Last Updated: July 2025
From consolidating debt to saving for a vacation, help fund your next goal with 2025's best personal loan lenders.
01
02
03
04
05
06
07
01
01
No hidden fees, free to use
Compare Multiple Rates
02
Reward your good credit
LightStream
03
Low rates, no fees required
SoFi Personal Loans
04
Easy to use application
Find Loan in 4 Easy Steps
05
Grow your financial confidence
Compare Multiple Rates
06
Streamline your loan payments
Compare Multiple Rates
07
Get approved and fund your happiness
Happy Money
01
No hidden fees, free to use
Compare Multiple Rates
01
Flexible terms with fast funding
02
Find a loan option that works for you
Find a loan option that works for you
A personal loan is money an individual can borrow from a bank, credit union, or online lender to cover various expenses or debts. The loan is repaid over a set term, with added interest.
Personal loans are unsecured, meaning they don’t require valuable collateral, like a house or car, to qualify. Approval generally depends on the borrower’s credit and income to assess repayment ability.
Before obtaining a personal loan, it’s advisable for borrowers to review their finances and compare offers from different lenders to find the terms and rates that best suit their needs.
Personal loans can be helpful for many things—like paying off high-interest debt, covering medical bills, making home improvements, or handling unexpected expenses. But before deciding, it’s good to look at potential risks and benefits.
APR (Annual Percentage Rate) represents the total yearly cost of a loan, including both interest and extra fees. It’s an easy way to see what a loan will cost over a year and helps borrowers accurately compare different loan options. For example, a loan with a lower APR will cost less overall than one with a higher APR, even if their monthly interest payments seem similar. Before applying, it’s helpful to compare rates between a personal loan bank and an online lender to see which offers the best terms for your needs.
APR is calculated by adding the loan’s interest rate + any fees involved, then averaging that cost over a year. This gives a complete picture of what you’ll pay annually. Since APR includes fees along with the interest rate, it often appears higher than just the interest rate alone. This way, APR makes it easier to see which option is truly the cheapest.
A credit score is one of the factors that shows how likely a person is to repay borrowed money, helping lenders assess the risk of lending to them. It plays a major role in determining loan eligibility, interest rates, and loan terms.
Credit scores fall within specific ranges, from 800+ (excellent) to 580 and below (poor). While each lender may have slightly different definitions of good or bad credit, maintaining a higher credit score typically opens up more financial opportunities and reduces borrowing costs.
Credit scores can be checked through mobile banking apps, credit card statements, credit bureaus, monitoring services, and free online sites. People with lower credit scores can improve their score by paying bills on time, lowering credit card balances, and fixing any errors on their credit reports.
Unsecured loans are the most common type offered by online lenders. They don’t require collateral, meaning no asset (like a car or home) is needed as security. Approval is typically based on the borrower’s creditworthiness, income, and ability to repay. Interest rates for unsecured loans tend to be higher than for secured loans due to the added risk for lenders.
Some online lenders offer secured loans, where the borrower provides collateral, such as a savings account or valuable asset, to secure the loan. Because the collateral reduces risk, secured loans often come with lower interest rates and may be an option for individuals with lower credit scores.
Fixed-rate personal loans have a consistent interest rate over the life of the loan, providing predictable monthly payments. This stability makes it easier for borrowers to budget, as they know exactly what to expect each month.
Variable-rate loans have an interest rate that may fluctuate over time based on market conditions. While they can offer lower initial rates, monthly payments may increase if the interest rate rises, introducing a level of uncertainty in budgeting.
Online lenders often provide specific debt consolidation loans for borrowers looking to combine multiple high-interest debts into one manageable monthly payment. These loans can simplify debt management and potentially offer a lower interest rate.
Some online lenders offer credit builder loans designed to help borrowers establish or improve their credit. Borrowers make payments toward the loan, and these payments are reported to credit bureaus, which can help build a positive credit history.
A personal line of credit gives borrowers flexible access to funds up to a set limit, making it useful for ongoing or unexpected expenses. Unlike a lump-sum loan, a personal line of credit allows you to borrow as needed and only pay interest on what you use. Some personal lines of credit are unsecured, while others may require collateral, which can affect your rate and terms.
A personal loan for homeowners is a way to borrow money by using the value of their home or their credit history. From small loans to larger amounts, these options can help cover big expenses like home repairs, pay off high-interest debt, or manage unexpected costs. Homeowners can borrow without selling their home to access the funds they need.
Interest rates for personal loans are determined by factors like loan type, lender or bank's policies, the borrower’s credit score, income, and current economic conditions.
Each type has its pros and cons, with fixed rates offering stability and variable rates offering potential savings when rates are low. Small loans may carry higher rates because the lender wants to make it worth their time and risk. Large loans may come with better rates—if the borrower has strong credit and income—because the lender is competing for high-value business.
Learn more about how lenderguide.org rankings are determined.