If you are looking for extra cash for emergency expenses or perhaps to fund home improvements or that vacation, online loans can be a good option. But are these loans legitimate? And what are the best sites and personal loans for those with bad, fair or good credit?
According to a report by TransUnion, there were over 19.5 million personal loans taken out in 2018, a 12.5% increase. Online personal loan sites allow borrowers to shop rates and see if they prequalify without applying and having a hard credit inquiry on their report. Once a borrower applies for the loan, the whole process – from qualification to signing – can be done online with a decision often being received in minutes. Funds are deposited directly into the borrower’s checking or savings account making the process quicker and more convenient than going through a bank or credit union. While predatory lenders exist, many online lenders are legitimate and are willing to loan to those with less than sterling credit.
Best Personal Loans for those with Bad Credit (FICO Score 300-620)
BadCreditLoans.com is a site that connects borrowers with lenders willing to loan to those with no or poor credit. There is no minimum credit score required and a decision is often made in minutes. Loan maximums are lower – $5000 – and interest rates can range as high as 35.99% (the maximum allowed). However, if the alternative is a payday or title loan, this could be a good alternative.
PersonalLoans.com is another site that connects borrowers with lenders. While they require a credit score of at least 580, they offer a larger range of potential lenders that Bad Credit Loans, a higher loan maximum of up to $35,000 and more flexible payment terms of two to five years. However, interest rates again can be as high as 35.99%.
LendingTree.com is the nation’s largest site for online loans offering more choices of lenders and the ability to compare different offers more easily. Generally, a minimum credit score of 500 is required with loan maximums of up to $50,000 and terms ranging from 2-5 years with interest rates from 3.99-$35.99% APR.
Best Personal Loans for those with Fair Credit (FICO Score 620-689)
Upstart.com offers loans for those with FICO scores of 620 or higher and typically puts more weight on income and employment history in making offers. Applicants are required to have at least $12,000 in yearly income and a maximum debt-to-income ratio of 45%. Personal loans can be made up to $50,000 with terms of 3-36 months and interest rates ranging from 7.69-35.99% (19% is average.). While Upstart has the advantage of one day funding upon approval (three days for education loans), it does require an origination fee of up to 8% of the loan amount.
Upgrade.com offers fixed-rate loans that are perfect for those looking to pay off higher interest credit cards or consolidate debt. Like Upstart, Upgrade requires a FICO score of 620 or higher. However, Upgrade borrowers typically have much higher average incomes ($30,000+) and are required to have a minimum of $800 in monthly disposable income. Personal loans can be made for up to $50,000 with repayment schedules of 3-5 years and interest rates of 6.99-35.99%. Upgrade has the advantage of offering credit health tools to help borrowers and a hardship program where borrowers that experience a job loss or other hardship can have their payments reduced or a loan modification done.
LendingPoint.com specializes in loans for borrowers who are looking at rebuilding their credit. While it requires a slightly lower FICO score of 585 for borrowers, it also requires a lower maximum debt to income ratio of 35%. Although there are no restrictions on loan purpose, Lending Point loans come with shorter terms (2-4 years) and a lower maximum loan amount of $25,000 than other fair credit lenders. Interest rates range from 15.49-35.99% with an origination fee of up to 6%.
Best Personal Loans for those with Good Credit (FICO Score Above 690)
Lightstream.com is the online lending arm of Sun Coast Bank and offers some of the best terms and interest rates for those with good to excellent credit. Borrowers need to have a minimum credit score of 660 (and most have better scores) and a long, solid credit history to qualify. With rates of 3.99-16.99%, terms of 2-12 years, no fees and loan maximums of $100,000, Lightstream is great for major home improvement project loans and can be more advantageous than taking out a home equity line of credit. Lightstream also offers a rate beat program where it will beat a competitor’s interest rate by one-tenth of a percentage point provided you have been approved for that competitor’s loan.
LaurelRoad.com is the online lending arm of KeyBank and offers competitive interest rates as low as 8% with no origination fee. Like Lightstream, it offers a rate beat program and discounts for auto-pay. Unlike Lightsteam, the loan terms are shorter – 3 to 5 years – and Laurel Road only loans up to $45,000 making it a better choice for debt consolidation or other shorter-term needs. It also requires a higher FICO score than Light Stream – 700. One of the unique features of Laurel Road is that it specializes in loans for medical professionals, often with lower interest rates, higher loan amounts and more favorable terms than their typical personal loans.
SoFi.com offers interest rate as low as 5.74% on loans of up to $100,000, making it a good option for a variety of loan needs. However, SoFi requires a minimum credit score of 680 with a solid credit history, higher income and cash flow after expenses. SoFi has the advantage of allowing for co-signers and offering variable and fixed rate loans, flexible repayment schedules and forbearance if the borrower becomes unemployed.
If you would like to see what your payments will be, use this calculator Loan Calculator.
With so many options available no matter what your credit looks like, online loans can be a good way to get much needed cash. If you would like to check rates, compare terms and see if you qualify, compare loans at LendingTree, America’s largest online lending marketplace.