In finance, a personal loan is a sum of money provided by an individual, organization, or any entity to an individual for personal use. The receiver of the loan is then obliged to pay back the principal at a specific interest rate within a stipulated period of time. You may not be sure where to turn or what questions to ask when initially thinking about applying for a personal loan. To enhance your repayment capacity, selecting a good lender is key.
When making the choice of a lender for a personal loan, some of the things you need to consider include: the application process, the amount you need to borrow, associated costs such as origination fees, prepayment penalty and other hidden expenses, the term of repayment, and the loan interest rate. Thus, it is important to compare lenders on those specific factors before making your choice.
Some questions to ask are:
- Does the lender offer an online platform and what is the repayment method?
- What is the limit and the loan size offered?
- Are there any hidden fees (such as origination fee)?
- What is the interest rate?
The lender you end up choosing should match your needs. Here are some lenders with positive reviews that offer different types of loans that might work for you:
Marcus by Goldman Sachs
According to thebalance.com, Marcus, the personal banking and borrowing brand of Goldman Sachs, has been consistently ranked the best in the industry. It scores highest on ease of transaction because of its simple five-minute online application and on the other factors because of its competitive interest rate range of 6.99% to 24.99%. It offers loans from $3,500 to $40,000 with terms from 36 to 72 months and no origination and prepayment fees.
Social Finance
SoFi, short for Social Finance, also offers competitive quality personal loan services. It uses an online application and automatic payments and offers loans starting from $5,000 up to $100,000 at an interest rate ranging from 6.99% to 15.24% in different terms such as 3, 4, 5, 6, or 7 years at no hidden charges. SoFi’s original targeted borrowers were students so its services are especially recommended for student loans. Also, it offers a distinctive unemployment protection package in case of job loss.
Best Egg
Best Egg, with its overwhelmingly positive reviews and an A+ rating by Better Business Bureau, provides loans from $2,000 to $35,000 at interest rates from 5.99% to 29.99% on a 3 or 5-year repayment term. It, however, charges an origination fee from 0.99% to 5.99%.
Earnest
Earnest makes the list of our best personal loan lenders as it renders useful, quick and easy services especially for student loan refinancing, and multiple monthly repayment plans which can considerably ease repayment worries. The loans offered, which range between $5,000 and $75,000, are provided at reasonably low-interest rates from 6.99% to 18.24% available in 3, 4, and 5-year terms.
Each lender has its own pros and cons. Your decision should depend on your ultimate goal. For example, if you are a student, consider Social Finance or Earnest as they have services geared towards students. The decision to get a loan is an one that should be taken seriously so be sure to do your research before you decide.