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Personal Loans

How Personal Loans Work and Common Traps to Avoid

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : 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.

how a personal loan works

Need money to pay for a kitchen renovation? Maybe you’d like a chunk of cash to pay off your high-interest credit card debt? An unsecured personal loan can help you accomplish these goals.

Because personal loans aren’t typically backed by any form of collateral, such as a home or car, you don’t need home equity or a vehicle to qualify for one. You do, however, need to do your research before applying for a personal loan. Here’s what you need to know and consider.

How personal loans work

You can apply for personal loans at banks, credit unions or through online lenders. And you often don’t have to put up any collateral to do so.

Unsecured personal loans are different from other types of loans, such as mortgages and auto loans. Those loans are backed by collateral. When you take out a mortgage, your home acts as the collateral, providing a safety net for your lender. If you stop making payments, your lender can take your home through a foreclosure process.

With an unsecured personal loan, there is nothing for a lender to take back should you stop making your payments. Because of this, this type of loan is riskier for lenders.

You can use the funds from a personal loan to pay for a variety of things, such as:

Personal loans come with terms that are usually pretty simple:

  1. There is a fixed term. You know when the debt is paid off, and it is almost always less than 5 years. (Pay the minimum due on your credit card, and you could still be paying 30 years from now). There usually aren’t pre-payment penalties, but some loans do have them, and you should check for that before you accept the loan.

  2. There is a fixed interest rate. Your monthly payment and interest rate stays the same for the life of your loan. Credit cards will increase the interest rate on your existing balance if you become 60 days past due. And they can increase your interest rate on future purchases at any time.

It’s important to compare multiple offers when signing up for a personal loan. Click “see offers” below to compare up to five personal loan lenders to find the best for your needs!

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Terms

24 to 60

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LendingTree is our parent company. 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.

Applying for a personal loan: What factors lenders consider

Because personal loans often don’t require collateral, lenders are taking on more of a risk by lending you money. Because of this, lenders will look closely at your credit score and other factors when determining your eligibility for loan funds and what interest rate they will offer you.

Credit score

The higher your credit score, the more likely you are to qualify for a personal loan at a lower interest rate. That’s because borrowers with higher credit scores tend to have a history of making on-time payments each month.

How high should your credit score be? That varies from lender to lender. In MagnifyMoney’s personal loan marketplace, you’ll find lenders who require a minimum score as low as 525. Other lenders require a minimum 710 credit score.

When lenders check your credit score, chances are they will look at your FICO Score. This score ranges between 300 and 850, with 850 being the highest score possible. Here’s a breakdown of the FICO Score ranges:

  • 800+: Exceptional
  • 740-799: Very good
  • 670-739: Good
  • 580-669: Fair
  • 579 and below: Poor

You can view your credit score for free at the three major credit bureaus once per year or you can sign up for free credit monitoring services with MyLendingTree (LendingTree is the parent company to MagnifyMoney).  If you find that you have a low score, try following these steps to improve your score.

Debt-to-income ratio

Lenders will also look at your debt-to-income ratio. Different lenders will have different standards for debt-to-income ratios. Most lenders, though, want your total monthly debts to consume no more than 43% of your gross monthly income.

View our video below to get a better understanding of how personal loans work and what factors lenders consider!

How much can you borrow with a personal loan?

Banks and lenders have limits to how much you can borrow with a personal loan. These will vary by institution, so you’ll need to do your research before you apply, especially if you need to borrow a significant amount of money.

At Pentagon Federal Credit Union, for example, you can borrow $500 and $25,000. At Discover Bank,  you can borrow between $2,500 and $35,000. Other lenders, however, will let you borrow up to $100,000.

How long do you have to pay back a personal loan?

Once you’re approved for a personal loan, your lender will provide you with a schedule of payments. This will spell out how much you pay each month, and how many payments you’ll make. It will also list your interest rate and annual percentage rate (APR). APR is the best measure of how much your loan will cost you. APR includes your loan’s interest rate and any additional charges levied by your lender.

How long it takes you to repay your personal loan depends on your lender and the loan term you sign up for. Most banks, though, offer personal loans that you pay back over one to five years.

For example, USAA Bank offers loan terms for 12 to 84 months. Discover offers terms between 36 to 84 months.

How much do personal loans cost?

Banks and financial institutions make their money with personal loans through the interest they charge you for borrowing money. You want to make sure when applying for a personal loan that you know exactly how much you will pay each month in interest.

The interest rate your lender charges will depend largely on your credit score and debt-to-income ratio.

Rates with personal loans, though, tend to be higher than they are with mortgages, auto or home equity loans. That’s because personal loans don’t require collateral, so they are riskier for lenders. To make up for that risk, lenders tend to charge higher interest rates.

What rates can you expect to pay? LightStream offers APRs between 3.34% and 16.99% with autopay, while Upstart has rates between 7.98% and 35.99%.

Some lenders will charge an origination fee to draft your personal loan. It’s not uncommon to see fees ranging from 1% to 6% or more of your loan amount. Many others, though, will not. In general, you should avoid paying an origination fee.

Click here to view the best options for a no fee personal loan.

Personal loan pitfalls to avoid

Personal loans do come with some advantages over, say, using your credit card. The interest rates are lower and you’ll have a fixed monthly payment, so you can more easily budget your payments.

But there are some potential traps you should avoid when signing up for a personal loan.

Insurance

We all want to protect our families from the unexpected and insurance is a great way to do just that.  Similar to how we recommend planning in advance for your debt (and looking for the best deal), you should do the same with insurance. However, many personal loan providers will try to add an insurance sales pitch at the end of a loan closing.  The two most typical types of insurance are life insurance and unemployment insurance.

For life insurance, a typical sales pitch would sound like this: “for just the cost of a can of soda a day, you can make sure your children never have to worry about this debt if you die.” Beware these high-pressure sales tactics.  The value of these add-on policies is almost always outrageously bad.

To protect your family, you should think about a good term life insurance policy that covers not just your personal loan, but all of your needs.  Do this search separate from the loan transaction.

Unemployment insurance could be a bit more compelling (because, unlike term life insurance, it is difficult to buy a policy separately that would make loan payments on your behalf if you lose your job).  I have seen people benefit from these policies.  But you need to do the math.  How much does it cost per month?  So long as you don’t have a high risk of losing your job in the next 6-12 months, you are almost always better off saving the money (rather than paying the premium).  There are also a ton of limitations to the amount of the loan payment that can be made (and the length of time that it will be paid).  You should ask them the following questions:

  1. How much does this cost a month?

  2. What are the requirements for me to be able to claim?

  3. How much would it pay and for how long?

When you ask those questions, you will likely see that the policy being offered is poor value, and you are better to just save the money yourself.

High interest rates

Depending on your credit score and lender, you could face high interest rates when taking out a personal loan. A high interest rate will result in a higher monthly payment.

In fact, if you qualify for an interest rate as high as 35.99% — which some lenders charge to customers with poor credit — you might not save any money over using a credit card if you have one.

Precomputed interest

Ask lenders how your interest is computed. What you don’t want to hear — and a situation that you want to avoid — is that your interest is calculated on a precomputed basis. The essence here? Precomputed interest is not a good deal for customers who might pay off their personal loans early.

The Consumer Financial Protection Bureau does a good job of explaining how precomputed interest works. At its most basic, though, when lenders precompute your interest, you will pay a greater amount of interest from earlier months and years of your personal loan. This won’t happen if your interest is computed using the simple interest method.

If you take the full term to pay off your personal loan, there is no difference between the simple and precomputed methods. You’ll pay the same no matter what. But if you pay off your personal loan before its term ends — say you pay off a five-year loan in just three years — you will pay more in interest under the precomputed method. That’s because you’ll be paying more interest in the earlier months of your loan than you would under the simple interest method.

In short, if you plan to pay off your loan early, avoid precomputed interest.

Origination fees

As mentioned earlier, there are plenty of lenders that don’t levy origination fees, the charge filed by lenders for originating your loan. If you can’t qualify for a personal loan with a lender that doesn’t charge an origination fee, you might consider skipping out on such a loan altogether.

That’s because origination fees can be costly.

Lenders that do charge origination fees vary in how high they are. Online lender LendingClub provides a good example. The lender says its origination fees range from 1.00% - 6.00% of your total loan amount, depending on your credit score.

For example, if you take out a $6,000 personal loan with an origination fee of 3.5%, you’d have to pay $210. This amount may reduce the amount of money you receive. LendingClub says that it subtracts your origination fee from your loan. This means that the money you receive will be less than what you were approved for.

Here’s an example provided by LendingClub: If you take out a $6,000 personal loan with 3.5% origination fee with their ongoing interest rate, you’d receive a total of $5,790 in your bank account. That equals $6,000 minus the $210 origination fee.

Prepayment penalties

Another way lenders can hit your finances is with prepayment penalties. As the name suggests, these are fees borrowers must pay if they pay off a loan too early.

Say you take out a personal loan with a term of five years. Your lender might charge you a prepayment penalty — usually a percentage of your remaining balance — if you pay ahead and pay off your personal loan in just two years.

The good news is that most lenders don’t charge prepayment penalties on personal loans, meaning that you should be able to avoid them. Just make sure you ask any lender with which you work if they do charge these fees.

Personal loans are great, if you do the research

With a personal loan, you can have a fixed interest rate, fixed payment, and fixed term.

If you compare APRs, then you will be making the right decision. Don’t just jump into picking a personal loan and end up taking out a pre-computed loan, with three add-on insurance policies and a big origination fee – only to refinance the loan three months later.  These are sub-prime tricks that can dramatically increase the costs.

If you borrow for 36 months and pay it off in 36 months, then you are in good shape.

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Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

Dan Rafter
Dan Rafter |

Dan Rafter is a writer at MagnifyMoney. You can email Dan here

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Your Guide to Comparing Personal Loan Offers to Get the Best Deal

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : 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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Shopping for a personal loan can help you find the most affordable way to borrow money or consolidate existing debt. However, don’t make the mistake of defaulting to comparing advertised rates and features. Advertised APRs, origination fees and loan amounts can be vastly different from the actual personal loan terms that each lender offers you.

Instead, collect and compare personal loan offers. These customized personal loan quotes will highlight the terms each lender is willing to offer you, and point you to the most affordable loan. Shopping around for personal loans this way could save a borrower up to 35% in interest costs over the course of a three-year loan, according to an analysis of personal loan offers from LendingTree, which owns MagnifyMoney.

If you’re interested in netting such savings for yourself, we’ll show you how. Use this guide to start rounding up and comparing your own personal loan offers.

How to get personal loan offers

Many lenders can pre-assess your creditworthiness and provide you with a personal loan rate quote for the loan amount, rates and fees you can expect. Here’s how to go about collecting these personal loan offers.

Identify what you need in a personal loan

Most lenders will require that you provide certain details before they can give you a personal loan quote. So it’s helpful to be clear on what exactly you’ll need in a loan.

Here’s what you’ll need to know before you start shopping for personal loans:

  • How you plan to use the personal loan. Some lenders restrict how these funds may be used. They might ask why you’re borrowing to check that your personal loan use meets their lending guidelines. Be ready to answer honestly about the general purpose of your loan, whether it’s for consolidating credit card debt or financing home improvements.
  • How much you want to borrow. Lenders will want to see if the amount you want to borrow will be realistically affordable for you to repay. Do some calculations now on the total costs your personal loan will need to cover to get a principal amount.
  • Personal details about your identity, income and expenses. Lenders will need to verify your identity to offer you a loan. Some lenders will ask preliminary questions about your income, existing debt and housing costs as well.
  • The general terms, rates and fees you’re looking for. It can help to have a specific loan length in mind, whether it’s two years or five. You can also start getting an idea of what kind of personal loan rates and fees would be reasonable.
  • What your credit score is. Checking up on your credit score can help you get an idea of how lenders will view your loan application. If you have credit that’s average or on the cusp of being good, for example, that could be a sign to look for lenders that have more flexible credit guidelines to improve your chances of approval.

Use a personal loan shopping tool

Once you’re clear on what you need in a personal loan, you can actually start your search.

A simple way to get offers is to use the LendingTree personal loan shopping tool. It asks a few basic questions about yourself and the loan you’re looking for, similar to the points covered above.

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LendingTree’s tool may then use details you provide to match you with up to five different lenders. It uses a soft credit pull to accurately assess your credit profile, without affecting your credit the way a hard credit pull can. You could get as many as five personal loan quotes in just minutes.

These offers are outlined clearly so you can easily compare them and find the offer that provides the best features for what you’re looking for.

Request rates from lenders with soft credit checks

You can also collect offers on your own, too, by searching for personal loan providers that offer general terms that match your needs. Then, visit each lender’s site and look for a button or link to request a rate quote. Typically, this will take you to a form asking for the kind of details outlined above, which you can complete and submit to get a personal loan offer.

One caveat: Before requesting a personal loan rate quote, check to see if the lender uses soft or hard checks to generate these offers. You can request a rate from lenders who use either credit check method but keep an eye on this to make sure you’re aware of how this process could impact your credit.

5 factors to consider when comparing personal loan offers

Whether you use a loan shopping tool, collect offers yourself or do both — you’ll still want to compare the offers to see how they stack up. Here are the important details to double-check as you assess each personal loan option and tease out the best rates and terms.

1. Loan APRs

Each loan offer should quote an APR. The APR, which stands for annual percentage rate, represents the amount you’ll pay each year to borrow with a specific loan. The APR will reflect all costs of the loan, including interest rate, origination fees and even rate discounts.

The APR you’re offered can also vary widely between lenders — a typical borrower might see a difference of 8.79 percentage points between their highest and lowest offered rates, according to LendingTree.

Because offered APRs includes all costs and can differ so much, comparing APRs is a quick and accurate metric to weigh if you’re seeking loans with the lowests costs.

2. Offered loan amounts

Usually, you’ll need to request a certain loan amount when collecting rate quotes and offers. But not every lender may be able or willing to offer you the amount requested.

Additionally, some lenders will charge origination fees that are taken out of the initial loan funds before they are disbursed to you. So if you’re facing a 2.5% origination fee on a $10,000 loan, you’ll actually receive only $9,750 of the funds.

So as you’re comparing your loan offers, keep an eye on offered amounts to be sure you’ll get the full funds you need.

3. Term length

Another important feature is loan lengths, or how long the lender will give you to repay this debt. Your loan term is important because it’s central to both your monthly costs or payments, and the total amount you will repay over the life of the loan.

Choosing a shorter loan term can have benefits, too. Shorter personal loan terms will lower your loan balance faster, which will also decrease the interest you’re charged on these loans. Short-term personal loans often provide lower interest rates as well, providing even more savings. Lastly, a short loan length will get you out of debt faster.

Need lower monthly payments? Look for the loan offer with the longest term, as this will stretch out repayment over more months and keep costs low.

4. Monthly payment

When reviewing loan offers, it’s important to keep an eye on monthly payments. Different loan amounts, lengths and APRs can all affect your monthly personal loan payments.

Choosing a shorter loan term or a higher loan amount could make monthly payments less affordable, however — even on loans that otherwise have lower costs. So check the monthly payments to be sure you can comfortably fit your new personal loan payments into your monthly expenses and budget.

Our personal loan calculator can be useful to compare different loan terms, and how each will affect monthly payments and total loan costs.

5. Other personal loan features and protections

Weighing your own preferences for a personal loan will also be an important part of comparing offers. In addition to reviewing the details of your offer, you can also investigate the lender’s site to see which offer additional features you value.

If you don’t have great credit, for example, you might need to look for personal loan providers that accept cosigners or have lower minimum credit score requirements. Other benefits, such as job loss protection or free credit score updates, could also sway you toward one lender over another.

How to accept a personal loan offer

You have all your personal loan offers in hand and reviewed them. You’ve chosen the personal loan that fits your financing needs and monthly budget.

If you’re ready to move forward, you might be wondering what’s next. Here’s how can you accept a personal loan offer and get approved.

Consider negotiating personal loan offers.

If you’re not satisfied with a final offer, reach out to lenders to discuss them. You might find that some personal loan providers are willing to work with you on the terms. If you have a lender you’d prefer to work with, for example, but doesn’t offer the lowest APR, you could see if it’s willing to match the lower rate.

Choose a lender and complete a personal loan application. When you have a loan offer that’s to your liking, you can move forward to completing a full personal loan application. If you used this LendingTree tool and found an offer that’s a good fit, you can simply click on the offer to connect with the lender and start the process.

Many lenders’ sites also allow you to complete and submit a personal loan application online. Look for a place to do so on the webpage of your preferred lender, or see if it offers a customer service hotline to apply by phone.

Get approved and receive a loan agreement. Once you submit a loan application, the lender will process and evaluate it. Specifically, lenders will want to see if you meet its personal loan requirements for credit scores, debt-to-income ratio and income level.

If you’re well-qualified, the lender will approve you for the loan and provide you with a personal loan agreement.

Review and sign your loan agreement. Carefully review this contract, as it will include the full terms and conditions of this debt, including when and how you’ll receive the loan funds. Make sure that the loan agreement reflects the terms, rates and costs you anticipated based on your original offer.

If it does, you can sign and submit the loan agreement. The lender will then process and certify your loan agreement, and fund the loan. Most borrowers can receive their loan funds within days of signing their final agreement.

The process of shopping for and comparing personal loans does take some time and effort. But loan comparison tools can make the process simple, fast and easy.

Even spending a couple of hours collecting and comparing personal loan quotes can pay off big. On a loan balance of just over $10,000, comparison shopping saves as much as $1,700 on average. You can also find the financing you need while paying less in interest and fees when you take the time to research your personal loan options and select the best fit for you.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
Elyssa Kirkham |

Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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Using a Personal Loan to Pay Off Taxes

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : 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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So you have a big tax bill to pay this April. Maybe you had too little withheld from your paychecks throughout the year or made more money as an independent contractor than you anticipated. Regardless of your circumstances, that outstanding debt can feel overwhelming — especially if you weren’t expecting it. Some borrowers may look into personal loans — generally used to consolidate debt, pay for home repairs or cover other big, planned-for expenses — as a way to pay back the IRS. But before you commit, learn more about whether these loans are the right choice for paying taxes.

Should you take out a personal loan to pay taxes?

The short answer: probably not.

“I can’t think of a time when it would be appropriate to take out a personal loan to pay income taxes,” Adam Funk, a CFP at Savings Coach in Troy, Mich., told MagnifyMoney.

Financial experts agree that, in general, personal loans shouldn’t be the go-to solution for unpaid taxes. One reason? It may cost more to take out a personal loan than to work directly with the IRS via one of their payment, installment or compromise plans. Interest rates for most personal loans range from around 6% to nearly 36% — and you’ll only qualify for the lowest rates if you have excellent credit.

By comparison, interest rates on outstanding taxes are the same for all borrowers and lower than most personal loans. The IRS updates interest rates on a quarterly basis. For underpayments, the rate is equal to the federal short-term rate plus 3 percentage points. As of Jan. 1, 2019, that rate is 6%.

Another benefit of working with the IRS, Funk told MagnifyMoney, is that you have more leverage to negotiate — and even have some or all of your debt forgiven — than you do once you pay off your bill and transfer the balance to a third-party lender.

In addition to interest, unpaid taxes will also incur monthly penalties — even if you have an agreement with the IRS. The IRS does note that paying via debit, credit or third-party loan may be less expensive than accruing these penalties on your outstanding bill, so you may want to explore all your options.

But before you use one of these alternatives, determine how much you’ll owe if you fail to pay off a credit card or loan balance in a timely manner. If your interest rate is high or you can’t tackle the total, you may be better off working directly with the IRS. Of course, simply failing to pay is the most expensive option.

Where to find a personal loan (if you need one)

If you do need to take out a personal loan, check with your bank first. A lender with whom you already have a relationship may be more flexible and open to working with you, especially if you have less-than-stellar credit. A local credit union may also be a good place to start — while you generally have to be a member to access personal loans and other financial products, credit unions often have lower interest rates and less strict qualification requirements for loans than traditional banks.

Online lenders may also have lower rates on personal loans than brick-and-mortar banks. With minimal overhead costs, these lenders are able to pass on savings to customers — though the best rates are reserved for borrowers with better credit.

Regardless of which type of lender you choose, make sure you shop around for the best rate. Start your research with MagnifyMoney’s personal loan marketplace, where you’ll find information about rates, terms, fees and requirements from a variety of lenders. You can also check your rates and offers directly — and see which lenders require a hard pull on your credit upfront.

LendingTree, which owns MagnifyMoney, also has a personal loan tool that may match you with lenders and loan offers. You do have to enter some personal information, including your address, employment status, and estimated income and credit score, before you receive any offers. Keep in mind: There’s no guarantee of offers using this tool.

LendingTree
APR

5.99%
To
35.99%

Credit Req.

Minimum 500 FICO

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

LendingTree is our parent company. 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.

Can’t afford your taxes? Consider these 4 alternatives

If you’re faced with a huge tax bill that you can’t afford outright, you do have options, including a number of payment plans and agreements you can negotiate directly with the IRS. Your specific tax situation will determine which alternative you qualify for.

1. Pay what you can, even if you request a filing extension

Tax returns and payments are generally due on April 15 (unless April 15 falls on a weekend or observed holiday). You can request a six-month filing extension directly with the IRS, which will push the deadline for your return to mid-October.

However, this extension does not apply to payments. If you don’t pay your estimated tax bill in April, you’ll owe penalties and interest on your balance. The IRS recommends paying what you can by the deadline to minimize these additional charges — from there, you can make a plan to pay the rest.

2. Apply for an installment agreement

If you can pay off your balance in 120 days or less, you can apply for a short-term payment plan. There’s no additional setup fee, but you will be responsible for any interests and penalties that accrue in addition to your outstanding taxes.

The IRS also offers a long-term payment plan, also called an installment agreement, which allows you to pay over 120 days or more. If you allow automatic withdrawals from your checking account, you’ll pay a fee of $31 for an online application or $107 to apply in person, by mail or over the phone. For other methods of payment (debit, credit, check or money order), the setup fees jump to $149 and $225, respectively. Interest and penalties apply.

3. Request an “Offer in Compromise”

If you can’t pay your taxes in full or via an installment agreement, you can apply for an Offer in Compromise. The IRS will look at your financial situation and may agree to settle your debt for less than what you owe. You may be eligible if your tax debt is inaccurate, you have insufficient assets to cover your bill or paying would cause economic hardship.

4. Request a collections delay

If paying any part of your tax bill would prevent you from meeting your basic needs, you can request that the IRS delay collections of your outstanding debt. You will have to provide information about your financial circumstances. Keep in mind: Delaying collections does not exempt you from your meeting your tax obligation, including interest and penalties. These will still accrue until you pay your full bill, and the IRS may still file a tax lien notice, which lets creditors know about your debt.

What happens if you don’t pay your tax bill

If you don’t pay your tax bill by the filing deadline in April — and don’t take any additional action — you’ll likely get hit with interest on your outstanding balance and a monthly fee for late payments. The late payment penalty is generally 0.5% of your unpaid taxes per month and can add up to 25% of what you owe.

There’s also a penalty for not filing your return. For 2016 tax returns, the minimum penalty for filing 60 days or more after the deadline was the lesser of $205 or 100% of the tax owed. According to the IRS, this penalty can be as much as 5% of your unpaid bill each month, up to a maximum of 25%.

If you don’t file or pay, the IRS will levy a combined penalty of up to 5% per month. There are exceptions to late payment penalties, however: If you’ve requested a filing extension and have paid 90% of your outstanding balance, you’ll only owe interest until your bill is paid off. Similarly, the IRS may waive penalties if taxpayers can show reasonable cause for failing to file or pay on time.

The IRS will send you at least two bills for outstanding taxes. If you don’t pay after your final bill, the agency will begin collections actions. The IRS can apply your unpaid balance to future refunds or seize your property — including everything from wages and retirement savings to your home — to cover your tax debt.

The bottom line: File your tax return and pay your balance by the due date. If you can’t afford to pay in full, at least pay what you can and actively explore options to minimize fees and penalties.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Emily Long
Emily Long |

Emily Long is a writer at MagnifyMoney. You can email Emily here

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Personal Loans

Capital One Personal Loan Alternatives

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : 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.

shopping personal loans
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If you need cash to make a big purchase or to pay down debt, a personal loan can quickly deliver the funds you need — possibly with a fixed term and interest rate, as well.

You can use a personal loan for a variety of purposes, such as to:

  • Consolidate your debt
  • Manage a large expense, such as moving or planning a wedding
  • Cover unexpected costs, such as medical or legal bills

Personal loans are popular with consumers seeking access to cash. In the fourth quarter of last year, 4.6 million personal loans were issued, the highest levels since 2015, according to a study by credit reporting agency TransUnion. Consumers are borrowing larger amounts as well, with the average unsecured loan hitting $7,986 in Q1 2018, up about $300 from a year before.

While one popular financial company, Capital One, no longer offers unsecured personal loans, many banks, credit unions and online lenders still do. However, the terms can vary depending on the lender and your financial position.

If you’re in need of a personal loan, consider the following options.

Alternatives to Capital One personal loans

Consumer have many options for a personal loan. Many banks and credit unions offer personal loans, as do online lenders such as SoFi, LendingClub and Earnest. Here’s what you need to know about the different kinds of lenders you may encounter on your search for a personal loan.

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Personal loans from online lenders

As more consumers get comfortable with e-commerce and online lending, the online banking sector has burgeoned into a fast-growing marketplace.

Online lenders offer consumers the convenience of browsing for loans and obtaining rate quotes on their own schedule. No more scheduling appointments with loan officers at banks and listening to their pitches. With sophisticated apps and websites, online lenders make it easy to apply for a personal loan and submit necessary documents.

While some consumers may worry about entering personal information online and uploading pay stubs and bank accounts, reputable online lenders offer strong web security. To get more comfortable with an online lender, consumers can look for reviews online and also search with the Better Business Bureau or states’ attorney’s offices. Also, online lenders are subject to the same federal oversight as traditional lenders, which should give consumers some added confidence.

Company
APR
Terms
Credit Req.
LendingTree

5.99% - 35.99%

24 to 60

months

Minimum 500 FICO

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on LendingTree’s secure website

LendingTree is our parent company

Disclaimer

3.34% - 16.99%

24 to 144

months

660

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on LendingTree’s secure website

Advertiser Disclosure.

Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.34% APR with a term of 3 years would result in 36 monthly payments of $292.31.
SoFi

6.99% - 14.99%

36 to 84

months

680

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on LendingTree’s secure website

Advertiser Disclosure.

Fixed rates from 6.99% APR to 14.99% APR (with AutoPay). Variable rates from 6.26% APR to 14.10% APR (with AutoPay). SoFi rate ranges are current as of November 30, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.26% APR assumes current 1-month LIBOR rate of 2.33% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.

See Consumer Licenses.

SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
Marcus by Goldman Sachs®

6.99% - 24.99%

36 to 72

months

Varies

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on LendingTree’s secure website

Your loan terms are not guaranteed and are subject to our verification of your identity and credit information.To obtain a loan, you must submit additional documentation including an application that may affect your credit score. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans).Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions.

5.99% - 29.99%

36 or 60

months

660

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on LendingTree’s secure website

Advertiser Disclosure.

*The Annual Percentage Rate (APR) is the cost of credit as a yearly rate and ranges from 5.99%-29.99%, which may include an origination fee from 0.99% - 5.99%. Any origination fee on a 5-year loan will be at least 4.99% and is deducted from loan proceeds. The APR offered will depend on your credit score, income, debt payment obligations, loan amount, loan term, credit usage history and other factors, and therefore may be higher than our lowest advertised rate. Requests for the highest loan amount may resulting an APR higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest rate.

Best Egg loans are unsecured personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. Equal Housing Lender. "Best Egg" is a trademark of Marlette Funding LLC. All uses of "Best Egg" on this site mean and shall refer to "the Best Egg personal loan" and/or "Best Egg on behalf of Cross River Bank, as originator of the Best Egg personal loan," as applicable. Loan amounts generally range from $2,000-$35,000. Offers up to $50,000 may be available for qualified customers who receive offer codes in the mail. The minimum individual annual income needed to qualify for a loan of $50,000 is $130,000. Borrowers may hold no more than two open Best Egg loans at any given time. In order to be eligible for a second Best Egg loan, your existing Best Egg loan must have been open for at least six months. Total existing Best Egg loan balances must not exceed $50,000. All loans in MA must exceed $6,000; in NM, OH must exceed $5,000; in GA must exceed $3,000.

Borrowers should refer to their loan agreement for specific terms and conditions. A loan example: a 5–year $10,000 loan with 9.99% APR has 60 scheduled monthly payments of $201.81, and a 3–year $5,000 loan with 5.99% APR has 36 scheduled monthly payments of $150.57. Your verifiable income must support your ability to repay your loan. Upon loan funding, the timing of available funds may vary depending upon your bank's policies.

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you.

6.95% - 35.89%

36 or 60

months

600

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on LendingTree’s secure website

Our Commitment We'll receive a referral fee if you click here. This does not impact our rankings or recommendations.

9.95% - 35.99%

24 to 60

months

Varies

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on LendingTree’s secure website

Avant branded credit products are issued by WebBank, member FDIC.

16.05% - 35.99%

24 to 60

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

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.

PenFed Credit Union

Starting at 6.49%

60

months

700

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on PenFed Credit Union’s secure website

7.98% - 35.99%

36 & 60

months

640

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on LendingTree’s secure website

We'll receive a referral fee if you apply for this loan. This does not impact our rankings or recommendations.

Personal loans from traditional banks

Banks with physical branches could be a good option for borrowers. If you aren’t comfortable applying online for a loan, for example, you could go in to your local branch and speak with a representative about your options.

There could be advantages to applying for a loan with a bank that you already do business with, too. Banks may offer incentives to their banking customers seeking personal loans, such as preferential rates if you enroll in autopay, are an existing customer or have a checking or savings account. However, this perk isn’t exclusive to banks with brick-and-mortar locations — though it could be a selling point.

You may be able to use your existing savings account as collateral for a secured personal loan, which could offer better terms than a traditional personal loan. Perhaps the biggest advantage of taking out a loan at your local branch, though, is having someone to work with in-person. You could make payments in person and have a go-to banking rep to answer your questions. That’s something online lenders can’t offer. (Though a credit union can.)

It’s worthing noting that some banks, such as US Bank, will only extend personal loans to existing banking customers.

Here are terms you may find from lenders in MagnifyMoney’s personal loan marketplace:

  • Rates: You can find rates between 5.99% and 35.99%.
  • Term length: Personal loan terms range from 12 to 60 months.
  • Borrowing limits: Borrow from $2,000 to $100,000.

Personal loans from credit unions

Another popular option is to get a personal loan from a credit union. These are nonprofit financial cooperatives whose members own the institution.

Credit unions typically charge lower fees and offer higher savings rates than for-profit banks. You may also find personal loans with lower interest rates. But to take advantage, you’ll need to be a member with an existing account.

Credit unions may be more willing than other lenders to extend a loan to someone with a lower credit score.

With a personal loan from a credit union, members can usually choose between a secured loan and an unsecured loan. Some credit unions get creative with what they’ll accept for collateral. For instance, the Credit Union of Denver allows members to secure loans with vehicles such as ATVs, dirt bikes, jet skis, or titled trailers, including horse trailers or flatbed trailers.

Here are terms you may find from lenders in MagnifyMoney’s personal loan marketplace:

  • Rates: You can find rates between 6.49% and 18.00%.
  • Term length: Personal loan terms range from 12 to 84 months.
  • Borrowing limits: Borrow up to $50,000.

How to compare personal loans

When you’re shopping for personal loans, consider taking these steps:

  • Check your credit report and report errors. Your credit report informs your credit score, which plays an important role in securing favorable rates and terms, as well which lenders you may be able to work with.
  • Shop around with lenders. Even if you’d prefer a brick-and-mortar bank, consider online lenders that may offers better terms. You may find the perks of a traditional bank aren’t worth a higher loan cost.
  • Get a breakdown of a lender’s fees. Ask about origination fees, charges for late or missed payments and penalties for early repayment.

Before tying down a lender, you should compare rates by getting pre-approved with different lenders. That way, you can make an informed decision before taking out loan funds. Here are some of the most common variables with a personal loan to compare:

APR: Short for annual percentage rate, this rate indicates how much a loan will cost you per year. It includes your interest rate and any associated fees from your lender. Your rate can be fixed or variable.

Term length: The period of time your loan must be repaid, including the interest. Personal loan terms typically run between one year and seven years.

Conditions: Personal loans can be secured loans, meaning they are guaranteed by hard assets or a bank account, such as a certificate of deposit (CD) or savings account, or unsecured loans, which are not tied to any collateral.

Borrowing limits: The amount of money you can receive from your personal loan. Different lenders may have different minimum and maximum borrowing amounts.

3 alternatives to personal loans

Sometimes, a personal loan isn’t the right fit for a consumer. Perhaps your credit score is low and that means you don’t qualify for an attractive interest rate. Or maybe the terms of the personal loans are too restrictive for your needs and budget. The good news is there are other forms of credit and ways to get you quick access to cash.

Personal line of credit

Along with personal loans, many banks and credit unions will extend their banking customers a personal line of credit.

Pros

  • You have to access to a pre-approved line of credit you can draw on when you need it.
  • Payments based on funds you access, not the full amount you qualify for.
  • You don’t need collateral because the line is tied to an existing bank account.
  • For an even lower interest rate, you can secure the loan with a bank account or CD.

Cons

  • When your draw period ends, you must repay the loan in full.
  • Rates and terms vary by lender, so shop around for the best deal.
  • It can take several days to get access to funds.

Intro 0% APR balance transfer credit card

Some credit card companies offer attractive introductory offers with 0% APR for a fixed period of time, usually six to 21 months. You can check out different options on MagnifyMoney’s credit card marketplace.

Pros

  • You get a grace period to pay off your balance without incurring interest payments.
  • Like a no-fee loan, these cards allow you to make purchases on credit while earning perks or rewards.
  • As long as you pay on time, you’ll avoid any interest charges or late fees.
  • Many cards come with no annual fee.

Cons

  • Once the introductory period ends, interest rates can skyrocket.
  • If you don’t pay on time and pay off the balance, you could face stiff fees and interest charges.
  • If you have weak or low credit, you may not qualify.

Discover it® Balance Transfer

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on Discover Bank’s secure website

Rates & Fees

Read Full Review

Discover it® Balance Transfer

Regular APR
13.99% - 24.99% Variable
Intro Purchase APR
0% for 6 Months
Intro BT APR
0% for 18 Months
Annual fee
$0
Rewards Rate
5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate, 1% unlimited cash back on all other purchases - automatically.
Balance Transfer Fee
3%
Credit required
good-credit
Excellent/Good Credit

Home equity line of credit (HELOC)

If you own a property and you’ve paid down a sizable chunk of your mortgage, you may be able to tap into some of your equity in your home. Many lenders and mortgage companies offer home equity loans, or HELOCs.

Pros

  • HELOCs function similarly to a bank line of credit, but in this case, your equity in your property guarantees the loan.
  • During the draw period, make minimum monthly payments of both principal and interest.
  • Option to pay for major expenses, such as home renovations, vacations or other large purchases, or pay down debt.
  • Interest rates are generally lower than credit cards.

Con

  • When you reach the end of your draw term, you have to keep repaying loan, but no longer have access to funds.
  • Interest rates are often variable, which can add to your costs if rates go up.
  • Some banks may offer fixed rates for some or all of your balance, but that rate could be higher than the variable rate.

Conclusion

While Capital One no longer offers personal loans, they do still offer credit cards, savings and checking accounts and auto loans. For personal loans, consumers can inquire with many other traditional and online lenders.

Since personal loans are a popular offering, there should be plenty of competitive offers on the marketplace, providing borrowers with the greatest chances to find a personal loan that meets their financial capabilities and their needs.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Alli Romano
Alli Romano |

Alli Romano is a writer at MagnifyMoney. You can email Alli here

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Personal Loans

Should You Finance Dental Work With a Personal Loan?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : 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.

dental loans
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First impressions are lasting impressions. So if you’re self-conscious about your smile, or you’re in need of dental work to resolve a health issue, you may be considering a dental loan. A dental loan is basically a personal loan you can take out to cover dental work.

In this post, we’ll discuss dental loans and other methods for financing your trip to the dentist, plus the pros and cons of borrowing money.

Financing your dental work with a personal loan

Dental coverage may be part of your health plan or purchased as a stand-alone plan — but what’s covered by insurance varies.

Annual check-ups and cleanings may be covered in full, along with preventative maintenance. Fillings, crowns and orthodontic services can have out-of-pocket costs. Elective cosmetic dental work like veneers may not be covered at all — and veneers can cost a staggering $500 to $2,000 (or more) per tooth.

If you can’t afford out-of-pocket costs, a personal loan may be used to cover the expense. The process of using a personal loan for dental work is pretty straightforward. You apply for a personal loan; once approved, you use the funds to pay your dental bills. Afterward, you make installment payments on the loan until it’s paid off. If you’re considering a loan for dental work, here are the pros and cons:

Pros

  • The speed. A personal loan may get you the cash you need fairly quickly. This will be helpful if you want to get dental work done within the next few months. The application process for a loan — especially if you get that loan online — can take just a few business days.
  • The fixed term and predictable costs. Personal loans are installment loans that have a set interest rate and set loan term. You’ll know exactly when the loan will be paid off.
  • The options. There are personal loans for borrowers with excellent credit and not-so-good credit. There are short-term loans of 12 months and long-term loans of up to 84 months. Check out a sampling of the personal loans available below.

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Cons

  • You’ll have another debt payment. Personal loans can be an affordable debt vehicle, but debt is still debt. If your dental work is a voluntary cosmetic procedure, you need to decide whether it’s worth the additional financial responsibility. There may also be upfront fees to take into consideration depending on the lender you choose. Upfront origination fees to process the loan can range from 1.00% to 8.00%.
  • Loans offer a set amount of cash. A personal loan gives you cash in one lump sum — so you could be out of luck if the dental work ends up costing more than your loan. In this case, you may need to pay some in cash, borrow more money or charge the balance to a credit card.
  • Higher rates for lower credit scores. You may be able to qualify for a loan will less-than-stellar credit, but the increased credit risk could increase your interest rate and fees. Shop around with multiple lenders locally and online to see where you can get the best deal.

How to get a personal loan

You should explore all options at local banks, credit unions, and online lenders when shopping for a loan. Financial institutions that you already have a relationship with may be able to offer you a competitive rate. The online lending marketplace is booming, too; many online lenders are offering low rates and easy online application processes.

LendingTree’s personal loan tool may be able to match you with personal loan products from up to five different lenders. Check out a few of the products available below:

Company
APR
Terms
Credit Req.
LendingTree

5.99% - 35.99%

24 to 60

months

Minimum 500 FICO

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

Disclaimer

3.34% - 16.99%

24 to 144

months

660

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.34% APR with a term of 3 years would result in 36 monthly payments of $292.31.
SoFi

6.99% - 14.99%

36 to 84

months

680

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

Fixed rates from 6.99% APR to 14.99% APR (with AutoPay). Variable rates from 6.26% APR to 14.10% APR (with AutoPay). SoFi rate ranges are current as of November 30, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.26% APR assumes current 1-month LIBOR rate of 2.33% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.

See Consumer Licenses.

SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
Marcus by Goldman Sachs®

6.99% - 24.99%

36 to 72

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

Your loan terms are not guaranteed and are subject to our verification of your identity and credit information.To obtain a loan, you must submit additional documentation including an application that may affect your credit score. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans).Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions.

5.99% - 29.99%

36 or 60

months

660

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

*The Annual Percentage Rate (APR) is the cost of credit as a yearly rate and ranges from 5.99%-29.99%, which may include an origination fee from 0.99% - 5.99%. Any origination fee on a 5-year loan will be at least 4.99% and is deducted from loan proceeds. The APR offered will depend on your credit score, income, debt payment obligations, loan amount, loan term, credit usage history and other factors, and therefore may be higher than our lowest advertised rate. Requests for the highest loan amount may resulting an APR higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest rate.

Best Egg loans are unsecured personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. Equal Housing Lender. "Best Egg" is a trademark of Marlette Funding LLC. All uses of "Best Egg" on this site mean and shall refer to "the Best Egg personal loan" and/or "Best Egg on behalf of Cross River Bank, as originator of the Best Egg personal loan," as applicable. Loan amounts generally range from $2,000-$35,000. Offers up to $50,000 may be available for qualified customers who receive offer codes in the mail. The minimum individual annual income needed to qualify for a loan of $50,000 is $130,000. Borrowers may hold no more than two open Best Egg loans at any given time. In order to be eligible for a second Best Egg loan, your existing Best Egg loan must have been open for at least six months. Total existing Best Egg loan balances must not exceed $50,000. All loans in MA must exceed $6,000; in NM, OH must exceed $5,000; in GA must exceed $3,000.

Borrowers should refer to their loan agreement for specific terms and conditions. A loan example: a 5–year $10,000 loan with 9.99% APR has 60 scheduled monthly payments of $201.81, and a 3–year $5,000 loan with 5.99% APR has 36 scheduled monthly payments of $150.57. Your verifiable income must support your ability to repay your loan. Upon loan funding, the timing of available funds may vary depending upon your bank's policies.

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you.

6.95% - 35.89%

36 or 60

months

600

SEE OFFERS Secured

on LendingTree’s secure website

Our Commitment We'll receive a referral fee if you click here. This does not impact our rankings or recommendations.

9.95% - 35.99%

24 to 60

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

Avant branded credit products are issued by WebBank, member FDIC.

16.05% - 35.99%

24 to 60

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

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4 alternatives to a dental loan

Personal loans aren’t the only way to pay for dental work. Here are a few alternatives along with the pros and the cons of each:

Use a credit card

Credit cards are one of the most common ways to borrow cash when you’re in need of funds. You can apply for credit cards on the card issuer’s website. Some credit card issuers even allow you to pre-qualify with a soft inquiry that doesn’t affect your score.

Pros

  • Credit cards can have introductory deals and special member rewards offers. Some credit cards offer 0% APR on purchases as an introductory deal. You can technically borrow money interest free if you can charge dental work to the card and pay if off before the intro period ends. There are also credit cards with sign-up bonuses that may reward you for spending.
  • You can use and pay back cash as needed. Credit cards offer a bit of flexibility. If your dental work costs more or less than what you expected, you can use what you need up to the credit limit.

Cons

  • Credit cards may have a higher interest rate than a dental loan. The average credit card interest rate is 14.38%, according to the Fed’s most recent data, but credit card interest rates can go beyond 20%, depending on your credit score.
  • You may not qualify for a 0% rate. Introductory 0% APR deals are only available for a limited time. Your rate jumps up to the standard rate after the period ends.
  • You can get caught in the minimum payment trap. Credit cards are not like personal loans, where you have a structured repayment schedule. Instead, there’s a minimum payment you have to make that’s likely a fraction of your balance. Debt can spiral out of control if you get into the habit of making just minimum payments. Be sure to develop a strategy to pay off the credit card otherwise the debt can linger.

Try a health care credit card or dental office payment plan

Health care financing options such as CareCredit and iCare Financial help patients cover out-of-pocket costs for dental and medical procedures. These financing options may be recommended to you by dental offices if you’re not able to pay for the procedure upfront. Dental offices themselves may also offer payment plans where you pay incrementally until the bill is paid off.

Pros

  • Credit check may not be required. Some financing products don’t have credit checks and have quick approval processes.
  • 0% introductory financing terms. Products like CareCredit offer promotional financing with no interest if you pay off the debt in 6, 12, 18 or 24 months.

Cons

  • Fees. There may be down payment, administrative fees and application fees involved.
  • The possible deferred interest. Be careful to read the fine print of any financing product pamphlet you get from a dental office. Financing options that have low interest starting out may have a deferred interest policy. This means that you get charged retroactive interest from the initial transaction date if you don’t pay off the balance within the low interest period.

Borrow from your home equity

If you have sufficient equity in a home, you may be able to tap into the home equity to pay for your dental work.

Pros

  • You have options when borrowing from home equity. One option is the home equity loan which gives you a lump sum that you pay back in installments. If you prefer a credit line, the home equity line of credit (HELOC) gives you an account that you can draw money from when you need it. LendingTree, which owns MagnifyMoney, has a marketplace where you can shop for HELOCs and home equity loans.
  • A better interest rate may be possible. Home equity loans and HELOCs are backed by your home. The collateral securing the loan may be able to land you a better interest rate compared to an unsecured personal loan.

Cons

  • The fees and interest. Lenders may charge draw fees when borrowing from home equity. HELOCs can also have a variable interest rate. Shop around for products with the most competitive rates and fees. Talk to your lender about rate caps and if there’s a way to lock in your rate.
  • The consequences of nonpayment. You could lose your home if you’re unable to pay back the HELOC or home equity loan.

Pull from savings

You could use cash you already have or you could put away money biweekly or monthly until you have enough for the procedure. Saving in a health Flexible Spending Account (FSA) or Health Savings Account (HSA) for dental work can offer tax benefits. Learn more about the HSA and FSA.

Pros

  • Using cash means no debt payment. You don’t have to worry about adding another debt payment to your budget.
  • You avoid financing costs. No need to shop for interest rates or read through fine print. In some cases, offices may even give you a discount for paying upfront in cash.

Cons

  • The high cost of dental work could drain your savings account. Dental work shouldn’t dry up all of your liquid savings. It’s a good idea to keep a cushion of rainy day savings in an account at all times in case you lose your job or an emergency happens.
  • The timing. Saving up can take some time if your savings for dental work is currently $0. If you need to get dental work done next month, saving up the cash may not be possible.

Final word

Borrowing money for dental work is not something you should jump into without some serious thought. Can you manage another debt payment? Is dental work something that can wait?

If it can wait, saving up cash can help you avoid the costs of financing and the responsibility of managing another debt product. If it’s a procedure that cannot wait, be sure to explore all options.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Taylor Gordon
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Taylor Gordon is a writer at MagnifyMoney. You can email Taylor here

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Marcus by Goldman Sachs Review: GS Bank Takes on Online Savings, CDs, and Personal Loans

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Year Established1990
Total Assets$179.2B
Most Americans probably think of fancy white-collar stock traders on Wall Street when they think of Goldman Sachs, a global investment firm that’s been around since the late 19th century.

In recent years, Goldman made a major pivot, launching a new arm of the company called GS Bank, which would provide internet-only savings accounts to the masses.

They also launched Marcus by Goldman Sachs®, a line of personal loans. Eventually, they decided to rebrand their savings account business, putting it under the Marcus umbrella as well.

Today, through Marcus, you’ll find three product offerings: personal loans, savings accounts, and CDs.

In this article, we’ll take a deep dive into all three products. We’ll tell you what you need to know before opening an account, including what rates they are offering.
Goldman Sachs Bank USA’s Most Popular Accounts

APY

Account Type

Account Name

3.10%

CD Rates

Goldman Sachs Bank USA High-yield 5 Year CD

on Goldman Sachs Bank USA’s secure website

Member FDIC

2.65%

CD Rates

Goldman Sachs Bank USA High-yield 12 Month CD

on Goldman Sachs Bank USA’s secure website

Member FDIC

Marcus by Goldman Sachs savings account

A very high interest rate and no fees make this one of the best savings accounts out there.

APY

Minimum Balance Amount

2.05%

None

  • Minimum opening deposit: None. However, you’ll need to deposit at least $1.00 if you want to earn any interest
  • Monthly account maintenance fee: None
  • ATM fee: N/A
  • ATM fee refund: N/A
  • Overdraft fee: None

This is a great account for almost anyone. However, before you click that “Learn More” button below, there are a couple of things to know.

No ATMs. First, Marcus by Goldman Sachs doesn’t offer ATM access to your savings account. You’ll either need to deposit or withdraw money by sending in a physical check, setting up direct deposits, or by moving the money to and from your other bank accounts via ACH or wire transfer.

No checking account. Second, Marcus does’t offer a corresponding checking account. That means you can only use this account as an external place to park your cash from your everyday money flow.

Keeping a separate savings account does have its benefits. For example, it’s harder to tempt yourself to withdraw the cash if you’re a chronic over-spender. But, it also means that there might be a delay of a few days if you need to transfer the money out of your Goldman Sachs online savings account and into your other checking account.

How to open a Goldman Sachs online savings account

It’s really easy to open an online savings account with Marcus by Goldman Sachs. You can do it online or over the phone as long as you’re 18 years or older, have a physical street address, and a Social Security Number or Individual Taxpayer Identification Number.

You’ll be required to sign a form which you can do online, or by mail if you’re opening the account over the phone.

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How their online savings account compares

Marcus’ online savings account can easily be described with one word: outstanding.

You’ll get a relatively high interest rate with this account, which is among the best online savings account rates you’ll find today. In fact, these rates are currently over seven times higher than the average savings account interest rate.

Even better, this account won’t charge you any fees for the privilege of keeping your money stashed there. It’s a tall order to find another bank that offers these high interest rates with terms this good.

Marcus by Goldman Sachs CD rates

Sky-high CD rates, but watch out for early withdrawal limitations.

Term

APY

Minimum Deposit Amount

6 months

0.60%

$500

9 months

0.70%

$500

12 months

2.65%

$500

18 months

2.65%

$500

24 months

2.70%

$500

3 years

2.75%

$500

4 years

2.80%

$500

5 years

3.10%

$500

6 years

3.15%

$500

  • Minimum opening deposit: $500
  • Minimum balance amount to earn APY: $500
  • Early withdrawal penalty:
    • For CDs under 12 months, 90 days’ worth of interest
    • For CDs of 12 months to 5 years, 270 days’ worth of interest
    • For CDs of 5 years or over, 365 days’ worth of interest

Marcus’ CDs work a little differently from other CDs. Rather than having to set up and fund your account all at once, Goldman Sachs will give you 30 days to fully fund your account.

Once open, your interest will be tallied up and credited to your CD account each month. You can withdraw the interest earned at any time without paying an early withdrawal penalty, but heads up: If you withdraw the interest, your returns will be lower than the stated APY when you opened your account.

If you need to withdraw the money from your CD, you can only do so by pulling out the entire CD balance and paying the required early withdrawal penalty. There is no option for partial withdrawals of your cash.

Finally, once your CD has fully matured, you’ll have a 10-day grace period to withdraw the money, add more funds, and/or switch to a different CD term. If you don’t do anything, Marcus will automatically roll over your CD into another one of the same type, but with the current interest rate of the day.

How to open a Goldman Sachs CD

Marcus has made it super simple to open up a CD. First, you’ll need to be at least 18 years old, and have either a Social Security Number or an Individual Taxpayer Identification Number.

You can open an account easily online, or call them up by phone. You’ll need to sign an account opening form, which you can do online or via a hard-copy mailed form. Then, simply fund your CD account within 30 days, and you’re all set.

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How their CDs compare

The interest rates that Marcus offers on their CDs are top-notch. In fact, a few of their CD terms are among the current contenders for the best CD rates.

If you’re interested in pursuing a CD ladder approach, Marcus is one of our top picks because each of their CD terms offer above-average rates. This means you can rest easy that you’ll get the best rates for your CD ladder without having to complicate things by spreading out all of your CDs among a handful of different banks.

The only downside to these CDs compared with many other banks is that you can’t withdraw a portion of your cash if you need it. It’s either all-in, or all-out. However, once out, you’re still free to open a new CD with the surplus cash, as long as it’s at least the $500 minimum deposit size.

Marcus by Goldman Sachs personal loan

Personal loans offered by Marcus have low APRs, flexible terms, and no fees.

Terms

APR

Credit Required

Fees

Max Loan Amount

36 to 72 months

6.99%-24.99%

Varies

None

$40,000

Marcus by Goldman Sachs® personal loans can be used for just about anything, from consolidating debt to financing a large home improvement project. They offer some of the best rates available, with APRs as low as 6.99%, and you’ll not only be able to choose between a range of loan terms, but you can also choose the specific day of the month when you want to make your loan payments.

While there are no specific credit requirements to get a loan through Marcus, the company does try to target those that have “prime” credit, which is usually those with a FICO score higher than 660. Even with a less than excellent credit score, you may be able to qualify for a personal loan from Marcus, though, those that have recent, negative marks on their credit report, such as missed payments, will likely be rejected.

Applicants must be over 18 (19 in Alabama and Nebraska, 21 in Mississippi and Puerto Rico) and have a valid U.S. bank account. You are also required to have a Social Security or Individual Tax I.D. Number.

No fees. Marcus charges no extra fees for their personal loans. There is No origination fee associated with getting a loan, but there are also no late fees associated with missing payments. Those missed payments simply accrue more interest and your loan will be extended.

Defer payments. Once you have made on-time payments for a full year, you will have the ability to defer a payment. This means that if an unexpected expense or lost job hurts your budget one month, you can push that payment back by a month without negatively impacting your credit report.

How to apply for a Marcus personal loan

Marcus by Goldman Sachs offers a process that is completely online, allowing you to apply, choose the loan you want, submit all of your documents, and get approved without having to leave home. Here are the steps that you will complete to get a personal loan from Marcus:

  1. Fill out the information that is required in the online application, including your basic personal and financial information, as well as how much you would like to borrow and what you will use the money for.
  2. After a soft pull on your credit, and if you qualify, you will be presented a list of different loan options that may include different rates and terms.
  3. Once you have chosen the loan you want, you will need to provide additional information to verify your identity. You may also be asked for information that can be used to verify your income and you will need to provide your bank account information so that the money can be distributed.
  4. You will receive your funds 1 – 4 business days after your loan has been approved.

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How their personal loans compare

Marcus offers low APRs and flexible terms with their personal loans, but their main feature is that they have no fees. If you are looking for a straightforward lending experience with no hidden fees or costs, Marcus will be perfect for you since you won’t even have to worry about late fees if you happen to miss a payment.

While Marcus offers some great perks, you may be able to get a lower rate if you choose to go with another lender, such as LightStream or SoFi. Both of these lenders offer lower APR ranges and they don’t charge origination fees, though, LightStreamwill do a hard pull on your credit to preapprove you.

LendingClub and Peerform both have lower credit requirements than Marcus, but they also charge origination fees and, being P2P lending platforms, you will need to wait for your loan to be funded and you run the risk that other users might not fund your loan.

Overall review of Marcus by Goldman Sachs‘ products

Marcus has really hit it out of the park with their personal loans, online savings, and CD accounts. Each of these accounts offers some of the best features available on the market, while shrinking the fees down to a minuscule, or even nonexistent, amount. Their website is also slick and easy to use for online-savvy people.

The only thing we can find to complain about with Marcus is that they don’t offer an equally-awesome checking account to accompany their other deposit products. Indeed, it seems like Marcus has turned their former hoity-toity image around: Today, they’re a bank that we’d recommend to anyone, even blue-collar folks.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lindsay VanSomeren
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Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Personal Loans

Should You Pay Off Credit Card Debt with a Personal Loan? What to Consider

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : 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.

paying off credit card
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If you’re carrying credit card debt, you’re not alone. Americans topped $1 trillion in total revolving debt in 2018, according to the Federal Reserve.

That adds up to a lot of debt per person. The average credit card balance is $6,354, according to CompareCards.com (MagnifyMoney and CompareCards.com are both under the same parent company, LendingTree). When you factor in the average credit card interest rate of 15.54% — that’s a hefty monthly financial obligation.

An outstanding credit card balance can weigh your budget down for years, even decades, so you need to get a handle on it as quickly as possible. We’ll go over the pros and cons of using a personal loan to pay off credit card debt to determine if this could be the right move for your finances.

Paying off credit card debt with a personal loan

You may be able to use the proceeds of a personal loan to pay the debt on multiple credit cards. Here are 5 reasons you might go this route.

5 pros of using a personal loan to pay off credit card debt

1. You can consolidate payments
Managing multiple credit card accounts is hard work. When you’re trying to keep track of too many cards, it’s easy to confuse payment deadlines or accidentally miss them altogether. Paying off multiple credit cards with a personal loan consolidates that debt into one monthly payment, meaning fewer bills to worry about.

2. You could lower your interest rate
There’s no guarantee, but you’ll likely be able to secure a lower interest rate on your personal loan than you were paying on your credit cards. Your interest rate is determined by factors including credit score, debt-to-income ratio, employment status and credit history. Every lender has different borrowing criteria, but generally speaking, a high credit score and a low debt-to-income ratio will help you get a more competitive interest rate.

3. Your monthly payment could go down
If you’re able to secure a lower interest rate on your personal loan, it will likely reduce the amount on your monthly payments. This will allow you to enjoy a little extra room in your budget.

4. You might boost your credit score
If much of your credit portfolio is consumed by revolving accounts, diversifying the mix by taking on a personal loan will likely improve your credit score, according to the credit bureau Experian. Making monthly payments on a timely basis showcases your ability to manage debt responsibly. In most cases, the increase will take time and won’t be monumental, but it’s a step in the right direction.

5. You more likely to pay off debt faster
If you’re making the minimum payment on a substantial credit card balance, you could be stuck with the debt for decades. On the other hand, most debt consolidation loans have a term of 24 to 60 months. This can allow you to pay off the debt in a fraction of the time.

5 cons of using a personal loan to pay off credit card debt

1. You might not qualify for a personal loan
Lenders don’t issue personal loans to just anyone. In most cases, you’ll need a minimum credit score of 525 to even have your loan application considered. Other factors that will be taken into consideration include your debt-to-income ratio, employment status and credit history.

2. You may continue to rack up debt
Technically speaking, paying off your credit card balances with a personal loan frees up space to start racking up charges again. If you don’t completely trust yourself to cut ties with the plastic, it might not be wise to put the temptation out there. After all, debt consolidation is supposed to help improve your finances, not make them worse.

3. You might not get a lower interest rate
Personal loan interest rates are largely based on your credit score. Generally speaking, most rates fall between 5.99% to 35.99%. It’s possible your credit card interest rate will be lower than the rate you’re offered for a personal loan. In this case, it wouldn’t make sense to proceed with debt consolidation.

4. Your monthly payment could increase
You pay for it with interest, but credit cards offer more repayment flexibility than personal loans. Since the latter is typically attached to a repayment period of 24 to 60 months, it’s possible you’ll end up with a higher monthly payment. If you don’t have a lot of extra room in your budget, this could be difficult to handle. The last thing you want is to default on the personal loan that was supposed to be getting you out of debt.

5. The loan might come with fees
Some lenders charge an origination fee, which is tacked on to your personal loan. In most cases, the fee costs 1% to 6% of the total loan amount. For example, if you had a $5,000 loan with a 2% origination fee, you would have to pay $100 upfront. Therefore, it’s possible the personal loan could be more expensive than your credit cards, even if you’re able to secure a lower interest rate.

How to find a personal loan to pay off debt

Shopping around to find the best offer for a personal loan is a must. MagnifyMoney offers a personal loan marketplace that allows you to quickly identify lenders that might meet your needs. You can personalize results by filtering for your credit score, desired loan amount and ZIP code.

What to consider as you review personal loan offers

When comparison shopping for a personal loan, take these key factors into account:

  • APR: Personal loan rates typically fall between 5.99% to 35.99%. The rate you’re offered directly impacts your monthly payment and the overall interest you’ll pay on the loan.
  • Term length: Most personal loans come with a term length of 24 to 60 months, which is the amount of time you’ll have to pay the balance off in full.
  • Fees: Some lenders tack on additional fees to personal loans, including origination fees and prepayment penalties. These can increase the total cost of the loan.
  • Loan amount: Personal loans are generally available in sums ranging from $1,000 to $35,000. However, not all lenders are able to approve the amount of money you might need.
LendingTree
APR

5.99%
To
35.99%

Credit Req.

Minimum 500 FICO

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Varies

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LendingTree is our parent company

LendingTree is our parent company. 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.

3 alternatives to a personal loan

Taking out a personal loan to pay off credit card balances isn’t the only way to get out of debt.

If you don’t qualify for a personal loan or are unable to find one that meets your needs, here’s a few other options to consider.

1. Balance transfer credit card

A balance transfer allows you to shift your debt from a high interest credit card to one with a more competitive rate if you qualify. Many credit card companies even offer a 0% introductory APR, making it possible for you to pay less interest or none at all for a period of time, so you can pay your balance down faster. The MagnifyMoney balance transfer card marketplace can help you comparison shop to find the right credit card for your needs.

Pros

  • If you get a new card with an intro 0% APR and pay it off in full during the promotional period, you can eliminate all interest charges.
  • Your new card might have better perks than the old one.
  • It might be possible to get a card with $0 intro balance fees, making it possible to save even more money.
  • There’s no prepayment penalty.

Cons

  • In most cases, you’ll need good or excellent credit — often a 700 minimum credit score — to qualify for the most competitive offers.
  • You’re unable to transfer balances between the same credit card issuer.
  • Cards often come with a transfer fee, which is usually 3% of the total balance transferred.
  • If you don’t pay the balance in full during the introductory period, you could face a higher APR than you were paying on your old card.

2. Home equity line of credit

A home equity line of credit, commonly known as a HELOC, allows you to borrow against the equity in your home. Equity is the difference between what the home is worth and the outstanding debt on it. For example, if your property is valued at $400,000 and you owe $250,000 on your mortgage, you have $150,000 in equity. Most lenders will allow you to borrow up to 85% of the current value of your home.

Pros

  • Borrow as much or as little as you need, up to your limit.
  • Repay only the amount used.
  • Interest rates are typically lower than credit cards and personal loans.

Cons

  • Interest rates are generally variable, which could cause your monthly payment to fluctuate.
  • You could be subject to annual fees, maintenance fees, transaction fees and closing costs.
  • Some lenders have a minimum borrowing or withdrawal amount.
  • If you fall behind on payments, you could lose your home.

3. Borrowing from a friend or family member

Nearly three in four Americans have borrowed money from a relative at some point in their lives, according to a survey from LendingTree, which owns MagnifyMoney. Unfortunately, more than one-quarter experienced negative consequences from the transaction. If you take this route, create a contract outlining the loan length, monthly payments and other terms, such as interest.

Pros

  • No credit check is involved, which is advantageous if your score isn’t the best.
  • If you have to pay interest, you’ll likely get a more competitive rate than would be offered by a traditional lender.
  • You won’t have to spend time comparison shopping for loans.

Cons

  • Missing payments could permanently damage your bond with a loved one.
  • Owing a friend or family member money might change the dynamic of your relationship.
  • Tensions could arise if the person needs the money before the expected loan payoff date.

5 questions to consider before tackling your debt with a personal loan

In many cases, using a personal loan to pay off credit card balances is a wise move, but not always. Ask yourself these questions to make sure this it’s the right choice for your unique situation.

Using a personal loan to pay off your credit cards opens the door to take on even more debt. You don’t want to end up with more debt than you had initially.

After paying your credit card(s) off, you might be ready to cut ties with them and close the account. But that might not be the best move — closing an account slashes your overall available credit, which can lower your credit score. If you close a credit card account that you’ve had for several years, it could also damage your length of credit history, which can also lower your credit score.

However, if you know you’ll charge the cards right back up, closing them could still be the better choice. Be honest with yourself and take the route that’s best for your unique situation.

Generally speaking, personal loans have an average interest rate of 5.99% to 35.99%, but they can go much higher. It’s possible you could be offered a higher rate than you’re currently paying on your credit card. For example, if you’re offered a personal loan with an 30% interest rate, but the interest rate on your credit card is 14%, you’d likely end up paying more with the loan.

In addition to high interest rates, some lenders attach costs, terms and conditions to personal loans that add up fast. Origination fees, prepayment penalties and longer term lengths, to name a few, can take more money out of your wallet than you’re currently paying credit card companies. Read the fine print carefully to understand exactly what you’re getting into.

For example, many lenders don’t charge origination fees, but others tack on approximately 1% to 6% of the total loan amount. Some lenders will also hit you with a prepayment penalty if you decide to pay your loan off early. Others might offer a lower monthly payment, but with an extended term that will take longer to repay, ultimately costing you more than if you’d just stuck with a credit card.

If you’re currently making the minimum payments on your credit card(s), transferring the balance to a personal loan could result in a higher monthly payment. Debt consolidation loans must typically be repaid within 24 to 60 months, so if this causes your payment to increase, make sure you can handle the added financial burden.

The bottom line

Most Americans carrying a credit card balance — 77% — don’t realize they can take out a personal loan to pay down their debt, according to Marcus by Goldman Sachs. This can be a savvy way to get a handle on your credit card debt, and finally pay it off for good. When shopping around for a personal loan, take the time to compare multiple offers and carefully review all terms and conditions, to make sure you’re making the best choice for your finances.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Laura Woods
Laura Woods |

Laura Woods is a writer at MagnifyMoney. You can email Laura here

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Personal Loans

7 Best Personal Loans that Accept Cosigners

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : 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.

best personal loans
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When you need to borrow money but don’t want to deal with the uncertainty of credit cards, a personal loan is a smart option to consider.

Not only do personal loans come with fixed interest rates, but they also come with fixed monthly payments and a fixed repayment period. With a fixed payment, you’ll never end up with a monthly bill that’s higher than you thought it would be. A fixed repayment timeline also lets you know exactly when your loan will be paid off.

If you’re on the fence about borrowing money, keep in mind that there are many reasons why a personal loan may be a viable option for you. Perhaps you want to consolidate high interest debt with a new loan that features a lower interest rate and better terms. Maybe you need to remodel your kitchen or fix your car that has been broken down for months. Whatever the reason, a personal loan offers a predictable way to borrow money without any surprises.

But what do you do if you can’t get a personal loan on your own? A cosigner could help you qualify for funds. Here’s what you should consider before applying with a cosigner, plus personal loans that accept cosigners.

When should you find a personal loan cosigner?

While personal loans offer a smart way to borrow money, not everyone can qualify. Lenders consider your income, employment status, debt-to-income ratio and your credit score before they approve you, which could be a problem if your finances aren’t in the best shape.

If you don’t have the time to improve your credit score before applying for a loan, a personal loan cosigner can help your application. A cosigner agrees to guarantee the loan if you stop making payments. A cosigner could be a family member or a close friend, but it needs to be someone with good credit for them to help you qualify for a loan.

Here are the pros and cons of getting a cosigner for your personal loan:

Pros

  • Qualify for a loan when you may otherwise not have been able to
  • Get better terms on your personal loan
  • Can use the loan to build your credit
  • Have someone to hold you accountable, if you’re new to debt

Cons

  • Your cosigner’s credit report could take a hit if you miss payments
  • If you stop making payments, your cosigner will be equally responsible
  • Can strain your relationship if you’re not on top of your loan

Don’t mistake a cosigner for a co-borrower

Before you apply for a personal loan with a cosigner, it’s also important to note the difference between a cosigner and a co-borrower. Where a cosigner lends their good credit to your loan application and guarantees to repay your loan if you do not, a co-borrower is someone who shares in your obligation to repay money you borrow.

If you plan to take out a personal loan with your spouse and you each plan to make payments toward the loan, for example, your spouse would act as a co-borrower and not a cosigner. With that being said, it’s possible you could benefit from having a co-borrower or a cosigner provided the other individual has good credit and the financial means to repay the loan.

7 best personal loans that accept cosigners

A cosigner can help you qualify for a loan you may not be able to get on your own. Fortunately, there are a handful of companies that readily accept loans with more than one applicant or a cosigner who is willing to guarantee the loan.

To help you find the best loan options within this category, we compared lenders based on their interest rates, loan terms, borrowing limits and credit requirements. Here are some of the top personal loans you can get with a cosigner or a joint applicant.

Company
APR
Terms
Min Loan Amount
Max Loan Amount

3.34% - 16.99%

24 to 144

months

$5,000

$100,000

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.34% APR with a term of 3 years would result in 36 monthly payments of $292.31.

6.95% - 35.89%

36 or 60

months

$1,000

$40,000

SEE OFFERS Secured

on LendingTree’s secure website

Our Commitment We'll receive a referral fee if you click here. This does not impact our rankings or recommendations.
Backed Personal Loans

2.90% - 15.99%

12 to 36

months

$3,000

$25,000

SEE OFFERS Secured

on Backed Personal Loans’s secure website

16.05% - 35.99%

24 to 60

months

$1,500

$30,000

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

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.

4.99% - 29.99%

24 to 60

months

$7,500

$40,000

SEE OFFERS Secured

on LendingTree’s secure website

All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details.

36.00%

12 to 60

months

$1,000

$25,000

SEE OFFERS Secured

on LendingTree’s secure website

SoFi

6.99% - 14.99%

36 to 84

months

$5,000

$50,000

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

Fixed rates from 6.99% APR to 14.99% APR (with AutoPay). Variable rates from 6.26% APR to 14.10% APR (with AutoPay). SoFi rate ranges are current as of November 30, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.26% APR assumes current 1-month LIBOR rate of 2.33% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.

See Consumer Licenses.

SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

1. LightStream

LightStream is a popular online lender that offers personal loans for almost any reason. Their personal loans come with a fixed interest rate, a fixed monthly payment and a fixed repayment timeline that dictates exactly when your loan will be paid off from Day One.

Although LightStream doesn’t list a minimum credit score requirement, they do note that their loans are available for consumers with “good credit.” LightStream also allows people to apply for their loans with a joint applicant. The best part is, LightStream personal loans come with no fees — no origination fee, no application fee and no prepayment penalties for paying off your loan early.

LightStream personal loans may be best for:

  • Individuals who have “good credit” or a FICO score of 660 or higher
  • Individuals who have a co-borrower whose credit score is 660 or higher
  • Anyone who needs to borrow a lot since LightStream personal loans have a higher borrowing limit than some of their competitors

2. LendingClub

LendingClub is another loan company that allows joint applicants to apply for personal loans. Unlike other lenders on this list, however, LendingClub is a peer-to-peer lender that gets its funds from other individuals who agree to invest in the platform.

LendingClub lets consumers borrow up to $40,000 for debt consolidation, home repairs, emergency expenses and many other purposes. Interest rates can be on the low side provided you have good or great credit since the lender’s lowest advertised rates start at 6.95%. However, LendingClub does offer personal loans to borrowers with credit scores as low as 600.

LendingClub also considers applicants with a maximum debt-to-income ratio of 40%, meaning that your monthly debt obligations cannot make up more than 40% of your monthly gross income.

LendingClub personal loans may be best for:

  • Borrowers with fair credit who may not be able to qualify for a loan with other lenders
  • Anyone who needs to borrow less than $40,000 with a joint borrower
  • People who want to borrow from individual investors rather than a traditional bank

3. Backed Personal Loans

Backed Personal Loans is a lender that is actually geared to consumers who need a cosigner to get a personal loan. This company refers to cosigners as “backers,” however, per the company name.

Backed offers special protections for individuals who agree to cosign on their loans. Unlike traditional personal loans that inform cosigners of a default after the fact, Backers personal loans offer the borrower and cosigner a 15-day grace period to keep a loan in good standing once a payment is late. Late fees aren’t charged during this time, and the late payment won’t be reported to credit bureaus until the 15-day period has lapsed. Plus, the cosigner is informed of the late payment right away.

Backers personal loans do charge an origination fee that can be decreased substantially if you fill out your application with additional information and add a qualified cosigner. Backed requires a minimum credit score of 660, and it does exclude borrowers who have recent derogatory marks on their credit reports. Currently, Backed personal loans are only available for individuals who reside in the following states: New York, New Jersey, Florida, Arkansas, Arizona and West Virginia.

Backed personal loans may be best for:

  • Individuals who need a cosigner for their loan
  • Borrowers who need a personal loan with poor credit
  • Anyone who wants their cosigner to have the added protection of a 15-day grace period before a payment is reported late

4. OneMain Financial

OneMain Financial is a personal loan company that offers higher interest rates than some of their competitors. However, OneMain does extend personal loans to borrowers with “fair credit” who may not be able to get a loan elsewhere.

Loan amounts are offered between $1,500 and $30,000 and repayment terms are available for up to five years. OneMain Financial also allows borrowers to apply for a loan with a cosigner, which could help you qualify for a lower interest rate if your credit is poor. It’s important to note, however, that will you will have to visit a physical OneMain Financial branch to close on your loan.

OneMain Financial personal loans may be best for:

  • Individuals who need a cosigner for their loan
  • People with fair credit who may not qualify for a personal loan with another lender
  • Anyone who needs to borrow up to $30,000 and pay it back for up to five years

5. FreedomPlus

FreedomPlus is another personal loan company that focus on borrowers with less-than-stellar credit. Loan amounts are offered up to $40,000 and you can repay for up to five years. FreedomPlus does charge an origination fee from 0.00% - 5.00% of your loan amount, but they don’t charge any penalties if you pay your loan off early.

While FreedomPlus doesn’t list an exact minimum credit score to qualify, they do list a maximum debt-to-income ratio of 40%. FreedomPlus also allows co-borrowers on their loan applications, which can make it easier to qualify if you do not have the income or credit to qualify on your own.

FreedomPlus personal loans may be best for:

  • Individuals with fair credit who have a co-borrower to apply with
  • Anyone who needs to borrow up to $40,000 for nearly any reason
  • Someone who can’t qualify for a personal loan without any fees

6. Mariner Finance

Mariner Finance is another personal loan company that allows individuals to apply for a personal loan with a cosigner. This company does offer interest rates as high as 36.00% depending on your creditworthiness, but they do not list a minimum credit score to qualify. For that reason, Mariner Finance may be a good option for consumers who may need to pay a higher interest rate due to credit mistakes they’ve made in the past.

While Mariner Finance does have looser requirements to qualify for their loans, it’s important to note that they only operate in 22 states: Alabama, Delaware, Florida, Georgia, Indiana, Illinois, Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Wisconsin. Fees can vary on personal loans from Mariner Finance as well, so make sure to read the fine print and understand all fees before you move forward with one of their loan options.

Mariner Finance personal loans may be best for:

  • Individuals who need a cosigner for their personal loan
  • Anyone with less-than-stellar credit who can’t get a loan with another company
  • People who need to borrow up to $25,000; however, note that loans greater than $7,000 or less than $1,500 need to be funded at a physical branch

7. SoFi

While SoFi is mostly known for their private student loans and student loan refinancing options, this company also offers personal loans. SoFi personal loans are available for people in every state except for Mississippi, and they allow co-borrowers on the same loan application.

One big benefit of personal loans from SoFi is their lack of fees. This company doesn’t charge an origination fee for their personal loans, nor do they charge prepayment fees or late fees. SoFi even has a program that allows you to pause your loan payments if you lose your job. The best part is, SoFi makes it possible to see if you could get approved for a loan without a hard inquiry on your credit report.

SoFi personal loans may be best for:

  • People with good credit who want to apply with a co-borrower
  • Anyone who needs to borrow a lot since personal loans amounts go up to $50,000
  • People who want a personal loan without any fees

Conclusion

If you need a personal loan with a cosigner or a co-borrower, make sure to check out all the companies on this list. While we included some lenders that charge higher interest rates and fees, our list of top lenders for personal loans with a cosigners was created to include options that could work for borrowers with all credit ratings and financial situations.

As you compare loan options, make sure to read the fine print and compare loan terms, interest rates and fees. With enough research, you’ll have the best shot at finding a personal loan that meets your needs — with or without a cosigner.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Holly Johnson
Holly Johnson |

Holly Johnson is a writer at MagnifyMoney. You can email Holly here

TAGS:

Get A Pre-Approved Personal Loan

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Won’t impact your credit score

Advertiser Disclosure

Personal Loans

Financing a Patent With a Personal Loan

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : 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.

financing a patent
iStock

You just invented what you believe will be “the next big thing.” Perhaps you’ve built a better mousetrap, created a product that is going to revolutionize an industry or just made something fun that is going to bring joy to everyone for years to come — remember the pet rock? Either way, you’ll need to protect your product with a patent.

Investing in a patent application is just as important as investing in the product you created. “The real power in a patent is a negative right, or the power to stop other people from practicing your invention,” says Adam Kelly, partner with Loeb & Loeb LLP in Chicago, who specializes in patent litigation and infringement.

Here’s what you need to know before financing your patent.

Financing your patent with a personal loan

A personal loan can provide you with a lump sum chunk of change to help you finance the cost of a patent. The pros of using a personal loan to finance a patent are obvious: “You will have the money up front to hire a registered patent attorney to draft a thorough patent application,” according to Kelly.

However, personal loans often come with higher interest rates compared to other types of loans, so if you are short on cash now, consider how you are going to be able to pay this loan back later. As Kelly noted, “the cons are that now you have this note that you have to pay at some point, and you need to be able, as a business person, to figure out how you’re going to monetize the invention to pay the money back.”

If you want to use a personal loan to finance a patent, Kelly suggests starting by creating a business plan. Then, do some research on potential lenders.

How to find personal loans for a patent

Before applying for a loan, make sure you know your credit score. You know the old story — the better your credit score, the better your loan. You can see your credit score for free using My LendingTree. If you need to improve your score before applying, you can follow these tips.

Once you’re ready to start shopping lenders, you can use LendingTree’s personal loan tool. By inputting some personal information, you may get to review loan offers from up to five reputable lenders. You could also compare lenders on MagnifyMoney’s personal loan marketplace (MagnifyMoney is a subsidiary of LendingTree).



Finance a Patent with a Personal Loan

Once you’ve narrowed down your options, fill out the paperwork for your personal loan.

Don’t qualify for a loan? Apply for a provisional patent application

If you can’t afford the cost of a patent and don’t qualify for a loan, a provisional application can be your saving grace. Kelly explains that for approximately $400, you can file a provisional application — which means temporary — that holds your place in line for one year.

In the meantime, you can try and raise the funds you need for a full patent application. If your one year is up and you haven’t converted your provisional patent application to a full patent application, you’ll lose your place in line and will need to start over.

Applying for a patent: Filling out your application and costs

The process for obtaining a patent starts with an application that will be submitted to the United States Patent and Trademark Office (USPTO). “This is a legal document that combines patent law with an explanation of the technology underlying the invention,” Kelly says. “It’s one of the most complex legal documents that we have in the United States.”

The type of patent application you’ll need depends on the product you’ve invented. There are three types of patents: design, utility and plant.

Patent typeDescription of patentFiling Fee

Design patent

A design patent covers how a product looks. The length of a design patent is 14 years.

$200

Utility patent

A utility patent protects the way an article is used and works. The length of a utility patent is 20 years.

$300

Plant patent

A plant patent protects new varieties of plants, flowers and seeds. The length of a plant patent is 18 years.

$200

As Kelly explained, the design patent protects the ornamental aspects of your product. “For example, the bug-eyed headlights on a Porsche 911 are covered by a design patent,” he said. “The same with the BMW kidney-shaped grill and the unique shape of a Heineken beer bottle.”

Compare that to a utility patent, which protects the functional aspect of an invention, or how that technology is used; as an example, Kelly noted, “On an iPhone, the round button that you press to use your phone is protected by a utility patent.”

The third patent is for those who create new plant varieties — say, a new corn or soybean seed.

Filling out a patent application

According to Kelly, each patent application requires several components: a description of the problem that the inventor was attempting to solve and the failed solutions to that problem; a description of how the inventor solved the problem and descriptions of the invention itself. The application also requires properly labeled and described drawings.

“Most importantly,” according to Kelly, “at the back of the patent application is the claim, a long run-on sentence which describes the invention.” Kelly also urges every entrepreneur to hire a registered patent attorney to complete the application: “The claim determines the scope of the patent rights that are afforded to the inventor. It takes a very skilled draftsperson to write a patent claim appropriately.”

Once your application is complete, it is filed with the patent office, along with the requisite fees. Then, Kelly says, a patent examiner who has the technical background that matches your invention reviews your application.

Your cost for a patent

Speaking of fees, a patent application can start at just a few hundred dollars, but the investment often comes with a hefty price tag. According to Kelly, entrepreneurs should plan on spending between $7,000 and $15,000 to prepare and file a patent application, which includes the services of a registered patent attorney.

“The fees also range based on the complexity of the invention,” he said. “If you need to hire a registered patent attorney who has a Ph.D in biochemistry, because your application deals with recombinant DNA technology, that’s going to be more expensive.”

Compare that to someone who has just designed a new cardboard coffee cup — according to Kelly, “that invention is pretty low technology and wouldn’t require as much time to put together the patent application.”

Applications can be five pages long or 200 pages long, depending on the invention and complexity of the technology.

“The Patent Office is one of the few administrative agencies of offices in the U.S. government which makes money,” said Kelly, “and that’s because there’s a fee for filing a patent application, a fee for asking for a once-a-year examination process, and even a fee for not meeting deadlines that the examiner will set to the inventor.

When it is time to award the patent, there is a issuance fee and there are maintenance fees so that the patent office will continue to recognize that patent as valid and enforceable.”

Beware submitting a patent application on your own

You can submit a patent application on your own, but this is the riskiest of all of your options. According to Kelly, if you want to do it yourself, you must have a strong familiarity with patent laws and the procedures of the Patent Office, and your application must comply with those procedures and laws. Unless you have a legal and patent background, it’s better to leave this tricky process to the pros.

Do you even need a patent?

Remember: You can’t patent an idea, just your actual invention, but maybe you don’t even need a patent for that either.

“If you discover or create an invention, you need to make a strategic decision as to whether you disclose that invention to the world or whether you keep it secret,” said Kelly. “It could be considered a trade secret, such as the formula for Coca Cola or the recipe for Kentucky Fried Chicken. You can derive proprietary value from a trade secret.”

However, Kelly noted that if the invention can easily be reverse engineered, then patent protection is a must.

The patent application process can take anywhere from one to three years. Once you apply for your patent, you can mark your product “patent pending” and continue to sell it (and hopefully make money) while you wait for an answer.

“The patent pending designation is important for calculating damages later if you sue an infringer, and if you’re successful proving infringement,” said Kelly.

A patent application takes money and time, but it ultimately protects the one thing you have been working on for a long time — your invention.

Fees mentioned above are accurate as of the date of publishing.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lisa Iannucci |

Lisa Iannucci is a writer at MagnifyMoney. You can email Lisa here

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Won’t impact your credit score

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Personal Loans

Where to Get an Unsecured Personal Loan

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : 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.

applying for an unsecured loan
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Life always has a way of coming up with new ways to surprise us. When those surprises call for quick cash, an unsecured personal loan might be what’s needed to fill in the gap between the funds you have and the debts you owe.

Taking out a personal loan to consolidate your existing debts might be wise if you’re facing high interest rates. Also, rolling all your debts into a single payment and interest rate can make it easier to manage and track how much you owe and how long it’ll take for you to pay off the loans.

An unsecured personal loan may also be preferable to selling your assets to get the money you need to pay for large purchases or unexpected emergencies.

What is an unsecured personal loan?

A personal loan is considered unsecured when it’s not backed by collateral, such as your car, which could be repossessed by the lender if you default on your loan agreement. Instead, unsecured loans are backed only by your promise to repay the lender, which is why they are called unsecured, or sometimes signature, loans.

Because an unsecured loan doesn’t require you to put down any collateral, lenders rely heavily on various factors to determine whether you’ll pay back your loan in full. Such factors include:

What can an unsecured personal loan be used for?

An unsecured loan is provided to the borrower in a lump sum and can be used for virtually anything, including:

  • Debt consolidation, which is where you use the personal loan to pay off high-interest debts, leaving you with an easier-to-manage single interest rate and monthly payment.
  • Special experiences such as a wedding or honeymoon so that you can enjoy the experience without worrying about the money.
  • Home improvements or other large appliance purchase, but borrowers should also consider alternatives such as a home equity loan or a home equity line of credit.
  • Medical bills for an unexpected treatment that isn’t covered by your health insurance.
  • College tuition to invest in your and your child’s future.
  • Business expenses to scale and set up your organization for success.
  • Unexpected expenses for those emergencies that often come up in life.

Still, borrowers should make it a point to check with their lender for any guidelines on ways in which the funds can be used.

Personal unsecured loans generally have term ranges between two and five years and rates that are usually fixed. The monthly payment is based on how much money you owe and the interest rate, which is determined by your credit rating and financial history. Some lenders offer revolving lines of credit that allow borrowers to withdraw as needed and only pay interest on the amounts withdrawn.

Where to find unsecured personal loans

If you’ve decided that a personal loan is right for you, you’ll need to begin researching lenders and the terms they offer.

MagnifyMoney offers a personal loan marketplace where you can discover lenders and review the loan terms they offer. But you may also consider these lenders:

Company
APR
Terms
Credit Req.
LendingTree

5.99% - 35.99%

24 to 60

months

Minimum 500 FICO

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

Disclaimer

3.34% - 16.99%

24 to 144

months

660

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates under the invoicing option are 0.50% higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.34% APR with a term of 3 years would result in 36 monthly payments of $292.31.
SoFi

6.99% - 14.99%

36 to 84

months

680

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

Fixed rates from 6.99% APR to 14.99% APR (with AutoPay). Variable rates from 6.26% APR to 14.10% APR (with AutoPay). SoFi rate ranges are current as of November 30, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.26% APR assumes current 1-month LIBOR rate of 2.33% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.

See Consumer Licenses.

SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
Marcus by Goldman Sachs®

6.99% - 24.99%

36 to 72

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

Your loan terms are not guaranteed and are subject to our verification of your identity and credit information.To obtain a loan, you must submit additional documentation including an application that may affect your credit score. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans).Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions.

5.99% - 29.99%

36 or 60

months

660

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

*The Annual Percentage Rate (APR) is the cost of credit as a yearly rate and ranges from 5.99%-29.99%, which may include an origination fee from 0.99% - 5.99%. Any origination fee on a 5-year loan will be at least 4.99% and is deducted from loan proceeds. The APR offered will depend on your credit score, income, debt payment obligations, loan amount, loan term, credit usage history and other factors, and therefore may be higher than our lowest advertised rate. Requests for the highest loan amount may resulting an APR higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest rate.

Best Egg loans are unsecured personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. Equal Housing Lender. "Best Egg" is a trademark of Marlette Funding LLC. All uses of "Best Egg" on this site mean and shall refer to "the Best Egg personal loan" and/or "Best Egg on behalf of Cross River Bank, as originator of the Best Egg personal loan," as applicable. Loan amounts generally range from $2,000-$35,000. Offers up to $50,000 may be available for qualified customers who receive offer codes in the mail. The minimum individual annual income needed to qualify for a loan of $50,000 is $130,000. Borrowers may hold no more than two open Best Egg loans at any given time. In order to be eligible for a second Best Egg loan, your existing Best Egg loan must have been open for at least six months. Total existing Best Egg loan balances must not exceed $50,000. All loans in MA must exceed $6,000; in NM, OH must exceed $5,000; in GA must exceed $3,000.

Borrowers should refer to their loan agreement for specific terms and conditions. A loan example: a 5–year $10,000 loan with 9.99% APR has 60 scheduled monthly payments of $201.81, and a 3–year $5,000 loan with 5.99% APR has 36 scheduled monthly payments of $150.57. Your verifiable income must support your ability to repay your loan. Upon loan funding, the timing of available funds may vary depending upon your bank's policies.

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you.

6.95% - 35.89%

36 or 60

months

600

SEE OFFERS Secured

on LendingTree’s secure website

Our Commitment We'll receive a referral fee if you click here. This does not impact our rankings or recommendations.

9.95% - 35.99%

24 to 60

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

Avant branded credit products are issued by WebBank, member FDIC.

16.05% - 35.99%

24 to 60

months

Varies

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure.

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.

PenFed Credit Union

Starting at 6.49%

60

months

700

SEE OFFERS Secured

on PenFed Credit Union’s secure website

7.98% - 35.99%

36 & 60

months

640

SEE OFFERS Secured

on LendingTree’s secure website

We'll receive a referral fee if you apply for this loan. This does not impact our rankings or recommendations.

You’ll find that personal loan lenders take different forms: traditional banks, credit unions, online lenders and peer-to-peer (P2P) lenders. If you’re not sure which lender is right for you, consider these pros and cons for each.

Traditional banks

At one time, brick-and-mortar banks might have been your best option for a personal loan. But nowadays, you may find that your local bank isn’t a competitive option. Why? Because banks with physical branches have higher overhead costs than online lenders — and they’re still trying to make a profit off your loan. Still, they can be a convenient option.

Pros

  • Can visit your local branch to learn more and apply
  • Likely a trusted and known brand

Cons

  • Higher fees
  • May have stricter loan requirements

Credit unions

Because credit unions aren’t trying to profit off your loan, they can generally offer lower interest rates on their personal loans. But to get a personal loan through a credit union, you have to become a member first — and you won’t qualify for membership at every credit union.

Pros

  • Lower fees
  • May have lower loan requirements

Cons

  • Have to become a member before applying
  • Fewer locations compared to a big bank

Online lenders

Online lenders don’t have brick-and-mortar locations. That could be a good thing or a bad thing depending on your needs. But with fewer overhead costs, online lenders are competitive options for personal loans.

Pros

  • Competitive rates and terms
  • Easier to research, plus streamlined application processes

Cons

  • Little name recognition can make them hard to find
  • No physical locations for in-person aid

P2P lenders

P2P lending is what it sounds like: Instead of going to a bank, borrowers receive their loans from their peers who they are connected to through a platform. Since P2P lending is only online, overhead costs are low and customers get lower interest rates. A personal loan through P2P lending comes with some cons, such as an origination fee, which is deducted from the total loan amount before the borrower gets their lump sum. Also, loans are not available in all states, and they can depend on debt-to-income ratio, financial history and career experience. They are generally limited to borrowers with above-average credit and income levels.

Pros

  • Can share your story if you’re struggling to qualify
  • Work with people rather than companies

Cons

  • Likely to receive high rates
  • Harder to qualify for a loan

How to compare personal loans: 3 factors to consider

With so many options, it’s beneficial for borrowers to consider several lenders for a comparison. Below are some considerations to take into account when shopping for a personal loan:

Interest rate

Take a look at MagnifyMoney’s personal loan marketplace and you’ll see that rates fall from 5.99% to 35.99%. Your loan’s interest rate will impact how much you pay throughout the life of the loan, so it’s important to shop around for the best rate.

Interest rates are determined through various factors, depending on the lender, but they are generally decided based on the borrower’s credit, income and whether there’s a cosigner.

Fees

Fees are serious factors to take into account when choosing a lender as they will greatly impact your total loan amount. Here are two common fees:

  • Origination fees are charged by the lender for processing a personal loan application. The origination fee is either presented as a flat rate or a percentage of the loan, which is typically withdrawn from the full amount of the loan and incorporated in the APR. This fee is negotiable.
  • Prepayment penalties are charged when a borrower pays off their loan ahead of the term schedule.

View our list of lenders with no personal loan fees here

Lender perks

If you have a strong credit history and are a good candidate for a personal loan, lenders will usually work with you on a repayment schedule that doesn’t overwhelm you each month. For instance, some lenders will allow you to use a cosigner who has good credit for a lower interest rate and term on your loan.

Some lenders take a nontraditional approach to the merit-based system utilized in personal loans. For instance, Earnest offers flexible terms along with customized loan and repayment plans, which work well for recent graduates who haven’t yet had the opportunity to establish a strong credit history. Upstart, founded by “ex-Googlers,” uses artificial intelligence and machine learning to determine whether someone would be a good borrower based on their education, career, job history and standardized test scores.

Some lenders are forgiving during challenging times. SoFi offers loan forbearance during a job loss. During this time, the interest will continue to accrue, but SoFi will not consider your payments overdue. LendingClub leaves its borrowers alone for at least 30 days if they’ve been affected by a natural disaster.

Applying for an unsecured personal loan

Most online lending platforms use a soft pull during the application process so that you will be able to shop around for the best interest rate and loan term without hurting your credit. These are called preapprovals or pre-qualification checks, but they are usually contingent on you passing a hard credit inquiry after you’ve accepted the loan offer.

While shopping around for the lender that works best for you, consider using MagnifyMoney’s loan payment calculator to get an idea of possible monthly payments. Put in the amount you need, the period you’ll need it for and the interest rate to get the estimated amount you’ll pay each month.

Submitting your application

Since an unsecured loan is not backed by anything other than a borrower’s creditworthiness, you’ll need a good credit score and documentation — recent pay stubs, tax returns and an offer letter to prove employment status – proving you have enough income to repay the new loan.

If you have this kind of information handy, the application process can be quick and simple.

Receiving loan funds

This varies by lender, but decisions are usually made quickly. Funds can be deposited as early as the same business day. Check with your lender on wait times.

Once you have your funds, make sure you are responsible with them. Taking on new debt can be scary if you don’t have a plan for repayment, so make sure you understand how your personal loan fits into your budget.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Vivian Giang
Vivian Giang |

Vivian Giang is a writer at MagnifyMoney. You can email Vivian here

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