Personal loans have fixed annual percentage rates, generally between 6% and 36%. The loan with the lowest rate is the least expensive — and usually the best choice. Other features, including no fees, soft credit checks and direct payments to creditors if you’re consolidating debt, set some loans apart.
We always recommend you know your credit score and compare personal loans from multiple lenders before making a choice. Here are our picks for the best personal loans:
- LightStream: Best for home improvement loans.
- SoFi: Best for good to excellent credit.
- Marcus by Goldman Sachs: Best for bank loans.
- Upgrade: Best for fair credit.
- Upstart: Best for short credit history.
- Universal Credit: Best for bad credit.
- Happy Money: Best for credit card consolidation.
- Discover Best for debt consolidation.
- Best Egg: Best for secured loans.
Why trust NerdWallet? NerdWallet’s editorial team has reviewed more than 35 personal loan providers and compared them to select the best personal loans. We chose these lenders based on features like star ratings, APR ranges, loan amounts, and minimum required credit scores.
What is a personal loan?
A personal loan is a money borrowed from a bank, credit union or online lender that you repay in equal monthly installments, usually over two to seven years.
Personal loans are typically unsecured, which means they don’t require collateral. Lenders instead consider your credit profile, income, and debts during the loan approval process. If you fail to repay the loan, your credit can take a hit.
When should I get a personal loan?
Personal loan funds can be used for almost any purpose, but taking a loan makes most sense when:
- It’s the least expensive form of financing.
- It’s used for something with the potential to increase your financial standing, like debt consolidation or home improvements.
- You can manage the monthly payments without stressing your budget.
In contrast, a personal loan used for discretionary expenses, like a vacation, can be expensive. NerdWallet recommends using savings for nonessentials to avoid finance charges.
If you’re borrowing for emergency or medical expenses, consider less-expensive alternatives first, such as community assistance or payment plans.
Personal loan interest rates and fees
Personal loan interest rates vary by lender, and the rate you receive depends on factors like your credit score, income, and debt-to-income ratio.
Borrowers with high credit scores generally receive lower rates, from about 11% to 15%, while those with low credit scores may get an APR of around 25%. Here’s what interest rates on personal loans look like, on average:
| How’s your credit? | Score range | Estimated APR |
| Excellent | 720-850. | 10.6%. |
| Good | 690-719. | 15.5%. |
| Fair | 630-689. | 19.6%. |
| Bad | 300-629. | 25.6%. |
