Looking for financial flexibility to cover unexpected expenses, home renovations, or dream vacations? Personal loans offer a lower-cost alternative to credit cards, especially for those with good credit. With a plethora of options from traditional banks to online lenders, finding the right personal loan can be overwhelming.
To simplify your search, we meticulously evaluated 70 lenders and gathered insights from real borrowers. This comprehensive review process ensures you make an informed choice tailored to your needs.
Comprehensive Data Collection and Review Process
Our detailed evaluation involved collecting 31 data points from 60 personal loan lenders and 10 finance companies. From media outreach to customer calls, every step was taken to ensure accurate information. The rigorous process took place between Aug. 4-23, 2023.
Additionally, our consumer survey of 962 borrowers provided valuable insights into personal loan preferences. This data, gathered from Aug. 14 to Sept. 15, 2023, informed our evaluation criteria.
Data Collection and Scoring
Following data collection, we scored 24 criteria, totaling 1,680 data points. Our ranking method ranged from binary to continuous scales, ensuring a comprehensive evaluation.
Personal Loan Evaluation Categories
Drawing on our expertise, each category was carefully weighted to reflect borrower priorities and lender offerings.
How Investopedia Ranks Personal Loan Features
Assigning weights to specific criteria allows us to calculate a lender’s total score accurately.
Loan Costs
Our survey highlighted loan cost as a key factor for borrowers. This category, representing 29.5% of the score, includes metrics like APRs and origination fees.
Minimum and Maximum Fixed APR
APRs significantly impact the total loan cost. We evaluated lenders based on their advertised minimum and maximum fixed APRs.
Minimum and Maximum Origination Fee
Origination fees contribute to the overall cost. Lenders offering lower or no fees scored higher in this category.
Maximum Late Payment Fee
Late payment fees affect borrower finances. We considered the maximum penalty fee in gauging a lender’s borrower-friendly approach.
Loan Terms
Loan duration and funding speed play vital roles in borrower satisfaction. This category, with a 22.25% weight, encompassed key criteria for personalized loan terms.
Minimum Days to Receive Funds
Funding speed is essential during emergencies. Lenders were scored based on the time taken to disburse funds after approval.
Minimum and Maximum Loan Amount
From small to large loans, flexibility is key. We assessed lenders on their range of loan amounts to accommodate diverse borrower needs.
Maximum Repayment Term
Longer repayment terms offer financial relief. Our evaluation focused on the maximum repayment term to ensure borrower-friendly options.
Borrowing Requirements
Lender expectations impact loan accessibility. This category, accounting for 28.5% of the score, examines factors like credit checks and co-signer requirements.
Co-Signer
Co-signers aid in meeting underwriting standards. We evaluated lenders based on their co-signer policies to reflect borrower support.
Offers Secured Loans
Securing loans can impact rates and approval. Our assessment considered lenders offering secured loan options for enhanced credit terms.
List of States Available
Geographic availability influences borrower choices. We rated lenders based on their service reach to cater to a wide range of borrowers.
Membership Requirement
Exclusive membership can affect loan accessibility. We assessed lenders’ membership prerequisites to ensure a seamless borrowing experience.
Hard Credit Check Required
Credit inquiries impact credit scores. We evaluated lenders on their credit check policies to provide transparency for borrowers.
No Credit History
Accessing loans with no credit history is vital. Our assessment considered lenders accommodating borrowers without established credit profiles.
Minimum Credit Score
Lending criteria impact approval rates. We rated lenders based on their minimum credit score requirements to cater to borrowers with varying credit profiles.
Additional Features
Loan features enhance borrower experience. This segment, with a 20% weight, explored offerings like pre-qualification and creditor payment services.
Pre-Qualification/Pre-Approval Available
Pre-qualification aids in rate comparison. We considered lenders providing this feature to empower borrowers in their financial decisions.
Refinance Available
Refinancing offers financial flexibility. Our evaluation assessed lenders offering refinancing options for improved loan terms.
Creditor Direct Pay
Direct payment simplifies debt consolidation. We rated lenders providing direct creditor payment services for borrower convenience.
Restrictions on Loan Use
Loan purpose restrictions safeguard borrowers. Our evaluation considered additional borrower protections beyond standard industry norms.
Allows Joint Applications/Co-Borrowers/Co-Applicants
Collaborative loan applications offer flexibility. We rated lenders accommodating joint applicants to cater to diverse borrower needs.
Discounts Available
Rate discounts benefit savvy borrowers. Our assessment included lenders offering promotional discounts to enhance borrower savings.
Reports to All Major Credit Bureaus
Credit reporting impacts credit profiles. We rated lenders reporting to major bureaus for borrower credit-building opportunities.
Credit Insurance Available
Risk protection benefits borrowers. Our evaluation included lenders offering credit insurance for added financial security.
Articles That Use Our Methodology
Our thorough research guides various personal loan roundups and reviews on Investopedia, helping readers make informed financial decisions.
Meet the Personal Loans Reviews Team
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