APR is short for “annual percentage rate” and represents how much you’ll pay to borrow money on an annual basis. It accounts for the interest rate and any upfront fees, and is expressed as a percentage of the loan amount. Many lenders are required to display APRs over interest rates so you can get a true sense of the cost to borrow money. For example, the average credit card APR is 21.59%, according to Federal Reserve data, while the average APR on a two-year personal loan is 12.49%.
You can also calculate the APR on loans that charge fees instead of interest to better compare the two types. We’ll cover how APR works, how it’s calculated, and how you can save money by comparing APRs.
APR represents the annual cost to borrow money, which is expressed as a percentage of the loan amount. It applies to many different credit products, including mortgages, auto loans, personal loans, and credit cards. It differs from the interest rate alone because it also considers upfront fees, such as an origination fee or administration fee. For example, since credit card issuers don’t typically charge upfront fees, the interest rate and APR on credit cards may be interchangeable.
APR disclosures are designed to make it easier to see how much you'll pay for a loan or other credit account, and to better choose how you want to borrow. For example, APR makes it easy to compare how much you’d pay to carry a balance on a credit card versus taking out a personal loan with an origination fee.
The factors affecting your APR can vary by loan type and lender, but generally include:
| |
|---|
| Credit score requirements vary by lender, but your FICO score generally gives the lender an idea if you’re a risky borrower. Missed payments and delinquencies are also noted in your report. |
| Lenders consider your payment history to determine your risk. If you fail to make payments on time you may have a lower chance of being approved. |
Debt-to-income ratio (DTI) | Your DTI is determined by dividing your minimum monthly debt payments by your gross monthly income. Lenders generally like to see a DTI of 36% to show you aren’t overextended. |
| Secured loans, such as a mortgage or auto loan, generally have lower rates than unsecured loans, like many personal loans and most credit cards. |
In addition to these factors (credit score, history, and DTI), lenders may ask for proof of income and employment in the form of pay stubs or bank statements to evaluate the amount and consistency of your income, which can impact your rate. For example, lenders often have an annual income requirement, such as Upstart which requires that you earn at least $12,000 per year.
When applying for an auto loan or mortgage, lenders use even more criteria to evaluate you and determine your APR. For example, an auto lender may look at your down payment amount and the age of your car. Mortgage lenders, on the other hand, may look at where the home is located and whether you choose a fixed-rate or variable-rate mortgage.
Interest rates, and therefore your APR, are also impacted by the federal funds rate, which the Federal Reserve adjusts in response to economic conditions. For example, when inflation is running high, the Fed may increase the target federal funds rate to slow down economic activity, making it more expensive for consumers and businesses to borrow. In fact, the Fed increased the effective federal funds rate from 5.08% to 5.33% July 27, 2023, which is where it’s remained since.
Good to know:
The federal funds rate represents the cost of borrowing between banks and impacts the prime rate, which is what credit card issuers use as a baseline to set credit card rates.
The following are different types of APRs. Many, but not all, apply generally to credit cards.
- Introductory APR: Some credit card issuers offer low or 0% initial APRs for new cardholders or on balance transfer offers. This rate may stay in effect for six to 21 months. Once the introductory APR period is over, you’ll begin paying the regular APR on the entire balance.
- Purchase APR: This is the APR you’ll pay on credit card purchases after the grace period. If you pay off your balance on-time and in-full every month, you can avoid this APR.
- Cash advance APR: If you need to borrow cash from your credit card issuer, you’ll likely pay a separate APR that is higher than your purchase APR. In addition, the balance will typically start accruing interest right away on any cash advances.
- Penalty APR: If you violate the terms of your credit card agreement by paying late or missing a payment altogether, your credit card issuer may raise your APR temporarily. This is known as a penalty APR.
- Fixed APR: A fixed APR generally stays the same over time, unless you violate your agreement. If your APR is fixed, your lender or credit card issuer must notify you of changes to your APR.
- Variable APR: A variable APR fluctuates with the prime rate, so you may pay more to carry a balance in some months than others. Variable APRs are common with credit cards, and some types of mortgages and student loans.
You can check your credit card statement or credit card agreement to find your credit card's APR. If you don’t have these documents available, you can also check your online account or call your credit card issuer and ask them to disclose your APR. For other loan types, you may also be able to check your statement or contact the lender directly.
The best way to calculate APR is with an APR calculator online, or with an amortization calculator. But, if you want to approximate the APR on a fixed-rate loan using a simple calculator like the one on your phone, use the formula below:
Formula: (Origination fee + total interest) / Amount borrowed / (Number of years in the loan) x 100
Let’s say you take out a personal loan for $20,000 with a term of seven years, an 8% interest rate, and a $200 origination fee. Here’s how you would calculate the APR.
- First approximate the total interest on the loan. You’d do this by multiplying the annual interest rate of 8% by the loan amount and the number of years in the repayment term.
- $20,000 x .08 x 7 years = $11,200
- Then, add the origination fee to the interest amount and divide that by the amount borrowed.
- ($11,200 + $200) / $20,000 = 0.57
- Finally, divide that number by the number of years in the loan and multiply by 100.
- (0.57/7) x 100 = 8.14% APR
However, the true APR on this loan is actually around 8.32%. That’s because as you pay down the loan, interest is only charged on the current balance that month (not on the original balance). APR calculators account for the reduction in principal and interest charges over the course of the loan since most lenders amortize payments.
In other words, even though the amount you pay towards interest decreases (as the principal balance decreases), your monthly payment stays the same.
Tip:
Credit card interest is calculated a little differently. Most credit card issuers use your average daily balance to calculate the interest you owe each day. As the interest is added to your balance, you’ll also pay interest on the interest you accrue.
Annual percentage rate (APR) and annual percentage yield (APY) both deal with interest rates, but in different ways. As previously mentioned, APR is the total expense of borrowing money, including interest and additional fees. APY, however, is the rate of return you can expect from saving or investing money. It represents how much you may earn, including compound interest.
APR generally applies when you owe money, and is used to express rate on:
- Credit cards
- Auto loans
- Personal loans
- Home equity loans
- Home equity lines of credit
- Private student loans
- Personal lines of credit
Whereas APY generally applies when you’re saving money, and is used with:
- High-yield savings accounts
- Money market accounts
- Certificates of deposit
Advertiser DisclosureOverview
Many lenders cap personal loans at $50,000, but LightStream is one of few that lets you borrow up to $100,000. This makes it an ideal lender if you’re looking to finance larger expenses, like home improvements or weddings. Additionally, LightStream doesn’t charge origination fees and APRs start at 6.99%—with the best rates reserved for borrowers with good to excellent credit.
Funds with LightStream may be available as soon as the same day, and repayment terms can last up to 20 years, depending on the type of loan you receive. However, LightStream does not offer prequalification on its site, so you won’t be able to see an estimate of your rates unless you formally apply.
pros
- Same-day funding available
- High maximum loan amount
- No origination fee
cons
- Good credit required
- No prequalification process
- Not available in Vermont
Repayment terms
2 - 20 years, depending on loan purpose
Eligibility
Available in all states except RI and VT
Time to get funds
As soon as the same business day
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Overview
Best Egg ranked second in J.D. Power's Consumer Lending Satisfaction Study, so it should come as no surprise that it’s one of our best picks for a wide range of borrowers. In addition to having relatively low rates and discounts, Best Egg provides loans from $2,000 to $50,000 and may consider applicants with credit scores of at least 600. Terms range from two to five years.
This lender stands out for offering better approval odds for prequalified applicants than many other lenders, according to Credible data. Specifically, prequalified applicants were more than twice as likely to be approved for final loans. Best Egg’s origination fees can reach 9.99%.
pros
- Secured loans available
- Low minimum income requirement
- Scored second in J.D. Power's Consumer Lending Satisfaction Study
- Funds in 1-3 business days
- High close rate on loans through Credible platform
cons
- Origination fees
- No discounts
- Not available in DC, IA, VT, or WV
Fees
Origination fee, late fee, unsuccessful payment fee, check processing fee
Eligibility
Available in all states except DC, IA, VT, and WV
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
Overview
Upstart often has one of the lowest minimum APRs available, making it a solid choice for borrowers with good credit or better. Applicants with poor, fair, or little to no credit may also be considered, as Upstart has no minimum credit score requirement (if you apply on the lender's website) and may accept applicants without scores. This lender offers loans between $1,000 and $50,000 with either three- or five-year repayment terms. Upstart may be ideal for you if you have good credit and can qualify for a low APR, or if you have bad credit and need a lender to look beyond your score.
In terms of its drawbacks, Upstart charges origination fees up to 12% on some personal loans. It also has a maximum APR of 35.99%, which is around the highest rate you'll find with a reputable lender, with no discounts available. Upstart also has fewer repayment term options than most lenders.
pros
- May fund in 1 business day
- No minimum credit score requirement on lender site
- Low minimum APR
- Trustpilot score of 4.9/5 stars
cons
- May charge a high origination fee
- No discounts offered
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
Overview
Splash is a lending marketplace that offers loans up to $100,000 (if you apply via its website) from a wide range of lenders, with next-day funding available with many. If you apply on its website, terms range from two to seven years. Notably, Splash has a live chat feature so you can get real-time answers without having to wait on hold or for an email.
It's worth considering a personal loan through Splash if you have good credit (ideally, a FICO score above 700). Rates are competitive, but borrowers with excellent credit may find lower APRs elsewhere, and origination fees can reach 12% on some loans.
pros
- Excellent customer reviews on Trustpilot
- Funding as soon as the next business day
- Large loan amounts available
cons
- Possible origination fee up to 7.49% (through Credible)
- Other lenders may have lower starting APRs
- No cosigner option
Loan amount
$5,000 - $100,000 (up to $35,000 on Credible)
Eligibility
Available in all states except VT. OH and NM net disbursed amount must be greater than $5,000. MA must be greater than $6,000
Loan uses
Debt consolidation, credit card refinancing, home improvement, major purchases
Overview
LendingClub provides personal loans up to $40,000 with repayment terms between two to five years. The company is a strong choice for borrowers with good credit who don’t need funds fast, as LendingClub does not specify funding times on its site.
You can prequalify directly with LendingClub without having to provide your Social Security number, though you will need to provide it if you formally apply. Origination fees may be charged and range from 3% to 8%. LendingClub doesn’t offer discounts for autopay or direct pay.
pros
- Mobile app
- Low minimum income requirement
- High close rate on loans made through Credible
- Available in all states
cons
- Origination fee
- No discounts
- Funding not as fast as some competitors
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
Overview
Happy Money, formerly known as Payoff, is an ideal lender for debt consolidation and credit card consolidation loans. The company offers APRs starting at 11.72% and loan amounts up to $40,000. You may be able to qualify for a loan with Happy Money with fair credit, but the best rates are reserved for those with good to excellent credit scores.
The company charges origination fees up to 5%, which is lower than some competitors, and you can receive funding in three to five business days once approved. Check to see if loans are available in your area, as Happy Money doesn’t fund borrowers in Massachusetts or Nevada.
pros
- Mobile app
- Live chat
- Low maximum APR
cons
- Limited loan terms available
- No discounts
- Origination fees
- Not available in MA or NV
Eligibility
Available in all states except MA, MS, NV, and OH
Time to get funds
As soon as 2 - 5 business days after verification
Loan uses
Debt consolidation and credit card consolidation only
Overview
SoFi’s personal loan rates are competitive, and that’s far from the only feature that makes this lender one of our best picks for borrowers with good credit. It also offers same-day funding, multiple rate discounts, large loans, and a range of terms — plus no mandatory origination fees. You may be able to borrow between $5,000 and $100,000 and repay it in two to seven years with SoFi.
Unfortunately, SoFi doesn’t allow cosigners, so the lender won’t be a good fit for borrowers with fair or poor credit profiles who want to apply with a friend or family member. SoFi does, however, have a convenient prequalification process than can give you an idea of whether you may qualify for a loan. The lender also provides a seamless online experience and has an admirable Trustpilot consumer review rating of 4.5 out of 5 stars.
pros
- No fees required
- Large loan amounts available
- Autopay and direct pay discounts
- Same day funding
- Long loan terms available
cons
- Good credit required
- 5,000 minimum loan amount
Fees
Option to pay an origination fee in exchange for a lower rate
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
Overview
Avant personal loans are better suited to borrowers with bad credit (a FICO score below 580) than many others because the lender may consider applicants with credit scores in the 500s. Loan amounts up to $35,000 are available, so these loans are on the smaller side. But if this maximum is sufficient, Avant might appeal to you because it offers funding as soon as the next business day after approval and is more likely to approve the applications of prequalified borrowers than other lenders.
That said, Avant’s interest rates are steep, and the lender charges an origination fee up to 9.99%.
pros
- Borrowers with bad credit considered
- Funds as soon as the next business day
- 2-year loan terms available
cons
- No discounts offered
- Origination fee
- Not available in HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
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
Overview
Upgrade offers loans from $1,000 to $50,000 and features competitive APRs, discounts for direct payments to creditors and enabling automatic payments, fast funding (as soon as the same day as approval), repayment terms up to seven years, and nationwide availability. Upgrade even offers secured personal loans, which is not common among lenders, and you don't need to input your Social Security number to prequalify on the website.
Upgrade does charge origination fees between 1.85% and 9.99%, however. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
pros
- Fair credit borrowers eligible
- Autopay and direct pay discounts
- Can fund in as little as 1 business day
- Mobile app
- Secured loans available
cons
- High maximum origination fee
- Cosigners not accepted on home improvement loans
- Low J.D. Power ranking
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Overview
BHG Financial stands out for offering the largest loan amounts - up to $200,000 - of any of our partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to find one. However, loan amounts start at $20,000, so look elsewhere for small loans. You'll have between three and 10 years to repay the loan, but you'll need an annual income of at least $100,000 and a FICO score of 660 or better to qualify.
Loan funds are available within three to 14 days of loan approval. BHG charges a modest origination fee between 3% and 4%, depending on your financial profile. Note that you can't prequalify for a personal loan with BHG.
pros
- Eligible applicants can borrow up to $200,000
- Considers borrowers with fair credit
- Long repayment terms
cons
- Not available in IL, ND, and MT
- No discounts
- Minimum annual income requirement of $100,000
- Funding takes at least five days
Fees
Origination fees, late fees, other fees may apply
Eligibility
Available in all states except Illinois, North Dakota, and Montana
Loan uses
Debt consolidation, credit card refinancing
Overview
Universal Credit personal loans are ideal for bad-credit borrowers because the lender may consider applicants with credit scores as low as 560. You can apply for loan amounts between $1,000 and $50,000 and may qualify for next-day funding. Because Universal Credit has higher APRs than other lenders, it may be best suited to individuals without the credit and/or income needed to qualify for more competitive rates with other lenders.
You can choose from repayments terms of three, five or seven years. Universal Credit has higher origination fees than many lenders, charging between 5.25% and 9.99% on all personal loans. This lender offers interest rate discounts when you opt for automatic payments or direct payment to creditors (in the case of debt consolidation).
pros
- Borrowers with bad credit considered
- $25,000 annual income requirement
- Autopay and direct pay discounts available
- Can fund in one business day
cons
- High APRs
- Potentially high origination fees
- Not available in Iowa
Eligibility
A U.S. citizen or permanent resident; not available in DC, IA, SC, WV
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
Overview
When it comes to personal loans for fair-credit borrowers, Reach Financial is one of the best choices around. This lender offers fast processing, with a majority of approved applications receiving funds within a day. Terms start at two years and end at five years for personal loans, and loan amounts are between $3,500 and $40,000. This isn’t the right lender for the shortest or longest terms available, and the borrowing range is narrower than you’d find with many lenders.
Reach focuses on borrowers using personal loans to pay off debt and only permits two purposes for its loans: debt consolidation and credit card refinancing. It’s also worth noting that the lender does not work with borrowers in every state and charges origination fees up to 8%.
pros
- Fast funding
- Can improve credit
- Fair-credit borrowers may be eligible
cons
- Limited use
- No direct pay discount
- Origination fee
- Limited availability: Not available in CO, CT, ME, NV, NH, TN, VT, WV, or WY
Fees
Origination Fee, $15 Late Fee, $25 NSF Fee
Eligibility
Available in all states except CO, CT, ME, NV, NH, TN, VT, WV, WY, and all U.S. Territories
Time to get funds
Funds typically deposited into your account in 1 business day13
Loan uses
Debt consolidation, credit card refinancing
Overview
For bad-credit personal loans, OneMain Financial is one of the best lenders you can consider. In addition to not setting a minimum credit score for applicants who apply directly through the website, OneMain permits cosigners on applications and offers secured personal loans. Cosigners can help you improve your chances of approval and possibly secure lower APRs. Secured loans require you to pledge collateral when applying and tend to be easier to qualify for than unsecured loans, which typically require higher credit scores and no collateral.
Repayment terms range from two to five years. Personal loan amounts between $1,500 and $20,000 are available, with different minimums and maximums in select states. Also depending on where you live, you’ll pay a flat fee of $25 to $500 or 1% to 10% for origination. You may be eligible for a personal loan with OneMain if you have bad credit (a FICO score of 580 or lower), but the lender’s rates are very high compared to many others.
pros
- Flexible eligibility requirements
- Offers secured options
- Competitive bad-credit loans
- Physical presence
cons
- Availability
- Origination fees
- High starting APR
- Low maximum loan amount
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Overview
Many lenders cap personal loans at $50,000, but LightStream is one of few that lets you borrow up to $100,000. This makes it an ideal lender if you’re looking to finance larger expenses, like home improvements or weddings. Additionally, LightStream doesn’t charge origination fees and APRs start at 6.99%—with the best rates reserved for borrowers with good to excellent credit.
Funds with LightStream may be available as soon as the same day, and repayment terms can last up to 20 years, depending on the type of loan you receive. However, LightStream does not offer prequalification on its site, so you won’t be able to see an estimate of your rates unless you formally apply.
pros
- Same-day funding available
- High maximum loan amount
- No origination fee
cons
- Good credit required
- No prequalification process
- Not available in Vermont
Repayment terms
2 - 20 years, depending on loan purpose
Eligibility
Available in all states except RI and VT
Time to get funds
As soon as the same business day
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Overview
Best Egg ranked second in J.D. Power's Consumer Lending Satisfaction Study, so it should come as no surprise that it’s one of our best picks for a wide range of borrowers. In addition to having relatively low rates and discounts, Best Egg provides loans from $2,000 to $50,000 and may consider applicants with credit scores of at least 600. Terms range from two to five years.
This lender stands out for offering better approval odds for prequalified applicants than many other lenders, according to Credible data. Specifically, prequalified applicants were more than twice as likely to be approved for final loans. Best Egg’s origination fees can reach 9.99%.
pros
- Secured loans available
- Low minimum income requirement
- Scored second in J.D. Power's Consumer Lending Satisfaction Study
- Funds in 1-3 business days
- High close rate on loans through Credible platform
cons
- Origination fees
- No discounts
- Not available in DC, IA, VT, or WV
Fees
Origination fee, late fee, unsuccessful payment fee, check processing fee
Eligibility
Available in all states except DC, IA, VT, and WV
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
Overview
Upstart often has one of the lowest minimum APRs available, making it a solid choice for borrowers with good credit or better. Applicants with poor, fair, or little to no credit may also be considered, as Upstart has no minimum credit score requirement (if you apply on the lender's website) and may accept applicants without scores. This lender offers loans between $1,000 and $50,000 with either three- or five-year repayment terms. Upstart may be ideal for you if you have good credit and can qualify for a low APR, or if you have bad credit and need a lender to look beyond your score.
In terms of its drawbacks, Upstart charges origination fees up to 12% on some personal loans. It also has a maximum APR of 35.99%, which is around the highest rate you'll find with a reputable lender, with no discounts available. Upstart also has fewer repayment term options than most lenders.
pros
- May fund in 1 business day
- No minimum credit score requirement on lender site
- Low minimum APR
- Trustpilot score of 4.9/5 stars
cons
- May charge a high origination fee
- No discounts offered
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
Overview
Splash is a lending marketplace that offers loans up to $100,000 (if you apply via its website) from a wide range of lenders, with next-day funding available with many. If you apply on its website, terms range from two to seven years. Notably, Splash has a live chat feature so you can get real-time answers without having to wait on hold or for an email.
It's worth considering a personal loan through Splash if you have good credit (ideally, a FICO score above 700). Rates are competitive, but borrowers with excellent credit may find lower APRs elsewhere, and origination fees can reach 12% on some loans.
pros
- Excellent customer reviews on Trustpilot
- Funding as soon as the next business day
- Large loan amounts available
cons
- Possible origination fee up to 7.49% (through Credible)
- Other lenders may have lower starting APRs
- No cosigner option
Loan amount
$5,000 - $100,000 (up to $35,000 on Credible)
Eligibility
Available in all states except VT. OH and NM net disbursed amount must be greater than $5,000. MA must be greater than $6,000
Loan uses
Debt consolidation, credit card refinancing, home improvement, major purchases
Overview
LendingClub provides personal loans up to $40,000 with repayment terms between two to five years. The company is a strong choice for borrowers with good credit who don’t need funds fast, as LendingClub does not specify funding times on its site.
You can prequalify directly with LendingClub without having to provide your Social Security number, though you will need to provide it if you formally apply. Origination fees may be charged and range from 3% to 8%. LendingClub doesn’t offer discounts for autopay or direct pay.
pros
- Mobile app
- Low minimum income requirement
- High close rate on loans made through Credible
- Available in all states
cons
- Origination fee
- No discounts
- Funding not as fast as some competitors
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
Overview
Happy Money, formerly known as Payoff, is an ideal lender for debt consolidation and credit card consolidation loans. The company offers APRs starting at 11.72% and loan amounts up to $40,000. You may be able to qualify for a loan with Happy Money with fair credit, but the best rates are reserved for those with good to excellent credit scores.
The company charges origination fees up to 5%, which is lower than some competitors, and you can receive funding in three to five business days once approved. Check to see if loans are available in your area, as Happy Money doesn’t fund borrowers in Massachusetts or Nevada.
pros
- Mobile app
- Live chat
- Low maximum APR
cons
- Limited loan terms available
- No discounts
- Origination fees
- Not available in MA or NV
Eligibility
Available in all states except MA, MS, NV, and OH
Time to get funds
As soon as 2 - 5 business days after verification
Loan uses
Debt consolidation and credit card consolidation only
Overview
SoFi’s personal loan rates are competitive, and that’s far from the only feature that makes this lender one of our best picks for borrowers with good credit. It also offers same-day funding, multiple rate discounts, large loans, and a range of terms — plus no mandatory origination fees. You may be able to borrow between $5,000 and $100,000 and repay it in two to seven years with SoFi.
Unfortunately, SoFi doesn’t allow cosigners, so the lender won’t be a good fit for borrowers with fair or poor credit profiles who want to apply with a friend or family member. SoFi does, however, have a convenient prequalification process than can give you an idea of whether you may qualify for a loan. The lender also provides a seamless online experience and has an admirable Trustpilot consumer review rating of 4.5 out of 5 stars.
pros
- No fees required
- Large loan amounts available
- Autopay and direct pay discounts
- Same day funding
- Long loan terms available
cons
- Good credit required
- 5,000 minimum loan amount
Fees
Option to pay an origination fee in exchange for a lower rate
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
Overview
Avant personal loans are better suited to borrowers with bad credit (a FICO score below 580) than many others because the lender may consider applicants with credit scores in the 500s. Loan amounts up to $35,000 are available, so these loans are on the smaller side. But if this maximum is sufficient, Avant might appeal to you because it offers funding as soon as the next business day after approval and is more likely to approve the applications of prequalified borrowers than other lenders.
That said, Avant’s interest rates are steep, and the lender charges an origination fee up to 9.99%.
pros
- Borrowers with bad credit considered
- Funds as soon as the next business day
- 2-year loan terms available
cons
- No discounts offered
- Origination fee
- Not available in HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
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
Overview
Upgrade offers loans from $1,000 to $50,000 and features competitive APRs, discounts for direct payments to creditors and enabling automatic payments, fast funding (as soon as the same day as approval), repayment terms up to seven years, and nationwide availability. Upgrade even offers secured personal loans, which is not common among lenders, and you don't need to input your Social Security number to prequalify on the website.
Upgrade does charge origination fees between 1.85% and 9.99%, however. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
pros
- Fair credit borrowers eligible
- Autopay and direct pay discounts
- Can fund in as little as 1 business day
- Mobile app
- Secured loans available
cons
- High maximum origination fee
- Cosigners not accepted on home improvement loans
- Low J.D. Power ranking
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Overview
BHG Financial stands out for offering the largest loan amounts - up to $200,000 - of any of our partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to find one. However, loan amounts start at $20,000, so look elsewhere for small loans. You'll have between three and 10 years to repay the loan, but you'll need an annual income of at least $100,000 and a FICO score of 660 or better to qualify.
Loan funds are available within three to 14 days of loan approval. BHG charges a modest origination fee between 3% and 4%, depending on your financial profile. Note that you can't prequalify for a personal loan with BHG.
pros
- Eligible applicants can borrow up to $200,000
- Considers borrowers with fair credit
- Long repayment terms
cons
- Not available in IL, ND, and MT
- No discounts
- Minimum annual income requirement of $100,000
- Funding takes at least five days
Fees
Origination fees, late fees, other fees may apply
Eligibility
Available in all states except Illinois, North Dakota, and Montana
Loan uses
Debt consolidation, credit card refinancing
Overview
Universal Credit personal loans are ideal for bad-credit borrowers because the lender may consider applicants with credit scores as low as 560. You can apply for loan amounts between $1,000 and $50,000 and may qualify for next-day funding. Because Universal Credit has higher APRs than other lenders, it may be best suited to individuals without the credit and/or income needed to qualify for more competitive rates with other lenders.
You can choose from repayments terms of three, five or seven years. Universal Credit has higher origination fees than many lenders, charging between 5.25% and 9.99% on all personal loans. This lender offers interest rate discounts when you opt for automatic payments or direct payment to creditors (in the case of debt consolidation).
pros
- Borrowers with bad credit considered
- $25,000 annual income requirement
- Autopay and direct pay discounts available
- Can fund in one business day
cons
- High APRs
- Potentially high origination fees
- Not available in Iowa
Eligibility
A U.S. citizen or permanent resident; not available in DC, IA, SC, WV
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
Overview
When it comes to personal loans for fair-credit borrowers, Reach Financial is one of the best choices around. This lender offers fast processing, with a majority of approved applications receiving funds within a day. Terms start at two years and end at five years for personal loans, and loan amounts are between $3,500 and $40,000. This isn’t the right lender for the shortest or longest terms available, and the borrowing range is narrower than you’d find with many lenders.
Reach focuses on borrowers using personal loans to pay off debt and only permits two purposes for its loans: debt consolidation and credit card refinancing. It’s also worth noting that the lender does not work with borrowers in every state and charges origination fees up to 8%.
pros
- Fast funding
- Can improve credit
- Fair-credit borrowers may be eligible
cons
- Limited use
- No direct pay discount
- Origination fee
- Limited availability: Not available in CO, CT, ME, NV, NH, TN, VT, WV, or WY
Fees
Origination Fee, $15 Late Fee, $25 NSF Fee
Eligibility
Available in all states except CO, CT, ME, NV, NH, TN, VT, WV, WY, and all U.S. Territories
Time to get funds
Funds typically deposited into your account in 1 business day13
Loan uses
Debt consolidation, credit card refinancing
Overview
For bad-credit personal loans, OneMain Financial is one of the best lenders you can consider. In addition to not setting a minimum credit score for applicants who apply directly through the website, OneMain permits cosigners on applications and offers secured personal loans. Cosigners can help you improve your chances of approval and possibly secure lower APRs. Secured loans require you to pledge collateral when applying and tend to be easier to qualify for than unsecured loans, which typically require higher credit scores and no collateral.
Repayment terms range from two to five years. Personal loan amounts between $1,500 and $20,000 are available, with different minimums and maximums in select states. Also depending on where you live, you’ll pay a flat fee of $25 to $500 or 1% to 10% for origination. You may be eligible for a personal loan with OneMain if you have bad credit (a FICO score of 580 or lower), but the lender’s rates are very high compared to many others.
pros
- Flexible eligibility requirements
- Offers secured options
- Competitive bad-credit loans
- Physical presence
cons
- Availability
- Origination fees
- High starting APR
- Low maximum loan amount
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Fox Business does not make or arrange loans.
Here’s how you can save money on credit card interest.
- Pay your balance on time and in full: You can avoid paying any interest on your credit card debt if you pay off your full balance within the grace period.
- Avoid late or missed payments: If you can’t pay your balance in full, pay at least the minimum payment or more by your due date. This will help you avoid a penalty APR.
- Use the debt avalanche method: If you have multiple credit cards, the debt avalanche method can help you decide how much to pay on each card. You’ll still make at least the minimum payment on all cards, but you’ll allocate any extra money you have toward the card with the highest APR until it’s paid off.
- Make multiple payments per month: Since credit card issuers calculate the interest you owe daily, you’ll pay less in interest if you make a payment multiple times a month.
- Consolidate your debt: You can use a balance transfer card, personal loan, or another low-interest loan to pay off your credit card debt. After consolidation, you’ll be left with one monthly payment and a lower APR.
- Apply for a low-interest credit card: If you expect to carry a balance temporarily, applying for a 0% introductory APR credit card can give you a break from paying interest.
- Ask for help: If you think you’ll carry a balance indefinitely, work with a nonprofit credit counseling agency to set up a budget that is more manageable. Otherwise, credit card debt can get out of hand. Your credit counselor can also enroll you in a debt management plan to help you get a handle on your current debts.
The current average APR across credit card accounts is 21.59% as of February 2024, so anything below that is relatively good. However, it’s possible to achieve an APR as low as 0% for a limited time if you take advantage of an introductory offer. On the other hand, you may pay a higher-than-average rate if you have bad credit or are just starting to build credit.
Your monthly payment for a loan is based on your loan amount, interest rate, and term, rather than your APR. APR is a way of looking at the total borrowing cost, including both interest and upfront fees.
In the case of a credit card, your minimum payment is calculated as a percentage of your statement balance plus interest and late fees, if any. Because your credit card APR is typically the same as your interest rate, a higher APR will mean a higher minimum monthly payment if you carry a balance.
Yes. If you have a variable APR, it will change over time as the federal funds rate and prime rate change. Even if you have a fixed APR, it can change due to factors like late payments.
Some credit card issuers may charge separate APRs for balance transfers and purchases. The higher the balance transfer APR, the more you’ll pay to carry the transferred balance on your new card. Many credit card issuers also offer a 0% APR on balance transfers for six to 21 months (after a balance transfer fee). After that, a regular variable APR will typically kick in.
Meet the contributor:
Lindsay Frankel
Lindsay Frankel has been in personal finance for over eight years. Her work has been featured by MSN, CNN, FinanceBuzz, and The Balance.
