What is a Personal Loan?

One kind of loan that you can get through a bank, credit union, or internet lender is a personal loan. In contrast to purpose-specific loans such as mortgages and auto loans, personal loans are usually unsecured, which means that no security is required.
Personal loans are flexible and can be used for several things, such as paying for home upgrades, paying for medical bills, consolidating high-interest debt, or even taking a vacation.
Personal loan interest rates might differ significantly depending on the lender and your creditworthiness. APRs, or annual percentage rates, must be compared to fully comprehend the cost of the loan, which comprises the interest rate as well as any additional fees.


The Types of Personal Loans
 

• Unsecured Personal Loans: These loans are dependent on your creditworthiness and don't demand collateral. They are flexible and can be used for a number of things, such as financing home renovations or debt consolidation.
• Secured Personal Loans: Secured loans are backed by collateral, such as your car or savings account. They usually have lower interest rates, but if you are unable to make payments, you run the danger of losing the collateral.
• Signature Loans: Signature loans, also referred to as unsecured personal loans, depend only on the borrower's creditworthiness and do not require collateral. The principal guarantee is the borrower's signature on the loan agreement. Signature loans have variable interest rates depending on credit ratings and loan periods, making them perfect for a range of personal costs.
• Co-Signed Personal Loans: A co-signer with stronger credit can assist you get a loan if your credit history isn't the best. Repayment is equally the co-signer's responsibility.
• P2P Loans: Peer-to-peer lending does away with traditional banks as middlemen by allowing loans to be made directly from people via internet platforms. While investors finance these loans, borrowers disclose their loans with details like the amount and interest rate. P2P loans are flexible and can be used for financing small businesses or debt consolidation.
• Salary Advance Loans: These loans are intended to assist you in bridging the gap between paychecks by offering a temporary fix for pressing financial issues.
• Wedding Loans: Planning a dream wedding? Wedding loans can help you enjoy your wedding day stress-free by paying for everything from the venue to the flowers.
• Medical Loans: Medical loans are a useful tool for securing the money you need to pay for unanticipated medical bills and maintain your health.
• Education Loans: Education loans can assist you in paying for tuition, books, and other expenses, whether you're going to college or just want to support your child's educational endeavors.
• Travel Loans: Are you ready to go on your ideal vacation? Travel loans provide you with various repayment choices so you may travel the world and make lifelong experiences.
• Debt Consolidation Loans: By combining high-interest loans into a single, affordable payment, these loans may lower your interest rates.
• Travel Loans: Are you ready to go on your ideal vacation? Travel loans provide you with various repayment choices so you may travel the world and make lifelong experiences.
• Lines of Credit: A line of credit gives borrowers access to a fixed credit limit that they can use as needed. Since interest is usually only assessed on the borrowed amount, it is an adaptable option for unforeseen short-term costs. Credit lines are useful for handling a range of financial requirements. They can be unsecured, meaning they don't require collateral, or secured, meaning they are backed by it.
   

Applying for an Online Personal Loan

Stage 1: Application
During this first phase, you will complete an online form with pertinent information such as the loan amount you would want to borrow, why you need the loan, and your personal information. You can also be questioned about your housing status and income level.

Stage 2: Pre-Qualification
The lender now performs a soft credit check, which has no effect on your credit score in contrast to a hard credit check. The lender decides the loan amount, terms, and interest rate that you may be eligible for based on your credit score and the information that you have submitted.

Stage 3: Document Submission
You will finish the application procedure once it has been pre-approved. A hard credit inquiry could be made during this time, which could have an impact on your credit score. Make sure you have your driver's license or passport, evidence of residency (energy bills, rental agreements, etc.), and pay stubs from your place of employment on hand in order to speed up this process.


What Documents Are Needed for a Personal Loan?

Lenders frequently want documentation to confirm your identification, income, and financial stability when you apply for a personal loan. Pay stubs, tax returns, bank statements, and forms of identity (such as a driver's license or passport) are examples of common papers.
In order to speed up the loan application process and improve your chances of acceptance, you must provide correct and comprehensive documentation.


What's the Interest Rate (APR)?
 
When applying for a personal loan, one item that you should give serious consideration to is the interest rate. It is essential to be aware that the annual percentage rate, often known as the APR, considers not just the interest rate but also any other fees that are associated with the loan.

If you compare the annual percentage rates (APRs) that are offered by a number of different lenders, you will be able to determine the true cost of the loan and make an educated decision.

How Much Can I Borrow?
 
You can often borrow anywhere from $1,000 to $100,000 with a personal loan, however the exact amount will depend on the restrictions imposed by the lender as well as your creditworthiness. It's possible that various lenders have varying maximums.

It is essential to evaluate both your current financial situation and the loan terms offered by a variety of lenders to select the one that will meet your borrowing needs most effectively.

What's the Loan Term?
 

The repayment period for personal loans often ranges anywhere from one to five years. The loan period that you choose will have an effect on both the total amount that you will pay in interest as well as the monthly payments that you make.

When the loan term is stretched out over a longer length of time, the monthly payment amount is reduced; however, the overall interest cost may increase. When you take out a loan with a shorter term, your monthly payments will likely be greater; nevertheless, you may end up paying less interest overall for the loan.

How to Choose a Lender

Shop around: Compare several top lenders

It should go without saying, but don't choose the first lender you come across. To acquire the best rates and ultimately save money, make sure to cast a broad net and dedicate a significant amount of time to reading internet reviews and comparing the top personal loan providers. You are the customer, the firm is trying to get your business, and they will probably try to work things out in the middle. If the conditions the company is offering you don't work for you, feel free to seek elsewhere.

Make sure the lender is legitimate

Is the reputation of the lender good? Do you find a lot of internet complaints? Are the customer service representatives responsive? It's important to carefully examine the company's history to determine its legitimacy, length of operation, and level of client-building experience.

Check the fees and charges

Your loan's cost isn't just determined by the interest rate or the amount you borrowed; origination fees, late fees, processing fees, and other costs are sometimes added on top of this. Verify that the costs won't be an excessive burden before adding them to your list of things to think about.

In order to choose the best personal loan provider for you, you must first determine what your needs are as a borrower, compare lenders and then see which one can fulfill those needs at the best rate possible.

Some of the key criteria that you should check when comparing loan providers are:

• Maximum Loan Amount: While some internet lenders only provide $1,000 loans, others provide loans up to $100,000.
• APR: Various lenders will offer you varying annual percentage rates (APRs), therefore it's critical to choose rates that you can afford.
• Loan Term: You should check with your lender about the exact timeframe for loan repayment as they might vary from months to years.
• Qualifications: While some lenders will be more lenient, others will demand that you have an outstanding credit score in order to provide you a loan. You might also need to present documentation of your income or job. It is best to check the lender's minimum requirements before wasting time applying for a loan.
• Simplicity and Speed: The fact that internet lenders typically eliminate a large portion of the paperwork from the process gives them a significant edge over banks. For the borrower, this translates into a speedier and simpler process. You may receive money from certain lenders in as short as a few days.

How Can Our Site Help You?
 

Are you confused by the abundance of loan companies when you find yourself in need of a personal loan? Getting a personal loan has never been easier thanks to our online comparison tool. To help you discover the right personal loan for your circumstances, we provide a detailed explanation of the many options available, including as unsecured, secured, signature, co-signed, P2P, and more. You'll be able to compare each lender's qualifications, loan amounts, annual percentage rates, and payback terms with ease thanks to the data we provide. To ensure your financial security, we will guide you through the maze of personal loan options. You can save yourself time and work by comparing the best lenders to get the one that meets your specific borrowing needs. Our mission is to make your search for a personal loan simple, legitimate, and economical.


Terms And Conditions for Example:

* Achieve Limited Offer Terms and Conditions:

The financial solutions for which you will be evaluated are offered by service providers with which we are affiliated and/or compensated by who participates on our website. Terms and conditions apply to each, and not all are available in every state.

Achieve.com, a d/b/a of Bills.com, LLC (NMLS ID #138464) operates as a marketing lead generator for affiliates and non-affiliates, and as a broker for loans and debt resolution services offered by its affiliates. We also offer certain mobile applications that allow consumers to view and analyze their finances. We may take applications for our affiliates, but we do not make credit decisions, originate loans, process consumer loans or bill payments, or provide any other financial services. We do not collect any fees or other compensation from consumers.

Personal loans are available through Achieve Personal Loans (NMLS ID #227977), originated by Cross River Bank, a New Jersey State Chartered Commercial Bank or Pathward N.A., Equal Housing Lenders and may not be available in all states. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, credit usage and history. Loans are not available to residents of all states. Minimum loan amounts vary due to state specific legal restrictions. Loan amounts generally range from $5,000 to $50,000 (including the origination fee) and are offered based on underwriting conditions and loan purpose. APRs range from 7.99 to 35.99% and include applicable origination fees. Repayment periods range from 24 to 60 months.

For example: A four-year $20,000 loan with an APR of 18.34% would have an estimated monthly payment of $561.60 and total cost of $26,956.80. To qualify for a 7.99% APR loan, a borrower will need excellent credit, a loan amount of $12,000.00 or less, and a term of 24 months.

Loan origination fees vary from 1.99%to 5.99%, most loans have a fee of 4.99%. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to pay off qualifying existing debt directly; or showing proof of sufficient retirement savings, could help you also qualify for a lower rate. Average interest savings for personal loans range from 0% - 6% based on closed loans that qualified for one or more of our rate discounts in July 2022.

†Times noted are estimates and can vary for a loan request from Achieve Personal Loans (NMLS#227977). Same day approvals assume that a fully completed application with all required supporting documentation is provided early enough on a day that our offices are open. Achieve Personal Loans consultants are available Monday–Friday 6AM to 8PM MST and Saturday–Sunday 7AM to 4PM MST.

* LightStream Limited Offer Terms and Conditions:  
 

*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 4.99% APR with a term of 3 years would result in 36 monthly payments of $299.66. SunTrust now Truist is an Equal Housing Lender. © 2020 Truist Financial Corporation. SunTrust®, Truist, LightStream®, the LightStream logo, and the SunTrust logo are service marks of Trust Financial Corporation. All rights reserved. All other trademarks are the property of their respective owners. Lending services provided by SunTrust now Truist Bank. You can fund your loan today if today is a banking business day, your application is approved, and you complete the following steps by 2:30 p.m. Eastern time: (1) review and electronically sign your loan agreement; (2) provide us with your funding preferences and relevant banking information; and (3) complete the final verification process. After receiving your loan from us, if you are not completely satisfied with your experience, please contact us. We will email you a questionnaire so we can improve our services. When we receive your completed questionnaire, we will send you $100. Our guarantee expires 30 days after you receive your loan. We reserve the right to change or discontinue our guarantee at any time. Limited to one $100 payment per funded loan. Truist teammates do not qualify for the Loan Experience Guarantee.


* SoFi Limited Offer Terms and Conditions: 
 

Terms and conditions apply. Limited time offer, for applications started before 1/1/2021 and funded before 1/16/2021. Not available to residents of Ohio and cannot be combined with any other offer, bonus, or discount. To receive the $350 holiday bonus offer, you must: (1) click the link in the promotion; (2) start your loan application before 1/1/21; (3) fund your loan before 1/16/21; (4) have and provide a valid US bank account to receive the bonus; Once conditions are met, you will receive your $350 welcome bonus via automated clearing house (ACH) into your checking account within 30 calendar days. Bonuses that are not redeemed within 180 calendar days of the date they were made available to the recipient may be subject to forfeit. Bonus amounts of $600 or greater in a single calendar year may be reported to the Internal Revenue Service (IRS) as miscellaneous income to the recipient on Form 1099-MISC in the year received as required by applicable law. Recipient is responsible for any applicable federal, state, or local taxes associated with receiving the bonus offer; consult your tax advisor to determine applicable tax consequences. SoFi reserves the right to change or terminate the offer at any time with or without notice.