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Best Online Personal Loans of August 2022

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With so many popular lenders to choose from, finding the right personal loan can be daunting, especially if you need a large sum of money. While some online lenders, like Discover, are helpful for debt consolidation, others, like Upgrade, offer loan options to eligible borrowers with poor credit. However, the best personal loans online are offered through SoFi.

SoFi offers personal loans up to $100,000 with repayment terms of 24 to 84 months. APRs are competitive and there are no set-up, late payment or prepayment fees. Although SoFi’s qualification requirements are more stringent than some providers, the lender offers flexible loans to meet a range of borrowing needs.

Guide to choosing the best personal loans online

Why apply for a personal loan online?

Online personal loans can be used for a wide variety of purposes and are often more accessible than traditional loans. For this reason, many borrowers opt for an online loan rather than financing from a traditional bank or credit union.

Here are some common circumstances in which an online personal loan may be appropriate:

  • You face emergency expenses for things like car repairs, medical bills, or funerals
  • You need same-day or next-day access to funds
  • You have credit card debt and want to streamline payments through debt consolidation
  • You want access to more competitive rates than those available at local banks and credit unions
  • It is difficult or impossible to go to a bank in person
  • You don’t qualify for a personal loan from a traditional lender

Comparison of online personal lenders

With so many online lending platforms to choose from, it can be difficult to identify the provider that best suits your borrowing needs. Consider these factors when comparing online personal lenders:

  • APR range: Personal loan APRs typically range from 2% to around 35% or more, with the most competitive rates reserved for the most qualified applicants. Where possible, pre-qualify with lenders to see the rate you are likely to qualify for before applying and undergoing a firm credit application.
  • Loan amounts: Depending on the lender, online personal loan amounts start at $300 and range up to $100,000. Consider how much you need to borrow and choose a lender who is willing to give you as much, or as little, as you can comfortably afford to repay. Many lenders offer online payment calculators to help determine the monthly cost of various loan amounts.
  • Repayment Terms : Loan conditions are generally between 12 and 60 months. However, some lenders offer longer or more flexible terms than others. Keep in mind that shorter repayment terms lead to larger monthly payments, and choose a lender whose terms fit your budget.
  • Ease of application: Online lenders have convenient application processes that don’t require visiting a branch in person. Still, some lenders have more stringent applications than others. Additionally, minimum qualification requirements vary by lender, so it’s important to choose a provider who is likely to approve your application.
  • Funding speed: If you need money fast, compare loan options based on each lender’s standard funding speed. While some offer same day funding, next day disbursements are more common and others take several business days to process. Keep in mind that the time it takes to receive the funds may depend on your financial institution.
  • Reputation of the lender: Before committing to a lender, read online reviews and, if possible, talk to friends and family who have worked with that financial institution before. Reviews can offer valuable insights into how long the approval process takes, the quality of the lender’s customer support team, and whether average borrowers actually qualify for competitive rates.

How to apply for a personal loan online

The online personal loan application process is lender specific. However, most lenders follow the same general application and underwriting process. Follow these basic steps to apply for a personal loan online:

  1. Complete an online application. Go to the lender’s website and initiate an application by providing the necessary information such as employment and income details, social security number, loan purpose and amount you intend to borrow . Depending on the lender, this may involve pre-qualification to see the rate you might receive, which usually doesn’t require a credit check.
  2. Review and accept the loan offer. Some online lenders offer several loan offers based on the information provided as part of the pre-qualification. After pre-qualification, select an appropriate loan offer to continue with your application and verification process.
  3. Wait for verification and approval. Once you have chosen a loan offer, the lender will further review your application and begin the verification process. This is usually when a lender does a credit check, which will show up on your credit reports and can impact your credit score. You may need to submit additional documents to verify your income and employment.
  4. Receive funds. After verifying your loan application, the lender will disburse the loan funds to the account specified in your application or directly to your creditors. Depending on the lender, funds may be available the same day, while other providers may take several business days to disburse funds. From there, most lenders allow customers to manage their accounts through an online portal or mobile app.

Frequently Asked Questions

What is a personal loan?

A personal loan is a type of installment loan which can be used to cover virtually any expense, such as medical bills, auto repair, travel and vacations, weddings, and emergencies. Many people use them for credit card debt consolidation. Personal loans are usually available from traditional banks, credit unions, and online lenders.

Funds are distributed in a lump sum and interest begins to accrue on the full loan amount from day one, usually at an annual percentage rate of between 2% and 35%. Borrowers make equal monthly payments over a set loan term or can choose to prepay the loan.

What are the benefits of getting a personal loan online?

Just like a traditional loan, online personal loans can provide cash when you need it most. However, online loans offer many advantages over borrowing from a physical lender. The main benefits of getting a personal loan online include:

  • Opportunity to prequalify quickly for a rate without firm credit application
  • Convenient online application process
  • Less stringent qualification requirements
  • Competitive rates and fees
  • Accelerated approval and funding times

Is it safe to get a personal loan online?

Getting a personal loan online is as safe as getting financing from a traditional bank, as long as the lender has a secure website and is otherwise reputable. Before submitting personal information online, potential borrowers can confirm that the lender has an up-to-date SSL certificate and that all data is properly protected with encryption. Applicants can also read reviews and view complaints that lenders have received from agencies such as the Consumer Financial Protection Bureau.

Can you get a personal loan online without a credit check?

Finding an online loan (or any type of financing) with bad credit can be difficult. If you’re looking for loans for bad credit, you may find lenders that advertise “loans without credit checks” or “guaranteed approval.” Such promises should be a red flag. According to the Federal Trade Commission, a lender who isn’t interested in your credit score or history could be running an advance loan scam.

Can I get a personal loan online instantly?

Many online lenders offer instant approval (if you qualify) when you apply for financing. However, instant loan approval is not the same as instant access to your loan proceeds.

Once you qualify for a loan, the lender may ask you to take some additional steps. For example, you may need to send documents proving your identity and income. Some lenders offer next day or even same day disbursement, but the time it takes to get your loan depends on many factors, including the lender’s ability to verify your information and your own bank’s processing time.

How We Choose The Best Online Personal Loans

Our team evaluated 38 lenders and collected 1,520 data points before narrowing down our top picks. We weighted more than 20 criteria and gave a higher weight to those having a more significant impact on potential borrowers.

Top picks were selected based on factors such as membership requirements (15% weighted), average fixed APR (15% weighted), and average origination fee (10% weighted).

We also considered flexible repayment terms, useful features such as pre-qualification, and whether co-signer or joint applications are allowed to ensure borrowers have the best possible experience. For more information on our selection criteria and process, our complete methodology is available.

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