Updated September 10, 2017
If you want a personal loan to pay off credit card or other debt, the absolute fastest and most effective way to lower the interest you pay is to apply for a balance transfer, with a 0% rate. You can read our guide to balance transfers to learn about their pros and cons.
But a balance transfer isn’t for everyone, especially if your credit score isn’t perfect or if you need to borrow cash.
A personal loan with a set payoff period a few years from now is often the next best thing with these advantages:
- One monthly payment
- A set rate
- You don’t need absolutely perfect credit
- You can check your rate without touching your score
There are more attractive deals than ever thanks to some new online lenders and you can see sample rates below for excellent credit and good credit.
Tip: Apply for several loans to check rates. Every lender has different approval criteria and different pricing models – and the difference in rate between lenders (even for people with excellent credit) can be significant. So long as you shop with lenders that use a soft credit pull, you can check your rate without negatively impacting your credit score.
Start Here – Multiple Lenders at Once
Dozens of lenders participate in LendingTree’s personal loan shopping tool – including all of the lenders listed on this page. (Full disclosure, LendingTree is our parent company.) With one online form, LendingTree will perform a soft credit pull (with no impact to your score) and match you with multiple loan offers. This is our favorite (because it is easy) way to get multiple offers from lenders in minutes. For people with excellent credit, you could get an interest rate below 6%. For people with less than perfect credit, there are many lenders participating with more liberal acceptance criteria.
Why is this a good way to save?
Banks don’t care much for personal loans because the lower rates earn them less profit than credit cards.
Fortunately, some new companies believe you should be able to get a competitive rate without dealing with credit card intro offers, even if your credit isn’t perfect.
They’re doing it by lending online only without the overhead of branches.
They pass the savings on to you through better rates, and you can check up on them below.
Personal loans for Excellent Credit
The following providers are for you if you want the absolute lowest possible rates that reward a record of no late payments and good income, even though you have some high rate debt you want to clean up.
Unless you get a rate of 5% or less, you’re probably better off with balance transfer deals, but the convenience of a fixed payment and walking away from credit cards makes personal loans appealing.
SoFi offers some of the lowest interest rates available if you’re looking to refinance your credit card debt or borrow cash. You’ll need to have a good record of paying your bills on time, but they’re willing to offer rates that are very competitive without an origination fee.
Sofi’s believes if you’ve graduated college or went to grad school you’ll be a more responsible borrower, so they may be more likely to give you a better rate, even if your credit history is limited.
For example, if you have $10,000 in credit card debt, good income, and great credit, their best rate could save you as much as 0% balance transfer deals once you factor in the fees for each.
What we like best about SoFi is that they offer no origination fee and no prepayment penalty. If you think you may be able to pay off your loan earlier (or want the flexibility to do that), SoFi is the only lender we reviewed that charges no fee at all. Given their very low rates, we think anyone with good credit should start with SoFi first, and then compare their offer to the rest of the providers.
Upfront fee: 0% – No origination fees, no prepayment fees and no balance transfer fees
Amount: $5,000 – $100,000
Period: 3, 5 or 7 years
BestEgg is an online personal loan company that offers low interest rates and quick funding. BestEgg is one of the fastest growing personal loan companies in the country, largely because it has been able to provide one of the best combinations of interest rate and loan amount in the market.
You can check to see your interest rate without hurting your score, and they do approve people with scores as low as the mid-600s. If you have an excellent credit score, BestEgg will be very competitive on terms.
Upfront fee: 0.99% – 5.99%
Amount: up to $35,000
Lightstream is a great choice for people with excellent credit. It is actually part of a bank you might have heard of, SunTrust Bank. They were recently set up to offer some of the best personal loan rates available, and they are delivering. The interest rate you are charged depends upon the purpose of the loan. Interest rates can be as low as 2.29% for a new car purchase (and Lightstream does not put their name on your title. They just put the cash in your bank account, and you can shop around and pay cash for the car). Home improvement loans start at 4.99% APR with AutoPay , making them cheaper and easier than a home equity loan.
They’ll also approve and deposit your money fast, often the same day, and give extra consideration if you have money in your 401K or equity in your home.
LightStream has created an exclusive offer, just for MagnifyMoney readers. (This offer went live in January 2016). Credit card consolidation loans for MagnifyMoney readers are now as low as 5.49%. The highest rate is 14.34%. Just beware: LightStream does a hard credit pull.
Upfront fee: None
Amount: $5,000 – $100,000
Period: 2 – 7 years
Personal Loans for Good Credit
These providers may be able to help you out if you’re not approved for the very best rates or a 0% balance transfer offer. Check those deals first, there’s no real harm to do that, but if they fall through, give these a try.
You might not have heard of LendingClub yet, but they are a big player in online loans. And they offer a wide range of rates and terms based on your credit profile and needs. Generally you’ll need a score of about 600 or higher to get approved.
Rates: 5.99 – 35.89% APR
Upfront fee: 1 – 6%
Amount: up to $40,000
Period: up to 5 years
Upstart offers loans that look a lot like the ones from the bigger online lenders like LendingClub or Prosper.
They’ll let you borrow up to $35,000 for 3 years. But the key is they will take into account the schools you attended, your area of study, the grades you earned in school, and your work history to see if you can get a better rate.
So while the range of rates Upstart offers is similar to the bigger guys, if you did well in school, you might find the rate you actually get is lower than what the others will offer you, so it’s worth trying.
You’ll need a 640 or better FICO and your monthly payments can’t be more than 55% of your monthly income.
Rates: 7.39% -29.99%
Upfront fee: 1% – 8%
Amount: $5,000 – $50,000
Term: [3 & 5 year loans available/UpstartTerm]
Previously, PenFed offers a fixed rate of 9.9% interest rate for 5 years. Veterans get extra special attention so it’s worth checking this online only offer. You have to be a member of the PenFed credit union, but that’s easy and anyone can do that online as part of the process.
Upfront fee: None
Term: 5 years
Personal Loans for Minimal Credit
APRs range from 9.95% – 35.99% and there is no prepayment fee. You can check to see your interest rate without hurting your credit score. Just one warning: if you are willing to borrow money at 35.99%, then you really need to step back and think about building a longer term financial plan. You can download our free Debt Guide, which will help you put together a plan so that you never have to pay interest rates this high again.
Avant’s platform offers access to loans from $1,000 to $35,000, with terms from 2 to 5 years. The minimum credit score varies, but we have seen people with scores as low as 580 get approved.
The good thing about Avant is that these loans are amortizing. That means it is a real installment loan, and you will be reducing your principal balance with every payment.
Rates: 9.95% – 35.99%
Upfront fee: 0.95% – 4.75%
Amount: up to $35,000
Period: up to 5 years
Available states: All except: Colorado, Iowa, Massachusetts, New York, Vermont and West Virginia.
Springleaf offers personal loans through its branch network to people with less than perfect credit. You can start your application online. If you qualify, you will have to visit a branch to complete the application. Once in the branch, if you have all of the required documents, you can receive you loan proceeds immediately via check.
You can borrow from $1,500 to $25,000. The interest rates are not low, and can go up to 36%. They will also charge an up-front origination fee that is not refundable. You should definitely shop around at other lenders first, given the high cost of the loan and the need to visit a branch.
Upfront fee: varies
Amount: up to $25,000
As these new companies evolve, expect even more attractive options to emerge, so when you think about lowering your rates, don’t just look to the banks you know.
Give an online lender a chance. You may be rewarded with lower rates, good service, and faster freedom from debt.
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