When looking for a personal loan it is good to keep in mind some of the most common features of these types of loans. Be clear on why you want the loan, how much you can afford to spend each month paying it back, and what your credit score is. Once you have that information in hand it is time to start comparison shopping. Some personal loans are developed for those with less than stellar credit scores, while others are for those who need a fast approval.
Regardless of your reason for needing a personal loan narrowing down the vast field can be a daunting task. The following personal loan companies have been selected because of their lowered requirement for a qualifying credit score, low to no account fees, soft credit checks and ease of application. These are the top five personal loans for 2020 to get you started and fully funded in no time.
Best Online Lenders
LightStream (by Suntrust Bank) Personal Loans
LightStream is rated #1 for their customer service by J.D. Power, which ranks all lending businesses in the nation. Their website is one of the easiest to navigate and asks you to select from a wide range of categories. Begin with selecting the purpose for the loan and use their handy calculator to determine what your monthly payments might be. There are no fees and no prepayment penalties. You are not allowed to use the loan to pay off any existing loan with LightStream. If you need money fast, this is a great option as they have 24-48 hour turn around on approvals and funding.
Upgrade Personal Loans
Upgrade offers personal loans up to $35,000 for those who qualify. They use a soft credit check so it will not impact your credit score. There are no fees, no penalties for early prepayment, and offer a cash back incentive. Upgrade offers money for a wide range of credit scores, and allows you to have a co-signer on the loan if you like. Loans are not available to you if you live in West Virginia, Iowa or Washington, DC. Unlike other lenders, Upgrade does charge an origination fee which can increase your overall interest rate.
Marcus Personal Loans
Marcus personal loans is a part of the larger Goldman Sachs banking firm. They do not charge fees, have flexible options for payment dates, and allow you to defer a payment now and again without penalty. You do not get the option to include a co-signer and they only report your payment history with them to one of the major reporting bureaus. These types of loans are designed for consumers who have good or excellent credit ratings. This means you must have at least a 680 to qualify.
SoFi Personal Loans
If you have a minimum credit score of 680 then SoFi may be the best personal loan for you. They offer some of the lowest interest rates for personal loans, do not charge additional fees and offer flexible payment arrangements. They do not do refinancing or direct payment to creditors if you want to use the money for debt consolidation. Many who have student loan debt utilize this company because it allows them to combine the various student loan debtors into one payment. If you qualify, they loan up to $100,000. What SoFi looks at in your overall financial landscape is how much cash flow you have after all your monthly debts are paid. Loan terms are from 2-7 years and are available in all states except Mississippi.
Best Banks for Personal Loans
Brick and mortar banks also offer personal loans, but you must apply for them in person (even if you pre-fill an application and submit it online). It is recommended to print out and hand deliver the application as the credit specialist can make sure you have correctly filled out everything. The following are considered good personal loan banks for those who have a 660 credit score or better.
- Wells Fargo.
- FifthThird Bank.
- U.S. Bank.
Included with banks are credit unions. While credit unions are financial institutions closely resembling banks, they do operate a bit differently. The largest difference is that credit unions are non-profit. Some of the larger credit unions offering good terms for personal loans include:
- SCE Federal Credit Union.
- Affinity Federal Credit Union.
- Aspire Federal Credit Union.
- Connexus Credit Union.
Places to Avoid for Personal Loans
While it may be tempting to go to a payday lender, avoid doing this at all costs. A payday loan company lends you money against the projected income you receive each month from your employer. The company gives you a lump sum and then you pay them back the amount on your paycheck, plus a fee for servicing the quick loan. The interest rate charged on these types of loans is almost 400%…and that is no typo. This can set you up for a cycle of diminishing returns, making your paychecks much less in the following months. If you think this is the only type of loan for which you would qualify because your credit score is low, many lenders will loan money to you if you have collateral or a co-signer. Payday loans are not necessarily the answer.