How to Find the Best Personal Loan

Interest rates and fees should be among your primary considerations when shopping for a personal loan, but also take a moment to examine each lender’s creditworthiness as well as if their lending criteria aligns well with your financial goals.

WalletHub has chosen the top personal loans based on six criteria, such as credit requirements, APR, fees, application process and loan amounts. To see your offers online by prequalifying for one online takes minutes without damaging your credit scores.

1. Interest Rate

Personal loans can be an invaluable financial tool to cover expenses. Borrowers with good-to-excellent credit may qualify for competitive interest rates while those with lesser scores may incur higher APRs.

Lenders set interest rates for personal loans based on their own criteria, which may include your credit score, financial history and income as well as market conditions.

The ideal personal loans provide competitive interest rates and flexible loan terms, typically 12-60 months. Furthermore, they don’t incur fees such as origination or prepayment charges that could add up to an expensive APR.

To secure the best personal loan rate, it’s crucial to shop around and compare offers from various lenders. Some allow pre-qualifying online, which won’t affect your credit score; other require full applications with identification verification and pay stub verification; some even offer discounts for long-term relationships or setting up automatic payments.

2. Fees

Although everyone understands personal loans come with interest payments, many don’t realize other fees may also apply, including loan origination costs, late payment penalties and prepayment fees. When selecting the ideal personal loans it is crucial to factor all these factors in.

There are a few lenders that provide personal loans without origination fees – these may have more restrictive credit requirements, but offer flexible repayment terms and competitive interest rates.

LightStream provides an exceptional personal loan, with no origination fee and flexible loan amounts and repayment terms; however, its credit requirements are stricter. Meanwhile, SoFi also provides loans without fees, although its repayment terms are more limited and requires co-applicants; however it offers unique features such as unemployment protection and payment modification which make SoFi worth considering for those with excellent to great credit scores.

3. Payment Options

Personal loans with flexible funding amounts and terms to meet different financing needs typically don’t charge origination or signup fees, such as Navy Federal Credit Union’s savings secured and certificate secured loans that use funds in its savings account as collateral with low interest rates and an unemployment protection benefit that allows borrowers to modify payments during job loss or temporarily suspend repayment.

Other advantageous loan features include flexible payment options such as being able to change due dates or skip payments during times of hardship, with some lenders also offering extras such as autopay discounts or free credit insurance policies.

If you have good to excellent credit, SoFi, PenFed and LightStream may offer the most cost-effective personal loan rates. These online and brick-and-mortar banks provide loan options for debt consolidation, home improvement, medical expenses and other purposes – as well as quick application processes with no upfront fees and soft credit inquiries that won’t negatively affect your scores.

4. Reputation

The best personal loan lender depends on your credit score and history. WalletHub compares lenders based on multiple metrics, such as loan requirements, APRs, fees and application processes – it’s always wise to shop around first if your credit score is low – banks, credit unions and online lenders offer personal loans; many of which allow pre-qualification offers without adversely impacting your score.

Some of the best personal loans are provided by large institutions that also offer other financial products, like checking or savings accounts. These lenders may have unique features, like offering lower interest rates if automatic payments are set up or unemployment protection in case of job loss. Furthermore, many have outstanding customer satisfaction scores as evidenced by high customer satisfaction scores and other data – for instance Navy Federal has an impressive customer rating and offers great loan terms for military members including no origination fees and reduced rates!

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