June 26, 2022

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Best Low Interest Personal Loans for May 2022

Applying for a personal loan? The Fed has already raised interest rates twice this year, and more hikes will come. So it’s important to find lenders that offer low APRs and work for your needs.

We’ve evaluated major lenders and highlighted the best options below. We’ll update this list regularly as terms change and new loan products are released. Note that all of the starting annual percentage rates, or APRs, that are listed are based on a high credit score of 800 or above. 

Keep scrolling for answers to frequently asked questions about personal loans and a list of all lenders we reviewed. 

LightStream

  • APR: 4.98% to 20.49% 
  • Loan amount: $5,000 to $100,000
  • Loan terms: 24 to 84 months
  • Time to receive funds: As soon as day of
  • Prequalification: No 
  • Origination fee: No
  • Co-signer/joint applicant option: Joint applicant option

Lightstream, an online lender under SunTrust Bank, offers the total package for personal loans: Flexible loan amounts and terms, same-day funding options, incredibly low APRS and no origination, prepayment or late fees. You can also save 0.5% on your loan rate when you sign up for autopay.  

The trade-off? You’ll need great credit to qualify for Lightstream loans. And you’ll need excellent credit, usually defined as 800 and up, to qualify for its lowest rates.

One caveat: Lightstream doesn’t offer prequalification. So, in order to find out what rates you qualify for, the lender will conduct a hard pull on your TransUnion or Equifax credit history, which could cause a temporary dip in your credit score.

Wells Fargo

  • APR: 5.74% to 20.99%
  • Loan amount: $3,000 to $100,000
  • Loan terms: 12 to 84 months
  • Time to receive funds: As soon as 1 business day 
  • Prequalification: Yes
  • Origination Fee: None
  • Co-signer/joint applicant option: No

This big national lender offers the most flexible loan amounts and terms on our list, making it a great choice if you’re looking for loan terms that are rather short, say one year, or a little longer than average, like seven years. The amounts are also flexible, allowing you to borrow as little as $3,000 or a maximum of $100,000. 

Its APRs are extremely reasonable, and they offer additional discounts of 0.25 % or 0.50% for customers who have certain Wells Fargo checking accounts. Wells Fargo may also charge fees for rejected payments, as well as significant late fees. 

Your credit score also plays a role in how much you’re approved to borrow, and at what rate. While Wells Fargo does not disclose credit score requirements, its website does note that you’re more likely to be approved with a credit score of 700. It also indicates that those with scores in the mid to high 600s may be approved at higher rates.

SoFi

  • APR: 5.74% to 21.28%
  • Loan amount: $5,000 to $100,00
  • Loan terms: 36 to 84 months
  • Time to receive funds: As soon as 1 business day 
  • Prequalification: Yes
  • Origination fee: No
  • Co-signer option/joint applicant option: Joint applicant option

Social Financing, or SoFi, offers lower APRs and relatively flexible terms, but its real appeal lies in its completely no-fee loan process, which can help you save while still securing a low-interest personal loan.

It requires a minimum credit score of 680 and routinely runs promotions on its site, such as its current referral program, where you can earn money by referring friends and family members to SoFi. This online lender is also notable for its special benefits, which include unemployment protection to put your loans into forbearance and lower your monthly payment if you lose your job, as well as free financial advising. SoFi does not offer loans in Hawaii or New York. 

Happy Money

  • APR: 5.99% to 24.99%
  • Loan amount: $5,000 to $40,000
  • Loan terms: 24 to 60 months
  • Time to receive funds: 2 to 5 days
  • Prequalification: Yes
  • Origination fee: 0% to 5%
  • Co-signer/joint applicant option: No

Happy Money’s Payoff Loan is specifically targeted toward borrowers who seek to pay off credit card debt. Boasting a minimum required credit score of 550, it’s one of the best options if you have a low credit score and want to exchange your high interest debt for a lower interest loan. 

To determine your APR, Happy Money will also consider your debt-to-income ratio (how much monthly debt you pay versus your monthly income), age of credit history, number of credit accounts and your credit utilization (how much credit you have access to versus how much you have used). Though Happy Money doesn’t charge late or prepayment fees, it does charge an origination fee of up to 5%. Happy Money does not offer loans in Massachusetts or Nevada.

PenFed Credit Union

  • APR: 5.49% to 17.99%
  • Loan amount: $600 to $50,000
  • Loan terms: 12 to 60 months
  • Time to receive funds: 1 to 2 business days
  • Prequalification: Yes
  • Origination fee: None
  • Co-signer/joint applicant option: Co-signer and joint applicant option

Pentagon Federal Credit Union, otherwise known as PenFed, is a credit union that offers low rates and flexible loan amounts and terms. It does, however, charge a $29 late payment fee. PenFed offers both co-signer and joint applicant options. 

A co-signer is an individual who acts as a guarantor for your loan, making payments if you are unable to. You might be interested in a co-signer if you have low or no credit and want to get approved at a lower rate. A joint applicant, or co-borrower, meanwhile, is an individual with excellent credit history who assumes equal ownership of and responsibility for the loan payment. If you apply for a joint application, both credit scores will be considered when determining the loan amount and rate.

To apply for a PenFed loan, you must become a member of its credit union, which is open to everyone and requires opening a savings account with a minimum $5 deposit. 

Best low interest personal loans, compared

LightStream Wells Fargo SoFi Happy Money PenFed Credit Union
Best for Great credit Flexible terms No fees Poor credit Joint applicants
APR 4.98% to 20.49 5.74% to 20.99% 5.74% to 21.28% 5.99% to 24.99% 5.49% to 17.99%
Loan amount $5,000 to $100,000 $3,000 to $100,000 $5,000 to $100,000 $5,000 to $40,000 $600 to $50,000
Terms length 24 to 84 months 12 to 84 months 36 to 84 months 24 to 60 months 12 to 60 months
Funding time Same day possible As soon as 1 business day As soon as 1 business day 2 to 5 business days 1 to 2 business days
Prequalification No Yes Yes Yes Yes
Origination fee None None None 0% to 5% None
Co-signer or joint applicant option Joint applicant No Joint applicant No Both

FAQs

A personal loan is a loan that can be used for any purpose — debt consolidation, home improvements, family-related expenses or emergencies — that are not education expenses or investments.

Personal loans are generally unsecured, meaning that they allow you to borrow money and pay it back upon a fixed schedule at a constant interest rate. A secured personal loan allows you to use an asset as collateral, like a home or a car, in order to access funding.  

What is prequalification?

Prequalification, which is offered by many lenders, allows you to view possible loan rates and repayment plans before actually submitting an application for the loan. Prequalification requires a soft credit pull, through which lenders view a portion of your credit history. A soft credit pull will not have any impact upon your credit score. 

How do co-signers differ from joint applicants?

If you lack a long credit history, or have a low credit score, you may need someone with great credit to co-sign your loan. A co-signer serves as a guarantor, and is required to make loan payments if you are unable to. Your loan repayment history will directly affect their credit score. 

On the other hand, a joint applicant is an individual with a great credit score and history who will hold equal ownership of the loan and equal responsibility to pay the loan back. As an equal holder of the loan, a joint applicant will have more rights and responsibilities than a co-signer. 

What is an origination fee?

An origination fee is a one-time loan processing fee that is a percentage of your total loan. For example, a loan of $10,000 with a 5% origination fee will require you to take out $10,500. 

What is a debt-to-income ratio?

A debt-to-income, or DTI, ratio is often used as a way for lenders to predict your ability to pay back the money they’ve borrowed. It can be calculated by totaling your monthly debt payments and dividing that number by your pretax monthly income.  

Lenders reviewed:

  • Alliant
  • Axos bank
  • Discover
  • Happy Money
  • Lightstream
  • Marcus by Goldman Sachs
  • PenFed
  • PNC
  • SoFi
  • U.S. Bank
  • Wells Fargo 

More loan advice

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.