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Best Personal Loans of 2022

Personal loans can help you pay off a major expense or build credit, but shopping around is critical. After all, not all personal loans are created equal.

Written by Andrew Pentis / July 20, 2022

Quick Bites

  • SoFi was the highest rated lender among 15 personal loan companies surveyed by Sound Dollar.
  • PenFed Credit Union (editor’s pick), Happy Money (for borrowers with fair credit), LightStream (good credit) and Marcus by Goldman Sachs (debt consolidation) also fared well during Sound Dollar’s analysis.
  • Comparing multiple loan offers helps you get the best possible product for your borrowing needs.
  • Compare lenders across crucial characteristics like APR, origination fee and repayment term, which we’ll define below.

Personal loans are just that—personal. You borrow one because you can’t budget for a major expense. Or maybe as a means to improve your payment history and, therefore, credit report. Or for another reason altogether.

But what makes a personal loan beneficial (or risky) is universal. Characteristics like interest rate and APR, repayment terms and protections separates a good personal loan from a not-so-good alternative. And that’s true for all of us.

That’s the mindset Sound Dollar took in investigating 15 national personal loan lenders—a list including traditional financial institutions (including credit unions) and fintechs (or online-only lenders). We pored over information to compare these lenders across three major categories at each stage of the borrowing process, from application (Eligibility) to cost (Loan Details) and paying the loan back (Repayment). See our full methodology below.

SoFi and the other best personal loans that stood out from the rest scored highly across these three categories. They carried relatively low APRs, few fees and less overall risk to prospective borrowers. But the best personal loans also have unique borrowing benefits, such as unemployment protection (and career coaching) offered by SoFi. In addition, these lenders have accessible eligibility rules, customizable loan amounts and repayment terms, plus helpful customer service and debt management tools.

After completing this research, we can confidently report on the best personal loan overall, and for various scenarios, including if you have fair credit or good credit or are aiming to consolidate debt.

Best personal loans in 2022

Company
SoFi personal loans logoVisit
Best for
Best for
Overall
Key benefit
Key benefit
Unemployment protection if you lose your job while in repayment on this no-fee loan
Visit
Best for
Best for
Editor's pick
Key benefit
Key benefit
Skip one payment per year if you run into a financial hardship
Best for
Best for
Fair credit
Key benefit
Key benefit
You can qualify with a 600 credit score and three or more years of credit history
Best for
Best for
Good credit
Key benefit
Key benefit
The lowest APRs advertised among national lenders, and a “Rate Beat” program to boot
Best for
Best for
Debt consolidation
Key benefit
Key benefit
Have Marcus disburse loan funds directly to your creditor/s

Best personal loan: SoFi

SoFi personal loans logo
APRs:

6.99% - 22.23%

Origination fee:

None

Repayment terms:

2 to 7 years

Borrowing amounts:

$5,000 to $100,000

Minimum credit score:

680

Prequalification:

Available

Visit

You might know SoFi as the pioneer for student loan refinancing, but the personal loan product it launched in 2015 is the nation’s best, according to Sound Dollar’s analysis.

The online lender registered perfect scores in our Loan Details and Repayment categories because it goes above and beyond the industry’s standard offering. Most notably, it offers unemployment protection. Through this unique initiative, if you lose your job involuntarily, you can pause your loan repayment for up to one year—three months at a time—while receiving free career coaching to get back on your feet.

SoFi didn’t notch a perfect score in our Eligibility category, in part, because it has relatively strict—and sometimes hidden—eligibility criteria. We had to dig up a May 2022 blog post from its site to confirm its minimum credit score requirement (680). For its part, however, SoFi is more accessible than most in at least one respect: Non-permanent residents (including DACA recipients and asylum seekers) could be eligible to borrow, assuming they have “valid documentation… showing your immigration status is current.”

All in all, SoFi was our top-rated lender overall, but if you’re borrowing a personal loan with less-than-stellar credit or to consolidate debt, among other borrowing purposes, you might be better off with a competitor—so, keep reading.

Pros

  • Prequalify without commitment
  • Co-borrowers allowed
  • No origination fee
  • Autopay discount (0.25 percentage points off your APR)
  • High borrowing limit
  • Fast funding of loan
  • 7-days-a-week customer service

Cons

  • Minimum credit score to qualify is higher than many competitors
  • Employment is among eligibility criteria

Editor’s pick: PenFed Credit Union

PenFed personal loans logo
APRs:

6.74% - 17.99%

Origination fee:

None

Repayment terms:

1 to 5 years

Borrowing amounts:

$600 to $50,000

Minimum credit score:

650

Prequalification:

Available

Visit

Banking with credit unions usually has perks, such as qualifying for lower APRs and greater repayment safeguards in case you struggle to make your monthly payment. Both are true of PenFed Credit Union personal loans.

In addition to a wide range of repayment terms and borrowing amounts, PenFed personal loans carry unique protections, including the ability to choose biweekly or monthly payments. You could also skip one payment per year or apply for financial hardship relief if repaying your personal loan gets to be too much.

Like with other credit unions, the catch is that you’d have to join PenFed, but it’s simpler than it sounds. When you borrow a personal loan, PenFed will preload your basic savings account with the $5 membership fee.

PenFed’s personal loans are also the smallest-dollar loans we found in the course of our review. You could borrow as little as $600.

Pros

  • Prequalify without commitment
  • Co-borrowers allowed
  • No origination fee
  • Low minimum borrowing amount
  • Fast funding of loan
  • 7-days-a-week customer service

Cons

  • No discounts available
  • $29 fee for late payments (5 days after due date)

Best personal loan for fair credit: Happy Money

Happy Money personal loan logo
APRs:

5.99% - 24.99%

Origination fee:

0-5%

Repayment terms:

2 to 5 years

Borrowing amounts:

$5,000 to $40,000

Minimum credit score:

600

Prequalification:

Available

Visit

If you have “fair” credit—FICO defines that as 580 to 669—taking on debt can be risky.[1] You might only qualify for high interest rates, and falling behind on payments can drop your score further. But if you have the budget to stomach the debt, borrowing could help you improve your credit over time. After all, a positive payment history is a key component driving an increase in credit score.

Formerly known as Payoff, Happy Money says that its “members see an average FICO Score increase of 40 points after making their first few payments.” Though you don’t need a great credit score to qualify, Happy Money requires three years of credit history.

The “Payoff Loan” was designed to help consumers pay off high-interest credit card debt, and it offers direct payment to your creditors, saving you a step. In our review, we also found Happy Money to have the best customer service of any lender under consideration. Its online chat function, operated by real humans, answered our every question (even when the answer wasn’t flattering to the company) and with speed.

Given that it offers prequalification—the ability to confirm your eligibility and check your potential APR options without submitting to a hard credit check (that can temporarily damage your credit score)—Happy Money is worth considering. There's no real cost to see if it's a fit.

And if you’re seeking a so-called bad credit personal loan, we found lenders with lower credit score requirements—300 at Upstart, for example—but it’s worth questioning whether borrowing is truly in your best interest. That's because borrowing a personal loan tagged with a high rate could make repayment unaffordable. If possible, taking the time to improve your credit score before borrowing could unlock lower interest rates with better lenders.

Pros

  • Prequalify without commitment
  • Direct payment to creditors is possible
  • 7-days-a-week customer service

Cons

  • Origination fee
  • No discounts available
  • Co-borrowers not allowed

Best personal loan for good credit: LightStream

Lightstream personal loans logo
APRs:

3.99% - 19.99%

Origination fee:

None

Repayment terms:

3 to 10 years

Borrowing amounts:

$5,000 to $100,000

Minimum credit score:

Not stated

Prequalification:

Unavailable

Visit

If location is the key to real estate, low rates are crucial for personal loans. The lower your APR, which accounts for interest rate and fees, the less interest you’ll have to pay on top of the amount you borrow. LightStream stands out, of course, for offering lower rates than every competitor we reviewed. The fine print: You’ll need excellent credit to access those single-digit APRs advertised online.

So, if you have good (or, ideally, better credit), LightStream could be a wise choice, particularly if you plan to borrow five figures. Backed by Truist Bank, it’s the only lender we surveyed that allows you to borrow up to $100,000 (though maximum borrowing amounts vary by loan purpose).

LightStream’s low rates are helped by the following initiatives, too:

  • Autopay discount shaves 0.50 percentage points off your APR

  • “Rate Beat” program will match any lower APR you’re quoted elsewhere—and beat it by 0.10 percentage points

  • If you’re not completely happy with your borrowing experience and you complete a related questionnaire, LightStream will give you $100

The only major downside of borrowing from LightStream is that it doesn’t offer you the chance to check your rate before committing to a hard credit check. With that in mind, save your formal application with LightStream until the end of your shopping-around process to minimize the impact to your credit score.

Pros

  • Co-borrowers allowed
  • No origination fee
  • Autopay discount (0.50 percentage points off your APR)
  • High borrowing limit
  • Long repayment term options
  • Fast funding of loan
  • 6-days-a-week customer service

Cons

  • Prequalification not possible
  • Minimum borrowing amount could be lower

Best personal loan for debt consolidation: Marcus by Goldman Sachs

Marcus by Goldman Sachs personal loans logo
APRs:

6.99% - 19.99%

Origination fee:

None

Repayment terms:

3 to 5 years

Borrowing amounts:

$3,500 to $40,000

Minimum credit score:

Not stated

Prequalification:

Available

Visit

You can borrow a personal loan for a variety of “personal” reasons, to pay for a vacation or wedding, to fend off medical bills or to consolidate your debt. Marcus by Goldman Sachs has the best personal loans for debt consolidation, in part, because it will pay off your creditors for you. Instead of the loan proceeds hitting your bank account, where you might be tempted to use them for something else, they’ll be sent directly to the credit card issuer or other debt-holders that have got you down.

On top of that, if you’re going to replace multiple debt accounts with one new balance, it better be with a lender you know and trust—and has tools to make debt management easier. With its mobile app and sleek website, Marcus personal loans fit that bill.

In our review of Marcus by Goldman Sachs, we also liked a few other borrower-friendly benefits, including:

  • Customize your payment due date to whenever suits you, and change it up to three times during the life of your loan

  • Skip one payment penalty-free (after 12 on-time, in-full payments)

Marcus personal loans have room for improvement, such as giving prospective borrowers more repayment term options, but its fee-free product is one of the best available, to be sure.

Pros

  • Prequalify without commitment
  • No origination fee
  • Autopay discount (0.25 percentage points off your APR)
  • High borrowing limit
  • Fast funding of loan
  • 7-days-a-week customer service

Cons

  • Co-borrowers not allowed

Compare the best personal loans

As with other financial products, it never hurts to shop around before choosing a personal loan. Thanks to the prequalification process offered by many top-ranked lenders, you can check rates and terms without commitment. Gather at least a few of these rate quotes so that you can zero in on the best possible loan for your situation.

Company
Winner
Winner
Best overall
APRs*
APRs*
6.99% - 22.23%
Minimum credit score
Minimum credit score
680
Winner
Winner
Editor's pick
APRs*
APRs*
6.74% - 17.99%
Minimum credit score
Minimum credit score
650
Winner
Winner
Best for fair credit
APRs*
APRs*
5.99% - 24.99%
Minimum credit score
Minimum credit score
600
Winner
Winner
Best for good credit
APRs*
APRs*
3.99% - 19.99%
Minimum credit score
Minimum credit score
Not stated
Winner
Winner
Best for debt consolidation
APRs*
APRs*
6.99% - 19.99%
Minimum credit score
Minimum credit score
Not stated

*Rates as of July 8, 2022. Visit lender for most up-to-date APRs.

Depending on your specific borrowing needs, there may be another lender out there that best caters to your situation. In the course of Sound Dollar’s analysis, we reviewed far more than the five lenders rated above. Below are additional personal loan companies that stood out during our review process.

CompanyGood for...
StiltNon-U.S. citizens, borrowers with thin credit files
DiscoverRepayment assistance programs
ProsperPeer-to-peer-lending offers
PNC BankPersonal credit lines
Best EggSecured (or collateralized) loans

How do personal loans work?

Personal loans work like other forms of credit-based borrowing. You submit information about yourself and your finances, and prospective lenders check your credit report to gauge your creditworthiness—or how likely you would be to repay the amount you’re requesting to borrow.

  • If you have bad credit, lenders might reject your personal loan application, encourage you to apply with a co-borrower or cosigner or offer you double-digit APRs and limited repayment options. For this reason, personal loans are best avoided if you can’t qualify for a relatively low and affordable interest rate.

  • If you have good credit, lenders will likely approve your loan application and offer you relatively lower APRs and more flexible repayment terms. Personal loans can be useful to consolidate higher-interest debt (such as for credit cards) but are best avoided for elective purchases (read: cruise to Greece) that can be budgeted for over time.

Like with other types of debt, personal loans can be secured or unsecured. You might put up collateral, such as a car or another asset, for a secured personal loan and its relatively lower APR. On the other hand, you can rely on financial indicators like your credit history and debt-to-income ratio to qualify for an unsecured personal loan. Unsecured personal loans may come with higher rates but also less risk for the borrower—you won’t have to worry about losing that collateral—so they’re by far more common than secured personal loans.

Once you’ve borrowed a personal loan, you would repay it in monthly installments until the balance hits zero. If you make your monthly payments without exception, your debt should disappear when you reach the end of your repayment term. Typical terms for personal loans are two to five years or longer.

Alert

If you’re looking for the best short-term personal loans, beware of payday loans. You can spot these and other predatory loans because they have much shorter repayment terms (weeks to months, in some cases) along with triple-digit APRs and hidden, exorbitant fees that make them dangerous to borrow. If you’re not sure if a given personal loan lender is legitimate, ask for information about its interest rates, terms and fees—and then compare it to the lenders that Sound Dollar has reviewed here.

How do you choose a personal loan?

Choosing a personal loan is as simple as determining what you want out of the loan and then matching that criteria up with a lender that delivers it. You might determine that you value personal loans with low rates but longer repayment terms, for example. In that case, you might limit your search to lenders that offer repayment terms of five years or longer.

Of course, there are also some characteristics of personal loans that are universally welcomed. All of us want to work with lenders who charge lower rates and fewer fees, for example, along with administering helpful and responsive customer service.

To ensure you find the best personal loan possible for your situation, give yourself at least a few options to choose from. By applying for personal loans at least three lenders, you can compare rates, terms and other details to choose the best option.

Key characteristics of personal loans

TermWhat to know
Interest rateMost personal loans carry fixed interest rates over time. Watch out for variable rates that fluctuate according to market forces. The lower your rate, the less interest you’ll fork over to your lender each month. Excellent credit is needed to qualify for the lowest advertised rates.
Origination feeAn administrative fee that’s tacked onto your loan at the time of borrowing. As you shop around, compare APRs which account for both the interest rate and the origination fee. The most reputable lenders don’t charge origination fees, but some companies may charge 1% to 8% of your loan amount.
Repayment termThis is the amount of time you have to repay your loan, typically in monthly installments. Most lenders allow you to choose a term of between 2 and 5 years, but shorter and longer terms are sometimes available. The shorter your term, the less time there is for interest to accrue onto your balance (but that also means higher monthly dues).
Co-borrowerIf you can’t qualify for a personal loan on your own, you might enlist a co-borrower who shares legal responsibility for repayment. Similarly, a co-signer would be held responsible for the outstanding balance, but they wouldn’t have direct access to the funds. Not all lenders allow personal loan co-applicants.

How do you apply for a personal loan?

You can walk into your local bank or credit union, to be sure, but you can also shop around online without committing. Prioritize lenders that offer prequalification, the ability to confirm eligibility and check rates seamlessly.

Here are some steps for applying for a personal loan:

1. Check your credit report and score: Review your credit reports at AnnualCreditReport.com and request scores as well so that you know whether lenders will view you as a creditworthy candidate to borrow. Getting your credit in the best possible shape before applying for a personal loan can help you secure the lowest possible rates.

2. Put in the research: Use reviews of the best personal loan reviews (like this one) as a starting point, but also make sure that recommended lenders cater to your specific needs, whether you’re a bad-credit borrower or simply looking for unique perks.

3. Start prequalifying: Even if your top choice for a personal loan at the outset is the financial institution you already bank with, it never hurts to consider and compare other offers. The most reputable online personal loan companies offer you the ability to confirm eligibility and check rates after a few minutes of entering information about yourself and borrowing purposes.

4. Choose the best loan: Once you have multiple loan offers, pick the lender that does the best job of meeting your needs, whether that’s a longer repayment term, lower rate or something else entirely.

5. Submit your formal application: After prequalifying and selecting a loan, your prospective lender will ask you to verify information you’ve provided, perhaps by uploading or signing documents. Once you receive an official personal loan approval, ask your lender about options for when and how the loan funds will be disbursed.

FAQs

Who has the best rates on personal loans?

Online lender LightStream advertises the lowest rates for personal loans. It and other personal loan companies typically promote a range of rates, from the basement to the ceiling, of what it offers to borrowers of varying creditworthiness. If you have good credit, you can expect something closer to the basement rate, which may start around 5% to 6%. With bad or thin credit, anticipate APR quotes closer to the ceiling, which approaches 36%.

What can you use a personal loan for?

Because personal loans are indeed personal, you can technically use them for any legal and legitimate expense, from consolidating debt to paying for a vacation or wedding. (Home improvement is another common reason to borrow a personal loan, though you have other financing options, including home equity loans and lines of credit.) With that said, just because you can borrow a personal loan doesn’t mean you should—it could be a very expensive form of financing. If you can avoid borrowing for a big trip, for example, by budgeting and saving for it over time, you won’t have to fork over interest to a financial institution.

What’s the best personal loan with a cosigner?

Applying for a personal loan with a co-applicant can help you qualify (if you’re creditworthy yourself) or secure a lower APR (if your co-applicant is more creditworthy than you are). Eight of the 15 lenders we surveyed offer you the chance to apply with a co-borrower who is legally responsible to repay the debt if you don’t. Far few lenders nationally allow cosigner support. The primary difference between co-borrowers and co-signers is that co-borrowers typically have direct access to the loan funds.

How we ranked the best personal loans

Sound Dollar spent about 10 hours collecting 300 data points to make objective comparisons of 15 leading personal loan lenders that operate across the U.S. We visited lender websites, took on the role of an inquisitive consumer and went through the application process, peppering customer service representatives with questions and concerns. We also considered customer reviews, company awards and accreditations from third-party companies and agencies.

The 15 lenders under consideration were scored across three categories—Eligibility, Loan Details and Repayment—to span every stage of the borrowing process. Given that a loan’s details, such as its APR and fees, are most likely to affect a borrower’s wallet, we gave this category double the weighting. Below is additional detail on these three categories.

Eligibility

If you can’t easily tell whether you’ll qualify for a lender’s personal loan product, that’s a red flag. We rewarded lenders with transparent eligibility criteria and little fine print. The very best lenders openly state the minimum credit score you need to apply, plus have a simple and fast prequalification process that allows you to confirm your eligibility and check APRs without submitting to a hard credit check.

Loan details

Once you know you’ll gain loan approval, you want to know the nuts and bolts of personal loans so that you can make apples-to-apples comparisons. We did this legwork for you, collecting critical inputs like APRs, origination fees and discounts so that you know which lender offers the most cost-effective loan options. Also under consideration: whether the lender offers a wide range of borrowing amounts and repayment terms so that you can customize your loan to fit your budget.

Repayment

You’ve got your loan, now you need to repay it. In this category, we rewarded lenders with in-house customer service teams that work seven days a week. We also looked for unique benefits not commonly found elsewhere, such as slick mobile apps, direct payment to creditors (in the case of personal loans for debt consolidation), grace periods and repayment safeguards.

Article Sources
  1. “What Is a Credit Score?” myFico, https://www.myfico.com/credit-education/credit-scores.

About the Author

Staff editor Andrew Pentis headshot

Andrew Pentis

Andrew Pentis has used his journalism background to write about personal finance topics since 2015. His work has appeared in over 40 publications, including LifeHacker, U.S. News & World Report and Marketwatch.

Full bio

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