Our top 4 picks for best personal loans for good credit

No matter what type of personal loan you’re getting, it’s always a good idea to find a lender with reasonable annual percentage rates (APRs), transparent fee information and repayment terms that fit your needs.

Compare the best lenders for borrowers with good credit

One of the most important things you can do when getting a personal loan is to compare rates and shop around.

“The key to finding the best loan is to research your local financial institutions and online providers as well,” said Dena Rothmann, managing vice president at Travis Credit Union.

“Read the small print in their personal loan disclosure and make sure you clearly understand the rates, fees and terms available. Use a loan calculator or contact the financial institution to have them help you figure out what the payment would be, and add this into your budget worksheet to make sure you are able to accommodate the added payment.”

Here’s how our top picks compare on important loan terms such as APR, fees, repayment period and maximum loan amount.

What is a good credit personal loan?

Having a top-notch financial profile is key to a personal loan, since these loans are unsecured. Borrowers with the best credit scores and highest incomes typically qualify for the best loan terms, such as lower interest rates and flexible repayment options.

Equifax considers credit score ranges as follows:

• 580 to 669: Fair
• 670 to 739: Good
• 740 to 799: Very good
• 800 and up: Excellent

You’ll likely get the best terms when your credit score is 740 or better. If you are on the cusp of a better credit score, it may be worthwhile to wait before applying for a loan until your score improves or take measures to boost your score.

A high credit score that reduces your personal loan interest rate or gives you the option for a longer loan term with a lower monthly payment could be worth the extra effort (or time).

» MORE: What credit score do I need for a personal loan?

Types of good credit personal loans

There are different types of loans that can help you reach your financial goals.

The biggest difference is whether you choose a secured loan, which requires collateral and tends to have lower interest rates, or an unsecured loan, which will have higher interest rates and more stringent income requirements.

Here’s a summary of loan products that you should be familiar with when shopping around:

• Unsecured personal loans: These loans do not require collateral and typically offer fixed interest rates and repayment terms. However, since they are not backed by an asset, they may have higher interest rates for borrowers with lower credit.
• Secured personal loans: These loans require collateral, such as a savings account, property or another valuable asset. The advantage of secured loans is that they usually offer lower interest rates than unsecured loans, making them an attractive option for borrowers with less-than-ideal credit.
• Lines of credit: These can be either unsecured or secured and operate much like a credit card. With a line of credit, you can draw funds up to a certain limit, pay off the balance, and then withdraw money again up to the credit limit.
• Balance transfer card: This type of credit card allows you to transfer high-interest credit card debt to a card with a lower interest rate, often with a promotional period of 0% interest. It gives you an opportunity to pay down debt faster without the burden of accruing interest, but there’s typically a balance transfer fee involved.

Pros and cons of getting a personal loan

Getting a personal loan is a big financial decision. You’ll be on the hook for payments for anywhere from one to five years, so it’s important to make sure you’re ready for the financial commitment.

Here are some pros and cons of getting a personal loan to consider.

Where to get a personal loan with good credit

Personal loans are widely available at a number of financial institutions, including banks, credit unions and online lenders. The most common use for these loans is consolidating higher interest rates, and some lenders will pay those creditors directly.

However, you can use your loan proceeds on a variety of expenses, including:

• Medical expenses
• Vacation
• Small business funding
• Home renovations
• Car purchase

Some lenders try to restrict the use of funds for things like college or post-secondary education expenses. Additionally, most lenders discourage or even prohibit the use of personal loans for gambling or investing in stocks and bonds. These restrictions are in place for high-risk activities because they can lead to financial loss and loan default.

» COMPARE: Best personal loan companies

How to apply for a personal loan with good credit

The first step to applying for a personal loan involves having a model credit profile because lenders assess your application based on a comprehensive review of your financial situation.

Ideally, you’ll have a good to excellent credit score and a near-perfect payment history. You should also have sufficient income and a lower debt-to-income (DTI) ratio.

If you’re applying for a secured loan, make sure you have enough assets for the loan amount you’re requesting. By strengthening these aspects of your financial profile, you can significantly improve your approval odds.

Here’s a list of data points and documents you may need in the application process:

• Name
• Date of birth
• Social Security number
• Address
• Government-issued ID
• All sources of income
• All debt obligations
• Proof of income (recent pay stubs, tax returns, etc.)

With some lenders, you may be able to check your rate with a soft credit pull. Once you are approved at this stage, you’ll get to see your terms, typically captured in a loan agreement. Once you accept the terms, you’ll likely have to submit to a hard credit pull and verification of the information you provided in the application process.

Tips to improve your personal loan approval

While each lender will have its own set of guidelines for approval, generally these tips can increase your odds of approval.

• Have all required documentation ready at the time of your application
• Make payments on time with your other existing credit accounts
• Maintain a low credit utilization ratio
• Avoid applying for new credit (unless it’s a soft credit check)

What loan rates can I expect with good credit?

Generally, personal loan rates will fall somewhere between a mortgage loan rate and a credit card rate. As mentioned, those with better credit scores and higher incomes will qualify for the best rates. If you choose a secured personal loan, your rate may be slightly lower.

Some lenders offer discounts for autopay or directing them to pay your creditors directly if your loan is for debt consolidation purposes.

Follow these tips to get a better rate on your personal loan:

• Maintain a good credit profile, consistent income and low DTI ratio
• Wait until the prime rate is lower to apply for a loan
• Choose a loan with no origination or late fees for a lower APR
• Get a secured personal loan
• Opt for autopay
• Allow the lender to pay your creditors directly if you are getting a debt consolidation loan

» MORE: What is a good interest rate on a personal loan?

Methodology

The ConsumerAffairs Research Team chose our top picks for good-credit loans by comparing popular lenders on online reputation, rate transparency and availability. All information is accurate at the time of publishing.

• Online reputation: We compared ratings and reviews on our site and across the internet, including Trustpilot. We also checked in with the Better Business Bureau for current alerts and government actions related to marketplace misconduct within the last year.
• Rates and fees: We gave preference to lenders with lower APR ranges, lower origination fees and no prepayment penalties. We also preferred companies with clear repayment terms.
• Availability: We confirmed that all of our picks are currently available throughout the United States. We also eliminated lead generators and companies that are only licensed in a few states.