Best online loans of November 2024

An online personal loan is a great way to fund an emergency expense, pay off credit card debt, or finance a major purchase if you don’t have enough savings to cover the cost. In fact, about 57% of adults have used a personal loan, according to Experian. This may be because average personal loan rates can be significantly lower than credit card rates, especially if you have good credit. 

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Best online loans

The best online loans come with low rates, few fees, a choice of repayment terms, quick funding, and superior customer service. To help you narrow your options, our experts evaluated online lenders based on these factors. 

Methodology

We evaluated the best online loans based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, fees, discounts, and whether cosigners are accepted. Our team of experts gathered information from each lender’s website, customer service department, directly from our partners, and via email support. 

Each data point was verified by a third party to make sure it was accurate and up to date. Read our full lender rating methodology for more information.

What is an online loan?

The term “online loan” may refer to any loan that you can apply for online, without visiting a bank or credit union to fill out paperwork. Mortgages, business loans, and auto loans are all available online, but we’ll focus on personal loans available from online lenders in this article. 

An online personal loan is a type of installment loan that provides you with a lump sum of cash. You repay the loan in predictable monthly payments based on a fixed interest rate and set repayment term. Interest rates on most personal loans range from around 7% to 36%, depending on your credit, current debt, and income; repayment terms typically range from one to seven years. But some lenders offer longer-term loans for specific purposes, like home improvement. 

Loan amounts are often available up to $50,000, though some lenders offer loans $100,000 loans or more if you can qualify. You can use the cash for almost anything, with a few exceptions. Each lender determines which loan purposes it will approve or allow. For instance, Happy Money only offers loans for debt consolidation. 

Pros and cons of online loans

Pros explained

A 2-year personal loan has an average interest rate over nine percentage points lower than the average rate on credit cards (12.49% vs. 21.59%, respectively), according to the Fed. This difference can make it advantageous to pay off high-interest credit cards with a personal loan, known as debt consolidation or credit card refinancing. 

Another benefit of online loans: You can skip the trip to a financial institution and fill out the application from the comfort of your couch. Most online lenders also offer a prequalification process, which allows you to get a rate estimate without hurting your credit. Plus, you can often make payments online or via a mobile app, and many lenders offer autopay discounts and/or direct pay discounts (if loan funds for debt consolidation are sent directly to your creditors). 

Cons explained

If you prefer in-person support, it’s not generally available from online lenders, though many do provide customer service by phone. In addition, you’ll need to provide sensitive financial information and access to your bank account on the internet. While most online lenders and loan marketplaces use encryption or other security measures to keep your data safe, you may want to avoid applying for an online loan on a public Wi-Fi network. 

Since personal loans are unsecured, many lenders have rigorous financial requirements. You’ll generally need to have good credit and enough income to comfortably afford your new and existing debt payments, although some online lenders are more welcoming to bad credit borrowers. You also may pay a higher interest rate than you would with some secured loans, like home equity loans and auto loans. 

How to get an online loan

• Check your finances: Compare your credit score and income to the lender’s minimum requirements to see which lenders you’re more likely to qualify with, and evaluate your budget to determine the monthly payment range you can afford. 
• Compare rates: Prequalify with a handful of lenders and compare your estimated rate along with the term options each lender offers. Pay attention to the loan’s annual percentage rate (APR), which includes interest and upfront fees, like an origination fee. 
• Compare repayment terms: Sometimes you can lower the overall cost of your loan by choosing a shorter repayment period. Most lenders offer 1- to 7-year repayment terms, but some loans can last 10 or more years, especially if used for home improvements or to buy a boat or RV.
• Compare fees: Some lenders charge an origination fee upfront. This can range as high as 12%, depending on your credit and where the lender caps such fees. Some lenders also charge late fees and insufficient funds fees.
• Compare discounts: Some lenders give rate discounts if you choose autopay or allow the lender to pay your creditors directly when using the loan to consolidate debt. Even a quarter of a percentage point could save you hundreds of dollars over the term of the loan.
• Select a loan offer: Make sure you can afford the monthly payment for the loan you choose, but bear in mind that you’ll pay less interest with a shorter term, and they may come with lower interest rates as well. 
• Formally apply: Proceed with the loan offer of your choice. This will usually trigger a hard credit check, which could cause a small dip in your credit score. You may also be required to upload documents that prove your identity, income, and employment information. 
• Sign your loan documents: Check that you’re happy with the final rate offer and review your loan agreement carefully before signing. You should receive the funds within a few days. 

Check Out: Best Fast Personal Loans

Can I get an online loan with bad credit?

It can be challenging to get an online loan with a poor credit score, but it’s not impossible. If you’re struggling, we have a few tips that can help with eligibility:

• Consider bad credit lenders: Some lenders use AI underwriting to look at a wider variety of financial data and approve more borrowers with lower credit scores. For example, Upstart has no minimum credit score requirement and may approve students and college graduates with no credit history, depending on other criteria. 
• Apply with a co-signer or co-applicant: If you have a friend or family member with good credit who is willing to cosign your loan, you may have a better chance of getting approved at a lower rate. That’s because they agree to repay the loan if you can’t, which reassures the lender. Applying jointly with a co-applicant, like your spouse, can have a similar benefit.
• Look for online secured loans: If you offer an asset as collateral for a loan, that gives the lender recourse if you fail to repay, which lowers the risk. That can make it easier to get approved if you have bad credit. For example, Upgrade offers an auto-secured loan.
• Improve your credit: Check your credit report at AnnualCreditReport.com. If there are errors that may be dragging down your score, be sure to dispute them. Then, take steps to improve your credit score, like paying down debt and making on-time payments. While these strategies take time, a tool like Experian Boost may provide a small score increase in seconds, which may help you qualify for an online loan. 

Online loan alternatives

If an online loan doesn’t seem like the right fit for your financial needs, consider alternative options, including:

• Personal loan from a bank or credit union: If you’re looking for personalized support, apply for a personal loan at your local bank or credit union. Credit unions tend to offer lower rates, but you’ll need to join as a member. Many credit unions also offer payday alternative loans, which may be a good alternative if you have bad credit. 
• 0% APR credit card: If you’re looking to fund a major expense that you can pay off within 21 months, consider a credit card with a no-interest introductory offer, like the Wells Fargo Reflect Card.
• 401(k) loan: If you have a 401(k) plan that allows loans, you may be able to borrow from it at a lower interest rate relative to an online loan, and the interest goes back into your account. There’s no credit score requirement, either, but there are risks and limitations, such as lost investment growth and severe tax consequences if you can’t repay the loan. 
• Cash advance app: If you just need a few hundred dollars fast, consider a cash advance app, which does not require a credit check but may come with fees. MoneyLion is a good option to consider. 
• Home equity loan: If you’re looking for a large loan with a low interest rate that you can pay back over a long term, consider a home equity loan, which allows you to borrow against the equity in your home. However, beware the risk of foreclosure if you fail to repay, and you’ll need to have sufficient home equity to qualify. 
• Non-loan options: While an online loan can be a great financial tool, it also requires you to take on more debt. If you’re already struggling to make ends meet, you should explore government benefits or ask for help from your friends or family. If you’re overwhelmed by credit card debt, consider talking to a nonprofit credit counseling agency. 

FAQ

How do online loans work?

Applying for an online loan is quick and easy, and you can skip the trip to the bank. You’ll provide your Social Security number and answer a few questions through an online portal. If you’re approved, you’ll get a lump sum of money, typically within a few days. You’ll repay the loan in monthly installments with interest over time. 

Where to get an online loan

You can get an online loan directly from an online lender, like SoFi or Lightstream, or you can use a loan marketplace to compare your options in one place. 

Are online payday loans bad?

Payday loans can trap borrowers in debt. While it’s easy to get an online payday loan with no credit check, you’ll need to repay the loan within weeks, and payday lenders in some states charge fees equivalent to and over 400% APR. Since many borrowers renew their loans, fees can mount further. If you need money in a pinch, consider a cash advance app or payday alternative loan (PAL) from a credit union instead. 

Hilary Collins has contributed to the reporting of this article.