Wed. Apr 14th, 2021

You can get just about anything online, including loans to buy a house or pay off high-interest debt. Some online loans can be approved in less time than it takes to drive to a bank branch.

As with any financial product, you will want to work with a reputable company and make sure your loan is a good fit for you.

Here’s a look at some pluses and minuses of online loans and what to look for to get the best deal.

  • What is an online loan?
  • Can you get an online loan instantly?
  • How can you get an online loan?
  • Are online loans legitimate?

Best Online Personal Loans

Lender

Learn More

APR

Max. Loan Amount

Min. Credit Score

3.49% to 16.79% $100,000 660

6.99% to 24.99% $35,000 660

5.99% to 29.99% $25,000 600

6.18% to 35.99% $50,000 620

6.49% to 17.99% $20,000 Not disclosed

7.16% to 29.99% $45,000 620

5.99% to 29.99% $50,000 640

15.49% to 35.99% $25,000 585

7.95% to 35.99% $40,000 Not disclosed

7.99% to 35.97% $35,000 620

Best for low interest

LightStream is the national online consumer lending division of SunTrust Bank, which last year merged with BB&T to become Truist. LightStream’s online personal loans may allow you to borrow up to $100,000 and use the money for nearly any reason. Borrowers in every state can access these personal loans.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $5,000 to $100,000
  • Repayment terms: 24 to 144 months
  • Better Business Bureau rating: A+

Best Features

  • Offers more than 30 different loan uses

  • Approves loans of up to $100,000

  • Charges no origination, prepayment or late fees

See full profile

Best for low costs

Discover may be known for credit cards but also offers fixed-rate personal loans of up to $35,000 to borrowers in every state. The lender boasts no fees as long as you pay on time.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $2,500 to $35,000
  • Repayment terms: 36 to 84 months
  • Better Business Bureau rating: A+

Best Features

  • Offers customizable loan terms from 36 to 84 months

  • Provides borrowers free access to their FICO credit score

See full profile

Best for poor credit

Peerform is a peer-to-peer lending platform that connects borrowers nationwide with investors who finance loans. Borrowers with credit scores of 600 or higher may qualify for loans of up to $25,000.

Before You Apply

  • Minimum FICO credit score: 600
  • Loan amounts: $4,000 to $25,000
  • Repayment terms: undisclosed
  • Better Business Bureau rating: A+

Best Features

  • Makes loans to some fair-credit borrowers

  • Allows borrowers to complete the entire loan process online

  • Delivers good customer service

See full profile

Best for customer service

Upstart is a national online lender that uses artificial intelligence to automate more than two-thirds of its lending decisions. Borrowers with fair to excellent credit can connect with investors willing to make loans of up to $50,000. Upstart has originated more than 500,000 loans since its founding in 2012.

Before You Apply

  • Minimum FICO credit score: 620
  • Loan amounts: $1,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Sometimes accepts applicants with fair or no credit history, using artificial intelligence to quantify risk

  • Offers loans for as little as $1,000

  • Provides a financial fitness dashboard that allows borrowers to modify payment dates and view credit score updates

See full profile

Best for no minimum loan amount

You don’t have to be a part of the military to join PenFed Credit Union, although the financial institution serves members of that community. Eligible members and co-borrowers in every state can apply for personal loans.

Before You Apply

  • Minimum FICO credit score: undisclosed
  • Loan amounts: up to $20,000
  • Repayment terms: up to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Offers terms of up to 60 months

  • Charges no origination fees

  • Provides borrowers immediate access to funds upon loan approval

See full profile

Best for online service

Rocket Loans, a national online lender, makes personal loans of up to $45,000 for people with fair to excellent credit in all 50 states. Borrowers can use the loans to consolidate debts, to complete home improvements, to pay medical bills, and to fund business operations or other needs.

Before You Apply

  • Minimum FICO credit score: 620
  • Loan amounts: $2,000 to $45,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Provides same-day funding for loans of up to $25,000

  • Applies no prepayment penalties

  • Offers an online application process

See full profile

Best for customer service

Best Egg is a national online lender with personal loans starting at $2,000 for a variety of purposes. Loans can be funded in as little as one business day.

Lender Highlights

  • Minimum FICO credit score: 640
  • Loan amounts: $2,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Funds typically available in one to three business days

See full profile

Best for bad credit

LendingPoint, which specializes in loans for borrowers with fair credit, has offered online personal loans since 2014. The lender, operating in 49 states and the District of Columbia, provides loans as large as $25,000.

Lender Highlights

  • Minimum FICO credit score: 585
  • Loan amounts: $2,000 to $25,000
  • Repayment terms: 24 to 48 months
  • Better Business Bureau rating: A+

Best Features

  • Funds available just one day after approval

  • Some fair-credit borrowers eligible

See full profile

Best for customer service

Prosper is a peer-to-peer lender that has originated $17 billion in loans since 2005. The lender offers personal loans nationwide to borrowers with fair to excellent credit.

Lender Highlights

  • Minimum FICO credit score: undisclosed
  • Loan amounts: up to $40,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Options for fair to excellent credit

  • Preapprovals with soft credit checks

See full profile

Best for small loan amounts

Upgrade is an online lender that offers personal loans and lines of credit nationwide. Borrowers can qualify for up to $35,000.

Lender Highlights

  • Minimum FICO credit score: 620
  • Loan amounts: $1,000 to $35,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Loans and lines of credit up to $35,000

  • Borrowers can complete loan process entirely online

See full profile

Best Online Mortgage Lenders

Better.com
Not disclosed Min. Down Payment
620 Min. Credit Score
SoFi
3% Min. Down Payment
620 Min. Credit Score
Lender
U.S. News Rating
Not disclosed Min. Down Payment
620 Min. Credit Score
Lender
U.S. News Rating
3% Min. Down Payment
620 Min. Credit Score

Best for VA loans

Veterans United Home Loans provides mortgages to veterans and military families in all 50 states and Washington, D.C., and specializes in VA loans. In 2019, Veterans United Home Loans generated the largest number of VA loans in the nation.

Before You Apply

  • Mortgage types: ARMs, conventional, FHA, refinance, USDA and VA
  • Minimum FICO credit score: 660
  • Maximum loan amount: $1.5 million
  • Better Business Bureau rating: A+

Best Features

  • Requires no military service

  • Sets no minimum loan amount

See full profile

Best for no down payment

Alliant Credit Union is a not-for-profit financial cooperative that serves customers in all states except Maryland. Borrowers can take out conventional, jumbo, refinance and home equity loans.

Before You Apply

  • Mortgage types: conventional, first-time homebuyer, HELOCs and refinance
  • Minimum FICO credit score: 620
  • Maximum loan amount: $2.5 million
  • Better Business Bureau rating: A+

Best Features

  • Issues no down-payment mortgages for first-time homebuyers with excellent credit

  • Offers mortgages to borrowers with FICO credit scores as low as 620

  • Allows a debt-to-income ratio of up to 50% for some loan programs

See full profile

Best for online service

SoFi is an online lender providing fixed- and adjustable-rate mortgages. Refinance loans are also available, including cash-out and student loan refinances.

Lender Highlights

  • Mortgage types: ARM, conventional, jumbo, refinancing
  • Minimum FICO score: 620
  • Maximum loan amount: $3 million
  • Better Business Bureau rating: A

Best Features

  • Down payments as low as 10%

  • Mortgage limits up to $3 million

  • Interest rate discounts on additional loans

See full profile

Best Online Student Loans

Methodology: U.S. News selected national student loan companies for this guide based on consumer ratings and availability of products.

Best for low APR

Splash Financial operates in every state to refinance student loans, including federal, private and Parent Direct PLUS loans for undergraduate and graduate programs. The company refinances loans for law, dental and medical school, plus MBA loans, and offers a special refinance program for doctors in training.

Lender Highlights

  • Loan types: refinancing
  • Minimum FICO credit score: 660
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Refinances a broad range of student loans

  • Charges no prepayment penalty

  • Offers fixed- and variable-rate loans

See full profile

Best for instant approval

College Ave Student Loans offers undergraduate, graduate and parent loans to borrowers in all 50 states. The lender specializes in simple student loan applications with instant decisions.

Lender Highlights

  • Loan types: dental, graduate, international, law, MBA, parent, refinancing, undergraduate
  • Minimum FICO credit score: undisclosed
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Provides loans from $1,000 up to 100% of the school-certified cost of attendance

  • Allows full, interest-only, flat or deferred payment options

  • Charges no origination or prepayment fees on student loans

See full profile

Best for product availability

Sallie Mae is a publicly traded consumer bank that offers private student loans to pay for undergraduate, graduate and specialty degrees. The company has helped thousands of students and their families with its range of student loans.

Lender Highlights

  • Loan types: dental, graduate, law, MBA, medical, parent, refinancing, undergraduate
  • Minimum FICO credit score: undisclosed
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Offers student loans that completely cover school-certified expenses

  • Well-rated customer service

  • Charges no loan origination fee

See full profile

Best for customer service

Education Loan Finance, also known as ELFI, is a national student loan refinancing program for federal and private student loans from Tennessee-based SouthEast Bank. Undergraduate, graduate and parent loans can be refinanced, as well as loans for MBA programs, and for law, dental and medical school.

Lender Highlights

  • Loan types: dental, graduate, law, MBA, medical, parent, refinancing, undergraduate
  • Minimum FICO credit score: 680
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Sets no maximum loan amount

  • Refinances all types of student loans

  • Approves some borrowers with up to 50% debt-to-income ratios

See full profile

Best for instant approval

Citizens Bank provides fixed- and variable-rate private student loans for undergraduate and graduate degrees, as well as parent loans. Borrowers can get approved for several years’ worth of student loans.

Lender Highlights

  • Loan types: graduate, parent, refinancing, undergraduate
  • Minimum FICO credit score: undisclosed
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Offers multiyear approval, meaning you won’t have to reapply each school year

  • Provides a 0.5% interest rate discount to Citizens Bank borrowers who sign up for automatic payments

  • Allows international students to apply with a U.S. citizen co-signer or permanent resident with good credit

See full profile

Best for minimal fees

Discover Bank has been operating for more than 100 years, and since 2010, it has offered private student loans to students attending more than 2,400 colleges and universities. Fixed or variable-rate loans are available to cover up to 100% of school-certified costs.

Lender Highlights

  • Loan types: dental, graduate, international, law, MBA, medical, parent, refinancing, undergraduate
  • Minimum FICO credit score: undisclosed
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Makes loans as small as $1,000 to help families bridge the gap between financial aid and out-of-pocket college expenses

  • Accepts co-signers to help students qualify for lower interest rates

  • Charges no origination, application or late fees

See full profile

Best for fair credit

Earnest is an online lender offering private student loans to undergraduate and graduate students, as well as refinance loans. Borrowers can choose their own loan terms from the company, founded in 2013, to fund up to the full cost of their education.

Lender Highlights

  • Loan types: dental, graduate, law, MBA, medical, parent, refinancing, undergraduate
  • Minimum FICO credit score: 650
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Charges no origination, application or late fees

  • Allows borrowers to choose a monthly payment and a repayment period

  • Permits co-signers on undergraduate or graduate student loans

See full profile

Best for no minimum FICO score

MPower Financing offers private student loans to undergraduate and graduate students who are within two years of graduating from, or about to start a one- or two-year program at, an approved U.S. or Canadian school. The lender specializes in working with international students, Deferred Action for Childhood Arrivals recipients, refugees and asylum-seekers.

Lender Highlights

  • Loan types: graduate, international, undergraduate
  • Minimum FICO credit score: 680
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Requires neither a credit history nor a co-signer

  • Offers loans to international students and DACA recipients

See full profile

Best for ACH discount

PNC was chartered in 1845 and operates in all 50 states. The bank offers student loan refinancing, with both fixed and variable rates, and neither application nor origination fees.

Lender Highlights

  • Loan types: dental, graduate, law, MBA, medical, parent, refinancing, undergraduate
  • Minimum FICO credit score: undisclosed
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Offers a range of loans for undergraduate, graduate and professional education

  • Makes loans as little as $1,000 in all 50 states

  • Provides interest-rate discounts for automatic payments from a checking or savings account

See full profile

Best for flexible loan terms

U-fi offers private student loans for undergraduate and graduate programs as well as refinancing loans to borrowers in 49 states. The lender specializes in flexible repayment options.

Lender Highlights

  • Loan types: dental, graduate, law, MBA, medical, parent, refinancing, undergraduate
  • Minimum FICO credit score: 680
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Offers repayment terms of up to 25 years

  • Provides an interest rate discount for automatic payments

  • Allows full, interest-only or deferred payment options

See full profile

Best Online Business Loans

Methodology: U.S. News selected national small-business loan companies for this guide based on consumer ratings and availability of products.

Best for bad credit

Established in 2013, BlueVine has delivered more than $6.5 billion in financing to over 125,000 small businesses. The lender offers invoice factoring credit lines of up to $5 million.

Lender Highlights

  • Loan types: invoice factoring, lines of credit, term loans
  • Minimum FICO credit score: 530
  • Maximum loan amount: $5 million
  • Better Business Bureau rating: A+

Best Features

  • Invoice factoring credit lines as large as $5 million

  • Disbursement within 24 hours

See full profile

Best for loan options

Biz2Credit was founded in 2007 as a platform to match small businesses with funding based on their needs by connecting borrowers with lenders that offer a range of loan and credit options. The platform has arranged more than $3 billion in small business funding for thousands of U.S. companies.

Lender Highlights

  • Loan types: lines of credit, merchant cash advances
  • Minimum FICO credit score: undisclosed
  • Maximum loan amount: $5 million
  • Better Business Bureau rating: A+

Best Features

  • Loans come from a network of financial institutions

  • Borrowers matched with loan options

See full profile

Best for large loan amounts

Established in 2013, Fundbox has served more than 70,000 small businesses with loans backed by investor partners. Borrowers can obtain revolving lines of credit of up to $100,000.

Lender Highlights

  • Loan types: lines of credit
  • Minimum FICO credit score: undisclosed
  • Maximum loan amount: $100,000
  • Better Business Bureau rating: A+

Best Features

  • Loan amounts from $1,000 to $100,000

  • Some funds with next-business-day availability

See full profile

Best for fixed monthly payments

Funding Circle is an online lender that connects small-business borrowers with investors. The platform has linked 81,000 businesses worldwide with more than $11.7 billion in funding.

Lender Highlights

  • Loan types: term loans
  • Minimum FICO credit score: 660
  • Maximum loan amount: $500,000
  • Better Business Bureau rating: A+

Best Features

  • Term loans of up to $500,000

  • No annual revenue minimums for loans

  • Loans available in every state except Nevada

See full profile

Best for short loan terms

OnDeck is an online lender providing small businesses with term loans and lines of credit. The company has extended $13 billion in loans using data analytics and digital technology to assess the creditworthiness of borrowers.

Lender Highlights

  • Loan types: lines of credit, term loans
  • Minimum FICO credit score: undisclosed
  • Maximum loan amount: $2 million
  • Better Business Bureau rating: A+

Best Features

  • Term loans and lines of credit

  • Loans of up to $2 million

See full profile

Best for product availability

Rapid Finance offers lines of credit, merchant cash advances and Small Business Administration bridge loans from $5,000 to $1 million. Approval in 24 hours is available, with one-day disbursement.

Lender Highlights

  • Loan types: bridge loans, invoice factoring, lines of credit, merchant cash advances, term loans
  • Minimum FICO credit score: undisclosed
  • Maximum loan amount: $1 million
  • Better Business Bureau rating: A+

Best Features

  • Loans charge monthly fee instead of annual percentage rate

  • Smallest loan amount is $5,000

See full profile

What Is an Online Loan?

Online loans allow you to complete the loan process online, from comparing rates to applying for and receiving funds. Typically, you can obtain your loan and manage your account without setting foot in a brick-and-mortar space.

Some online lenders offer three choices for customer service. They provide not only online resources, but also options for phone and in-person service.

Most online loans are personal loans, with uses ranging from debt consolidation to home improvement loans. But mortgages, business loans, student loans and other loan types can also be obtained online.

“Personal loans have been the fastest-growing type of loan over the last couple of years,” says Peter Klipa, senior vice president of creditor relations for the nonprofit National Foundation for Credit Counseling. “A lot of that is driven by the category of debt consolidation.” Debt consolidation loans are popular because personal loan rates tend to be lower than credit card rates.

Adds Yasmin Farahi, a policy counsel at the Center for Responsible Lending, a consumer advocacy group: “So much of what consumers are doing is online these days, so in that way, (the growth) is not surprising.”

Can You Get an Online Loan Instantly?

One main benefit of online loans compared with traditional loans is speed. Application, approval and the chance to review multiple offers happens quickly, so you can obtain online loans fast.

Some online personal loan companies say they can obtain loan approval in five minutes or less. And you might be able to get funds as soon as the next business day.

Where Can You Get an Online Loan?

Many types of lenders let you borrow money online: traditional banks, credit unions and online financial technology, or fintech, companies. The latter issues almost half of all unsecured personal loans, according to a 2019 report from the credit bureau Experian.

Some of the largest online loan companies for personal loans include SoFi, LightStream, Prosper and Upstart. Like traditional lenders, they require a hard credit check and have set minimum annual income and other eligibility criteria, such as good to excellent credit.

Unlike traditional lenders, though, online lenders use automated underwriting for quicker and easier online loan approval. And you won’t have to visit a bank branch or make a phone call to get a loan.

How Can You Get an Online Loan?

Follow these steps as you choose an online loan:

Decide how much you need, and budget for monthly payments. First, figure out how much money you need to borrow, such as the minimum loan amount to consolidate high-interest debt. Determine what you can reasonably afford to pay on the loan each month.

Get quotes. Many online lenders allow you to prequalify for loan offers with basic information such as your Social Security number, which can tell you how much you may be able to borrow, term lengths, your interest rate and other loan terms. Prequalifying is a good way to assess competitive interest rates and potentially get a lower interest rate. Check that the lender only does a soft credit inquiry for rate quotes, which won’t affect your credit score.

A hard credit inquiry, used when you formally apply for a loan, could affect your credit history and score. But that’s only if you are piling up inquiries in a short span of time.

Review costs. Compare loan rates, terms, loan amounts and other factors to find the best online loan for your needs. Look closely at the loan costs disclosed by the lender, which should include the interest rate and fees, including the origination fee and late fees. Your annual percentage rate can tell you what your loan costs with interest and fees.

“Think about interest as the rent you must pay for borrowing,” says Nandita Das, founder of Das Financial Health in Newark, Delaware. “Along with the interest, you have other fees that become the total cost of the loan.”

The federal Truth in Lending Act requires lenders to provide you with clear information about the costs of a loan. It also allows borrowers to cancel certain loans within three days of signing up for them.

Loan terms should be clear, including loan amount, fees and interest, finance charge and payoff amount.

Are Online Loans Legitimate?

Most online loans are safe, but scams – and really bad deals – can be pitfalls of online loans. Here’s how to tell the difference between legitimate online lenders and ones you should avoid.

Online loan companies fall into two groups: firms that rely on credit report checks before they approve your loan and payday-type lenders that only use soft credit checks and may consider wages or bank accounts instead. Although a loan with no hard credit check might sound like a good deal, especially if you have bad credit, a full credit check is a good sign an online lender is legitimate.

Because they have few approval requirements, payday loans can help you borrow if you have bad credit. But easier access to bad credit loans comes at a cost.

A consumer will pay much higher interest rates for not going through a credit check, Klipa says. “As much as the consolidation loans have been growing, the payday lenders have also been growing,” he adds.

Payday lenders target consumers with a below-average credit score.

If an offer seems too good to be true – such as fast funding for anyone, with no minimum credit score – be careful. Getting payday loans online is rarely a good choice because the cost of borrowing can quickly become overwhelming.

  • The offer seems too good to be true.
  • Loan costs aren’t clear, or information is limited.
  • High interest rates or fees are well above average.
  • No credit check is required.
  • Payments aren’t reported to credit bureaus.

Online payday-type lenders “are the same thing in a different package,” Farahi says. “Because of a new shiny package, people think of them as different, like they’re not payday loans or have the same kinds of issues, but they do.”

Look for online lenders that perform credit checks and provide clear terms, with fees that are within reason for the type of loan you want.

Is an Online Loan the Right Choice?

Sometimes a loan of any kind just isn’t the right choice. Maybe you’re buried under credit card debt and credit counseling would be more helpful than credit card refinancing with another bill to pay. Or if you want to take a vacation, saving money could be a better option than borrowing.

Online loans can be faster and easier than traditional loans, but those aren’t the most important factors to consider. If you want an online loan, get prequalified for offers from all types of lenders to see whether you’re getting the best deal on rates, terms and fees.

Advertising Disclosure: Some of the loan offers on this site are from companies
who are advertising clients of U.S. News. Advertising considerations may impact
where offers appear on the site but do not affect any editorial decisions,
such as which loan products we write about and how we evaluate them. This site
does not include all loan companies or all loan offers available in the marketplace.

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