Compare Loan Companies
Whether they want to buy a car, house or business, most consumers will need a loan at some point in their life. Consumers can also take out personal loans to cover unexpected bills or consolidate credit card debt.
When consumers are ready to borrow money, they’ll have many lenders and types of loan companies from which to choose. Consumer should evaluate several lenders and loan offers before signing any paperwork, but with so many options, choosing a loan company can be overwhelming.
Top 10 Best Rated Loan Companies
|Read 357 Reviews|
LoanMe provides personal loans in as little as four hours. We strive to make the process quick and easy to yield needed funds for one-time purchases or debt consolidation.
|Read 966 Reviews|
LendingTree, Inc., offers many loan services, including business loans and mortgages. It was founded in 1996, and the website launched in 1998. It allows borrowers to fill out one application to apply to multiple lenders.
|Read 254 Reviews|
Currency Capital's services include various business financing options including business loans, equipment financing, equipment leasing and working capital. They offer competitive interest rates and 100 percent financing services.
|Read 169 Reviews|
RoadLoans.com offers car loans and auto refinancing loans for customers within a wide range of credit scores. Instant online decisions allow customers to get pre-approved before shopping for a new or used vehicle.
|Read 198 Reviews|
Since 1999, AmOne has matched consumers and business owners with lenders to provide immediate access to loans. Our Loan Matching Specialists provide personalized guidance in finding and securing reliable funds.
|Read 59 Reviews|
Business Finance Advance has a free, quick quote option via their website that gives business owners an instant approval decision. They have a 95 percent approval rating, and their loans go as high as $2.5 million per location.
|Read 139 Reviews|
Prestige Financial Services, Inc. was established in 1994 and is headquartered in Salt Lake City. It offers subprime auto loans through car and truck dealerships across the United States. Loan applications are available online.
|Read 290 Reviews|
Westlake Financial was established in 1988 and is a part of the Hankey Group of Companies. It is headquartered in Los Angeles. Westlake offers auto financing through car dealerships across the United States.
|Read 438 Reviews|
Credit Acceptance is a publicly-traded company that has been in business since 1972. It provides auto dealers with financing programs for traditional borrowers and those with poor credit. Dealers share in the company’s profits.
|Read 64 Reviews|
Lobel Financial offers auto financing to vehicle dealers for subprime customers. The company’s DealWRITER program lets dealers offer instant approval to those applying for financing, and customers can make payments online.
The ConsumerAffairs Research Team believes everyone deserves to make smart decisions. We aim to provide readers with the most up-to-date information available about today's consumer products and services.
What features matter most when choosing a loan company?
When you take out a loan, chances are you’re thinking more about the cost of the item you’ll purchase with the loan money than about the cost of the loan itself. If you don’t consider the loan cost, that item could end up costing much more than you expect. To ensure that you get the best deal on a loan, make sure you understand all fees associated with it and how interest will accumulate.
- Interest rate: The interest rate is the money a lender charges you when you borrow money and is a percentage of the total amount borrowed. Your credit score will influence the interest rate a lender charges, because they will charge people deemed higher risk a higher rate. If your loan doesn’t have pre-payment penalties or precomputed interest, you’ll save money on interest by paying your loan off early.
- APR: The Annual Percentage Rate (APR) is often confused with the interest rate; however, the APR actually accounts for the total cost of the loan, including any one-time fees. When comparing loan offers, look at the APR to get the best price comparison.
- Origination fee: The origination, or processing, fee, is a one-time charge that covers the cost of processing a loan. This fee is typically included in the overall loan amount, so you aren’t required to pay it up front.
- Pre-payment penalties: Some lenders charge a fee if you pay off your loan early. These fees help the lender make up the money they lose in interest, but they also prevent people from getting out of debt early when they’re able to.
- Precomputed interest: Loans with a precomputed interest rate use the original amount instead of the outstanding balance to determine the amount of interest a consumer will pay each billing cycle. This method means your payments may get smaller as time passes. However, if you pay the loan off early, you won’t save any money on interest.
- Late payment fees: Most lenders will charge a fee if you pay your bill late. Avoid that fee by setting up autopay from your bank account or just put a reminder on your calendar to keep you on track.
- Payment processing fees: Some lenders charge a fee to pay your bill in a certain way. For example, some lenders may charge a small fee if you pay your bill by phone or using a check instead of setting up automatic electronic withdrawals. Make sure you understand these fees and choose a lender that allows you to make your payment in the way you want for free.
When working with a lender, you should choose someone you feel comfortable with and who is trustworthy. In general, if you’re taking out a mortgage or auto loan from a well-established bank or credit union, you can feel confident in the lender’s credibility. If you’re working with an online loan company or new business, make sure to fully research the company to avoid being scammed. Scams may be most likely to occur with unsecured, personal loans.
- Hold loans vs. flip loans: Determine whether the lender you’re working with will hold the loan after you close or if they’ll flip, or sell, it to another party. While lenders who flip loans aren’t more or less trustworthy than those who don’t, you’ll have to simply accept that the company they sell your loan to will be trustworthy and offer good customer service.
- Customer service: Consider how easy it is to get in touch with your lender now to determine if they’ll be easy to reach later if you have any problems. Also consider how patient they are in answering your questions. They should be willing to address all your concerns and explain anything you’re confused about.
- Registered: Lenders must be registered to do business with the appropriate authority, usually the department of banking or consumer credit, in every state in which they do business. You can find a list of state licensing authorities on the Nationwide Mortgage Licensing System & Registry website.
Mortgage broker vs. loan officer
When taking out a loan, you’ll have the choice to work with either a mortgage broker or a loan officer. There are perks to each one, so it is important to know the difference.
- Loan officer: Loan officers work for the bank or lender, so getting a loan through them may be faster than working with a mortgage broker. These individuals are primarily accountable to their employer, so they may not always make recommendations that are best for you.
- Mortgage broker: Mortgage brokers are a kind of middle-man between those seeking loans and multiple lenders. If you’re worried that your credit may make it difficult to get a loan, consider working with a broker because they can help you decide which lender is most likely to approve you. These individuals may also be able to help you find a better interest rate because they’ll be comparing multiple lenders.
There are a variety of other factors to consider when borrowing money. If at any point during the process you’re confused, make sure to discuss the matter with your lender.
- Expertise: Look for a loan company that specializes in the type of loans you’re considering. If you’re working with a big bank, ask whether they have loan officers who specialize in certain types of loans.
- Credit report: All consumers are entitled to get one free report from each credit reporting company every year. If you’re considering taking out a loan, request one of your credit reports as far in advance as possible to make sure no inaccurate information appears on it. Many credit cards show you your credit score for free; knowing your credit score may help you decide whether to work with a loan officer or mortgage broker.
- Down payment: If you’re taking out a mortgage or car loan, consider how much of a down payment you’re able to make. The larger your down payment, the less money you’ll need to borrow. Saving a little longer to have a larger down payment could save you a significant amount of interest later.
- Special programs: Many homebuyers qualify for special program loans, like FHA or VA loans, for example. Research these options to determine whether you qualify for any special programs before taking out a loan.
- Private mortgage insurance: Individuals who qualify for a mortgage but do not have a down payment that accounts for 20 percent of the home’s value may be required to purchase private mortgage insurance (PMI), which will allow the lender to recover money if the borrower defaults on the loan. This insurance does not offer any protection to borrowers. PMI is usually between .5 and 1 percent of the total amount of the loan.
What are different types of loans?
Secured loans rely on an asset (such as a car, a home or a boat) that will be used as collateral for the loan.
Unsecured loans are more difficult to qualify for and have higher interest rates because an asset for collateral is not required. These are sometimes called personal loans.
Variable rate loans have an interest rate that changes based on market rates. Consumers payments will vary based on changing interest rates. They may end up paying more or less in interest based on the overall economic situation.
Fixed rate loans have an interest rate that remains the same for the entire life of the loan. The payments for these will remain the same, regardless of whether the market interest rate goes up or down.
Home loans, or mortgages, are available to help people finance their homes. Conventional mortgages usually require the borrower to have a down payment for 20 percent of the purchase price.
Auto loans are available for both new and used cars, and consumers can obtain car loans from banks and credit unions as well as most auto dealers.
Those wishing to open a business or expand their current business can take out loans to finance their ventures.
Many private lenders work with the Federal Housing Authority to offer FHA mortgages. These loans require a much smaller down payment than conventional loans.
Veterans Affairs loans
Armed service veterans, current service members and their spouses may qualify for a Veterans Affairs (VA) mortgage. These home loans have a very low down payment, and borrowers aren’t required to purchase mortgage insurance.
Who should take out a loan?
Individuals who rent should consider taking out a loan to purchase their own home if they have a stable income. Mortgage payments are often lower than rent, and owning their property allows them to build equity.
Homeowners who want to remodel or improve their house and those who want to lower their interest rate should consider refinancing their home.
Small business owners
Small business owners who want to expand their business should consider a small business loan.
Credit card holders
Anyone carrying an outstanding balance on a high interest credit card should consider whether they could save money on interest by taking out an unsecured personal loan.
Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.