For some people, a personal loan makes financial sense, especially for borrowers who have good to excellent credit scores. However, taking out a personal loan will require paying interest, and it can negatively affect your credit score if you fall behind on payments.
Before you apply for a personal loan, evaluate and compare lenders. Make sure you understand the different rates, fees and repayment terms that will vary from lender to lender. Consider the minimum credit score requirements and how long it will take to get your loan funded. Also, think about the different types of loan purposes and whether or not your chosen lender will allow you to use your personal loan funds for the purpose that you intend.
We compared personal loans offered by traditional banks, online lenders and peer-to-peer lenders. In addition to looking at the average APR and other key loan terms, we considered a lender’s reputation among customers, its minimum credit score requirements and how quickly it could fund your loan. Upstart stood out because of its unique ability to lend to borrowers with lower credit scores. It uses an AI-powered loan application that takes into account alternative information, such as your employment history and area of study, to determine your ability to repay a personal loan. This helps it offer competitive APRs for borrowers with lower scores than other lenders. It also offers a flexible repayment term of up to six years. However, it charges a loan origination fee of 1% to 5% and has a check payment fee of $5 or 5% of your unpaid monthly payment, whichever is greater. best personal loan