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If you need money to cover an expense or make a purchase that you don’t have enough cash to immediately afford, you may consider taking out a personal loan. You can use a personal loan for debt consolidation, medical expenses, and home improvement projects, among many other purposes.
When shopping for a personal loan, you’ll find there are two main types: secured and unsecured. Secured loans are backed by collateral, such as a house or a car, that the lender can take if you don’t pay. Unsecured loans don’t require collateral and typically come with higher interest rates than secured loans. Most personal loans are unsecured.
We’ve gathered the best lenders for unsecured personal loans.
SoFi
SoFi has a high maximum loan amount of $100,000, so if you need to finance a large expense, you’re in luck. However, its minimum loan amount is $5,000, making it a poor option for borrowers looking for just a bit of cash to tide them over.
The company also offers unemployment protection, meaning you’ll receive forbearance if you lose your job during your loan repayment. This unique feature provides for as much as 12 months of forbearance that you apply for in three-month increments.
Watch out for: High credit score required. To get a loan from SoFi, you’ll need at least a 680 credit score. This puts the company out of reach for some borrowers. For those with lower credit scores, consider one of the other companies on our list of the best unsecured loans.
Read Insider’s full review of SoFi.
LightStream
LightStream has some of the lowest personal loan rates in the market, provided you have a good enough credit score to qualify for them. While the high end of its APR range is still competitive, you may get a better rate with a credit union if you have a lower credit score.
LightStream also doesn’t charge any fees — unlike some of the other lenders on our list. If you can qualify for a personal loan from the company, it’s a great choice.
Watch out for: No loan preapproval. Borrowers looking to shop around for rates to get the best deal won’t be able to get a rate from LightStream without going through the full application process. The complete process may temporarily lower your credit score, as LightStream will conduct a hard inquiry to make an approval decision.
Read Insider’s full review of Lightstream.
Happy Money
Happy Money’s Payoff loan is an excellent choice for debt consolidation, as the company designs its personal loan offerings specifically for this purpose. It’s easier to qualify with worse credit. You need a minimum credit score of 640 to be eligible for a Payoff personal loan, which is toward the lower end of the fair range of scores.
Unfortunately, you will pay an origination fee between 0% to 5% with Happy Money. Some of the other lenders on our list don’t charge these fees.
Watch out for: Limited loan usage. While a Payoff loan is an excellent choice for consolidating debt, that’s the only reason you can take out a loan from the company. If you have a different loan purpose, such as wedding expenses or home improvement, you can’t get financing from the company.
Read Insider’s full review of Happy Money.
Marcus by Goldman Sachs
Marcus’ unique feature is its on-time payment reward. If you pay your loan on time and in full every month for twelve months, you can forgo a month of payments, and interest will not accrue during that period. Marcus will then extend your loan by one month.
There are no fees on Marcus personal loans.
Watch out for: No co-borrowers allowed. If you have a low credit score, you often are able to enlist a co-borrower to improve your chances of loan approval or to get a better rate. With Marcus, you’ll need to qualify on your own.
Read Insider’s full review of Marcus.
Upstart
Upstart is the best lender on our list for borrowers with poor credit, as it has a minimum credit score of just 600. This makes it accessible to borrowers who have shakier credit histories. It also funds its loans the next business day after approval.
The lender also caters to borrowers looking for small loan amounts, with a minimum of just $1,000.
Watch out for: Hefty origination fees. Upstart’s personal loans can have origination fees up to 8%, which will take a big chunk out of your overall loan proceeds. You can avoid those fees with some of the other lenders on our list.
Read Insider’s full review of Upstart.
PenFed Credit Union
PenFed has the smallest minimum loan amount of any of the lenders on our list at $600. This is great for borrowers who only need a bit of cash to tide them over.
The credit union has no origination fees or prepayment penalties, and co-borrowers are allowed. Co-borrowers can help you get a better rate or qualify if you otherwise would not have.
Watch out for: Membership requirements. While you need to be a member to get a loan, eligibility requirements are fairly lax. Members of the military and employees of qualifying organizations will be eligible. But if you don’t qualify, you can join by simply opening a savings account with a $5 minimum deposit.
Read full review of PenFed Credit Union.
Wells Fargo
Wells Fargo is the best brick-and-mortar lender on our list, with about 4,700 locations throughout the country. If you value in-person support, it may be a great choice for you.
You can also borrow as much as $100,000 with the lender, making it a solid option for borrowers looking for large sums of money.
Watch out for: History of controversies. Wells Fargo has been at the heart of numerous scandals over the past several years, including creating fake bank accounts to meet sales goals, predatory lending practices to minorities, and overcharging customers on home and auto loans.
Read Insider’s full review of Wells Fargo
Other personal loan lenders we considered
Best Egg. This lender has higher starting rates and maximum rates than most of the other lenders on our list. Additionally, its maximum loan amount is just $35,000. Discover. Discover also has a low maximum loan amount of $35,000, making it not the best option for borrowers looking to finance expensive purchases. The company also charges a hefty $39 late fee. Avant. While Avant is a good option for borrowers with bad credit, it charges multiple types of fees and has high minimum and maximum APRs. Rocket Loans. You can only choose between a three- or five-year repayment term length with Rocket Loans. Other companies on our list offer you more options for repayment.
Which lender is the most trustworthy?
We’ve compared each institution’s Better Business Bureau score to give you another piece of information to choose your lender. The BBB measures businesses based on factors like their responsiveness to customer complaints, honesty in advertising, and transparency about business practices. Here is each company’s score:
LenderBBB Grade
SoFi
A+Lightstream
Lightstream
A+
Payoff by Happy Money
A+
marcus by goldman sachs logo
A+
Upstart
A+PenFed
PenFed
A+
Wells Fargo
F
With the exception of Wells Fargo, our top picks are rated A+ by the BBB. Know that a high BBB score does not ensure a positive relationship with a lender, and you should keep researching and talking with others who have used the company to get the most complete information possible.
The BBB has an F rating for Wells Fargo as the company responds to previously closed complaints. In the past few years:
The bank paid the city of Philadelphia $10 million as a result of the city’s claims that Wells Fargo was involved in predatory mortgage lending to racial minorities (2019).
If you’re uncomfortable with this history, you may want to use one of the other personal loan lenders on our list.
How to qualify for an unsecured loan
There are several factors that go into qualifying for an unsecured loan, including your credit score, income, and credit history.
Generally, you’ll need a credit score in the mid-600s to get a loan. Some lenders, like Upstart, will accept borrowers with lower scores. However, when you have a lower credit score you’ll often pay a higher interest rate.
In addition to a solid credit score, you’ll need proof of your employment and ability to repay to determine eligibility. Lenders will check your debt-to-income ratio to ensure you haven’t borrowed more than you can feasibly pay back.
Frequently asked questions
What is an unsecured personal loan?
An unsecured personal loan is a loan that you don’t need collateral to receive. With some other types of loans, like auto loans or mortgages, you need to put up a car or house in the event you don’t pay the loan back.
Can I get an unsecured loan with bad credit?
It depends on the lender. Some lenders have high minimum credit scores for their loans, while others are more generous with their minimums. On our list of the best unsecured loans, a great option for borrowers with bad credit is Upstart, which has a minimum requirement of just 600.
What can I use an unsecured loan for?
Unsecured loans can be used for many purposes, depending on the lender, including:
Debt consolidationCredit card refinancingHome improvementsMoving expensesTravelCar repairMedical bills
Reach out to your individual lender to ask about what it offers.
Methodology
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.
To find the best personal loans for debt consolidation, we combed through the fine print and terms of about a dozen personal loans to find the ones that were best suited to help with consolidating debt. We considered four main features:
Interest rates: We look at range of rates a lender offers, from the minimum APR to maximum APR, to determine its rating. We want to serve readers who have both higher credit scores (thus qualifying for a lower rate) and lower credit scores (thus getting a higher rate). Term lengths and loan amounts: We looked for unsecured loans with a wide range of term lengths and loan amounts to cater to a variety of borrowers. Funding speed: We assess how quickly a lender will get you your money after you apply and are approved for a loan and tried to pick lenders with fast funding times.Fees: Lenders might charge a variety of fees, from origination fees to late payment penalties. We prioritized lenders that charge minimal or no fees. Nationwide availability: We only considered loans with availability in most or all 50 US states.
See our broader ratings methodology for personal loans »