When you need money to cover an expensive expense but don’t want to use credit cards, a personal loan can help. The best lenders offer affordable rates, flexible terms and fast funding. Aside from comparing interest rates, you should consider whether the lender you’re considering has other features that make it stand out. These include limiting nuisance fees, offering credit score flexibility and providing responsive customer service.
Generally, personal loans are unsecured, meaning the lender cannot seize your assets if you fail to repay the debt. However, some lenders will require a certain level of credit to qualify for the lowest rates. For example, SoFi and Social Financing typically require borrowers to have good-to-excellent credit scores and high incomes to receive the lowest possible rate.
If your credit scores aren’t high enough to qualify for the best personal loan rates, you may be able to get a more competitive rate by getting a cosigner to share liability for the debt if you default on the payment. You should also check out the lender’s origination fee, which is a fee charged to process and disburse your loan if approved.
Many banks, credit unions and online lenders offer personal loans. If you’re looking for the most flexible lending options, you may be better off with a peer-to-peer lender like LendingClub or Prosper or a financial institution where you already have an account, such as PenFed or Navy Federal. Some lenders also let you prequalify without impacting your credit score.