6 personal loan types and when to use them (2024)

Fox Money is a personal finance hub featuring content generated by Credible Operations, Inc. (Credible), which is majority-owned indirectly by Fox Corporation. The Fox Money content is created and reviewed independent of Fox News Media. Credible is solely responsible for this content and the services it provides.

Personal loans may have flown under the radar for a number of years as a credit card alternative, but no longer. According to TransUnion data, 23.5 million consumers had at least one personal loan in the fourth quarter of 2023, with an average account balance at a record $8,704. If you’re new to personal loans or need a refresher, we’ll cover the various types available, how they work, and when they make sense.

6 personal loan types and when to use them (1)

Good to know

A personal loan is a type of installment loan that you can use to cover most personal expenses — like a move, a vacation, a new water heater, or a surprise medical bill. You can also use a personal loan to consolidate debt, like credit card debt.

1. Unsecured personal loans

Best for: Good and excellent credit, debt consolidation, large and small purchases

Most of the personal loans on the market today are unsecured, which means lenders extend them without requiring that you pledge collateral, like a savings account or your car. Instead, approval is primarily based on your income, employment history, credit score, and credit history. This makes the application and approval process relatively quick — you could be approved and receive funds the same day you apply, with some lenders.

But what happens if you default?

Lenders can’t immediately force you to pay the outstanding balance on an unsecured loan. However, they can send your account to collections and report it to the consumer credit bureaus. Additionally, they can sue you to try to get a judgment against you. If successful, the court may grant them the right to seize your assets, such as garnishing your wages.

That said, as long as you keep up with all your payments, you won’t have to worry about any of that.

6 personal loan types and when to use them (2)

Tip

Most personal loans have a fixed annual percentage rate (APR) that ranges between 7% and 36%, depending on your credit. Once approved, you’ll repay the amount, plus interest and fees, through fixed monthly payments over a set term, such as 2 to 7 years.

2. Secured personal loans

Best for: Borrowers with bad credit, fair credit, and no credit; lowering your interest rate

Secured loans are the opposite of unsecured loans. To get one, you need to pledge an asset as collateral, such as a savings account, certificate of deposit (CD), or your car.

You may want to go the secured loan route if you’re having trouble getting approved for an unsecured loan or if you want a lower rate. The collateral reduces the risk for the lender, which can help you get approved or qualify for a larger loan amount or lower interest rate. However, it’s important to understand that if your loan goes into default, the lender can seize and sell your collateral without taking you to court.

While less common than unsecured personal loans, these are offered by a few lenders. Upgrade and OneMain Financial, for example, offer auto-secured personal loans to select customers.

Secured personal loan lenders

Advertiser Disclosure

4.54.5

Fox Money rating

Fixed (APR)

8.49% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

600

Check Rates

on Credible’s website

View Details

Overview

Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don't need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.

However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.

Loan amount

$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)

Repayment terms

2 to 7 years

Fees

Origination fee

Discounts

Autopay and direct pay

Eligibility

Available in all states

Min. income

Does not disclose

Customer service

Email

Soft credit check

Yes

Time to get funds

1 business day

Loan uses

Credit card refinancing, debt consolidation, home improvement, major purchase, other

44

Fox Money rating

Fixed (APR)

8.99% - 35.99%

Loan Amounts

$2000 to $50000

Min. Credit Score

600

Check Rates

on Credible’s website

View Details

Overview

Best Egg is a solid lender for a wide range of borrowers and, notably, scored second for personal loan satisfaction in J.D. Power's Consumer Lending Study. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You'll need a FICO score of at least 600 to qualify, but the lower your score, the higher your APR may be. The APR includes the interest rate and origination fees, which range from 0.99% to 8.99% with Best Egg.

Note that if you successfully prequalify with Best Egg, you may be more likely to be approved for the loan relative to other lenders you prequalify with. Based on Credible data, borrowers who chose to apply for a loan with Best Egg were more than twice as likely to be approved (relative to most other Credible partners).

Loan amount

$2,000 to $50,000

Fees

Origination fee, late fee, unsuccessful payment fee, check processing fee

Discounts

None

Eligibility

Available in all states except DC, IA, VT, and WV

Min. income

None

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 to 3 business days after successful verification

Loan uses

Credit card refinancing, debt consolidation, home improvement, and other purposes

3.93.9

Fox Money rating

Fixed (APR)

18.00% - 35.99%

Loan Amounts

$1500 to $20000

Min. Credit Score

540

Check Rates

on Credible’s website

View Details

Overview

OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can't, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.

Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn't a given.

Loan amount

$1,500 to $20,000

Fees

Origination fee, unsuccessful payment fee, late fee

Discounts

None

Eligibility

Must have photo I.D. issued by U.S. federal, state or local government

Min. income

Does not disclose

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 to 2 days after acceptance

Loan use

All except business, and education

Terms | Privacy Policy

Fox Business does not make or arrange loans.

3. Debt consolidation loans

Best for: Paying off high-interest credit card debt and medical bills; lowering monthly payments, lowering interest rates

Debt consolidation loans are personal loans that borrowers use to pay off two or more other debts. For example, suppose you have a $500 medical bill, a $1,500 credit card bill, and a $1,000 credit card bill. If a lender approves you for a $3,000 personal loan, you could use it to pay off all three balances. These can be helpful if you want to streamline multiple debts and can qualify for an interest rate lower than what you’re currently paying.

You can also use a personal loan to pay off a single debt, like a credit card, in order to refinance it at a lower rate. Credit card refinancing with a personal loan has added benefits of locking in a fixed rate and avoiding compound interest.

Loans for debt consolidation and credit card refinancing

3.93.9

Fox Money rating

Fixed (APR)

7.80% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

620

Check Rates

on Credible’s website

View Details

Overview

Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it's also is one of few lenders that doesn't have a minimum credit score requirement (if you apply on the lender's website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.

Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.

Loan amount

$1,000 to $50,000

Fees

Origination fee

Discounts

None

Eligibility

Available nationwide

Min. income

$12,000

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 to 3 business days

Loan uses

Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes

4.44.4

Fox Money rating

Fixed (APR)

-

Loan Amounts

$2500 to $40000

Min. Credit Score

660

Check Rates

on Credible’s website

View Details

Overview

Discover Personal Loans offers low APRs, repayment terms up to seven years, no origination fees, nationwide availability, and doesn't require your Social Security number to prequalify on its site. You'll need to have an annual income of at least $40,000, and a FICO score 660 or higher, to be eligible. If your credit score is fair or poor, you'll need to go elsewhere, as Discover doesn't allow cosigners.

Funds are available as soon as the next business day after loan approval.

Loan amount

$2,500 - $40,000

Repayment terms

3 - 7 years

Fees

Late fee

Discounts

None

Eligibility

Available in all 50 states

Min. income

$40,000

Customer service

Phone

Soft credit check

Yes

Time to get funds

Funds can be sent as soon as the next business day after acceptance

Loan uses

Auto repair, credit card refinancing, debt consolidation, home remodel or repair, major purchase, medical expenses, taxes, vacation, and wedding

4.54.5

Fox Money rating

Fixed (APR)

8.49% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

600

Check Rates

on Credible’s website

View Details

Overview

Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don't need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.

However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.

Loan amount

$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)

Repayment terms

2 to 7 years

Fees

Origination fee

Discounts

Autopay and direct pay

Eligibility

Available in all states

Min. income

Does not disclose

Customer service

Email

Soft credit check

Yes

Time to get funds

1 business day

Loan uses

Credit card refinancing, debt consolidation, home improvement, major purchase, other

Overview

LendingClub is a solid lender for good credit borrowers and some fair credit borrowers that apply directly on its website. It's easy to prequalify with LendingClub, especially if you're uncomfortable providing your Social Security number, as the company doesn't require it at the prequalification stage. (You will need to provide it if you move forward with a full application.)

While prequalification is not a guarantee that you'll be approved for a loan, LendingClub does a better job than most other Credible partner lenders at approving applicants that have successfully prequalified. In other words, you're less likely to have your application declined once you apply (if you've already prequalified). LendingClub may charge an origination fee between 3% and 8%.

Loan amount

$1,000 to $40,000

Fees

Origination fee

Discounts

None

Eligibility

Available in all 50 states

Min. income

None

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

Within 3 days

Loan uses

Debt consolidation, paying off credit cards

4.94.9

Fox Money rating

Fixed (APR)

8.99% - 29.99%

Loan Amounts

$5000 to $100000

Min. Credit Score

Does not disclose

Check Rates

on Credible’s website

View Details

Overview

SoFi stands out for offering no-fee personal loans with competitive rates, high loan amounts, long loan terms, discounts for autopay and direct pay, and funding as soon as the same day. Plus, SoFi prioritizes convenience for existing and potential customers with features like live chat and an easy prequalification process that doesn't require your Social Security number. Once you have a loan with SoFi, you may be eligible for unemployment protection and unemployment assistance.

The main catch is that you need to qualify for a loan with SoFi, which can be hard to do if you don't have good credit. You also won't be able to apply with a cosigner, since SoFi doesn't accept cosigners; nor does it offer secured personal loans.

Loan Amount

$5,000 to $100,000

Repayment terms

2 - 7 years

Fees

Option to pay an origination fee (up to 6%) in exchange for a lower rate

Discounts

Autopay, direct pay

Eligibility

Available in all states

Min. income

Does not disclose

Customer service

Phone, email, live chat

Soft credit check

Yes

Time to get funds

Typically within a few days, given approval and bank account verification, but sometimes within the same day

Loan uses

Solely for personal, family, or household uses

44

Fox Money rating

Fixed (APR)

8.99% - 35.99%

Loan Amounts

$2000 to $50000

Min. Credit Score

600

Check Rates

on Credible’s website

View Details

Overview

Best Egg is a solid lender for a wide range of borrowers and, notably, scored second for personal loan satisfaction in J.D. Power's Consumer Lending Study. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You'll need a FICO score of at least 600 to qualify, but the lower your score, the higher your APR may be. The APR includes the interest rate and origination fees, which range from 0.99% to 8.99% with Best Egg.

Note that if you successfully prequalify with Best Egg, you may be more likely to be approved for the loan relative to other lenders you prequalify with. Based on Credible data, borrowers who chose to apply for a loan with Best Egg were more than twice as likely to be approved (relative to most other Credible partners).

Loan amount

$2,000 to $50,000

Fees

Origination fee, late fee, unsuccessful payment fee, check processing fee

Discounts

None

Eligibility

Available in all states except DC, IA, VT, and WV

Min. income

None

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 to 3 business days after successful verification

Loan uses

Credit card refinancing, debt consolidation, home improvement, and other purposes

4.34.3

Fox Money rating

Fixed (APR)

11.69% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

560

Check Rates

on Credible’s website

View Details

Overview

Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.

Note that rates and fees can be relatively high you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you've improved your credit score.

Loan amount

$1,000 - $50,000

Repayment terms

3, 5, or 7 years

Fees

Origination fee

Discounts

Autopay and direct pay

Eligibility

A U.S. citizen or permanent resident; not available in DC, IA, SC, WV

Min. income

None

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 business day after acceptance

Loan uses

Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases

3.93.9

Fox Money rating

Fixed (APR)

11.72% - 17.99%

Loan Amounts

$3000 to $40000

Min. Credit Score

640

Check Rates

on Credible’s website

View Details

Overview

Happy Money has been in operation since 2009 (formerly known as Payoff). It's an option for fair-credit borrowers (plus those with better credit), and notably has a relatively low top-end APR. In other words, you could qualify for a lower rate with Happy Money with fair credit, relative to other lenders that offer fair-credit loans. The company does charge an origination fee on some loans, up to 5%, but that's not as high as some other lenders' origination fees.

You should be prepared to wait a few days to get your money, as funding can take three to five days once approved. And loans aren't available in Massachusetts or Nevada. Happy Money has an A+ rating with the BBB and is ideal for debt consolidation and credit card consolidation loans.

Loan amount

$5,000 to $40,000

Fees

Origination fee

Discounts

None

Eligibility

Available in all states except MA, MS, NV, and OH

Min. income

None

Customer service

Phone, email, chat

Soft credit check

Yes

Time to get funds

As soon as 2 - 5 business days after verification

Loan uses

Debt consolidation and credit card consolidation only

Terms | Privacy Policy

Fox Business does not make or arrange loans.

4. Cosigned and joint loans

Best for: Partners applying for joint loan; applicants with fair or bad credit

When you apply for a personal loan, lenders assess factors like your credit, income, and employment history to determine if you qualify. If you’re having trouble getting approved or getting the rates you want, a cosigned loan or a joint loan with a co-borrower may be able to help.

  • Cosigned loan: A cosigned loan involves applying with another person (the cosigner) who shares responsibility for the loan, and agrees to pay it if you don’t. The cosigner doesn’t have access to loan funds, but the loan will go on their credit report, along with any late or missed payments on your part.
  • Joint loan: A joint loan involves two people applying for a loan together and taking equal responsibility for it. The co-borrower has equal access to loan funds, unlike a cosigner.

If you know someone who has good credit and is willing to apply with you, they may be able to help you land a better deal. While many lenders allow co-borrowers, not all offer personal loans with a cosigner.

Lenders offering personal loans with a cosigner

44

Fox Money rating

Fixed (APR)

-

Loan Amounts

$20000 to $200000

Min. Credit Score

660

Check Rates

on Credible’s website

View Details

Overview

BHG Money stands out for offering the largest loan amounts up to $200,000 of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You'll have up to 10 years to repay the loan, but you'll need an annual income of at least $100,000 to qualify and a FICO score that's 660 or higher. However, if you have a cosigner that meets these requirements, BHG will consider your application.

Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 2% and 4%, depending on your financial profile. Loan funds are available within three to 14 days of loan approval. Note that you can't prequalify with BHG.

Loan amount

$20,000 - $200,000

Repayment terms

3 - 10 years

Fees

Origination fees, late fees

Discounts

None

Eligibility

Available in all states except Maryland and Illinois

Min. income

$100,000

Customer service

Email, phone

Soft credit check

Not on lender's site

Time to get funds

In as few as 5 days

Loan uses

Debt consolidation, baby (adoption), engagement ring financing, moving (relocation), business, home improvement, special occasion, cosmetic procedures, major purchase, taxes, credit card refinancing, medical expenses, vacation, wedding, other

3.93.9

Fox Money rating

Fixed (APR)

18.00% - 35.99%

Loan Amounts

$1500 to $20000

Min. Credit Score

540

Check Rates

on Credible’s website

View Details

Overview

OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can't, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.

Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn't a given.

Loan amount

$1,500 to $20,000

Fees

Origination fee, unsuccessful payment fee, late fee

Discounts

None

Eligibility

Must have photo I.D. issued by U.S. federal, state or local government

Min. income

Does not disclose

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 to 2 days after acceptance

Loan use

All except business, and education

Terms | Privacy Policy

Fox Business does not make or arrange loans.

5. Home improvement loans

Best for: Home improvements, home repairs, remodels, and some home purchases

Some lenders offer home improvement loans to fund home repairs, HVAC replacements, kitchen remodels, etc. These are unsecured personal loans that are meant to be used primarily or solely to fund home improvement projects.

What’s different about home improvement personal loans is that you can often find longer available loan terms and higher available loan amounts. For example, LightStream offers home improvement loans for amounts up to $100,000 with repayment terms up to 12 years, and Navy Federal offers home improvement loans for amounts up to $150,000 with repayment terms up to 15 years.

Using a personal loan to pay for home improvements can be an especially convenient option if you don’t have enough home equity to qualify for a home equity loan.

Lenders offering home improvement loans

4.24.2

Fox Money rating

Fixed (APR)

7.49% - 25.49%

Loan Amounts

$5000 to $100000

Min. Credit Score

700

Check Rates

on Credible’s website

View Details

Overview

Lightstream is one of three Credible partner lenders to offer loan amounts up to $100,000, which makes it ideal for financing large expenses like home improvements or weddings. Funds are available as soon as the same day you apply, and you'll have up to 12 years to repay certain types of loans, including home improvement loans, RV loans, and boat loans. There are no origination fees, and rates are low Lightstream's lowest APR beats SoFi's advertised lowest APR by 1 percentage point. But you'll need good credit to qualify.

Unlike most lenders, Lightstream does not let you prequalify on its site. Nor does it provide a contact phone number next to its customer service hours on its website.

Loan amount

$5,000 to $100,000

Repayment terms

2 - 12 years, depending on loan purpose

Fees

None

Discounts

Autopay

Eligibility

Available in all states except RI and VT

Min. income

Does not disclose

Customer service

Email

Soft credit check

No

Time to get funds

As soon as the next business day

Loan uses

Credit card refinancing, debt consolidation, home improvement, and other purposes

3.93.9

Fox Money rating

Fixed (APR)

7.80% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

620

Check Rates

on Credible’s website

View Details

Overview

Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it's also is one of few lenders that doesn't have a minimum credit score requirement (if you apply on the lender's website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.

Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.

Loan amount

$1,000 to $50,000

Fees

Origination fee

Discounts

None

Eligibility

Available nationwide

Min. income

$12,000

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 to 3 business days

Loan uses

Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes

4.54.5

Fox Money rating

Fixed (APR)

8.49% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

600

Check Rates

on Credible’s website

View Details

Overview

Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don't need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.

However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.

Loan amount

$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)

Repayment terms

2 to 7 years

Fees

Origination fee

Discounts

Autopay and direct pay

Eligibility

Available in all states

Min. income

Does not disclose

Customer service

Email

Soft credit check

Yes

Time to get funds

1 business day

Loan uses

Credit card refinancing, debt consolidation, home improvement, major purchase, other

4.94.9

Fox Money rating

Fixed (APR)

8.99% - 29.99%

Loan Amounts

$5000 to $100000

Min. Credit Score

Does not disclose

Check Rates

on Credible’s website

View Details

Overview

SoFi stands out for offering no-fee personal loans with competitive rates, high loan amounts, long loan terms, discounts for autopay and direct pay, and funding as soon as the same day. Plus, SoFi prioritizes convenience for existing and potential customers with features like live chat and an easy prequalification process that doesn't require your Social Security number. Once you have a loan with SoFi, you may be eligible for unemployment protection and unemployment assistance.

The main catch is that you need to qualify for a loan with SoFi, which can be hard to do if you don't have good credit. You also won't be able to apply with a cosigner, since SoFi doesn't accept cosigners; nor does it offer secured personal loans.

Loan Amount

$5,000 to $100,000

Repayment terms

2 - 7 years

Fees

Option to pay an origination fee (up to 6%) in exchange for a lower rate

Discounts

Autopay, direct pay

Eligibility

Available in all states

Min. income

Does not disclose

Customer service

Phone, email, live chat

Soft credit check

Yes

Time to get funds

Typically within a few days, given approval and bank account verification, but sometimes within the same day

Loan uses

Solely for personal, family, or household uses

44

Fox Money rating

Fixed (APR)

8.99% - 35.99%

Loan Amounts

$2000 to $50000

Min. Credit Score

600

Check Rates

on Credible’s website

View Details

Overview

Best Egg is a solid lender for a wide range of borrowers and, notably, scored second for personal loan satisfaction in J.D. Power's Consumer Lending Study. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You'll need a FICO score of at least 600 to qualify, but the lower your score, the higher your APR may be. The APR includes the interest rate and origination fees, which range from 0.99% to 8.99% with Best Egg.

Note that if you successfully prequalify with Best Egg, you may be more likely to be approved for the loan relative to other lenders you prequalify with. Based on Credible data, borrowers who chose to apply for a loan with Best Egg were more than twice as likely to be approved (relative to most other Credible partners).

Loan amount

$2,000 to $50,000

Fees

Origination fee, late fee, unsuccessful payment fee, check processing fee

Discounts

None

Eligibility

Available in all states except DC, IA, VT, and WV

Min. income

None

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 to 3 business days after successful verification

Loan uses

Credit card refinancing, debt consolidation, home improvement, and other purposes

4.34.3

Fox Money rating

Fixed (APR)

11.69% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

560

Check Rates

on Credible’s website

View Details

Overview

Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.

Note that rates and fees can be relatively high you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you've improved your credit score.

Loan amount

$1,000 - $50,000

Repayment terms

3, 5, or 7 years

Fees

Origination fee

Discounts

Autopay and direct pay

Eligibility

A U.S. citizen or permanent resident; not available in DC, IA, SC, WV

Min. income

None

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 business day after acceptance

Loan uses

Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases

44

Fox Money rating

Fixed (APR)

-

Loan Amounts

$20000 to $200000

Min. Credit Score

660

Check Rates

on Credible’s website

View Details

Overview

BHG Money stands out for offering the largest loan amounts up to $200,000 of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You'll have up to 10 years to repay the loan, but you'll need an annual income of at least $100,000 to qualify and a FICO score that's 660 or higher. However, if you have a cosigner that meets these requirements, BHG will consider your application.

Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 2% and 4%, depending on your financial profile. Loan funds are available within three to 14 days of loan approval. Note that you can't prequalify with BHG.

Loan amount

$20,000 - $200,000

Repayment terms

3 - 10 years

Fees

Origination fees, late fees

Discounts

None

Eligibility

Available in all states except Maryland and Illinois

Min. income

$100,000

Customer service

Email, phone

Soft credit check

Not on lender's site

Time to get funds

In as few as 5 days

Loan uses

Debt consolidation, baby (adoption), engagement ring financing, moving (relocation), business, home improvement, special occasion, cosmetic procedures, major purchase, taxes, credit card refinancing, medical expenses, vacation, wedding, other

Terms | Privacy Policy

Fox Business does not make or arrange loans.

6. Bad-credit personal loans

Best for: Borrowers with FICO scores under 580

If you have bad credit, you’ll have the best chance of getting approved for a personal loan with lenders that specialize in bad-credit personal loans, such as OneMain, Upstart, and OppLoans. Such lenders look beyond your credit score to determine eligibility, but you should expect to pay a higher interest rate and up-front fees, like an origination fee.

According to Credible data, borrowers with FICO scores under 599 prequalified for APRs around 31%, on average, for a five-year personal loan. Applying for a secured personal loan or applying with a cosigner could help you get approved, and potentially lower your rate.

Personal loans for bad credit

6 personal loan types and when to use them (3)

Important

Prequalify before you apply to check rate estimates and see which lenders are most likely to approve you. You generally need to provide some personal information, but it won’t hurt your credit. Be aware that formally applying could impact your score.

3.93.9

Fox Money rating

Fixed (APR)

7.80% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

620

Check Rates

on Credible’s website

View Details

Overview

Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it's also is one of few lenders that doesn't have a minimum credit score requirement (if you apply on the lender's website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.

Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.

Loan amount

$1,000 to $50,000

Fees

Origination fee

Discounts

None

Eligibility

Available nationwide

Min. income

$12,000

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 to 3 business days

Loan uses

Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes

4.54.5

Fox Money rating

Fixed (APR)

8.49% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

600

Check Rates

on Credible’s website

View Details

Overview

Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don't need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.

However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.

Loan amount

$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)

Repayment terms

2 to 7 years

Fees

Origination fee

Discounts

Autopay and direct pay

Eligibility

Available in all states

Min. income

Does not disclose

Customer service

Email

Soft credit check

Yes

Time to get funds

1 business day

Loan uses

Credit card refinancing, debt consolidation, home improvement, major purchase, other

3.93.9

Fox Money rating

Fixed (APR)

9.95% - 35.99%

Loan Amounts

$2000 to $35000

Min. Credit Score

550

Check Rates

on Credible’s website

View Details

Overview

Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who've prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.

Loan amount

$2,000 to $35,000**

Fees

Origination fee, late fee, dishonored payment fee

Discounts

None

Eligibility

Available in all states except HI, IA, MA, ME, NY, VT, and WV

Min. income

$1,200 monthly

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)

Loan uses

Debt consolidation, emergency expense, life event, home improvement, and other purposes

Repayment terms

1 to 5 years (2 to 5 years through Credible)

4.34.3

Fox Money rating

Fixed (APR)

11.69% - 35.99%

Loan Amounts

$1000 to $50000

Min. Credit Score

560

Check Rates

on Credible’s website

View Details

Overview

Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.

Note that rates and fees can be relatively high you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you've improved your credit score.

Loan amount

$1,000 - $50,000

Repayment terms

3, 5, or 7 years

Fees

Origination fee

Discounts

Autopay and direct pay

Eligibility

A U.S. citizen or permanent resident; not available in DC, IA, SC, WV

Min. income

None

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 business day after acceptance

Loan uses

Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases

3.93.9

Fox Money rating

Fixed (APR)

18.00% - 35.99%

Loan Amounts

$1500 to $20000

Min. Credit Score

540

Check Rates

on Credible’s website

View Details

Overview

OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can't, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.

Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn't a given.

Loan amount

$1,500 to $20,000

Fees

Origination fee, unsuccessful payment fee, late fee

Discounts

None

Eligibility

Must have photo I.D. issued by U.S. federal, state or local government

Min. income

Does not disclose

Customer service

Phone, email

Soft credit check

Yes

Time to get funds

As soon as 1 to 2 days after acceptance

Loan use

All except business, and education

Terms | Privacy Policy

Fox Business does not make or arrange loans.

Personal loan alternatives

Not sure if a personal loan is right for you? Here are three alternatives to consider:

  • Personal lines of credit: A personal line of credit is a credit line that you can use on an as-needed basis for a certain period, often 10 years. Once the draw period ends, lenders may require a balloon payment, offer a renewal, or allow you to split the balance up into payments. The perks here are that interest is only charged on amounts you’ve withdrawn, and payments are usually lower during the draw period.
  • Cash advance apps: Cash advance apps like Dave and EarnIn allow you to borrow small amounts of cash between paydays, often between $100 and $750. Fees vary depending on the app you use, where you’re sending the money, and how fast you need the advance. A unique advantage is that approval is based on your bank account activity rather than your credit, but instant delivery fees can be steep.
  • Credit card cash advances: Most credit cards allow you to withdraw a percentage of your credit line in cash from an ATM or make a deposit via check into your bank account. Cash advances can be convenient, but often have a higher APR than your card’s standard rate. Plus, interest is charged on the amount advanced immediately. They can get particularly expensive if you only make the card’s minimum required monthly payment.

Frequently asked questions

How do I get a personal loan?

Personal loans are available through many banks, credit unions, and alternative lenders. In most cases, you can apply online or over the phone. If you want to speed up the comparison shopping process, use a loan marketplace to compare lenders side by side and to prequalify with multiple lenders within minutes.

Can I refinance a personal loan?

Yes, it’s possible to refinance a personal loan. To do so, you’ll need to get approved for a new loan that’s equal to or greater than your current loan in order to pay it off. For a refinance to make sense, you’ll typically want a lower interest rate on the new loan. However, refinancing to a longer repayment term — even with a higher interest rate — could make sense if you need to lower your monthly payments.

Can you have more than one personal loan?

It’s possible to have more than one personal loan at a time. However, whether you can get approved or not will depend on factors like your credit, income, and debt-to-income ratio. Each lender you apply with will independently assess whether you qualify and what rate you qualify for. This is why it’s a good idea to prequalify with multiple lenders before applying.

Meet the contributor:

Jessica Walrack

6 personal loan types and when to use them (4)

Jessica Walrack is a freelance finance writer and journalist with over a decade of experience. During that time, she’s written hundreds of articles about loans, insurance, banking, mortgages, credit cards, budgeting, and taxes for well-known publications including CBS News MoneyWatch, USA Today, US News and World, Investopedia, and The Balance Money.

6 personal loan types and when to use them (2024)
Top Articles
Latest Posts
Article information

Author: Jeremiah Abshire

Last Updated:

Views: 5632

Rating: 4.3 / 5 (74 voted)

Reviews: 81% of readers found this page helpful

Author information

Name: Jeremiah Abshire

Birthday: 1993-09-14

Address: Apt. 425 92748 Jannie Centers, Port Nikitaville, VT 82110

Phone: +8096210939894

Job: Lead Healthcare Manager

Hobby: Watching movies, Watching movies, Knapping, LARPing, Coffee roasting, Lacemaking, Gaming

Introduction: My name is Jeremiah Abshire, I am a outstanding, kind, clever, hilarious, curious, hilarious, outstanding person who loves writing and wants to share my knowledge and understanding with you.