September 25, 2021

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6 best personal loans for good credit

12 min read

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

Having good credit can open doors to more personal loan options and better interest rates. (iStock)

Personal loans can be a helpful tool for debt consolidation, home improvements, medical expenses, family emergencies, and much more. Having good credit makes it easier and often more affordable to secure the best personal loan rates. 

But even if you have good credit, it pays to shop around to find the best personal loan lenders to find the best interest rate available to you. A lower interest rate can mean significant savings over the life of a personal loan.

Let’s look at what to know about the best personal loans for good credit.  

Best personal loans for good credit: Check these lenders

The best personal lenders for good credit have minimum credit score requirements that fall in the range of good credit — but don’t require you to have excellent credit to qualify for a loan with them. 

The following four Credible partners all have moderate credit score requirements, and some offer large loan amounts.

Axos

Axos offers a range of loan terms and competitive rates, as well as fast funding, for borrowers with good credit. Funds can be available as quickly as the next business day.

Minimum credit score: 740

Loan terms: One to five years

Loan amount: $5,000 to $35,000

Good for: People who want fast funding

Lending Club

Lending Club is a peer-to-peer lender offering personal loans with a maximum loan amount of $40,000. The lender provides an opportunity for a lower interest rate if you let Lending Club pay your creditors directly. 

Minimum credit score: 600

Loan terms: Three or five years 

Loan amount:  $1,000 to $40,000

Good for: People with a low debt-to-income ratio and who are interested in credit card debt consolidation 

Prosper

Prosper is one of the best lenders for joint personal loans and offers competitive rates and budget-friendly loan terms. 

Minimum credit score: 640 

Loan terms: Three or five years

Loan amount: $2,000 to $40,000

Good for: People who are consolidating debt or making improvements to their home 

SoFi

SoFi offers competitive rates and a wide range of loan terms on personal loans of up to $100,000.

Minimum credit score: Not disclosed

Loan terms: Two to seven years 

Loan amount: $5,000 to $100,000

Good for: People interested in debt consolidation and home improvement loans

You can compare personal loan rates from these and other lenders through Credible.

Other personal loan lenders to consider

The following two lenders are not Credible partners, but they’re also worth considering if you’re looking for a personal loan with good credit.

Laurel Road

Laurel Road offers an autopay discount, and it doesn’t charge any fees on its personal loans. 

Minimum credit score: 660

Loan terms: Three to five years

Loan amounts: $5,000 to $45,000 (depending on loan type)

Fees: None

Good for: People who want to borrow money without paying fees

PNC Bank

PNC Bank offers personal loans that can be used to consolidate debt, pay for a home improvement project, or cover an unexpected expense.

Minimum credit score: Not disclosed

Loan terms: Three years

Loan amount: $1,000 to $35,000

Good for: People who already bank with PNC and want to keep their financial products in one place

Methodology: How Credible evaluated lenders

Credible evaluated the best personal loan lenders for good credit based on a variety of factors, including customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, and fees. Credible’s team of experts gathered information from each lender’s website, customer service department, and via email support. Each data point was verified to make sure it was up to date.

What is a personal loan for good credit?

A personal loan for good credit is an unsecured loan that offers low interest rates and favorable terms. 

Good credit loans require not only a good credit score but also solid credit history and reliable income. If your income is low, you may not be eligible for the loan amount you need. Lenders may also require you to meet other stringent requirements to qualify for the best rates. 

Having good credit opens the door to more personal loan options, favorable interest rates and terms, and other benefits. If you have fair credit or lower, you may not be eligible for a personal loan through many lenders, or you may need the help of a cosigner to qualify. Good credit shows lenders you’re a responsible borrower and less of a lending risk than someone with a less impressive credit history. 

What’s a good score?

Most lenders use FICO credit scores to determine eligibility for a loan. FICO breaks its credit scores into five score categories ranging from 300 to 850.

  • Poor credit: 300 to 580
  • Fair credit: 580 to 669
  • Good credit: 670 to 739
  • Very good credit: 740 to 799
  • Exceptional (or excellent) credit: 800 to 850

FICO scores are determined using information from your credit reports. Five key factors determine your credit score. 

  • Payment history: Your payment history is how well you’ve handled paying creditors on time in the past. It accounts for 35% of your credit score.
  • Amounts owed: Your credit utilization is the amount of debt you have compared to the total credit you have available to use. Those who use a high percentage of available credit are considered high-risk borrowers to most lenders. Your credit utilization makes up 30% of your credit score.
  • Length of credit history: The age of your oldest and youngest credit accounts( the average age of your accounts) makes up 15% of your credit score. Having long-established credit accounts can boost your credit score and looks good to lenders.
  • New credit: Opening several new credit accounts over a short period looks risky to lenders. New credit accounts make up 10% of your credit score.
  • Credit mix: Lenders also like to look at what type of credit accounts you have open. Having a good mix of credit accounts, like installment loans, credit cards, mortgage loans, and other accounts, can help your cause when applying for a loan. Your credit mix makes up 10% of your credit score.

Lenders may also look at other factors like your income and employment history to determine if you’re a good credit risk. 

Why credit scores are important

Your credit score is a snapshot in time of your credit health, so lenders rely on credit scores to determine eligibility for loans and other products. Your score also factors into the interest rate and loan term options you may receive. 

Not only do lenders use credit scores to determine eligibility, but so do other businesses like cellphone providers. Insurance companies in some states may use credit information in determining insurance premiums. Landlords often check credit scores before renting an apartment or condo to a new tenant. Your credit score can open the door to more, and often better, options. 

How much does a personal loan for good credit cost?

Generally, your credit score and history, the amount you borrow, fees you pay, and the interest the lender charges will determine the cost of a personal loan. If you have good credit, a lender is more likely to give you a lower interest rate. And you may be subject to fewer fees than someone with poor credit.

For example, a lender may waive origination fees for people with good credit. But they may charge late fees for someone who doesn’t make their payments on time. 

What are good credit personal loan rates?

Interest rate ranges vary between different lenders. Most personal loan interest rates fall between 4.99% and 36% — with those lowest rates most likely going to people with good to excellent credit. The average national personal loan interest rate was 9.46% in the first quarter of 2021, according to the most recent data from the Federal Reserve.

Here’s an example of how credit scores and interest rates could affect the cost of a $5,000 personal loan with a five-year repayment term.

  • A borrower with poor credit might qualify for an interest rate of 30%. At the end of five years, they’ll have paid $9,706 — $4,706 in interest charges.
  • A borrower with fair credit may get an interest rate of 20%. Their total interest charge will be $2,948 — $1,758 less than the borrower with poor credit paid.
  • A borrower with good credit might qualify for a loan at just 10%. Over the life of the loan, they’ll pay $3,332 less than the borrower with poor credit — just $1,374 in interest.

 The interest rate you receive plays an enormous role in how much your personal loan will end up costing you. 

What are some personal loan fees?

When you take out a personal loan, it’s common for lenders to charge fees. Here are some common fees you may encounter when looking for a personal loan. 

  • Origination fees: Lenders often charge loan origination fees to cover their underwriting and processing costs. Origination fees are typically a percentage of the loan and are subtracted from the total loan amount.
  • Application fees: Although not as common as origination fees, some lenders use loan application fees to cover the cost to process a loan application.
  • Prepayment penalties: If you pay off your loan early, you may end up paying prepayment penalties. Not all lenders charge this fee, but it’s meant to help them recoup some of the interest they would have received if the loan went to full term.
  • Late payment fees: Lenders charge late payment fees when a borrower is late making monthly payments. Many lenders allow you to set up automatic payments to ensure that you won’t end up paying any late fees.

It’s always free to compare rates from multiple lenders using Credible.

What are the pros and cons of personal loans for good credit?

Like any financial product, personal loans have advantages and disadvantages. It’s always a good idea to weigh the pros and cons before applying for a personal loan.

Pros

  • Lower interest rates: Personal loans typically have lower interest rates than credit cards, so they can be a good option for debt consolidation or a big purchase.
  • No collateral needed: Most personal loans are unsecured, meaning you don’t have to put up any collateral. This means there’s no risk of losing possessions like your house or car like there is with a secured loan.
  • Easy payment management: If you’re using a loan to consolidate debt, you only have to worry about one monthly payment instead of several.
  • Pay for purchases over time: Personal loans allow you to afford large purchases or home improvement projects now and pay them off with manageable monthly payments over an extended period.

Cons

  • Potentially high penalties and fees: Personal loans come with fees and sometimes penalties, especially if you pay them off early. Always factor these costs into your decision.
  • May not solve your debt problem: Getting a personal loan to consolidate debt is great as long as you use it to pay off debt. If your debt is the result of consistently overspending, getting a personal loan may just free up space on your credit cards for more debt.
  • You may not receive the loan amount needed: Applying for a $50,000 personal loan doesn’t guarantee that’s how much you’ll receive. If your credit or income isn’t up to par, you may be offered less money.
  • Payments are higher: Monthly loan payments can be more than your minimum monthly credit card payment. But keep in mind that with a personal loan you’ll be reducing the principal of the debt, whereas a minimum credit card payment is mostly made up of interest charges.

How to compare good credit personal loans and lenders

You should always take time to compare lenders to find the right personal loan for your needs. Here are some factors to keep in mind when looking for a personal loan. 

  • APR: APR stands for annual percentage rate. It includes the interest rate and any loan fees you might pay, so it’s a better measure of a loan’s total cost. Most lenders charge upfront fees, but the APR is the same as the interest rate when there are no fees.
  • Fees: Added fees can make your personal loan more expensive. Lenders subtract origination fees from your loan total before disbursing the loan, which can cut into the total amount you receive.
  • Repayment terms: The length of your loan term determines your monthly payment and also affects how much interest you’ll end up paying on your loan. Shorter loan terms usually mean paying less interest overall. A longer loan term will lower your monthly payments, but you’ll end up paying interest for a longer period.
  • Loan type: Personal loans are available for almost any need, like home improvements or to cover medical expenses. The type of personal loan you choose can often affect the rates you receive.
  • Lenders: It’s not just about the personal loan. You should also research the lenders to make sure you’re working with a reputable lender that offers quality customer service.

How to get a personal loan for good credit

Getting a personal loan isn’t complicated, but there are specific steps you should take to secure the right loan for your situation. 

1. Determine your needs

Before you take out a loan, determine how much money you need to borrow to accomplish the purpose of your loan. Whether it’s a home improvement project, paying off credit card debt, or something else, add up any expenses or estimate the total amount you’ll need. Use a personal loan calculator to estimate how much you’ll pay for a loan. 

2. Check your credit score

It’s always a good idea to know where you stand before applying for any loan or other financial product. Knowing your credit score will help you determine what types of personal loans are available to you, and the kind of rates you might receive. 

You can take this one step further and obtain a free copy of your credit report from each of the three national credit bureaus at AnnualCreditReport.com. Your credit report will give you greater insight into where you stand, and it’s also a chance to look for any errors that might be affecting your credit. 

3. Compare rates and offers from multiple lenders

Shop around to find the best rates. You can find personal loans through online lenders, banks, credit unions, and other financial institutions. Shopping around allows you to find the most competitive rates and run the numbers before applying for a loan. 

4. Prequalify 

Prequalification takes checking rates one step further and only requires a soft credit check. You can prequalify with multiple lenders without affecting your credit. It also gives you a better idea of the loan deal each might offer you. 

5. Choose the one that best fits your needs

Once you’ve shopped around for the best rates, take time to compare your needs to the best personal loans and lender options to find the one that makes sense to you. 

6. Apply

Once you’ve determined the best lender and personal loan type for you, start the application process. Most lenders allow you to apply online. During the application process, the lender will ask you to provide personal and financial information and documents to verify your identity and provide a more well-rounded picture of your finances

The application process time may vary depending on the lender, the type of loan, and other factors. If you’re approved, the process ends by accepting the loan and receiving your funds. Depending on the lender, funds can sometimes arrive the same or next business day. 

Note the date of your first payment and make a plan to pay off your loan. Some lenders offer rate discounts for setting up automatic payments, which can also help you avoid late fees. 

You can quickly compare rates and get prequalified for a personal loan using Credible.

Alternatives to personal loans for good credit

Personal loans are a great way to consolidate debt or pay for large purchases over time, but they aren’t suitable for everyone, especially if your credit doesn’t meet lender requirements. Here are other options to consider. 

  • Home equity lines of credit: Home equity lines of credit, or HELOCs, are an option if you have equity in your home. Unlike a personal loan, a HELOC is secured using your home. There’s a risk of repossession if you can’t repay what you borrow. On the other hand, you may qualify for a lower interest rate than you’d  receive with an unsecured personal loan.
  • Peer-to-peer loans: Peer-to-peer loans are a type of personal loan with funding through multiple investors instead of a lender. These types of loans often provide more flexibility with loan terms and lower rates than other personal loans.
  • Balance transfer credit cards: If you’re looking for a loan to pay off existing credit card debt, a balance transfer card might be an option. Balance transfer credit cards often come with introductory 0% APR offers for up to 18 or 24 months. If you can pay off your total balance during the introductory period, you won’t pay any interest. Keep in mind that most credit card issuers charge a balance transfer fee, usually between 3% and 5% of the balance, added to the total amount owed. And if you don’t repay the full amount by the end of the introductory period, you could face hefty interest charges.

Personal lines of credit:

 A personal line of credit lets you draw from a specified credit limit similar to a credit card, but it also features loan terms and interest rates more comparable to a personal loan. With a personal line of credit, you only pay interest on the amount you borrow, not the total credit limit.