lenders. That makes the decision process easier and less time-consuming.
• Looking past your credit history – Some online lenders will also consider things like your education or career. For example, Upstart accepts applicants who don't even have a defined credit score yet but fulfill other requirements, like a job contract starting in the next six months or a 4-year college degree.

Cons

• Might be expensive – Although some online lenders have APRs as low as 2.49% (LightStream), the lowest rates are only available to borrowers with good-to-excellent credit. All the others can expect to pay hefty interest rates. Each online lender has its algorithm for calculating APRs. While some are more transparent, like Peerform (determines APR according to AAA-DDD grades) or Best Egg (only borrowers with a credit score of above 700 will get the lowest APR – 7.99%), some, like LightStream, won’t even allow for a prequalification.
• No in-person customer support – If you prefer talking to a representative in person, and online communication is an issue for you, skipping online lenders will be best.
• Unfortunately, predatory online lenders make life harder both for reputable lenders and consumers. If a loan sounds too good to be true, for example, promises that they won’t check your credit score, you’ll be better off not applying for such loans. Before applying, check out reviews from other clients and apply only for loans from trusted online lenders.

Online personal loans vs. Payday loans

A payday loan is a form of short-term borrowing in which a lender offers credit at a high-interest rate determined by your income. The principal is usually a percentage of your paycheck. Payday loans have high interest rates since they’re used for short-term, urgent credit and provide instant funding.

Unlike personal loans whose minimum loan amounts start at $1,000, payday loans minimums can be as low as $50. The repayment term is from two weeks to a month.

We recommend choosing a personal loan over a payday one. Even if you have bad credit, a personal loan will be a lot cheaper.

How much will an online loan cost me?

We cannot answer this question without knowing your credit history or loan preferences. Those with good credit scores will generally get a lower interest rate and pay lower fees, while those with bad credit scores will get higher APRs to compensate for the lender’s risk.

On some lenders' websites, a payment example can be found. Let's look at a few examples, so you get a better idea.

LightStream: Monthly payments for a $10,000 loan at 5.93% APR with a term of 3 years would result in 36 monthly payments of $303.90.

Upstart: The average 3-year loan offered across all lenders using the Upstart Platform will have an APR of 25.06% and 36 monthly payments of $37 per $1,000 borrowed.

Social Finance, Inc: Monthly payment and total payments during the life of a $30,000 personal loan with a 2-year repayment term, a 0.25% autopay discount, and a fixed rate between 5.99% – 18.85%. It works out to 24 monthly payments ranging from $1,329.48 – $1,490.20 for a total amount of payments ranging from $31,907.60 – $35,764.71. (Assuming you’ve signed up for AutoPay and have made all payments on time without pre-payments).

LendingClub: You receive a loan of $13,411 for a term of 36 months, with an interest rate of 12.16% and a 5.30% origination fee of $711, for an APR of 15.99%. In this example, you will receive $12,700 and will make 36 monthly payments of $446.46.

How to find the best online personal loan?

The prequalification option makes finding the best online personal loan a more straightforward process. We advise checking your rates at several lending websites and then comparing them. Inform yourself about discounts or offers regarding the APR. For example, LightStream has a Rate Beat Program and claims to beat the competitor’s APR by 0.10%.

Another thing you should take into consideration is fees. An origination fee can be found with most of the loans, it typically ranges from 0% - 8%, and it'll be deducted directly from the loan proceeds. However, the extra fees that come with some loans can be hassling. For example, Peerform has four fees you should be aware of if you opt for a loan with them.

Our advice is to read the terms and conditions on every website thoroughly. The more you research and compare, the more confident you can be in your decision.

How to apply for an online personal loan?

We’ve already stressed enough how simple it is to apply for a personal loan. Visit the lender’s website and follow the lead there. You’ll usually be required to enter some information about yourself, like your address, Social Security Number, employment details and income, and credit score. Furthermore, you might be required to provide additional documents to prove the information (such as proof of income). The lender needs this information to determine whether you qualify for a loan and, if yes, at what rate. They'll also use information about your credit provided by the three major credit rating bureaus.

Is getting an online personal loan safe and legit?

We understand why some might be hesitant to borrow money online. There are many stories about online scams, but if you’re careful and trust only legitimate loan companies (like those on our list!), you won’t have much to worry about.

Here are some red flags that imply the lender is probably a scammer:

• Doesn’t ask for your credit history.
• Not registered in any state.
• Has an unsecured website.
• Pressures you to take out the loan right away.
• Guaranteed approval.
• No documents required.
• Not transparent regarding rates and fees.

Do your homework about a lender before giving out your personal or private information and agreeing to a loan.

Is an online loan the right choice?

Online loans are a great way to help you pay back some debts or finance a purchase. They can be used for almost any purpose. But, same as with other loans, it's essential to be responsible and make timely payments to avoid getting stuck in even more debt.