The best personal loans of 2021

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

Here are the best personal loans right now:

Rates in this post are current as of 05/03/2021.

Credit scores play a big role in your ability to get a personal loan, and how much you’ll pay to borrow the money. The better your credit score, the lower your interest rate is likely to be, and the less you’ll pay in interest over the life of the loan. Credit scores fall into five categories in a range of 300 to 850, according to FICO:

  • Very poor: below 579
  • Fair: between 580 and 669
  • Good: between 670 and 739
  • Very good: between 740 and 799
  • Exceptional: above 800

While credit does have an impact on your interest rate, it’s worth noting that interest rates can also change on their own, fluctuating based on the bank’s cost of borrowing called the federal funds rate. While there are alternatives to borrow money, like 0% APR credit cards and home equity loans, they don’t always work for every person or situation. If a personal loan seems like the right fit for you, here are the best for several different situations. 

PFI Best lightstream Logo Banner


LightStream: Best personal loan overall, best personal loan for excellent credit

SunTrust Bank created Lightstream for online loans, and the bank offers personal loans for things like home remodels, medical debt, and debt consolidation. While mainly catering towards borrowers with better credit, interest rates are fairly low.

Interest rate range: 2.49% to 19.99% APR with AutoPay (Rates as of 05/03/2021. Rates vary by loan purpose.)

Look out for: High credit score requirements. Lightstream’s minimum credit requirement for a personal loan is 660, so this lender might not be right for all credit types.  

PFI Best SoFi Logo Banner


SoFi Personal Loan: Best personal loans for good credit

SoFi’s personal loans have a minimum credit score requirement of 680, at the lower end of what’s considered a good credit score. Interest rates on these loans range by about 13 percentage points, making for a smaller range than offered by other companies. This means interest rates for borrowers with relatively lower credit scores can only go so high.

Interest rate range: 5.99% to 18.85% (with AutoPay)

Look out for: A relatively high minimum income for approval. According to loan comparison site Credible, less than 1% of borrowers approved for personal loans through SoFi have an income less than $50,000 per year, and a majority make more than $100,000. 

PFI Best Wells Fargo Logo Banner


Wells Fargo: Best personal loans for debt consolidation

As a longstanding bank, Wells Fargo offers a variety of loan types. Its personal loans offer low interest rates, smaller minimum borrowing amounts, and shorter terms than others. Wells Fargo offers loans between $3,000 and $100,000, for payoff terms as short as 12 months. Borrowers who want to get their debt under control quickly might find that Wells Fargo’s personal loans are flexible enough to tackle debt consolidation. 

Interest rate range: 5.74% to 24.49% APR

Look out for: Secured and unsecured loan options. With secured loans, you’ll be putting up collateral to protect your loan. That could mean your home or your car at risk if you don’t pay. While secured loans can offer lower interest rates, they can put very important assets in jeopardy.  Wells Fargo is the only one of our top picks to offer secured loans.

Additionally, it’s worth noting Wells Fargo’s history with data security and compliance. The bank has faced several federal penalties for improper customer referrals to lending and insurance products, and security issues associated with creating fake accounts several years ago. 

PFI Best Avant Logo Banner


Avant Personal Loans: Best personal loans for bad credit

Personal loans are generally offered to those with better credit scores, but online lender Avant offers personal loan options for borrowers with credit scores as low as 580. It has a lower limit than other lenders, with $35,000 as the maximum loan amount.

Interest rate range: 9.95% to 35.99% APR

Look out for: Administrative fees. Avant’s personal loans carry a fee of up to 4.75% of your loan’s value. Considering that many of the other loans on this list don’t carry administrative fees, prepayment fees, or origination fees, Avant’s fee is high. 

It’s also worth noting that interest rates are high from this lender. While this is a good option for anyone with credit scores in the upper 500s and lower 600s, those with better credit could find better rates elsewhere. 

Others we considered and why they didn’t make the cut:

  • Marcus Personal Loan: This well-known lender and bank requires the same 660 minimum credit score as banks that offer much lower interest rates, like Lightstream. 
  • Discover: Discover’s loans are similar to Marcus’, with the same 660 minimum credit score requirements and starting 6.99% APR. But borrowers with good credit could get lower interest rates elsewhere. 
  • LendingClub: This online lending marketplace has an accessible 600 minimum credit score requirement. But, it charges an average origination fee of 5.2%, which can make the cost of borrowing add up. 
  • Prosper Personal Loan: Fees keep Prosper from being a top choice. While it only requires a minimum credit score of 640, it also requires an origination fee between 2.4% and 5%. 

Frequently asked questions

Why trust our recommendations?

Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We understand that “best” is often subjective, so in addition to highlighting the clear benefits of a financial product, we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don’t have to.

How did we choose the best personal loans?

Business Insider combed through the fine print of personal loans and compared our findings to those of personal finance sites including NerdWallet, MagnifyMoney, and ValuePenguin. The research included personal loans at all different credit levels. We considered factors like:

  • APR range: We considered interest rates, or what it costs to borrow. However, APRs are variable, and could change in the future. 
  • Variety of term lengths: We looked for banks that offered variety in loan terms, or the length of time it will take to repay the loan. The longer a loan is, the more likely it is to cost more.
  • Fees:  Early payoff, origination, and administrative fees can increase the cost of borrowing. Where possible, we looked for loans without fees. 
  • Nationwide availability:  Loans considered were available in most US states, if not all 50. 

Is a personal loan right for me? What are other alternatives?

Personal loans aren’t right for every situation, nor every person. Often, personal loans can be difficult to qualify for, with high credit score requirements. They can also carry high interest rates, which could mean there are better options out there. 

Personal loans come in two types: secured or unsecured. Unsecured loans aren’t backed by collateral like a home or car, while secured loans are. Personal loans also have higher interest rates than you’d see on a car loan or a student loan. Homeowners sometimes find that home equity lines of credit are better to fund major repairs or renovations with lower interest rates.

For small amounts, you might find that a 0% APR credit card would be a better fit — they can be especially useful for consolidating credit card debt or making purchases that you’d like to pay off over time. Generally, these cards have 0% APRs for the first 12 to 16 months from opening. Pay off the card in full before the introductory period is up, and you won’t pay interest on your purchase. 

F or larger purchases that won’t fit within a credit limit, a personal loan might be the right option. It’s worth calculating the interest you’ll pay, and carefully considering options like a secured loan to bring down the interest rate. However, personal loans should be used wisely, as they have high interest rates and could be risky when there’s collateral involved. 

Where else can personal loans be found?

If you’re a member of a local credit union or have one nearby to join, it could be worth checking on rates for a personal loan there. Oftentimes, smaller lenders like credit unions can offer much lower interest rates than bigger banks and lenders. They also tend to be more flexible about credit requirements. It might be worth checking on their rates and terms as part of your research.   

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

Disclosure:*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

Read More