You can choose the best personal loans for good credit with a good rating. Credit scores are one of the most important factors. Financial institutions consider many of them when deciding whether to issue loans.
An excellent credit story will indicate that you are responsible for processing the debt. Thus, you are considered a low-risk borrower. You are likely to borrow at better interest rates and conditions. With so many competing online lenders, finding the best loan terms has never been easier.
What is a good credit loan?
A good-credit personal loan is a low-interest loan on fair terms. One of these loans usually requires a solid credit story and a reliable source of income. Yet, financial institutions may list extra requirements.
In general, financial institutions consider a FICO score of 670 or higher to be a “good” score. In contrast, a “very good” score of 740 or higher and a score of 800 or higher are considered “excellent” scores.
The higher the rating, the easier it is to pass the credit check and the lower the interest rate.
The highest interest rates on the best personal loans for good credit are about 3% to 36% today. Actual interest rates depend on several factors, including creditworthiness, annual income, and leverage. Before choosing a lender, consider the appropriate interest rates and additional options.
How do good-credit loans work?
Many people borrow money to buy things they can’t buy themselves, such as houses and cars. Loans can be a great financial instrument if used correctly, but they can also be a disadvantage.
Before you borrow money from a thirsty money lender, you need to understand how credit loans. Lenders’ money works so that you don’t carry a lot of debts. In the financial world, loans are big business. It is used to make money for lenders.
No one wants to lend money without expecting a reward. Keep this in mind when looking for loans for yourself or your business. The mechanics of lending are confusing and can lead to a high level of debt.
The great thing about loans is that they are versatile for most of the things you need. The best personal loans for good credit can be used to cover debt consolidation and unplanned expenses. For example, these are home renovation projects and car repairs. Ideally, a loan should be used for fixed expenses.
Read Also: How to Increase Your Credit Score
How to choose a personal loan
The choice depends on the lender’s reputation and the lending terms offered. Whether you can get lending depends on your score and overall financial history. But it’s a good idea to get quotes from multiple lenders and estimate interest rates and fees.
It is also important to choose a good financial institution. It should have a proven track record of providing excellent customer support to clients.
Don’t blindly chase after loans with low-interest rates. Sure, low-interest loans are attractive. But that’s not the only deciding factor for lending that suits you. For example, low-interest rates can be combined with short terms, high minimum amounts, or high requirements you may not meet.
Compare rates
Maybe a bank offered a personal loan interest rate of “only 14%”. Or, if you contact a bank with a savings account, you may be told that the interest rate is only 16%.
A crucial stage before determining which bank to get a loan from is to look at each bank’s personal loan terms and compare interest rates. You can look at the home pages of various banks to determine the interest rates. Or look at financial pages that provide the necessary details based on the entered conditions.
The interest rates for the best personal loans for good credit are currently between 3 and 36%. It depends on the creditworthiness.
In 2024, the average interest rate on credit personal loans will be 10.28%. The higher your rating, the more likely you will receive a low-interest personal loan. Before applying for a personal loan, compare your loan offers to see what conditions apply to you.
Loan amount
Before you take out a personal loan, deciding how much you want to borrow is one of the most critical factors. It is essential to determine the desired loan amount according to the funds required is essential.
Then calculate the equivalent monthly installment payment (EMI) from the loan amount and the holding period of the loan. After that, you can choose a loan that suits your budget. Just compare the loans offered by different financial companies.
Each lender calls a personal limit. However, depending on your eligibility, the maximum amount you can receive may vary from person to person. So, it is vital to have a fair understanding of your claims and the lender’s offers. With this information, you can choose the right loan.
Loan purpose
The advantage of a personal loan is that you can usually spend money freely, such as repaying a high-interest credit card or renovating the house. However, the interest rate varies depending on the purpose.
Lenders, as a rule, don’t limit the use of funds. However, the best personal loans for good credit are either collateralized (or require collateral for verification) and unsecured. There are also fixed interest rates. Variable interest rates change over time. Many of them are sold for specific purposes.
Also, consider the repayment terms’ flexibility, convenient features such as pre-verification, the possibility of joint guarantor and joint application, etc., so the borrower can use it in the best condition.
Loan term
The best personal loans for good credit usually have terms of two to seven years. But some financial institutions have extended them for certain purposes. The shorter the lending term, the lower the total interest rate on the loan.
The longer the lending term, the lower the monthly payments, which can be more profitable. Choosing the right financial institution can be daunting with so many options. In such cases, it is important not to fall into fraud or trap.
The best choice is to use the online platform to make informed decisions. You can compare different lenders, their terms, and interest rates. You will also be informed from time to time on such platforms about the offers offered by these different lenders.
If you want a long-term loan, consider an old-established bank that offers favorable conditions.
Read More: Personal Loan Term Length: How and Which One To Choose?
Pros and Cons of Personal Loans
Understanding the pros and cons of the best personal loans for good credit is essential when deciding whether to apply for a loan.
Here are some advantages:
- Flexibility and universality. The best personal loans for good credit give borrowers deep flexibility to use the loan systematically or unplanned for certain costs.
- Can help you to create a loan. You can build excellent credit by taking out a loan and fulfilling your monthly obligations. This way, you gradually improve your creditworthiness.
- Relatively low prices. Depending on the financial institution, the interest rate on the personal loan can be set low due to various factors. These are the borrower’s creditworthiness, the amount of the loan, and maturity.
- Relatively high borrowing limit. Very credible individuals may get an unsecured loan that pays out tens of thousands of dollars in advance.
- Unsecured personal lending may not require collateral. Consumers can often get unsecured personal loans. This is a lending product that doesn’t require collateral for verification.
Here are the disadvantages:
- Interest rates are higher than some alternatives. Personal loans may have higher interest rates than some alternative lending products,
- The fees can be high. In addition to principal and interest, lending may incur additional fees, which can be high.
- Higher prices than others. The best personal loans for good credit can pay out more monthly than other products.
- Can increase debt. A loan can increase your debt load, especially if you use your money for large purchases and not to consolidate your debts.
- Collateral may be required. Financial institutions may require borrowers to provide property or collateral to approve personal loans for good credit.
- It can negatively affect your excellent credit score. Applying for a loan can harm your creditworthiness.
Best Place to Get a Personal Loan
Three types of financial institutions offer the best personal loans for good credit.
Online lenders
Online financial institutions offer the most competitive interest rates and repayment terms for personal loans for good credit. A wider choice means finding the one that best suits your needs and financial situation.
In many cases, they will conduct a pre-screening to determine if you are eligible before applying for your loan. You can compare financial institutions to find your budget’s best interest rates and terms.
Banks
Since banks are commercial institutions, interest rates may be higher than credit unions. However, if you already have a bank account in a large financial institution, it may make sense to take out a loan based on it. Also, taking out lending at a bank you already work with is easy. In addition, existing customers are usually discounted.
Credit unions
Credit unions, as a rule, are non-profit financial institutions aimed at residents of a particular area. It offers the same products and services as banks. But these unions are owned by their members and generally have lower interest rates and fees than banks.
Most credit unions are close to the individual community. Therefore, you have the opportunity to visit a branch near you. These unions usually issue small loans.
Make sure you research all the options before deciding on a personal loan. The best financial institutions offer the lowest interest rates, low fees, and repayment conditions that fit your budget. In addition, it’s a good idea to find a place to make a deposit immediately and where you need a guarantor.
Read More: How to Get a Personal Loan in 7 Steps
Best personal loans for good credit
A high rating often leads to lower annual interest rates and better conditions for the best personal loans for good credit. These loans are unsecured, so you don’t have to mortgage your car or savings.
Instead, the lender assesses the applicant’s ability to repay based on factors such as creditworthiness, debt, and income. You can get good loans from online financial institutions, credit unions, and banks.
You should find a loan offer with competitive interest rates, fair conditions, and an excellent credit rating. Of course, you probably won’t get the absolute minimum annual interest rate. But you can find a financial company that meets your needs.
The lending information in the list below is current at the time of the announcement. Details can be found on the website of the relevant financial institution. The financial institutions listed here are selected based on loan maturities, annual interest rates, loan amounts, and fees. If you are looking for a loan, start your research here.
Best for high borrowing limits — SoFi
SoFi has all the standard features of a 5-star lender, including no fees, ample lending amounts, and flexible conditions. In addition, this lender has many advantages. SoFi members can access free career and financial advice, referral rewards, networking events, and even free property design.
- APR Range: 6.99-22.23%
- Minimum Credit Score: 680
- Loan Amounts: $5,000-$100,000
SoFi doesn’t disclose the borrower’s conditions. But customer service representatives say the most creditworthy borrowers receive the best. To get money, you must reach the legal age in your state, be a US citizen, permanent resident, or visa holder. You also must be employed for the next 90 days, have sufficient income, or have a job offer.
After signing the loan application and confirming the address by the SoFi representative, the borrower can receive the money within a few days or the next business day after the conditions are approved and accepted. SoFi personal loans are repaid in 2 to 7 years.
Pros:
- There is no charge;
- Provides an option that allows you to add a guarantor to your lending options;Offers a discount of 0.25% for setting up automatic registration;Protections against unemployment;
- Provides a mobile app for managing loans.
Cons:
- There are no secured or joint loan options;
- The minimum loan amount is high.
Best for personal loans without any fees — Marcus
Marcus is the sole online consumer finance arm of investment bank Goldman Sachs. They offer borrowers with high ratings fee-free, unsecured personal loans for good credit. In addition, Marcus offers nine repayment plans. They allow you to adjust your loan and monthly payments and defer payments without paying interest.
- APR Range: 6.99-19.99%
- Minimum Credit Score: 660
- Loan Amounts: $3,500-$40,000
Marcus’ unsecured structure, combined with a wide range of loan terms and a solid loan amount, makes it a flexible option for creditworthy borrowers. Marcus hasn’t announced a requirement. But it is recommended that you have at least 660 points to increase your chances of getting approved.
Against this background, many people still use Marcus loans which can be used at the same interest rates as other first-class financial institutions. However, joint guarantors and joint debtors are not allowed. Nevertheless, Marcus is one of the best personal loans for good credit with zero fees and customizable deadlines.
Pros:
- There is no charge;
- Abundant repayment methods;
- Offers a discount of 0.25% for setting up automatic registration;
- Proposed direct payment to lenders for debt consolidation loans.
Cons:
- There are no options for joint loans or secured loans.
Best for borrowing money from other investors — LendingClub
LendingClub is a borrower who wants the best: consolidation and financing of large purchases. It is not the cheapest financial institution but offers transparently flexible payments, interest rates, and fees. Half of the borrowers return to LendingClub for a second loan at the money lender.
- APR Range: 6.34-35.89%
- Minimum Credit Score: 600
- Loan Amounts: $1,000-$40,000
LendingClub considers information such as creditworthiness, income, existing debts, and cash flow when making a loan decision. Here are the minimum requirements for a loan. You can choose between two types of loan periods – 36 months and 60 months.
It has looser audit conditions than other financial institutions, making it a good option for borrowers with medium credit history. LendingClub’s term loans are limited. But if you add a co-borrower, you can borrow at a lower interest rate.
Pros:
- Provides joint loan;
- Providing a service that pays creditors directly with a consolidation loan;
- Check the soft loan in the preliminary examination;
- Changeable payment date.
Cons:
- You can choose between two repayment methods;
- There is a start-up fee.
Beat for borrowers who can qualify for the best rates — LightStream
LightStream offers low-interest, fee-free personal loans for good credit for customers with high creditworthiness. It allows borrowers to choose when they want to receive money, among other consumer-friendly features.
After approval, a deposit to your account is possible on the same day or at the earliest after 30 days. In addition, its financing gives you more time to plan your first payment and allows you to align your loan with starting a renovation project or other major expenses.
- APR Range: 4.99-19.99%
- Minimum Credit Score: 660
- Loan Amounts: $5,000-$100,000
LightStream is one of the best financial institutions for creditworthy borrowers with low-interest rates and zero fees. Once you have submitted your loan application, LightStream will review it, conduct a hard loan transaction and email you the status of your application. After approval, you can sign a loan agreement and set loan data and payment information online.
After approval, the lender transfers the money to your account. If the application documents are confirmed and approved by 14:30 EST on working days, they can be realized immediately after the application.
Pros:
- There is no charge;
- Competitive interest rates at online financial institutions;
- Offers a discount of 0.5 points;
- Special features such as an evaluation program and satisfaction guarantee.
Cons:
- A preliminary check is not possible on the homepage;
- You need a few years of credit history;
- LightStream doesn’t make direct payments to creditors for debt consolidation.
Read Also: Best Low-Interest Personal Loans
Best for good credit and fast funding — Figure Personal Loan
The div is for borrowers with high creditworthiness (FICO score 690 or higher). The company has appropriate application procedures and financing within a few business days. Unlike comparable online lenders, the chart loan lacks the flexibility to choose payment dates and guarantors and add collateral.
- APR Range: 5.75-31.44%
- Minimum Credit Score: 680
- Loan Amounts: $5,000-$50,000
Figure offers the best personal loans for good credit, from $5,000 to $50,000. The minimum and maximum qualifications vary depending on your information and state. These loans have an annual fixed rate of return from 2.75% to 22.94%, and if you choose automatic registration, your yearly income will be reduced by 0.25%.
The annual percentage rate depends on your creditworthiness. To determine this, the Figure looks at your creditworthiness, credit request and utilization, and debt ratio. A period of 3 or 5 years also affects the annual percentage rate.
With a 3-year contract, you can set the minimum interest rate. Figure loans are ideal for creditworthy borrowers who want a fast and complete online loan.
Pros:
- Preliminary check and soft credit check;
- Offers a point discount of 0.25%;
- Report payments to all three credit bureaus;
- Provides a mobile app for credit management.
Cons:
- An origination fee may be charged;
- There is no way to select or change the payment date;
- There are no common or secured loan options;
- Borrowers can only choose between two repayment terms.
Conclusion
A personal loan is just right for you if you need to borrow money and prefer a fixed plan and stable monthly installments. However, do you want to get the best interest rates and terms? Then, take steps to become an attractive borrower, such as improving your score and minimizing other debts.
Decide whether you want to take out a loan, and consider the following questions:
- Is cash the best, or is a card sufficient for your particular situation?
- How much will you borrow?
- Is it reasonably possible to make monthly repayments?
- Is the amount of interest paid justified by the usefulness of the lending (that is, is it worth it)?
However, if you need the money and are sure (as far as possible) that you have enough income to repay it, you should consider it a way to raise your own money.
In addition, it is essential to compare the interest rates of the best personal loans for good credit with several financial companies. This is the only way to find the cheapest loan for your situation.
Sources Used in Research for the Article:
- Your Credit History, Federal State Commission, https://consumer.gov/credit-loans-debt/your-credit-history
- Using Credit, Federal State Commission, https://consumer.gov/credit-loans-debt/using-credit
- Personal Loans: Secured vs. Unsecured, National Credit Union Administration, https://mycreditunion.gov/life-events/consumer-loans/secured-unsecured