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 for personal loans online to find the best rates and terms without ever having to leave your house.
Online personal loans can vary in their rates, terms, and payment options. So knowing what qualities to look for can help ease your search immensely.
Pros and cons of finding personal loans online
There are a ton of benefits to getting an online personal loan, but it’s also not without some potential drawbacks.
Pro: Convenience. The personal loan online application and payment process is entirely web-based. There’s 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 complete a full application for online personal loans 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. With these options, individual investors provide the funds to back personal loans online. 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 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, companies offering personal loans online 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? Ask yourself these questions as you search.
Where to find the best online personal loans
If you’re shopping for personal loans online, start with the best personal loans available today. These are reputable lenders with low interest rates, low fees, and flexible online personal loan options.
Those include SoFi personal loans, which offer a wide breadth of loan amounts, from $5,000 up to $100,000. It also offers competitive interest rates.
Keep in mind that while SoFi’s terms are generous, and fees nonexistent, the site’s approval standards are quite high. Prospective borrowers need to demonstrate a high credit score and low debt-to-income ratio.
Earnest is also a trusted source of personal loans online. Amounts cap out at about $50,000, with competitive interest rates. Earnest personal loans might 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 online. Use it to pay down debt or affordably finance major expenses, and you’ll be on track to save money in the long run.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|6.26% – 14.87%1||$5,000 - $100,000||Visit SoFi|
|6.99% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|5.99% – 24.99%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|