Loans » Personal Loans » The Best Personal Loans 2021
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The Best Personal Loans 2021

Choose the right online loan at The Smart Investor. Understand your needs and compare a variety of personal loans from different lenders.

We may receive compensation from companies that appear on this page. This may impact how and where products appear on a page (including, for example, the order in which they appear). It doesn’t affect our editors’ opinions. our opinions are our own.

Personal loans are loans that are often sought after due to their versatility. Funds acquired through personal loans can be used for whatever the borrower needs.

Often these funds are used for consolidating debts into one payment, planning for future needs, and an almost endless number of other things.

These loans are often unsecured loans which means their interest rates and other terms and conditions vary from case to case. The biggest factor in the variations is your credit score. The biggest problem is which loans are actually worth looking into.

Just like the list of how funds can be used, the list of personal loan lenders is a long one. Now, you have to figure out which one is trustworthy and will help you, not hurt you. This is actually why we are here.

We have gathered information of the best personal loans so that you can shorten your time hunting for the perfect loan that fits your needs. 

Here are The Smart Investor Select’s picks for the top personal loans:


  • Overview
  • Details
  • Pros & Cons

LightStream is an online lender that offers very high loan amounts yet at low interest rates. LightStream is part of the Truist Bank group, formerly the SunTrust Bank. You can use the loan for any purpose, including home improvements, debt consolidation, etc.

LightStream does not charge fees. So, there are no late payment fees, processing fees, or pre payment fees. Most of the loans have a term of two to seven years, but this may be extended to 12 years for solar financing, home improvement loans, or swimming pool loans. 

  • Interest Rate Range: See website
  • Minimum credit score: Good to excellent
  • Terms: Flexible
  • Discount: 0.5% for auto pay
  • Time to funding: As soon as same day (conditions apply), within 30 days of approval (conditions apply)


  • No Fees
  • Flexible Term Options
  • Competitive Rates
  • Many Loan Uses
  • Joint Applicants
  • High Maximum Amount
  • Not For Bad Credit Borrowers
  • No Soft Pull
  • Restrictions for Business Use
  • Stipulations
Lightstream Personal Loan Review


  • Overview
  • Details
  • Pros & Cons

The original idea of SoFi was to have school alumni invest funds in refinancing recently-graduated students’ debt. SoFi has moved away from that business model and moved to a “non-traditional underwriting approach focused on lending to financially responsible individuals. SoFi uses an underwriting model that examines free cash flow, professional history and education in addition to a history of responsible bill payment to evaluate its borrowers.”

SoFi offers plenty of benefits for those who qualify for a personal loan. They also have some of the highest credit and cash flow standards. Also, SoFi offers professionals many benefits and tools that can help them become more financially independent.

  • Interest Rate Range: 4.99%-19.63%
  • Minimum credit score: 680
  • Terms: 24-60 months
  • Loan Amount: $5,000 – $100,000
  • Origination Fee: None
  • Time to funding: Up to 7 days
** Include 0.25% autopay and 0.25% direct deposit discounts
  • Joint Borrowers
  • Soft Pull Inquiry
  • Competitive Rates
  • Unemployment Protection
  • No Fees
  • Autopay Discount
  • Slower Turnaround Times
  • High Requirements
  • Limited Uses
  • Not Available in All States
  • Higher Minimum Amount
sofi logo


  • Overview
  • Details
  • Pros & Cons

Marcus is an online only lender offered by Goldman Sachs. It offers personal loans with no fees including late fees, prepayment fees or sign up fees. Since you’re only required to pay the principal loan sum and interest, the interest rates are a little higher than the competition. However, this can be a good option for those with a good credit score who want to avoid annoying fees.

Where Marcus personal loans are a little different is that there is the option of prequalification. If you’re not sure if you will be eligible for a loan, you can complete a basic, short form. This only involves a soft check, so you can avoid triggering a hard credit check and potentially compromising your credit score. Prequalification will allow you to check and compare your Marcus loan options.

  • Interest Rate Range: 6.99% – 19.99%
  • Minimum credit score: 660
  • Terms: 36-72 months
  • Loan Amount: $3,500 – $40,000
  • Origination Fee: None
  • Funding: 1 to 4 days
  • No Fees
  • Competitive Rates
  • One Time Payment Deferment
  • Simple Application Process
  • Soft Pull Inquiry
  • More than One Loan
  • Multiple Loan Options
  • High Requirements
  • Not for Limited Credit
  • Pre-Approval Does Not Mean Approval
  • Limits on Loan Amount for Loan Use
  • No Joint Applicants
  • Not Available in All States
Marcus logo


  • Overview
  • Details
  • Pros & Cons

Credible is a personal loan marketplace. They have a few different lending options and a variety of different personal loans that range from a standard personal loan to home improvements to debt consolidation. 

Once you get through their simple questionnaire process, you will get results of pre-qualified rates. You can shop your rate options there and compare lender options that are produced for you. They have a client success team on standby in case you need any help in the process. 

  • Interest Rate Range: 2.49%-35.99%
  • Minimum credit score: Varies based on lender
  • Terms: 12-84 months
  • Loan Amount: $1,000 – $100,000
  • Origination Fee: Varies based on lender
  • Best Rate Guarantee (*)
  • Soft Pull Inquiry
  • Competitive Rates
  • Rate Comparison Tool
  • Top-Notch Service
  • Information on Repeat
  • Unexpected Fees
  • Requires Free Cash Flow
  • Fewer Choices
credible logo


  • Overview
  • Details
  • Pros & Cons

Prosper is the first peer-to-peer lending marketplace, established in 2006 in San Francisco with $13 billion in loans. Peer-to-peer lending is a platform that matches lenders with borrowers.

Prosper marketplace is a great place to start in your personal loan search. Prosper focuses on the mass market of borrowers and their personal loans can be used for a wide range of reasons. They also have a lending arm for medical costs, Prosper Healthcare Lending. They offer personal loans for a wide variety of purposes and to a large market of borrowers. 

They do have a high origination fee while other providers do not have one. The process will take longer than with other platforms, so if you need funds quickly Prosper may not be the right place to start your search.

  • Interest Rate Range: 7.95% - 35.99%
  • Minimum credit score: 640
  • Terms: 36-60 Months
  • Loan Amount: 2,000 - $40,000
  • Origination Fee: 2.4%-5%
  • Funding:  Up to 14 days and then 1 to 3 days to deposit
  • Competitive Rates
  • Soft Pull Inquiry
  • Peer to Peer
  • Wide Range of Borrowers
  • Business Loan
  • More than One Loan
  • Potentially Long Turn Around times
  • No Joint Borrowers
  • Origination Fee
  • Potential to Go Unfunded
  • Not Available in All States
prosper logo


  • Overview
  • Details
  • Pros & Cons

Discover offers a variety of products including personal loans with competitive rates and no origination fees.

You can use a Discover personal loan for various reasons, from financing a large purpose, such as home repairs or a wedding to debt consolidation. You can also use your personal loan to cover unexpected expenses, remodeling your home or purchasing a new vehicle.

If you want to use a Discover loan for debt consolidation, Discover will send funds directly to your creditors. You will need to use at least 70% of your loan for your existing creditors, or your final APR may be impacted.

  • Interest Rate Range: 6.99% – 24.99%
  • Minimum credit score: 660
  • Terms:  36 to 84 months
  • Loan Amount: $2,500 – $35,000
  • Minimum Income: $25,000 annually
  • Time to funding: 1 to 7 days
  • Soft Pull Inquiry
  • No Origination Fee
  • Direct Payment to Creditors
  • Competitive Interest Rates
  • Available in All States
  • Longer Application Process
  • Smaller Max Amount
  • No Joint Borrowers
  • Large Late Payment Fee

How to Get the Best Personal Loan

What is a Personal Loan?

In short, a personal loan is money that you borrow from a lender. They will usually have you pay them back in monthly installments, until the amount is paid back. You can take out a personal loan from a credit union, online lender, or bank.

Often, personal loans will not be secured, which means they do not have collateral. That is why lenders will choose who to give loans to based on credit scores and credit history, as well as debts. They use this financial information to determine whether or not you would be risky to lend money to.

When choosing a personal loan, you will want to look at the loan’s APR first, or Annual Percentage Rate. The APR will include the interest and any other fees associated with your loan. Lender rates have a wide APR range, usually falling between 5% and 35% APR- you will want to do some research before you settle with one.

What Can I Use a Personal Loan For?

A personal loan can be used for just about any purpose. The most popular reasons people take out these types of loans are for debt consolidation, medical bills and expenses, weddings, vacations, home improvement projects, and even refinancing an already existing loan.

The best way to use them would be to reach your financial goals, instead of impulsively. A personal loan should only be used when it makes your goals easier to reach. For instance, home improvement projects make your house worth more.

Personal loans offer a flexible form of finance, as they can be used for practically any purpose. In this chart compiled from LendingTree consumer data, you can see that debt consolidation is the most common reason for taking out a personal loan. The least common reason is for home improvement. This is likely due to more advantageous products that can be used for home improvements such as home equity lines of credit.

percent of Personal Loans by reason

Additionally, consolidating your debt under a lower interest rate would help you pay it off faster. No matter what you choose, you will want to use it well. The best options are large expenses, whether they be planned or a surprise. You will need to be certain taking out the loan will not harm you financially in the future.

How to Get a Personal Loan?

Before you take out a personal loan, be sure you are able to follow these steps:

  • Determine how much you need to borrow
  • Review your credit score
  • Find a good lender
  • Check your eligibility and get prequalified
  • Review the loan details

1. Determine How Much You Need

Remember, when taking out a loan, you will need to pay back more. You are going to be paying interest and possibly a fee to get the money. You do not want to pay on funds you do not need, so only take out what is absolutely necessary.

Additionally, you will want to know you can afford the payments that come later. There is no reason to put yourself into debt if you can help it.

2. Review Your Credit Score

There are some websites that offer a free credit score report. You can get one a year from the biggest brands such as TransUnion, Experian, Credit Karma, and Equifax. Some student loan sources report your credit score a few times a year as well, such as Sallie Mae.

The higher your score, the better APR and loan amount you will receive. If your score is 760 or more, you will have the best options.

There are a number of factors that influence personal loan APRs. One of the factors with the most weight is credit score. If you have a lower credit score, you represent a greater risk to the lender and this is reflected in the rate. In this chart compiled with LendingTree customer data, you can see that those with a 720+ credit score pay an average of 7.63%. At the other end of the scale, those with a poor credit rating of less than 560, the rate shoots up to an eye watering 113%.

Personal Loan Average APR by Credit Score

3. Find a Reliable Lender

Credit Unions and banks are the best places to go for a personal loan. If they have a banking license and operate under the FDIC, you can be sure they are reliable. You will want to go to those options first and stay away from Payday loans.

4. Check Eligibility and Get Prequalified

You can call or visit potential lenders to find out if you are eligible for a loan with them. If you are, you can be pre-approved. It does not mean you will get the funds for sure, but it helps. You will be asked to fill out a form with your information.

5. Review Loan Details

Finally, go over the details in the loan. You will want to be familiar with the APR, monthly payments, the loan term, and if there are fees or penalties for late payments. Lenders must legally give you this information.

When You Shouldn’t Get a Personal Loan

First of all, if you do not need the funds for a good reason, it is usually not advisable to get a personal loan.

It is usually not a good idea to get a personal loan to pay for a vacation or a luxury purchase. It should only be used for important reasons like paying medical expenses or buying a car.

If you do not have good credit it can often be a bad idea to get a personal loan. This is because you already don’t have a good record of dealing with credit and you may end up worsening your score even more.

Personal loans offer a flexible form of finance, as they can be used for practically any purpose. In this chart compiled from LendingTree consumer data, you can see that debt consolidation is the most common reason for taking out a personal loan. The least common reason is for home improvement. This is likely due to more advantageous products that can be used for home improvements such as home equity lines of credit.

percent of Personal Loans by reason

You will also be paying much higher interest on your borrowed use when you have a poorer credit history. Therefore, it may make more sense to use a different form of credit than a personal loan if this is the case.

How Much Do Personal Loans Cost?

Keep in mind that when you are getting a loan, that amount is not all that you have to pay back. Many lenders will charge an origination fee, which can be a certain percentage of the loan. The fee is for processing and disbursing the funds to your account.

The origination fee can be calculated in different ways. It can be impacted by the data on your loan application and many other factors.

Plus, you will also be dealing with APR.

Annual Percentage Rate

APR is the interest you will need to pay back on the loan. That interest amount will be added to your monthly payments to the lender. They will use a formula to figure out how much interest you owe on your loan, which is the APR divided by 365 (the amount of days in a year) to find your daily periodic rate (DPR).

Then the DPR is multiplied by the days in a billing period and again multiplied with your current loan balance. The final result is the interest charged.

Because of this, every loan that is taken out will cost a different amount to pay back. Plus, the faster you pay it back, the less interest charged to you in the long run.

How to Compare Personal Loans

If you have decided to get out a personal loan, you will need to take the next steps to determine which one is right for you. You will need to start by comparing rates from various lenders.

These are the factors in a personal loan you will want to compare:

  • APR
  • Loan Term
  • Monthly payments

Overall, the loan with the lowest APR is going to cost the least in the long-run- making it the better option most of the time.

  • Loan Terms

The loan term is the amount of time you will be making the payments. When it comes down to it, a longer term means lower monthly payments, but also causes you to pay more back in interest. You will want to consider how the monthly payments fit into your budget and what is possible for you to spend.

Additionally, the loan term can be impacted by the repayment method. For example, signing up for automatic payments with your lender may give you a reduced interest rate or term as a reward. You will want to ask your lender about any benefits they might be able to offer you.

  • Monthly Payments

When comparing personal loan options, make sure you are comparing the monthly payments. That way, you can determine which option will fit into your budget later. You do not want to cause yourself financial hardships, so be sure to carefully examine the monthly payments from each potential lender.

Some lenders can even offer you a flexible payment plan, which allows you to alter the payment due dates. They may have more features available.

Your lender will be required to give you a lot of this information, including APR. From there, you should be able to determine what your payments are going to look like. Figure out the amount for each lender you are looking at.

The Potential Risks of a Personal Loan

However, there are some risks of personal loans that you will need to be aware of. It can be nice to make a large purchase right away, but you will need to pay back that amount. When you can not, you might ruin your credit score, among other things.

  • Hurting Your Credit

If you miss your payments often, your credit score could be impacted. Even one late payment can cause your score to lose 100 points- taking a “very good” score to “fair” overnight. If you wait longer to make the payment, your score is going to be damaged even further.

It can take a very long time to rebuild your credit score, so you will want to be sure you can make the payments on time.

  • Fees

Some loans come with many fees. For instance, the origination fees we mentioned above. They typically will make up 1 to 8 percent of your total loan amount- which can be a lot depending on circumstance.

However, while rare, you will also want to keep an eye out for prepayment fees. These are fees that are charged when you pay off your loan too early. If you are unaware of this fee, it can be a major surprise to be charged extra money for doing something good.

Can I Get a Personal Loan With Bad Credit?

Even if your credit score is not the best, you can still take out personal loans. However, you will need to be aware that your APR is likely to be on the higher side as a result. As long as you pay attention to the loan details and do your research, you should be able to find something that fits your budget.

Bad Credit Loans

Bad credit loans are designed for people who have a low score or a short credit history. These loans are an option, but their fees, interest rates, and terms can vary depending on the lender.

You can find bad credit loans at plenty of banks, online lenders, and credit unions, although their threshold for low credit scores will also vary. Plus, some lenders might be stricter, so you will want to check out the details thoroughly.

What is a Bad Credit Score?

According to the FICO scoring system, bad credit would be within these ranges:

  • Fair Credit Score: 580 – 669
  • Poor Credit Score: 300 – 579

The lower your score, the harder it will be to find a good loan with a decent APR. Plus, poor credit can even impact your ability to rent or buy a home. Bad credit loans tend to have a much higher interest rate, so you will want to raise your score if possible before taking out a loan.

Things to do Before Applying to a Personal Loan

There are five things you need to do before you apply for a personal loan. They are:

  • Check on your credit score
  • Gather proof of income
  • Calculate debt payments
  • Know your net worth
  • Have your employer’s contact information

1. Check Your Credit

Before going to take out the loan, make sure you know your credit score and your credit history. The better your credit, the more likely the lender is to trust you to pay the loan back on time. Plus, you will get the best options that way.

If your credit is not good, you may want to wait to take out the loan.

2. Proof of Income

Next, you will need your proof of income. This can be w-2 forms, pay stubs, 1099s, or your tax returns. Be sure you contact the lender and ask what they prefer to see. For yourself, you will want to know how much income you receive each month, so you can compare it with the loan payments.

3. Calculate the Payments

You will need to be aware of the payment amounts before you sign the loan. That way, you know you are able to pay. For instance, if you make $4,000 a month, but already pay $3,500 for other debts- adding more to the mix would be a bad idea.

Loan applications will ask for your financial obligations, so you will be denied if the lender does not believe you can pay them back.

4. Net Worth

Next, know your net worth. Lenders might ask for your assets, which are objects you own that have a value. It might include properties or your car. Then, they compare it with liabilities, such as other loans and mortgages. This is known as your debt-to-income ratio.

5. Employer’s Contact Information

Finally, lenders may ask for your employer’s contact information, whether they are past or present employers.

Personal Loan Mistakes You Should Avoid

There are many potential mistakes that you might make if you are borrowing for the first time. These are the mistakes you will need to avoid.

  • Not knowing your credit score – It is crucial that you know your credit score before you apply for a personal loan. You want to get the best terms, but can not unless you know it is good.
  • Not comparing options – You will always want to compare your options- something better you might be out there. You can find loans with lower APRs and different lending terms. When you go with the first loan you can find, it is not likely to be a good one.
  • Making late payments – On-time payments improve your credit, but late payments can greatly harm your score. Plus, you might also be required to pay late fees. You can avoid this by going with automatic payments or setting reminders for each month in your phone for a few days before it is due.
  • Not reading details in the contract – People have a habit of signing things they have not read- never do this with a loan. You might be agreeing to impossible terms. Your lender is required to disclose all information about the terms of the loan, so you will want to ask if you are not understanding something.
  • Not considering APR and your term – The APR includes your interest rate, fees, and other charges which add into the cost of the loan. Additionally, your loan term will impact your monthly payment and how long it takes to pay back the debt.

Alternatives to Personal Loans

There are more financial options out there. If you have good credit, you can seek out better loans. Of course, if you think you can save for the large expense, then you will want to do that instead of getting a loan.

  • Credit Cards

You are likely familiar with these. They allow you to make purchases, then pay back what you owe over time. You can avoid interest if you pay back the amount within a month. They can also be used to build back up credit scores.

  • Peer to Peer

Also known as P2P, these loans are provided by individuals, instead of banks or credit unions. The P2P determines your eligibility, then allows investors to review your application. If you can not qualify with traditional loans, then this is another great option.

  • Home Equity Loan

This loan is like a second mortgage that allows you to receive a lump-sum of money that you can repay on a schedule. It is based on the equity within your home and can have terms of just a few years, all the way up to 15.

  • Small Business Loan

These loans are better for business owners. They cover the cost of a company, although the application process is more extensive and takes longer. Still, you will find better rates for your business than you would with a personal option.

How Does My Credit Score Affect My Offer?

Credit scores can greatly impact the offer you receive from a lender. This is what you need to know.

How Lenders See Credit Scores?

Credit scores can be anywhere between 300 and 850. When lenders check your credit score, they want to see a higher number, as it means you are less of a risk to them. If you have a higher number, then you can expect to receive better offers.

Some lenders might view 670 or above as safe options, although it can vary between lenders.

A higher credit score can save you thousands of dollars, since you will be paying back a lower interest. For example, there is a huge difference between 2% and 4% APR. Depending on the monthly payment, you could be saving a ton of money over the term of your loan.

Can I Pre-Qualify For a Loan?

Yes, the process is usually fast as well. You will start by filling out the pre-qualification form, which asks you for information. It varies between lenders, but your income, job, and debts are all common questions to be asked.

The lender will do a soft credit check, which allows them to view your credit score and credit history. That way, they can determine if you are a risk to them. From there, the lender will either approve or deny your application.

At this point, you receive an offer. You will want to review it, then decide whether you want to apply for the loan offer.

What is a Loan Term?

In short, a loan term is the amount of time it takes to pay off the loan when you are making regular payments. It can be either a long or short amount of time.

The term is usually easy to identify. For instance, a 30-year mortgage has a term of 30 years. However, loan terms would refer to the aspects of a personal loan that you agree to, instead of the amount of time it takes to pay it off.

Your lender will set the term, which then impacts the interest and the monthly payment amount you owe.

When you have shorter loan terms, you are going to receive less of an interest cost over time. That is why they are crucial to consider when researching loans.

What is an APR?

We mentioned APR above, but it would be worth discussing this item in more detail. APR stands for Annual Percentage Rate.

Why Is It Important?

APR is important because it shows how much it is going to cost you to borrow the money from the loan. You should try to stay away from options with high APRs because they could end up including an amount of interest that is hard to handle.

Fixed APR

This means the APR is not going to change depending on other situations- it should stay the same for the entire life of the loan. They are a more predictable option and better for financial planning.

Your personal loan will come with fixed APR, so you will want to ensure that it is an amount you can handle.

Average Loan Amount by Loan Type

Overall, the lender is going to be the one to determine your APR and interest rate. Having a higher credit score will help you accumulate less debt in the long run.

Will a Personal Loan Hurt My Credit Score?

A personal loan can actually hurt or make your credit better– it can go both ways. It can help your score since it is helping you to build a longer payment history, reducing your credit ratio, and making a stronger credit mix.

However, if you do not make payments, it is going to hurt your score.

How Loans Hurt Credit

Your personal loan can hurt your score in a few different ways. First, it is creating an inquiry on your credit report. That means that lenders are going to have to complete a check on you. That can cause a hard inquiry on your report.

What does that mean? Well, a hard inquiry negatively impacts your credit score. You will want to only apply for loans within the span of a few weeks to minimize the damages, since reports will only see this as shopping around for loans.

Additionally, you might find yourself in more debt. If you can not pay, you will be charged fees and your credit score is going to suffer. You will need to be certain you can afford the payments on the loan.

Is a Personal Loan Worth It?

It depends. They are best used for paying off medical bills, home improvement projects, and major life events. You will not want to splurge on a loan for something that is not going to be worth it for you in the long run.

When to Not Take Out a Personal Loan

Many people take out these loans for vacations and weddings- although they should not. They are short term purchases that cause you to go into a lot of debt. You need to pay these off, and you will probably not want to still be paying on a vacation 7 years from now.

When to Use a Personal Loan

However, there are still cases where a personal loan is worth it. For example, if you are looking to reduce or consolidate your credit card debts. You can use a personal loan to do this, making your financial situation much better.

Paying off medical bills is another good use of a personal loan, if you do not have health insurance. And finally, making improvements to your home will make the value of it increase- making it a good option.

Overall, short term purchases are not worth going into debt for many people. Consider long term purchases instead.

Personal loans are one of the most flexible finance products on the market. You can use a personal loan for practically any purpose from making a purchase to refinancing your debt. In this chart using TransUnion data, we can see that the number of individual personal loan borrowers has steadily increased since quarter one of 2017, increasing from 15.7 million to 20.2 million in quarter three of 2019.

Number of Individual Personal Loan Borrowers (Millions)

How Quickly Will I Receive My Funds?

For the most part, personal loans tend to have a fast application processing time- which means if you are going to be approved, it will happen a lot faster. If you decide to go with an online lender, the process could be completed in less than 24 hours.

This is because online lenders have a much more straightforward process than banks and credit unions do. It usually takes 15 minutes to apply and a day at least to be approved. Although, it could take anywhere between 3 days and a week at most.

Once you are approved, you can expect to receive the funds in your account between one to seven business days.

What is a Good Interest Rate on a Personal Loan?

A good interest rate on a personal loan is going to be dependent on your credit score. You will want to consider up to 32% for bad credit while good scores can consider 10% or even lower.

This is because the lender is going to offer different rates depending on your credit score. If your score is very low, you can not expect to get 10% APR, as the lenders will consider it too risky to offer it to you.

However, if you have a good score, you have the chance to shop around more. Some lenders will be able to offer you much lower rates than others, making them more worth your time and money to work with.

Overall, you will want to consider your credit score before you start thinking about what a good interest rate would be for you. The average interest rate on a personal loan is about 9.4% right now. However, 6% to 36% is the common range, depending on your credit score.

What Coronavirus Relief Options are Available For Loans?

Due to the Covid 19 impact, the government announced some special plans in order to help businesses and individuals:

  • Small Business Relief

If you are running a small business, there are loan relief options available for you. This is known as the CARES Act, which offers relief packages to American small businesses. It is a temporary solution made available due to the pandemic.

The SBA (Small Business Administration) can also provide some financial assistance to small businesses that are in debt. It provides debt relief during the pandemic.

  • Paycheck Protection Program

This program provides loan forgiveness for retaining employees by expanding the SBA 7(a) loan program. It is designed to help you keep your employees during these hard times.

There may also be more local options in your area, so be sure to search online for them.

  • Coronavirus Relief Options

The SBA recognizes several different relief options for nonprofits, businesses, and faith-based organizations. There are plenty of loans available, as well as some relief from debts you might already have.

What Are The Qualification Requirements for a Personal Loan?

There are several common requirements for a personal loan. However, you will want to keep in mind that each lender is a little bit different. Most will still consider you based on the following factors.

  • Credit scores – When looking at your credit score, the lender is going to determine how much of a risk they think you are. They will also look at your payment history and income level for the same reason.

    Remember, lenders are not giving you money for fun- they expect it to be paid back before the term runs out. They will check all of these factors so they feel confident they are giving a personal loan to a responsible person.

  • Payment history – Your payment history impacts your FICO score. If you miss payments, it will be recorded here- making it more difficult to get loans in the future. Lenders are going to give offers to people they believe will make their payments on time.
  • Your income level – Lenders are also going to want to look at your income level. They do this to ensure that you will be able to successfully make all of the payments. Lenders do not want to give out money they will never see again, so they look at all of these factors to determine your eligibility

Can I Pay Off My Loan Early?

We understand how tempting it can be to pay off a loan early, especially if it is one you have been working down for many years. Before you pay off the loan, make sure you consider the following.

  • Prepayment Fees

First, does the loan come with any prepayment fees? These are charges applied to your loan when you pay it off too early.

If your loan does have this penalty, you will want to ensure that your remaining interest is worth more than the fee, to make paying it off early worth your money.

  • Don’t Ruin Your Monthly Budget

Additionally, if paying off the loan early means that you are not going to be able to buy necessities for the month or you have to skip out on a different payment- you will not want to do it.

You do not need to take on financial harm to get out of a loan a few payments early. It is worth considering the pros and cons deeply before moving forward with this.

What Happens if I Can’t Pay Back My Loan?

When you miss that payment, a few different things are going to start happening. First, missing a payment is going to hurt your credit- by a lot. It can immediately lower your score by 100 or so points.


When you miss a payment, you can default. When that happens, your account with the loan could be considered delinquent, after missing another payment.

When you default, your loan can be sent to a collection’s department or sold to another agency. Those groups will be able to garnish your wages or even withhold your tax refund as a payment.

Additionally, the lender could seek legal action in some cases. All of these things you will want to avoid, so be sure you only take out loans you know you can pay back.

How Defaulting Affects Credit

Any negative mark on your credit report will stay there between seven and ten years. A single late payment that is reported can greatly hurt your credit score, while multiple missed payments deeply worsen the impact.

Plus, lower credit scores make it harder to approve in the future. Whether that be for a mortgage, a job search, or another personal loan.

Common Personal Loan Terms You Should Know

Here are some basic terms that can help you during the process:

  • Installment Loan – A loan that is paid back monthly through set payments.
  • Term – The amount of time you have to pay off your personal loan.
  • Fixed-Rate – An interest rate that is not going to change, it is common for personal loans. You may not want to consider one without it.
  • APR – Or Annual Percentage Rate. It includes your interest rate, fees, and other charges that come with your personal loan.
  • Principal – The loan amount that you have borrowed from the lender.
  • Fixed Payments – Payment amounts that stay the same each month. They are common with personal loans and keep your payments the same until you have paid it off or adjust the amount yourself.
  • Debt Consolidation – This is the process of combining all of your debts into one loan. It can include credit card bills, home bills, and more.
  • Cosigner – A person who can sign a loan with you. If your credit score is not good enough or you have not had a long credit history, you may need to have a cosigner to receive a loan. They are required to pay the loan if you are not able to.
  • Credit Score – A number given by FICO that lets lenders know how likely you are to repay the loan and make the payments by their due dates.
  • Unsecured Loans – These loans are not backed by collateral, which can be a car, boat, home, etc. This means that your belongings can not be taken to pay back a loan when you miss payments.

Loan Reviews Methodology

When it comes to choosing personal, student or car loans, we make sure that we evaluate all of the different products and services that are available for the lender we review. 

The Smart Investor’s selection of loan providers for inclusion here was made based on key areas we evaluated: loan types and loan products offered, fees, and APR. We also considering customer satisfaction and reliable external ratings such as J.D power/Trustpilot.

Cutting fees is now table stakes in the personal and student loans market. In addition, the most valuable loan products tend to offer a deep bench of options that meet a wide array of customer needs. These include a diverse range of loan amounts and terms, as well as loan structures. We also make sure that you’re going to save money by cutting down on the APR that goes along with the loans offered.