By | October 15, 2022
Best Personal Loans

Best Personal Loans Of 2022

Many personal loans can be used for general family expenses such as home improvement projects, wedding expenses, vacations, and in some cases even buying land. Borrowers also turn to personal loans for debt consolidation, as interest rates for personal loans are often lower than for credit cards—especially for applicants with good to excellent credit.

Best Personal Loans

Best Personal Loans

These loans are available from traditional banks, credit unions and online lending platforms that make it easy to apply online without visiting a bank branch. What’s more, many personal loans can be funded within a few business days so you don’t have to wait to get the money you need. The best personal loans offer low interest rates, flexible loan amounts and repayment terms, and limited fees for well-qualified borrowers.



Above personal loan rates and details are accurate till September 30, 2022. While we update this information regularly, annual percentage rates (APRs) and loan details may have changed since the page was last updated. Keep in mind, some lenders make specific rates and terms available only for specific loan purposes. Be sure to confirm the available APR range and loan details based on your desired loan purpose with your lender before applying.

What is a personal loan?

A personal loan is a type of lump-sum financing that borrowers can get from a traditional bank, credit union, or online lender, which they can use for a variety of expenses. Common uses include medical bills, auto repairs, home improvement projects, and debt consolidation. Personal loans typically have repayment terms of between two and seven years and offer interest rates as low as 3% for highly-qualified borrowers.

Tips for comparing personal loans

Consider these tips when comparing personal loans:

Where possible, prequalify.

Many personal loan providers offer potential borrowers the ability to pre-qualify for loans. This means that the applicant can submit details about their credit requirements, income, housing status and other relevant information to know what kind of loan amount, rates and repayment terms they are eligible for. Even better, this process usually only requires a soft credit inquiry so you can make the purchase without damaging your credit score.

Consider the purpose of your loan.

While personal loans can be used for a very wide range of purposes, they are limited to things like consumer debt consolidation, home improvement, vacations, weddings, funerals, major purchases, and other personal expenses.For this reason, lenders often restrict the use of personal loans for postsecondary education expenses, business purposes, and illegal activities at least. When considering a lender, make sure your intended use of the loan is permitted under its borrower agreement.

purpose of your loan

purpose of your loan

Watch out for additional fees.

Some lenders offer fee-free personal loans that don’t require borrowers to pay origination fees, late payment fees, prepayment penalties or any other common loan costs. However, this is more the exception than the rule, so it’s important to ask about fees when shopping for the best loan terms. And, if a lender charges an origination fee, find out if it’s built into the APR or deducted from the loan amount before funding, as this can affect the loan amount you need to request.

Evaluate the lender’s customer support options.

If you have found a lender who is willing to offer you the money you need on acceptable terms, there is one more thing to consider before signing the loan agreement. Customer support may not seem like a big deal in the honeymoon phase of your loan, but it can make a huge difference if you face payment issues or financial hardship during your repayment period. Review the lender’s customer service resources and read reviews from past and current borrowers to ensure they are a good fit.

How does a personal loan work?

Personal loans are usually available from banks, credit unions and online lenders. Prospective borrowers apply for a loan online or in person and then wait for a decision—approval or denial. If approved, borrowers receive their funds as a lump sum payment in their bank account and interest starts accruing in the first month. Personal loans require fixed monthly payments for the entire loan term, usually between one and seven years.


Average personal loan interest rates by credit score
Here are the average estimated interest rates for personal loans based on VantageScore risk levels, according to Experian. Please note that interest rates are determined and set by the lenders. Rates provided are approximate.

Average personal loan interest rates by credit score

Vantage V4 Credit Score Average Interest Rate
Deep Subprime (300-499)


Subprime (500-600)


Near Prime (601-660)


Prime (661-780)


Super Prime (781-850)


While lenders determine and set rates, as an applicant, you can increase your chances of receiving favorable terms.

“Consumers with high credit scores typically qualify for lower interest rates,” says Rod Griffin, senior director of consumer education and advocacy at Experian. To boost your credit scores, make sure you make your payments on time and try to keep your balances low. Missed payments and high [credit] utilization rates, or balance-to-limit ratios on your credit cards, are the two most heavily weighted factors in determining your credit scores. If possible, I recommend checking your credit report and score three to six months before you apply for a personal loan. This will give you time to take steps to improve your credit standing if needed.

Reasons for getting a personal loan

You can use a personal loan for almost any kind of personal expenses. In general, however, personal loans are good for:

getting a personal loan

getting a personal loan


Emergency expenses. If you need money immediately for medical bills, funeral expenses, car repairs or unexpected expenses that require immediate attention, you can use a personal loan.

Debt Consolidation. A personal loan is a great way to consolidate high-interest debt to help you save money on interest and streamline your payments.

Home improvement and repair. If you have an upcoming home improvement project, you can take out a personal loan to finance the cost. You can also use a personal loan for unexpected home repair or maintenance expenses.

Auto financing. While auto loans are the most common way to finance a vehicle, personal loans can also help you get the job done. Personal loans have fewer restrictions on the type of car you can buy, but they usually charge higher interest rates than traditional auto loans.

Moving expenses. The cost of moving can add up quickly. If you don’t have cash on hand, a personal loan can help you finance the expenses.
Best place to get personal loan

You can get a personal loan from three types of institutions:

Online Lenders. These are mostly technology-based non-bank companies that offer a small range of credit products, including personal loans. Online lenders typically offer low interest rates, loans that are available nationally and can provide funding within 24 to 48 hours.

banks. Many local and national banks offer personal loans in addition to other financial products, such as checking and savings accounts. If you have an existing relationship with a bank, you can consider opening your personal loan through that bank.

Credit unions. These are local to your community and offer applications both online and in person. Credit unions require membership, so be sure to check to see if you qualify.
The best place to get a personal loan is where you can avail the most favorable terms and loan limits to suit your needs.

Related: How Do Best Acquisition Loans Work? 2022

How to get a personal loan

Although the process varies by lender, follow these general steps to apply for a personal loan:

Check your credit score. Start by checking your credit score for free through your credit card issuer or another website that offers free scores. This will give you an idea of ​​your creditworthiness and your chances of qualifying. Aim for a score of at least 610; However, a score of at least 720 will give the most favorable terms.

If necessary, take steps to improve your credit score. If your score falls below 610 or you want to raise your score to get the best terms possible, take the time to improve your score before applying, such as reducing your credit utilization or paying off unpaid debt.

improve your credit score

improve your credit score

Determine how much you need to borrow. Once you check your credit score, calculate how much money you want to borrow. Remember, though, that you’ll receive your money in one lump sum, and you’ll have to pay interest on the entire amount—so only borrow what you need.

Shop around for the best terms and interest rates. Many lenders will let you prequalify before submitting your application, which lets you see what terms you’ll receive with just a soft credit inquiry. Prequalifying lets you shop around for the best rates without hurting your credit score.

Submit a formal application and wait for a loan decision. After you find the lender that offers the best terms for your situation, submit your application online or in person. Depending on the lender, this process can take anywhere from a few hours to a few days.

How to choose the best personal loan

Here are things to consider as you shop around and compare personal loans.

Soft credit check. Most online lenders let you check your estimated interest rate by doing a soft check of your credit during pre-qualification. This won’t affect your credit score, so it pays to take steps to pre-qualify for a loan with multiple lenders and compare rates and loan features.

Annual percentage rates. Because APRs include interest rates and fees, they offer an apples-to-apples cost comparison for borrowers deciding between individual loan offers. Use our personal loan calculator to see estimated rates and payments based on credit scores.

Payment terms. Having different repayment term options gives you the option of getting a shorter term and lower interest or a longer term and lower monthly payments. Depending on your budget, one may make more financial sense than the other.

Loan amount. Depending on how much money you need, one lender may be more attractive than another. Some lenders offer small and medium-sized loan amounts like $2,000 to $40,000, while others offer loans up to $100,000. Determining the amount you need ahead of time will help you compare and make decisions.

special features. You can benefit from features like autopay rate discounts, unemployment protection or financial coaching. See if the lender you’re considering offers any benefits that can help you reach your financial goals.

Survey: Borrowing money has improved financial situation

Borrowing money does not always have a negative impact on your finances. In fact, 69% of Americans say that borrowing money has made their finances better. You, too, can experience the benefits of borrowing money by following responsible practices. To avoid financial difficulties when borrowing money, we recommend you:


  • Pay your bills on time or early to avoid damaging your credit score
  • Borrow below your means and within your budget
  • Take the time to find the lowest rates and fees to reduce overall borrowing costs
  • Improve your credit score or apply with a co-signer to increase your chances of getting the most favorable terms
  • Don’t overspend if you’re using a credit card or line of credit
  • Set up automatic payments to never miss a payment
  • Monitor your monthly statements
  • Consolidate high-interest debt into one streamlined payment

Advantages and Disadvantages of Personal Loans

Depending on your financial situation and the purpose of the loan, a personal loan may be the right move or one you should skip.


Lower introductory APR than credit cards. For consumers with strong credit, personal loans typically have lower APRs than credit cards. While some credit cards offer 0% interest during the introductory period, the rate is usually higher after the period ends.

Fixed rate and monthly payments. Personal loans have fixed rates and monthly payments for a set term, so you always know what you owe and for how long. Other financing options such as home equity lines of credit have variable rates which can mean monthly payments can fluctuate.

Flexible loan amount. Depending on the lender and your creditworthiness, you may have access to personal loan amounts ranging from $1,000 to $100,000. The range caters to a wide variety of expenses, from minor emergencies to major home improvement projects.

No collateral. Unlike home equity loans that require you to secure the loan with your home, unsecured personal loans do not require collateral. You risk damaging your credit if you can’t pay, but you won’t lose any assets.


The maximum APR may be higher. If you have a low credit score, the APR on a personal loan may be higher than the credit card APR.

Potential fees. Borrowers may have to pay fees — such as origination or late fees — along with their loan repayments.

Increase in debt. Taking out a personal loan adds debt to your budget, so it’s important to factor in the additional liability and feel comfortable repaying it.

How 2022 Fed Rate Hikes Affect Personal Loans

To combat inflation, the Federal Open Market Committee (FOMC) raised interest rates by three-quarters of a percentage point in June and then again in July, September and November.

A rise in these rates affects the personal loan interest rates. Most personal loans have fixed interest rates, so borrowers who already have personal loans need not worry. However, those looking to take a personal loan may face higher interest rates.

The average personal loan interest rate has increased from 10.41 percent in early May 2022 to 11.27 percent as of November 2, 2022. Personal loan interest rates are likely to continue to rise if the Fed hikes the prime rate again in its next meeting.

Despite rising interest rates, there are things borrowers can do to cut costs when taking out a personal loan. The rate you get from a lender depends on factors within your control such as your credit score, desired loan amount and current debts.

If you want to take out a personal loan and qualify for a better interest rate, here are some things you can do:

Pre-qualification. If you’re not sure what interest rate you might qualify for with a lender, the easiest way to find out is by prequalifying online. Most lenders allow you to do this without damaging your credit score. Prequalifying can help you decide between lenders as well as help you determine what work you may need to do.

Check your credit. Your credit score affects the rates and lenders you qualify for. Knowing where you stand can help you figure out where to look. If you have less than stellar credit, bad credit loans have reasonable interest rates for borrowers with poor credit.
Pay off other debts. If you have the time and are able to do so, it’s smart to reduce existing debt before taking on more. Having less debt increases your chances of getting a lower interest rate when you apply for a personal loan.

Reduce your loan amount and repayment term. If you can afford it, taking out a small loan can be smart. The bigger the loan you take, the higher the interest rate is likely to be. Additionally, larger loans come with longer repayment periods, which means you’ll pay more interest over the life of the loan.

Apply with a co-borrower. Applying for a loan with someone else can qualify you for a lower interest rate, especially if your co-applicant has strong credit.
Shop around and compare rates. Each lender offers unique features, requirements and benefits. It’s always important to do your research and pre-qualify with a few lenders before deciding on one. The best lender for someone else may not be the best for you.



We reviewed 29 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and application process. We have selected the 10 best lenders based on the weightage assigned to each category:

  • Loan Details: 20%
  • Loan Cost: 35%
  • Eligibility and Accessibility: 20%
  • Customer Experience: 15%
  • Application Process: 10%

Within each major category, we also considered several characteristics, including available loan amounts, repayment terms, APR ranges and applicable fees. We also looked at minimum credit score requirements, whether each lender accepts co-signers or joint applications, and the lender’s geographic availability. Finally, we evaluated each provider’s customer support tools, borrower benefits and features that make the borrowing process easier—such as pre-qualification options and mobile apps.

Where appropriate, we awarded partial points based on how well the lender met each criterion.




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