5 Best Personal Loans of August 2022

Whether you’re looking to consolidate debt, finance a big purchase or make home renovations, a personal loan could be the right tool to help you get there.

Get started with our list of the best personal loans of 2022. Reviews include credit score requirements, available loan terms, loan amounts and annual percentage rates.

Our Top Picks for the Best Personal Loans

• LightStream – Best Variety of Loan Options
• Credible – Best Marketplace
• SoFi – Best Online Lender
• Upstart – Best Peer-to-Peer Lender
• PenFed – Best Credit Union
• U.S. Bank – Best Bank

Best Personal Loan Reviews

Why we chose it: LightStream offers a wide variety of loan options and terms ranging from two to eight years, which is longer than most competitors. Additionally, LightStream offers a low starting APR (3.99%), with a discount option for AutoPay.

LightStream, a division of Truist Financial Corporation, has a wide range of loan options, a low minimum APR and loan terms that can range from two to eight years, some of the longest repayment terms available in the market. You can take out a personal loan for any service, product or purchase such as home improvement projects, medical bills, vacations, big purchases, K-12 education, recreational vehicles or family planning.

LightStream offers some of the lowest rates in the industry with a starting APR rate of 3.99%. Borrowers benefit from an additional 0.50% discount to their APR if they sign up for AutoPay. Additionally, Lightstream’s Rate Beat program offers a 0.10% discount if a borrower is offered a lower APR offer by a competing lender (if approved for the same loan options offered by LightStream).

As part of their customer satisfaction guarantee, LightStream will pay you $100 if you’re not satisfied with your experience after closing the loan.

We also like LightStream’s sustainability measures — not only is their online loan process largely paperless, they’ve also partnered with American Forests to plant a tree for every loan closed.

Why we chose it: Credible lets borrowers compare multiple quotes from some of the top-rated personal loan lenders in the market.

Credible’s lending platform lets you compare quotes from 17 lenders in as little as two minutes — without making a dent on your credit score. They feature an excellent network of reputable lenders, which include SoFi, LightStream, PenFed and others.

This can save you time and money by narrowing your choices by location, loan amount, desired APR and loan purpose.

Additionally, Credible offers a $200 Best Rate Guarantee incentive. If you find a personal loan with a lower rate on a competing website and submit it to them within 10 days of receiving Credible’s personal loan rates, the company will give you $200.

The company welcomes applicants with a variety of credit histories, but applicants with excellent credit histories tend to see more loan offers, more flexible repayment terms and lower interest rates. Credible offers tools to check how prequalifying rates are affected by adding different co-signers.

Why we chose it: We chose LendingTree as a runner-up for our best loan marketplace because it partners with some of the top lenders in the industry. However, compared to competing marketplace Credible, it had a higher number of CFPB complaints.

Like Credible, Lending Tree is a marketplace where you can shop for competitive rates for personal loans from reputable lenders. You can receive quotes within minutes.

LendingTree’s website is easy to use and clearly lists their lenders’ current APR rates as well as minimum credit score needed to apply — for example, as of June 2022, the minimum it lists is 585. Additionally, they offer individual lender descriptions and a personal loan payment calculator to help you make your best choice.

Why we chose it: Online lender SoFi stands out for its ease of use and fast application process.

Initially a student loan lender, SoFi now offers personal loans up to $100,000, one of the highest loan amounts on this list.

You need a good credit score with a minimum of 680 to apply, but there’s a lot to like about SoFi personal loans.

Unlike many other lenders, SoFi considers alternative credit data — like free cash flow, professional history and history of financial responsibility — while still offering competitive interest rates. They also offer an online community and other learning resources. Additionally, they offer the option of pausing loan payments for a certain period of time during important life changes such as graduation or starting a new job.

SoFi also offers unemployment protection. If you lose your job, you can request they modify your monthly payments. In addition, they’ll provide you with free tools, like career coaching and financial advice.

The application process is entirely online and can be completed in a matter of minutes.

Bear in mind, however, that if you’re looking for a small loan, SoFi might not be the best option for you — their minimum loan amount is $5,000.

Why we chose it: Upstart is the only peer-to-peer lender that accepts applicants with lower FICO scores and short credit histories.

Upstart’s peer-to-peer model is simple: instead of getting the money from a traditional financial institution, you get it from investors. Upstart’s AI-powered loan application model takes into account job history, highest level of education you've achieved and area of study to determine eligibility.

Upstart is the only peer-to-peer lender that accepts applicants with a fair credit score (580-669) and short credit histories. Even unemployed individuals may apply as long as they have an employment offer with a starting date that isn’t more than six months from the date of application.

You can check your rate before applying, and loan funds can be disbursed as early as the next business day after you close on the loan.

Why we chose it: PenFed offers both the nationwide presence of a traditional brick-and-mortar lender and credit union perks, like flexible loan terms and low fees.

PenFed is our top credit union for personal loans because of its flexible repayment terms, low loan amounts and lack of loan origination fees or prepayment penalties.

They offer a lower APR range than other credit unions, and candidates can apply individually or with a co-borrower. Non-members can apply for a personal loan and only need to join if they choose to accept the loan offer.

Membership was previously limited to the military, certain government agencies, and residents of eligible locations, but as of 2019, PenFed makes it easy for others to join. All you have to do is select “None of the above” in the membership application’s eligibility section and open a savings account that has at least $5 for the membership fee.

Why we chose it: U.S. Bank offers quick funding and lower APRs than most traditional banks.

U.S. Bank has a starting APR that competes with the best personal loan rates in the industry. Its maximum personal loan APR caps out at 18.49%, much lower than those of other big banks like Citi and Wells Fargo, which cap their APRs at around 24%.

U.S. Bank also has an emergency Simple Loan available for minor, short-term expenses with a minimum loan amount that starts at $100 and goes up to $1,000. While the Simple Loan has a $6 monthly fee for every $100 you borrow, it could be a good alternative if you need a smaller amount quickly.

Do note, however, that, if you do not have a bank account at U.S. Bank, you will be subject to stricter credit score requirements and may only borrow up to $25,000.

Other personal loans we considered

Marcus by Goldman Sachs Personal Loans

Marcus by Goldman Sachs specializes in debt consolidation loans and has many worthy features including no service fees and customizable due dates. However, they don’t allow co-signers or co-borrowers, which can be a deal-breaker for borrowers with lower credit scores.

Best Egg Personal Loans

Best Egg specializes in debt consolidation loans and features quick one-day funding and online approval. However, customers may only have a maximum balance of $50,000 across multiple loans and origination fees are fairly high compared to competitors.

Prosper Personal Loans

Prosper is a peer-to-peer lending marketplace offering loans funded by investors. The high number of complaints lodged against the company with the Consumer Financial Protection Bureau (CFPB) knocked it off our main list.

LendingClub Personal Loans

LendingClub is yet another peer-to-peer lending marketplace. We didn’t include it on our list because of its high origination fees and comparatively low maximum loan amount ($40,000).

USAA Personal Loans

USAA features a variety of loan options ranging from $2,500 to $100,000, with repayment terms ranging from 12 to 84 months. However, their credit requirements vary widely depending on the terms of the loans, their maximum APR is higher than many competitors (18.5%) and their services are only available for military members and their families.

Wells Fargo Personal Loans

Wells Fargo is one of the largest and oldest banks in America. The high number of complaints registered against it with the CFPB disqualified it from our list.

Avant Personal Loans

Avant uses a proprietary algorithm to determine borrowers’ creditworthiness, making its underwriting more lenient. However, it charges high origination and administrative fees and has less competitive rates. Moreover, in January 2022, the Federal Trade Commission returned $3.7 million to Avant customers after alleging the company had engaged in deceptive loan practices.

Discover Personal Loans

Credit card issuer Discover also originates loans, but its minimum income requirement and the fact that it doesn’t allow co-signers on loans disqualified it from our main list.

Personal Loans Guide

Personal loans can be used for a variety of purposes. Many of these loans offer great benefits such as flexible terms and low interest rates. Our guide outlines everything you need to know about personal loans, including how they work and what you need to qualify for one.

Table of contents

• What is a personal loan
• How do personal loans work
• Types of personal loans
• How to choose a lender
• How to apply for a personal loan

What is a personal loan?

Personal loans are a type of installment loan.

Compared to other types of loans, personal loans may feature shorter repayment terms — typically between 12 and 72 months — and fixed interest rates.

They can be used for debt consolidation, home improvement projects, medical expenses or for financing big purchases, events or vacations.

How do personal loans work?

You can request personal loans from banks, credit unions or other financial institutions.

Lenders will look at different factors when evaluating your application. These include:

• Debt-to-Income Ratio (DTI). This is your monthly debt — such as mortgage payments, credit card debt, alimony or student loans — divided by your gross monthly income. This shows banks how much of your income is being used to pay existing debt and whether you can afford to pay this new loan. Overall, the lower your DTI, the likelier you are to get an approval.

• Credit score. Lenders will pull your credit report and review your credit score. Lenders prefer a FICO credit score of 660 or more. It’s a good idea to do this yourself before applying for a loan. If you need help doing that, make sure to read our article on How to Check Your Credit Score.

• Credit utilization ratio. Banks will review how much of your available credit you’re currently using. Most lenders favor a credit utilization ratio below 30%.

Most personal loans have fixed interest rates and are processed quickly – once approved, you could have money deposited into your bank account within 24 to 48 hours.

Types of personal loans

There are two basic types of personal loan: secured and unsecured loans.

• Secured loans require collateral, which is a guarantee of payment based on an asset you own such as your house, car, stocks and bonds or even a certificate of deposit account. If you default on these loans, the lender can claim these assets and use them to pay off the debt.

• Unsecured loans don’t require collateral, and therefore, won’t lead to foreclosure or loss of assets. However, these loans usually carry higher interest rates, and defaulting will still significantly impact your credit score. Most personal loans are unsecured loans.

Alternatives to personal loans

Personal loans aren’t the only way to consolidate debt or pay for household repairs. You might also look into one of the following options:

• Balance transfer credit card – With a balance transfer, you move your debt from one card to a different card with a lower APR and other introductory benefits, such as reward and points programs. Many cards will offer an introductory 0% APR specifically for balance transfers. Typically, this option is available to those with very good or excellent credit.

• Credit card advance – A credit card cash advance is a short-term loan that you can get from your credit card issuer at almost any ATM machine. However, these cash advances are usually subject to high APR rates.

• HELOCs vs. home equity loans – Both home equity lines of credit (HELOCs) and home equity loans allow you to tap into your home’s equity and use your home as collateral. They usually have lower APRs than personal loans. Additionally, whereas HELOCs are a revolving line of credit and have variable rates, home equity loans provide you with a lump sum upfront and have fixed interest rates.

• Cash-out refinance – In a cash-out refinance you replace your old mortgage with a larger one and receive the difference as a lump sum. The benefits are that you may be able to obtain a lower interest rate than your existing rate and receive funds in a relatively short amount of time.

• Retirement account loans – You’re allowed to borrow up to 50% of your 401k balance (with a cap of $50,000) without getting penalized by the IRS. These loans often have low interest rates. However, keep in mind you’d be repaying that loan with money that has been taxed (while the funds invested in a 401k are pre-tax dollars).

Emergency Assistance Loans

Many people consider applying for a personal loan when facing an emergency or when struggling to pay their bills. If this is your case, you might also want to consider these other options for financing assistance.

• Federal rental assistance – The Emergency Rental Assistance (ERA) program provides funding at the state and local level for those who need assistance with rent and utility payments, internet and costs associated with moving, including security deposits. You can check out the Consumer Finance Protection Bureau’s website to find programs in your area.

• HUD grants and programs – The U.S. Housing and Urban Development (HUD) Program offers the Housing Choice Voucher Program (Section 8) and housing counseling services. Additionally, HUD will provide housing inspection assistance through their Real Estate Assessment Center (REAC) to ensure the house is structurally sound and sanitary.

• Disaster relief – If you’ve been the victim of a natural disaster, the Federal Emergency Management Agency (FEMA) could help you obtain temporary housing, funds for household repair, as well as other expenses approved by your state through the Individuals and Households Program (IHP).

Avoid these types of loans

Payday loans and title loans are also immensely popular alternatives to personal loans, especially for borrowers with fair to poor credit. There is also a lesser-known type of quick loan called the tax anticipation loan. However, we do not recommend any of these options for several reasons

• Payday loans are typically small, quickly funded loans. Payday lenders keep a postdated check or request direct access to your checking account so they can withdraw the funds by the following payday. However, their sky-high interest rates — often as high as 400% — can make the debt balloon so quickly that borrowers find themselves unable to repay them.

• Title loans use your car title as collateral, and lenders can repossess and resell your car or motorcycle if you don’t pay it back in time. Although these loans are relatively easy to qualify for, they have extremely high interest rates, typically from 100 to 300%.

• Tax anticipation loans give you an advance on your tax refund and act much in the same way as a payday loan. They are issued through a third-party lender once you provide proof that you’re owed a tax refund.

Failing to pay off these loans on time has trapped many borrowers in an endless debt cycle. If you have poor credit, make sure to look into bad credit loans and secured credit cards aimed specifically at high-risk borrowers.

How to choose a lender

When choosing a lender, it’s important to understand the terms and the true costs of the loans they offer. It’s also important to get acquainted with the many factors they evaluate when processing your application. For example, in addition to your credit score, banks will also take a look at your employment history, credit utilization and your debt-to-income ratios, among other things.

Read on for some additional tips to help you make the right choice.

Identify the purpose of the loan

Most people consider a personal loan when they need access to funds quickly to cover various circumstances and life events such as:

• Debt consolidation
• Emergencies
• Home improvement
• Weddings and funerals
• Travel expenses
• Medical expenses
• Large purchases such as appliances

You’ll need to discuss your reasons for wanting a personal loan with the lender. Though some lenders might not place conditions on how you use a personal loan, many will not grant loans if they’re meant to buy a car, pay for schooling or cover business expenses.

Similarly, if you need money to make urgent repairs to your home, you might consider a home improvement loan. These loans tend to feature lower interest rates than personal loans; note, however, that some require you to offer your home as collateral.

Choose between a bank, credit union, online lender, or peer-to-peer lender

You can get personal loans from banks, credit unions, or from online and peer-to-peer lenders such as the ones featured on our list.

It’s important to only apply to reputable lenders since you’ll have to provide personally identifiable information on your application, including your social security number and address.

Banks	Credit Unions	Online Lenders	Peer-to-Peer (p2p)
Ideal if you prefer in-person customer service.	NCUA-insured, federal credit unions cap their APRs at 18%.	Faster application and funding than traditional banks.	Type of online lender connecting borrowers to funding from individual investors and companies.
Could streamline the process if you already have an account at the bank.	Unlike banks, credit unions are nonprofit institutions.	Lower overhead costs could translate to better APR rates and lower fees.	Provides loan options for people with lower credit scores or limited credit history.
May charge higher fees and penalties than online lenders and credit unions.	Potential borrowers must become members before applying.	Some use alternative credit data, which could help borrowers with shorter or non-traditional credit histories.	Often charges additional fees and higher personal loan interest rates.

Compare interest rates vs annual percentage rate

It’s important to know the difference between interest rates and APR when comparing loan options.

• Interest Rate – is an additional percentage, fixed or variable, that the lender will charge you to borrow the principal, or the amount you agree to borrow from a lender.

• Annual Percentage Rate (APR) – is the total annual cost you’ll pay for a loan. It takes into account the loan terms and includes the loan principal, the interest rate, plus all additional fees, such as origination fees, administrative fees and/or discounts.

Check the lender’s prequalification and preapproval requirements

When you’re getting ready to apply for a personal loan, you’ll often hear the terms prequalification and preapproval. Both these terms involve an assessment of your current financial situation. Sometimes these terms are used interchangeably; however, often there are important differences to be aware of.

• Prequalification involves a “soft” inquiry of your credit history, meaning it won’t leave a mark on your credit report. A prequalification lets you know whether you’d be approved for a loan and can give you a rough estimate as to the amount you could borrow. It does not, however, mean you’re approved for the loan.

• Preapproval involves a “hard” credit inquiry, which can slightly impact your score. Because it’s a more thorough evaluation of your finances, preapproval can give you a better idea of the final amount and APR you will qualify for.

Understand the terms of the loan

Personal loan terms can range anywhere from a few months to eight years. Some lenders offer more flexible repayment schedules than others and allow you to choose a monthly payment date.

Be sure to keep in mind interest rates and upfront fees as you choose a term length. While you might prefer lower monthly payments, this also means you’ll be paying the loan for a longer time and paying more in interest.

Look for any additional fees

It’s important to read the fine print and look for any additional fees when applying for a loan.

Here are some of the most common types:

• Origination fees – Lenders may charge a fee for administrative processes and costs involved in your loan. These fees, also known as administrative or underwriting fees, are included in your APR rate and usually range from 1 to 8% of your loan total.

• Prepayment fees – Some lenders may charge you a fixed fee or percentage of the total loan if you pay your loan early. The time frame for payoff and any applicable prepayment fees will be stated in your loan agreement.

• Late payment fees – Lenders may charge a fixed amount (could be as high as $50) or a percentage of the payment due if you don’t pay on time. Some lenders might offer a grace period. Note that if you’re more than 30 days late in your payment, the lender could report it to the credit bureaus which may affect your credit score.

Consider their customer support

Customer support is an important service offered by lending companies. Consider the type of support you prefer and be sure to check whether the lender offers your preferred mode of communication. Most financial institutions offer the following:

• Email
• Chat
• Phone
• Physical location
• Mobile app

How to apply for a personal loan

• Get all your financial documents in order – In most cases, you’ll need proof of income, bank statements, along with proof of identity and citizenship to apply.

• Review your credit report – Higher credit scores get the lowest rates, and most lenders will require a credit score of 660 or more. Check your report for any inaccuracies that could be impacting your score or consider signing up with a credit repair company.

• If you’re trying to consolidate debt, figure out how much you need to borrow and the rate you need – Find out exactly how much you’re paying in interest rates now and calculate the interest rate you’d need from a personal loan in order to truly reduce your debt.

• Shop around – Most online lenders have fast prequalification processes and can give you an estimate of the rate they could offer you. These prequalifications involve a soft credit inquiry which won’t impact your credit score like a hard credit inquiry would.

• Apply – Once you settle on a lender that fits your needs, submit an application and await a response.

Latest News on Loans

• Need a personal loan but your credit isn’t where you’d like it to be? Check out our article on ways to improve your credit score right now.

• You might have heard that the Fed will raise loan interest rates soon — but what does that mean for borrowers? Make sure to read 5 Money Moves to Make Before the Fed Hikes Interest Rates to learn how you can best prepare.

How We Found the Best Personal Loans

Our methodology to find the best personal loans for our readers included an in-depth evaluation of 40 banks, credit unions, marketplaces and peer-to-peer lenders taking into account the following:

• Loan rates and fees. We chose banks that provided the most affordable loans, that is, those that offered lowest interest rates and fees. We also evaluated which banks offered the most benefits and unique offers.

• Loan term flexibility. We preferred banks that offered customers with multiple term options and ways to pay.

• Customer satisfaction. We evaluated how banks ranked in J.D. Power’s Customer Satisfaction surveys and checked any complaints filed with the Better Business Bureau (BBB).

• Regulatory compliance. We checked for complaints and reports filed with the Consumer Financial Protection Bureau (CFPB) database and the Federal Trade Commission (FTC).

Summary of Money’s Best Personal Loans of July 2022

• LightStream – Best Variety of Loan Options
• Credible – Best Marketplace
• SoFi – Best Online Lender
• Upstart – Best Peer-to-Peer Lender
• PenFed – Best Credit Union
• U.S. Bank – Best Bank