How to Find the Best Personal Loans Online


You’ve examined the options, weighed the pros and cons, and you’ve decided to get a personal loan.

Walking into your local bank branch is a good, conventional option, but you should also consider looking online for a lender. Not only are there a wealth of options, you can shop online for the best rates and terms without ever having to leave your house.

Online lenders can vary in their rates, terms, and payment options, so knowing who and what qualities to look for can help ease your search immensely.

Online personal loans: pros and cons

There are a ton of benefits to getting an online personal loan, but it’s also not without some potential drawbacks.

Pro: Convenience. The online lending application/payment process is entirely web-based — no need to visit a brick-and-mortar branch.

Pro: No hard credit checks. When applying for most types of loans and lines of credit, lenders will perform a “hard pull” of your credit. These hard inquiries can ding your credit score.

Online lenders, however, typically gauge your loan and interest rate eligibility though a “soft” pull, which won’t have an effect on your credit (you will, however, have a hard inquiry once you’re ready to apply with a specific lender).

Pro: No pressure to buy other products. A bank or other lender may give you the sales pitch (or several) to open an account or buy some other product from them in addition to a personal loan. Online lending is usually reserved to just the loan itself.

Pro: Various lending avenues and perks. In addition to traditional personal loans, online loans are also available through peer-to-peer (P2P) lending, where your funds are backed by numerous private investors. Lenders may also offer other benefits, like more payment flexibility, if needed.

Con: Fees and limitations. Some online lenders, however, may not approve your loan if the amount requested is too small. Others are known to charge fees and extra interest that can make your loan payments more expensive in the long run.

Choosing the right online personal loan

Like any online business, online personal loan lenders range in credibility and affordability. When searching for online personal loans, start by checking with the Better Business Bureau or Federal Trade Commission to see if your lender in mind is legitimate; does it have any complaints or grievances against it?

Compare terms and conditions if you’ve narrowed your search down to a few lenders. Does one offer a better interest rate, but with too many penalty fees and other surcharges, versus the lender with more flexible terms but a higher APR? And while the internet is worldwide, not all online lenders loan in every state.

Also take into account how an online personal loan will fit into your budget. Does the lender you choose offer a reasonable rate and repayment period? What’s the loan maximum you’re allowed to borrow according to your credit score? What will your monthly payments be compared to your existing student loan? Ask yourself these questions as you search.

Best online personal loan picks

Our previous post gave you six student loan refinancing options to choose from; some of them also offer personal loans, too.

Those include SoFi, which offers a wide breadth of loan amounts, from $5,000 up to $100,000. Fixed rates begin at 5.50% and variable at 4.04%.

Keep in mind that while SoFi’s terms are generous, and fees nonexistent, the site’s approval standards are quite high, necessitating prospective borrowers to demonstrate a high credit score and low debt-to-income ratio.

Earnest is another — though student loans are one of its specialties, Earnest is also a trusted source of online personal loans. Amounts cap out at about $50,000, with interest rates ranging from 4.25% to 9.25%. Earnest may be a good option for borrowers with less-than-excellent credit, since it evaluates other factors, such as your income, the amount of savings you carry, employment status, and debt repayment history.

Above all else, once you’re armed with this knowledge, don’t be afraid to use discretion in your search. Don’t confuse personal loans with payday loans and zero-credit lenders, which can leave you saddled with triple-digit interest.

With the right strategy in place, you’ll be able to obtain a low-interest personal loan that helps you pay down your major expenses, and best of all, save money in the long run.

Interested in a personal loan?

Here are the top personal loan lenders of 2017!
LenderRates (APR)Loan Amount 
* = includes AutoPay discount
4.77% - 14.24%*$5,000 - $100,000
5.75% - 16.24%1$5,000 - $50,000
5.67% - 29.99%$1,000 - $50,000
8.00% - 25.00%$5,000 - $35,000
5.25% - 12.00%$2,000 - $50,000
9.95% - 36.00%$1,000 - $35,000
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Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

Published in Personal Loans