One of the most powerful financial lessons anyone can learn is simply this: what’s good for the bank isn’t necessarily good for you. More specifically, what a particular bank wants for you isn’t always your best option.
When you’re looking for the best place to get a personal loan, for instance, it’s really in your best interest to shop around. It’s not (usually) that they’re trying to cheat you; maybe you’re just not a good fit for each other. A bank that specializes in high-net-worth individuals, for instance, may just not have the kind of financial package you need. The best personal loan companies will tell you so and perhaps recommend another institution, but occasionally they do try to fit square pegs into round holes. Don’t let this happen to you!
Luckily, this is the 21st century, and you no longer have to walk, cap in hand, from one bank branch to another to see which can give you the best deal. There are a couple of online services take a lot of the work (and guesswork) out of this process. How to get the most out of them is what this article is all about.
Table of Contents
- 1 What Is a Personal Loan?
- 2 When a Personal Loan Is Not What You Need
- 3 What Makes a Loan Personal?
- 4 When Is Taking out a Personal Loan a Good Idea?
- 5 Our Top 3 Websites Overall for Finding the Best Personal Loans in 2020
- 6 Where to Find a Top Personal Loan Offers for Good Credit Ratings
- 7 The Best Place for Personal Loans if Your Credit Is Low
- 8 The Best Place to Get a Personal Loan if Your Credit Score Is Modest but Passable
- 9 How the Best Personal Loan Companies Outperform Credit Cards
- 10 How Did We Pick These Top Personal Loans Sites?
- 11 Some Tips for Finding the Best Personal Loans
- 12 How to Get a Personal Loan as Quickly and Cheaply as Possible
- 13 How Can We Help You?
What Is a Personal Loan?
You might be anxious to get busy with actually finding the personal loan that’s right for you, but please hold your horses for a moment. Before we jump right into the meat of this topic, it’s important to make sure that we’re all on the same page as far as some basic terminology and concepts are concerned. Working through the following section may seem boring, but trust us, you really should understand exactly what you’re getting yourself into before you even start the application process.
When a Personal Loan Is Not What You Need
To start off with, if you need to borrow some cash to buy a car or build an addition to your house, a personal loan is probably not your best bet. Since you are buying or creating something that has real value and will keep that value for the foreseeable future, you automatically have collateral, which immediately brings down the interest rate you’ll have to pay.
Similarly, if you run a business (even if the only employees are you and your cat), you should probably be looking at a small business loan. Assuming that you’ve been trading for a couple of years, you probably have piles of financial statements to help prove that you’ll be able to make the payments. You’ll also be able to explain, in the dollars-and-cents terms that banks understand best, exactly what you plan to do with the money to earn even more.
What Makes a Loan Personal?
More freedom with regards to that last part is pretty much what defines a personal loan. The bank may ask you on what you intend to spend the money, but they don’t really care. If you take out a bad credit car loan, you can’t use that borrowed money on anything but a vehicle, and probably a specific vehicle at that.
The funds from a personal loan can be spent on consolidating existing debt, medical expenses, a holiday (Christmas loan, etc.) or whatever you wish. You don’t even have to use this money for its intended purpose; as long as you keep up with the payments, you’re welcome to spend it as needed. Depending on the terms and conditions of the lender, you might be able to pay the principal back immediately with only a modest surcharge in case you realize you don’t actually need the money. Once you’re approved, which may be done online, the cash is available as a lump sum, very quickly.
Personal loans are also typically unsecured, meaning that they’re not backed by any collateral. This implies two things:
- Because the bank is taking a larger risk, interest rates for personal loans tend to be higher than mortgages or other secured loans. It is possible, but not very common, to supply collateral of some kind to negotiate a lower rate.
- Unsecured personal loans are also more difficult to get. Without collateral, your credit score and financial situation become much more important. Still, especially with expert help, it is possible to borrow up to $50,000 at a reasonable rate.
With this in mind, it might seem like it would be a good idea to offer collateral if you’re at all able to. There is a danger to this, though: if you fall too far behind on your repayments, the bank may take out a lien against that asset, meaning that you will probably lose it even if it’s worth more than the outstanding amount. You will also be legally unable to sell the item pledged as collateral until the loan is paid in full.
When Is Taking out a Personal Loan a Good Idea?
Sometimes, people have to borrow money because they simply don’t have any better options. We sincerely hope that you’re not reading this because you’re in that position right now, but life is imperfect. Stuff happens. Just because you really need money immediately isn’t a reason to fall prey to lenders that operate on the fringes of the law and ethics. Let’s look at a few examples of how you might be forced to take out a cheapest personal loan:
- You’ve been hit by a tax bill you didn’t know you had. The IRS is generally pretty good about working with you to clear any debts with them as long as you’re cooperative, but it may be better for you and your credit rating if you pay them in a lump sum.
- Taking out funeral insurance is something everyone over a certain age should really do. If someone doesn’t, unfortunately, it’s their relatives who end up holding the bag. A quick small loan may be the only way to get enough cash together for a proper sendoff.
- If you unexpectedly have to stop working due to illness (cancer, coronavirus, etc.) or other causes, it might take some time for your benefits and retirement plan to activate. A personal loan can help you bridge the gap.
On the other hand, taking on debt can certainly be part of a deliberate, growth-focused financial strategy. Fortune 500 companies and governments do it all the time. You do, however, need to have a hard, objective look at your current financial position and your future plans before taking the plunge. Some good reasons to look at a personal loan are:
- You’re planning to sell a property and you want to improve or repair it to jack up the price. If you’re reasonably sure of getting an offer within a few months, you might turn a profit far in excess of the interest you’ll end up paying.
- Some events come around only once in a lifetime. You may not have enough cash on hand to cover your dream honeymoon or snatch up a rare collectible at auction. You might even feel moved to pay for something like this as a gift.
- Maybe you just feel like treating yourself: take an ocean cruise or buy something you’ve always wanted. As long as you’re capable of making the payments without straining your cashflow, there’s nothing wrong with this.
Our Top 3 Websites Overall for Finding the Best Personal Loans in 2020
Right now in 2020, there are probably more lenders offering personal loans than ever before. This certainly gives the average person more options, but can also make looking for the best deal incredibly complicated and time-consuming.
Fortunately, there is a solution. There are a number of online services which will process your details, including your credit rating, the amount sought and how you intend to repay it. They then contact dozens of loan companies on your behalf, determining which offers the lowest rate and placing you in touch with the one that will suit you best. Here are three of those we consider top in the field, regardless of your credit rating:
PersonalLoanOnline is all about making the process of applying for a loan as simple as possible, even if paperwork normally frightens you. Depending on how competitive your application is, they may suggest up to five different deals you’re eligible for, and you can apply for loan amounts up to $35,000. They actually specialize in larger amounts; for sums under $1,000, another option like MidWeekPay might work better. It’s recommended that, instead of immediately clicking on the amount you want, you scroll down until you see the various options relating to what you need the loan for. These include:
- A large one-time purchase;
- Consolidating your debt, especially credit card balances;
- Help with buying a car;
- Paying medical bills;
- Starting or growing your own business.
Some of the lenders PersonalLoanOnline partners with won’t even look at this information, but to others, it’s very important. This may make a huge difference when determining which is the best place for personal loans that match your particular circumstances.
If, for instance, you want to use your loan to convert the credit card debt (which you’ve already been approved for) into a single loan with a lower interest rate, you’re actually improving your financial situation. If you want to use it for business purposes, chances are that you’ll be using the money borrowed from them to earn more, which will, in turn, be used to pay off the loan. In either case, stating what the loan’s intended use is can help you get a better interest rate.
This website makes it easy to quickly request smaller amounts of money, from a minimum of $100 up to $5,000 (which may take a little longer to process). Typically, once you’ve been accepted and signed the contract, digitally and on your mobile device if you prefer, you should see the money appear in your bank account the very next working day.
Unlike some other top personal loans sites, MidWeekPay first classifies applicants based on their geographic location, specifically their Zip codes. One thing that’s nice about this website is that they make it very easy for you to use them again the next time you need a little extra cash before payday comes around. Simply click on “Returning Customer” at the top right corner of your browser, enter your phone number and part of your Social Security number, and you’re nearly there.
GetFundsOnline is a direct competitor to MidWeekPay and works very similarly. Both will use your Zip code to direct you to the best personal loans 2020 has to offer. Unfortunately, some states have laws that prohibit certain types of loans; if you live in one of these, the website will inform you that you are out of luck.
Here are a couple of things you should really keep in mind:
- Neither website charges you for using their services.
- If and only if a loan is made, the lending company pays them a small referral fee, which doesn’t come out of your pocket.
- There’s absolutely zero obligation on you until you’re approved and you agree to the offered terms.
To sum up the above: if you’re going to take on a financial obligation for the next three to twelve months, it’s really worth your while to look closely at all your options. You might as well put in your details on both MidWeekPay and GetFundsOnline and see which one connects you to the better lender. All of the loan originator websites we recommend, by the way, have strict privacy policies and use secure servers, so your personal information is safe with them.
Where to Find a Top Personal Loan Offers for Good Credit Ratings
Having a top-notch credit rating doesn’t happen overnight or by accident. Instead, it’s usually built up over the course of years, and doing so sometimes requires that you sacrifice some present enjoyment for future advantage.
If you’ve been doing all the right things for long enough, though, you’ll reap the rewards when you need money fast. Even if your current financial circumstances aren’t totally rosy, you’ve demonstrated to banks and other lending institutions that you can be trusted with money. They will be actively looking for your business, and one of the ways they compete for it is to offer you unusually low interest rates, even on an unsecured loan.
One of the online loan aggregator websites that specializes in rapidly securing personal loans for people with above-average credit is Loans Lab. They aim to build long-term relationships with their customers and make it exceptionally easy to re-apply for additional loans. The amounts they typically deal in are also on the lower end of the spectrum ($100 to $5,000), making them a good option for people who have decent credit but often need a little assistance before payday comes around.
Requests normally take between one and two days to be processed, although this process is often completed in under 24 hours, especially if you’ve done business with them before and you have all your necessary documentation in order. Please note that, like most of the websites we recommend, LoansLab requires you to receive a regular income to qualify for the best place for a personal loan in 2020, preferably in the form of formal, salaried employment.
If you need money to take care of some unexpected emergency, seeing what kind of deals on Cash Request Online fit your general profile is a good first step. Requesting cash amounts of up to $5,000 is surprisingly easy assuming you meet some basic requirements, and you will usually receive a personalized answer the next business day. It’s actually not unusual to be approved, pending the lending institution receiving any necessary documents and your electronic signature, within less than an hour after clicking “Submit”.
As with any broker or financial services website, CashRequestOnline cannot guarantee that you’ll be accepted for a top personal loan for good credit. This decision is out of their hands: the actual contract you sign will be between you and the lending organization. What this website does is point you in the direction of the bank or online lender where you’re likely to receive the best possible deal with a minimum of fuss and hassle.
The Best Place for Personal Loans if Your Credit Is Low
There’s an old joke that describes the situation pretty accurately: banks will only give a loan to people who can prove they don’t need one. There is some truth to that statement, but it’s not time to give up hope just yet, even if your credit rating isn’t exactly stellar.
The best place to get a personal loan if you’ve had some money troubles in the past will usually be an online lender that specializes in unsecured high-interest loans. Instead of competing directly with traditional banks, they take the time to look at factors other than your bare-bones credit rating.
Don’t expect them to fall over themselves trying to help you, though. You will probably be limited to amounts under $5,000 and pay interest at over 30%. They’re also likely to ask for more paperwork, including proof of your employment and current finances. Still, it is possible even for people with credit scores under 600 to borrow at least small amounts, especially if you use an online loan aggregator.
Direct Loan Transfer is one online service designed to bring people in temporary financial distress together with organizations willing to make loans traditional banks won’t even consider. They support loans of up to $2,000 in value. You should understand, though, that someone with a poor credit rating in a difficult financial situation will often pay higher interest rates on larger amounts.
Some websites will recommend as many as five or more lenders that may be willing to let you borrow on the terms (amount, repayment period, etc.) you’ve specified; DirectLoanTransfer.com will usually introduce you only to the best, meaning the one offering the most affordable interest rate. This makes it more difficult to compare other aspects of the agreement, such as any applicable fees and late payment penalties. Still, that kind of stuff is not always important when you really need cash fast with a minimum of delay and paperwork.
You’ll also be happy to know that DirectLoanTransfer prides itself on protecting their clients from unscrupulous practices. They will never refer you to a lending organization that’s known to take advantage of people in a tight spot, and they’ll be happy to give advice if something in the loan contract seems fishy to you.
As long as you are a United States citizen or permanent resident with a Social Security number and older than 18 years, Lendmobi will consider your application for a short-term, unsecured loan of up to $5,000, regardless of your credit score. Of course, it goes without saying that you will have to prove to any lender that you’ll be able to repay the principal plus interest. This usually means producing pay stubs or demonstrating that you receive Social Security benefits, but Lendmobi.com tends to be more flexible with people who are self-employed or work part-time.
Although they are willing to work with people who have a poor credit history, you should know that neither Lendmobi nor any broker or loan originator can promise that your application will be successful. If it is, you will probably be offered a very unattractive interest rate: more than 30% is common unless you can offer a car or house as collateral (which may not be your best option). With something over 100 loan providers in their network, though, there’s a good chance that at least one will be willing to write a loan for you. Assuming that you keep up with the payments, your next loan is likely to be both simpler to get and easier on your pocket.
The Best Place to Get a Personal Loan if Your Credit Score Is Modest but Passable
Most people have an average credit rating – that’s kind of what “average” means. Strangely enough, if you find yourself in this position, you should actually spend more time and energy on searching for a loan with the best possible terms.
While people with poor credit have only a limited number of options to begin with, and individuals with outstanding scores can take their pick of what’s available, there are a whole bunch of lending companies that are more or less suitable for people who fall near the middle. Each of these has different policies, requirements, and loan-making algorithms. Without some help, you can tie yourself in knots figuring out which one is actually offering the best deal.
In today’s economy, lending organizations are exceptionally willing to grant loans to qualifying applicants. Each has its own specific requirements and ways of determining the risk (and hence interest rate) attached to any given customer, which makes approaching them one by one a very tedious, difficult affair. If you search for a personal loan in this way, you’re almost certain not to get the best possible deal.
Start Fresh Funding takes a lot of the pain out of trying to navigate this minefield. You’ll still need to spend some time reviewing the specific terms and conditions offered by different lenders, but with this website, loan companies come to you rather than you to them. You can compare your various options by interest rate and also quickly see how (for instance) changing the repayment period affects how much you’ll end up paying.
With StartFreshFunding, the entire process, from filling out a short form to receiving the desired amount in your bank account, usually takes under 48 hours. They typically handle loans of between $100 and $5,000, but will also work with larger amounts by special request.
This company emphasizes speed and convenience. Filling out their online form takes only about five minutes, after which they’ll poll different lenders to find the offer that best suits your needs. You don’t have to take any action whatsoever during this stage.
Once a suitable match between loan applicant and lending institution is found (which generally takes between a few minutes and a couple of hours), you will be notified and given the opportunity to check whether the loan conditions are acceptable to you. If they are, you should receive cash money in your bank account within no more than two days.
Remember: like every website we recommend in this blog post, using QuickCashOnline is totally free of charge, nor does it entail any obligation on your part until the moment you actually sign an electronic contract. If you’re financially stretched and weighing your options, you’ve got absolutely nothing to lose by seeing what kinds of personal loan you qualify for. Since you can choose to let Quick Cash Online store your personal information for future use, this takes only a minute – unless your circumstances change, you only need to fill out the form once.
While many people fear to get into debt and perhaps don’t have the greatest credit rating, you might be surprised at how cheaply you can sometimes borrow money. This is often a better option than, for instance, cashing out an investment prematurely.
How the Best Personal Loan Companies Outperform Credit Cards
Credit cards and personal loans have a number of things in common: both are unsecured, relatively easy to get and very handy in a pinch. They are not the same, though, which is why personal loans are the fastest-growing category of consumer debt.
- First of all, credit cards usually charge higher interest rates than personal loans for people with the same credit rating. The national average for credit cards with awful credit is currently 17.71%; use one of the websites we recommend above to see if you can’t do much better with a personal loan.
- With a personal loan, you have to apply anew each time you want to borrow a lump sum, forcing you to plan ahead. Credit cards are always in your wallet, making it easier to make impulse purchases, which is one reason many people struggle to control their credit card debt.
- Unlike with credit card purchases, you have to be approved for each new personal loan. This can stop you from taking on dangerous levels of debt without realizing what’s happening.
- When you need to finance a large expense, the limit on your credit card will probably not be sufficient. With personal loans, you are able to borrow $25,000 or more at once.
This doesn’t mean that taking out a personal loan is better than using your credit card in every instance. Many personal loans have a minimum as well as a maximum repayment period, meaning that you’ll have to carry that debt for longer than you might want to, even if you have the cash to pay it off. Also, credit cards are far more convenient – you wouldn’t exactly take out a personal loan every time you want to buy groceries!
How Did We Pick These Top Personal Loans Sites?
There are many more loan originator websites out there than the dozen-or-so we’ve decided to include here. Some of those sites I wouldn’t trust with my Social Security number if you paid me. Why, then, did we select the ones we did instead of others? Here are a few of the characteristics we insisted on:
- Credible: Anyone can register an internet domain ending in any suffix. Just because a website’s URL is scammyloans.com doesn’t tell you a thing about where they are located and which country’s laws they have to follow. A website that claims to steer you towards the best place to get a personal loan, but doesn’t have a physical business address in the United States, might not be one you should trust.
- Free: All of the sites we recommend let you use their services without paying for it and without any obligation on your part. If an online personal loan aggregator asks you for money upfront, you’re probably better off just giving it to a broker who has a physical office near you.
- Unbiased: These websites do receive a commission if they refer somebody to a loan company and a transaction occurs, but they don’t favor one provider over another based on this fact. They just show you the best available deals, regardless of how much they will earn if you pick one over another.
Some Tips for Finding the Best Personal Loans
When you are looking for an unsecured loan, you have to be realistic in your expectations. Even if a particular lending institution advertises a great interest rate on personal loans, that doesn’t mean you qualify for it. The very first thing a loan officer will look at is your credit score; this is as inevitable as compound interest and taxes.
The following table offers a very rough guide to how your credit rating affects your interest rate. These numbers can vary considerably depending on economic conditions, your personal circumstances, any prior experiences with specific lenders (such as Cash Net USA, etc.) and even the phase of the moon.
How to Get a Personal Loan as Quickly and Cheaply as Possible
- Just using one of the loan aggregators we’ve listed here is already a good first step. If you choose a financial institution you already have a long-standing account with, they may offer you a special rate…but this isn’t necessarily the case, so check out all your options.
- Keep an eye out for “hidden” fees, including application, origination and monthly fees. Many loans also involve late payment and early-payoff penalties. These aren’t really hidden – by law, the lending institution has to disclose them to you – but many people don’t bother reading the fine print. The APR rate includes normal fees, but penalties may mean you end up paying more.
- Understand the difference between variable and fixed interest rates. Almost all unsecured personal loans have a fixed rate, but this is just good advice in general.
- Ask for a different repayment schedule. If you take a loan that runs for 12 months instead of 6, you’ll end up handing over more cash in the long run, but the individual payments will be easier to manage.
- Get a copy of your credit report and fix what you can. Credit reports do sometimes contain errors or data that are out of date.
- Have your ducks in a row: the more documentation you can provide about your financial situation (including other debts), the more likely it is that your application will be processed quickly and favorably.
- If you can provide collateral that the lending company will accept, you may choose to do so and get a much better interest rate. Some assets, like real estate, may require an appraisal, while some lenders are only interested in making unsecured loans. Keep in mind that a lien can cause you to lose that asset if you fail to make payments on time.
- This might not be an option, but if you can pay off any existing debt before applying, you will be offered a better rate. Lenders definitely pay attention to your debt/income ratio.
- If you have a partner but you’re not married, consider pooling your resources and co-signing the loan.
How Can We Help You?
We do the research so you don’t have to. We’re passionate about helping people to take control of personal finances. If this is something you would like to do, fill out the simple form below for more tips and advice. If you’d like to see us cover a particular topic, by all means, let us know. We can’t fulfill every request, but we will try out best.