Personal Loan companies provide individuals with credit to buy now and pay back the amount borrowed over time. Many types of companies offer personal loans, including banks, credit unions, peer-lending companies and private lenders.
Personal loans offer customers financing with predictable monthly payments. They're often used to consolidate high interest debt, fund a new business or finance a big purchase such as a home remodel. Consumers may borrow money for a personal loan online or in person.
Top 10 Best Rated Personal Loans
Best Egg's online application process makes it easier than ever to obtain a personal loan. With their quick and simple 3 step process, you can have the money you need in your account in 1 business day.
|Read 19 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 340 Reviews|
Massachusetts-based OneMain Financial has been offering personal loans since 1912. Customers can borrow from OneMain for a range of purposes, including debt consolidation, unexpected expenses and home improvements.
|Read 2807 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 198 Reviews|
Founded in 2006, Lending Club is a peer-to-peer lending company that is based in San Francisco, California. Lending Club's platform is Internet-based, and the company is extending its reach into car loans and mortgages.
|Read 18 Reviews|
Founded in 2012, Avant is a personal loans company with headquarters in Chicago, Illinois. The company offers personal loans ranging from $1,000 to $35,000, and has facilitated loans totaling over $1 billion to date.
|Read 20 Reviews|
1st Franklin Financial, founded in 1941, is a loan and investment company. The company offers consumers the cash they need, for any event or expense, through their short-term personal loans. Consumers can apply online.
|Read 20 Reviews|
Republic Finance has been offering consumers a variety of loan products and services since 1955. Today, the company has offices in Kentucky, Tennessee, Mississippi, Alabama, Georgia, South Carolina and Louisiana.
|Read 36 Reviews|
Pioneer Services is a financial services company dedicated to serving members of the military and their families. The company is the military division of MidCountry Bank, and it is headquartered in Kansas City, Missouri.
|Read 12 Reviews|
Lendmark Financial Services is a consumer finance company that provides a variety of personal loans, automobile loans and retail merchant financial services. It was founded in 1996 and has over 130 branches in 11 states.
|Read 38 Reviews|
What features matter most?
Lenders make money on loans by charging customers interest and fees. Interest is calculated as a percent of the amount borrowed. There are many ways to calculate interest payments. Companies vary based on the amount of interest and fees they charge.
- High interest loans: Some personal loan companies charge high-interest rates, which encourage customers to repay loans quickly. Certain ‘pay day’ loans offer money with very high interest rates to tide you over until your next paycheck.
- Low interest loans: Many personal loan companies offer customers low-interest rate loans, which are often used to refinance debt with higher-interest rates. For example, if you have 3 credit cards which charge an average of 20% interest, you may want to pay off the balance due on those cards with a personal loan that has a lower interest rate of 12%. In general, to qualify for a lower interest rate, the borrower needs a credit score above a specific level.
- Varied interest rates: Many personal loan companies charge a wide variety of interest rates, which differ based on who is borrowing the money and how long it will take them to repay the loan. In general, borrowers with higher credit scores are charged lower interest rates. Additionally, smaller loans usually have higher interest charges.
Types of loans offered
Personal loan companies differ from one another by the types of loans that they offer.
- Secured loan: This type of loan requires an asset to secure the loan. If the borrower defaults on the loan, the lender has a right to take the collateral. Secured loans are commonly used when buying a vehicle.
- Unsecured loan: There is no collateral required on an unsecured loan, thus the interest rates are normally higher than for an unsecured loan due to the higher risk to the lender.
- Single payment loans: Single payment loans allow borrowers to borrow an amount of money, then agree to repay that amount in full at some point within a fixed amount of time.
- Monthly payment loans: These types of loans require the borrower to repay the loan principal and interest with a fixed amount each month. The repayment dates are scheduled at the start of the loan.
- Salary advance loans: People who borrow cash for a short time period, usually between paychecks, may use personal loan companies that offer salary advance loans; these are often short-term, low amount loans with high interest rates and fees.
Another way that personal loan companies differ is in their borrower application process. The application process gives the lender basic information about the client’s current expenses and income as well as their credit history. This allows the lender to find out whether the borrower is likely to repay the loan in a timely manner. Before applying for a personal loan it’s useful for a borrower to check his or her credit score. Also, gather all of the necessary paperwork in advance and to make certain to complete the application in full.
- Online application: Some personal loan companies allow customers to apply for loans by entering all the necessary information online, which the loan company then assesses to determine the borrower’s creditworthiness.
- Phone application: Loan companies that have a phone-based application require borrowers to apply for a loan over the phone. Before making the call, prospective borrowers should compile all of their related documents.
- Mixed process: Many personal loan companies require customers to fill out application forms with their personal information, and then follow up with phone calls to verify information and discuss loan options and terms.
Personal loan companies differ from one another based on the amounts of the loans that they offer. In general, the loan amounts vary from company to company. Personal loans may be for an amount as low as a few hundred dollars on up to $70,000 for a small business or home remodel loan.
- Maximum limits: Some personal loan companies put a cap on the maximum amount a customer can borrow.
- Minimum limits: Some personal loan companies require borrowers to take out at least a certain amount in order to borrow.
Personal loan companies vary based on the types of fees they charge with their loans.
- Fee-free: Fee-free personal loan companies do not charge any fees for their loans and simply make money from the loan's interest payments.
- Loan fees: Other personal loan companies charge standard fees such as an origination fee and a closing fee. These may be a set fee or calculated as a percent of the amount borrowed.
- Late and failure-to-pay fees: Most personal loan companies charge customers fees for late or missed payments.
There are a variety of ways a personal loan is funded.
- Bank funded: Historically, banks and credit unions use depositors’ money to fund borrowers’ loans. Banks and related financial institutions also fund payday lenders and other types of personal loan providers.
- Peer funded (individual): Individual peer support is a new type of funding alternative for both borrowers and lenders. Peer funded loans are provided by regular individuals or peers and not financial institutions.
- Peer funded (group): Similar to individually funded peer loans, many hedge funds, bank endowment funds and other large investors fund personal loans through the peer-to-peer or social lending platforms. The difference between individual and group peer funded loans is typically the amount of money lent-groups typically lend greater amounts than individuals.
What are different types of personal loan companies?
Peer lending companies
Peer lending companies are personal loan companies in which individual lenders select the loans they want to fund, and borrowers receive money directly from peer lenders.
Private lending companies
Private personal loan companies may offer borrowers loans from their own funds, and they collect interest on the loans to make money. Other private lending companies receive funding for the loans they offer through the traditional financial system.
Banks and credit unions
Banks and credit unions are official financial institutions that make personal loans.
Borrower-specific lending companies
These personal loan companies only give loans to specific types of borrowers, such as those in the military or in a particular affinity group such as a church or alumni association.
Who might need a personal loan?
People looking to refinance debt
People who are in debt but looking to pay lower interest rates might take out a loan to refinance their debt. When looking for a debt consolidation loan, it’s important to make certain that the future interest rate and fees are lower than the rates on the existing debt.
People starting a business
People starting a business might use a personal loan company to borrow money to fund their business' startup costs.
People facing financial hardship
People who are facing financial hardship might take out a personal loan in order to afford the costs of living or pay off medical bills until they are in a better financial spot.
People experiencing a big life event
Some individuals use personal loan companies to fund an expensive life event, such as a wedding or important family vacation.
People looking to finance a home remodel
A homeowner might take out a personal loan when adding a room on to their home or remodeling a kitchen.
LoanMe offers unsecured installment loans to consumers and businesses. The company's primary focus is to provide personal or small business lending solutions. The company offers loans from $2,600 to $100,000 for purposes such as debt consolidation or costs associated with starting a new business. LoanMe streamlines the loan application process, making it easier for consumers.
- Loan range: LoanMe offers personal loans ranging from $2,600-$100,000. This wide range gives consumers several options to choose a loan amount that meets their needs, even if they do not own a home.
- Direct deposit: With application approval, consumers can receive their loan funds via direct deposit into a checking account.
- Automatic payment withdrawals: LoanMe automates the loan repayment process, withdrawing loan payments from the borrower's bank account based on an agreed-upon repayment schedule.
- Three ways to apply for a loan: Applicants can call the company toll-free to begin the loan application process with a live agent, complete the process online or use the company's website to request a callback from a live agent.
- Best for LoanMe's services are best for anyone looking for an unsecured personal consumer loan, individual's ineligible for typical bank or credit union loans and those facing financial hardship.
AmOne takes a unique approach to helping individuals and business access the financial services they need. Instead of providing direct services, AmOne matches borrowers with suitable lenders. AmOne specializes in personal, unsecured, debt consolidation, small business and start up business loans. After completing a simple application, users are given a list of loan options. The borrower can pick the lender on their own or use one of AmOne’s consultants. The AmOne service helps the consumer narrow his or her borrowing options and make an informed credit decision.
- Best for People starting new businesses, business owners who want to expand their organizations, those facing financial hardship, those who want a one-stop-shop for lending-related solutions, people experiencing a big life event and people who want help exploring financial solutions.
Prosper is the country's first peer-to-peer lending marketplace. The company has provided more than $2,000,000,000 in loans. Loan interest rates range from 5.99% for the most credit worthy borrowers to 36.00% APR for consumers with lower credit ratings. Borrowers can obtain loans from $2,000 up to $35,000.
- Best for People looking to refinance debt, individuals starting a business, consumers facing financial hardship and those looking to finance a major life event.
Lending club is the biggest peer lending marketplace. The company was launched in 2007, and it was originally one of Facebook's applications. Lending Club makes loans up to $35,000.
- Best for People looking to refinance debt, those starting a business, experiencing financial hardship and consumers experiencing a big life event.
NetCredit is a personal loan company offering loans up to $10,000. The company is a subsidiary of Enova International, Inc. Net Credit has a creative My RightFit ToolTM to help consumers customize their loan amount and repayment terms.
- Best for People looking to refinance debt, facing financial hardship and those experiencing a major life event.
Peerform is a peer lending company founded in 2010 that offers loans from $1,000 up to $25,000. The company was started by a group of Wall Street executives with backgrounds in both finance and technology. Loan interest rates start at 7.12% APR.
- Best for People looking to refinance debt, people facing financial hardship, people facing financial hardship and those that need assistance paying for a big life event.
Avant, formerly AvantCredit is a personal loan company that’s helped 350,000 customers. Borrowers can access between $1,000 and $35,000 for debt consolidation, home improvement and/or emergencies. The company has a 96% satisfaction rating.
- Best for Individuals looking to refinance debt, planning a home improvement project or those facing an unexpected expenses.
OneMain Financial has been in business since 1912. In 1998, their parent company, Travelers Group, merged with Citicorp and created Citigroup, a global financial services company. In 2011, after many acquisitions, the company became OneMain Financial with 2,000 branches across 48 states. This personal lender combines a variety of lending solutions with a comprehensive website complete with financial education articles, calculators and tools.
- Loan amounts: Loans range from $1,500 to $15,000, and the maximum loan amount varies according to state.
- Secured and Unsecured Personal Loans: OneMain offers both unsecured and secured personal loans. The secured loans may offer lower interest rates. The interest rates are fixed for the life of the loan.
- Flexible payment options and no prepayment: OneMain Financial allows borrowers to choose the date they make their payment and the method by which they pay - online, by phone or in person at a branch. There are no prepayment penalties when the borrower repays the loan early.
- 14-day guarantee: OneMain offers a 14-day risk-free guarantee; in other words, a borrower can cancel his loan and return the money within 14 days without penalty.
- Hardship assistance program: The company has a program in place that helps borrowers who encounter a financial hardship and cannot repay their loan.
- Community involvement: OneMain Financial shows their generous and community-minded philosophy by getting involved in many community service endeavors, as well as providing financial education throughout the U.S. for both adults and kids.
- Best for People looking for an extensive library of information as well as loan options to refinance debt, fund financial hardship such as excessive medical bills and help with expensive home repairs.
Pioneer Services is a personal loan company dedicated to lending to active or retired members of the military. The company has been in business for more than 25 years, and it has awarded loans to more than 1.4 million military families. Pioneer Services is the military division of MidCountry Bank, a company that makes VA home loans to eligible active-duty and retired veterans. The website provides an extensive learning center with specialized money topics to help the military population.
- Best for People in the military looking for travel loans, auto loans, debt consolidation or home loans.
Founded in 1996, Lendmark Financial Services offers individuals personal loans across the U.S. The company is headquartered in Covington, GA.
- Best for Lendmark makes loans for various personal needs such as seasonal expenses, major home repairs, emergencies and debt consolidation.
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.
11 – 13 Best Rated Personal Loans
Founded in 2005, Prosper is a personal loan company based in San Francisco, California. The company was America's first peer-to-peer lending marketplace, and it offers borrowers anywhere from $2,000 to $35,000 per loan.
NetCredit is an online platform that allows it users to obtain personal loans of up to $10,000, with no hidden fees. The company is a subsidiary of Enova International, Inc and is headquartered in Chicago, Illinois.
Peerform is a startup that was founded by Wall Street investors in 2010. It offers an online marketplace where students can more easily get private loans than they might be able to do through a traditional bank or credit union.