Personal loans are available from traditional banks, credit unions, or online lenders. Borrowers receive a lump-sum payment that can be used for any legal personal expense.
Loan amounts generally vary between $1,000 and $50,000, although some lenders offer up to $100,000.
Refer to the comprehensive guide below for detailed insights on personal loans worldwide.
What is a Personal Loan?
A personal loan is a lump-sum financial option from banks, credit unions, or online lenders globally.
You can utilize this financing for multiple needs, such as medical bills, auto repairs, home improvements, or debt consolidation.
These loans usually have repayment periods ranging from two to seven years, and interest rates start at 3% for highly qualified borrowers.
The 10 Best Personal Loans of 2024
Explore the top ten personal loans globally as of September 2024, ideal for various financial purposes and offering more flexibility than credit cards.
When selecting a lender, assess the monthly payments and reviews from sites like Trustpilot. Opt for preapproval via a soft credit check to safeguard your score while comparing your options.
Note: Rates, fees, and loan amounts are accurate as of August 30, 2024, but may change.
1. LightStream Personal Loans
LightStream offers personal loans ranging from $5,000 to $100,000 with APRs between 6.99% and 25.49%.
These loans are available for durations from 24 to 144 months. LightStream distinguishes itself by not charging origination or late fees and potentially funding loans on the same day of approval.
Additionally, if you find a lower rate for an unsecured personal loan elsewhere, LightStream promises to beat it by 0.10%.
2. BHG Money
BHG Money, part of BHG Financial based in Florida, provides personal loans from $20,000 to $200,000.
These come with APRs ranging from 11.96% to 25.31% and repayment terms from 36 to 120 months.
BHG Money stands out by offering large loan amounts without collateral and extended repayment periods, enhancing your flexibility in managing larger loans.
3. SoFi
SoFi offers personal loans from $5,000 to $100,000, featuring APRs from 8.99% to 29.49% and terms from 24 to 84 months.
SoFi’s loans are notable for competitive rates, absence of late fees, and same-day funding upon approval.
They also provide unemployment protection, offering modified payment plans and job placement help if you lose your job.
4. PenFed Credit Union
Pentagon Federal Credit Union offers personal loans ranging from $600 to $50,000 with APRs from 8.99% to 17.99% and terms up to 60 months.
PenFed is recognized for its low rates and does not charge origination or prepayment penalties, with funding available within one to two business days after approval.
5. Wells Fargo
Wells Fargo provides personal loans between $3,000 and $100,000 with APRs ranging from 7.49% to 24.99% and repayment terms from 12 to 84 months.
Known for competitive rates and extensive banking services, Wells Fargo offers loan repayment flexibility and extensive customer service resources.
6. TD Bank
TD Bank offers TD Fit loans from $2,000 to $50,000 and APRs between 8.99% and 23.99% over terms of 36 to 60 months.
This bank provides quick financing solutions with no origination or application fees and flexibility in early repayment.
7. American Express
American Express provides personal loans from $3,500 to $40,000, with APRs from 5.91% to 19.97% and repayment periods from 12 to 60 months.
American Express is notable for its low rates and lack of origination fees. It offers a straightforward application process for its cardholders.
8. U.S. Bank
U.S. Bank offers personal loans ranging from $1,000 to $50,000, with APRs from 8.74% to 24.99% and terms up to 84 months (60 months for non-customers).
It is highlighted for its competitive APRs and strong customer support, providing quick funding without origination or prepayment fees.
9. PNC Bank
PNC Bank, based in Pittsburgh, offers personal loans from $1,000 to $35,000 with APRs ranging from 7.89% to 24.74% and terms from 6 to 60 months.
PNC is suitable for short-term, low-amount loans and is ideal for urgent financial needs.
10. Discover Bank
Discover Bank provides personal loans from $2,500 to $40,000 with APRs between 7.99% and 24.99% over 36 to 84 months.
Known for flexible and low-cost options, Discover Bank offers competitive terms comparable to other leading lenders, suitable for various borrowing needs.
Compare Rates
To choose the best personal loan option, comparing APRs across various lenders is crucial.
Below is a breakdown of APR ranges and special features offered by ten financial institutions, helping you navigate the possibilities for securing a personal loan globally.
- American Express: Offers some of the lowest APRs, starting at 5.91%.
- LightStream: APRs range from 6.99% to 25.49%; offers a rate-beating guarantee.
- Discover Bank: Provides competitive rates starting at 7.99%.
- PenFed Credit Union: Offers APRs from 8.99% to 17.99%; no origination fees.
- U.S. Bank: APRs range from 8.74% to 24.99%; offers quick funding without fees.
- TD Bank: Features APRs between 8.99% and 23.99%; no origination fees.
- Wells Fargo: Provides APRs from 7.49% to 24.99%; extensive service network.
- PNC Bank: APRs range from 7.89% to 24.74%, and they are suitable for short-term, low-amount loans.
- BHG Money: Offers APRs from 11.96% to 25.31%; large loan amounts without collateral.
- SoFi: Extends APRs from 8.99% to 29.49%; includes unemployment protection.
Steps to Get a Personal Loan
To secure a personal loan, follow these steps:
- Credit Score Check: Start by obtaining your credit score at no cost through a service provided by your credit card issuer or another online platform. This score informs you of your credit standing and your likelihood of approval. Ideally, your score should be at least 610. For optimal terms, aim for a score of 720 or higher.
- Improve Your Credit: If your score is below 610 or you seek better terms, improve your credit. This can involve reducing your credit utilization or settling outstanding debts.
- Loan Amount Determination: After assessing your credit score, decide the amount you need to borrow. This will be a one-time sum and will incur interest on the entire amount, so it’s advisable to borrow only what is necessary.
- Comparison Shopping: Many lenders offer the option to prequalify, which involves a soft credit check that doesn’t impact your credit score. This step lets you compare different terms and interest rates to find the most favorable options.
- Application Submission: Choose a lender that provides the best conditions for your needs and submit your application either online or in person. Depending on the lender, the approval process can take a few hours to several days.
How To Compare Best Personal Loans
When comparing personal loans globally, focus on these critical factors:
Prequalify When Available
Many providers allow prequalification, which lets applicants provide details like income and housing to gauge probable loan terms without impacting credit scores, as it often involves a soft credit inquiry.
Understand Loan Usage Restrictions
Personal loans cover various needs, including debt consolidation, home improvements, and major life events.
However, usage for postsecondary education, business ventures, and prohibited activities is often restricted. Always verify that your loan’s intended use aligns with the lender’s policies.
Be Aware of Extra Charges
Inquire about potential fees such as origination or late payment fees. Some lenders may offer loans without these additional costs, but they are not common.
Understand how these fees are applied, whether included in the APR or deducted from the loan amount, to determine your required loan sum accurately.
Assess Lender’s Customer Support
Before finalizing a loan, evaluate the lender’s support services. Effective customer assistance is vital for addressing payment issues or financial difficulties during the loan term.
Reviewing other borrowers can provide insight into the lender’s reliability and service quality.
Best Place To Get a Personal Loan
The best sources for personal loans worldwide are:
- Online Lenders: Non-bank companies that specialize in lending offer competitive rates globally. These lenders can disburse funds quickly, often within 24 to 48 hours, making them a practical choice for immediate financial needs.
- Banks: Both local and international banks provide personal loans, which might be advantageous if you already hold accounts with them. They offer additional financial products, potentially simplifying your financial management.
- Credit Unions: Community-based and requiring membership, credit unions are another option for personal loans. They offer the convenience of both online and in-person applications, catering to community members’ needs.
Selecting the right lender involves comparing terms and choosing one that aligns with your financial requirements and offers the best conditions globally.
Alternatives to Personal Loans
Personal loans often provide competitive interest rates and terms when considering financing options, particularly for those with solid credit histories.
However, alternatives suited to varying financial circumstances and credit profiles exist. These alternatives include:
Credit Cards
Utilizing credit cards involves borrowing against a pre-approved line of credit, offering the flexibility to repay over time.
Current average Annual Percentage Rates (APRs) for credit cards stand at approximately 22%, significantly higher than the 12.35% typically seen with two-year personal loans globally.
Personal Line of Credit
This option mirrors credit card mechanics, permitting borrowing up to a set limit during a designated draw period, followed by repayment obligations.
Loans from Friends or Family
Borrowing from acquaintances might offer lower or no interest rates with adaptable terms, though it’s essential to agree on clear repayment terms to prevent relational strains.
Home Equity Loans
These loans enable borrowing against home equity with installment payments. While they generally offer lower rates, the risk is higher as the property guarantees the loan.
Conclusion
In conclusion, personal loans offer a versatile financial solution globally, suitable for various needs with generally favorable terms.
It’s important to compare rates and terms from different lenders to find the best fit for your financial goals.
Assess the lender’s reputation and the flexibility of loan terms to make an informed decision that promotes financial stability.
