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Hours of in-depth editorial research and debate along with referral fee compensation will determine placement for companies listed below.
Key takeaways
Updated 6:22 am ET Apr. 8, 2025
SoFi is a great choice if you have excellent credit.
A personal loan can be used for consolidating debt, funding home improvements, or even financing a large purchase.
Credible is the best solution if you're not sure which lender to choose and need multiple quotes.
Compare 4 Best Personal Loans of 2023
Credible 
4.8
Review
APR
4.60% - 35.99%
Loan Term
3 - 5 years
Credit Score
Fair/Good
TrustPilot
4.7/5
U.S. News
4.7/5
Savology
4.6/5
Avant
4.7
Review
APR
4.99 - 32.99%
Loan Term
3 - 5 years
Credit Score
Fair
CreditKarma
4.2/5
WalletHub
4.3/5
Forbes
3.5/5
Best Egg
4.5
Review
APR
4.99 - 32.99%
Loan Term
3 - 5 years
Credit Score
Good
NerdWallet
4.5/5
CreditKarma
4.7/5
Forbes
3.0/5
Understanding the Basics of Personal Loans
Personal loans are unsecured types of credit that individuals can use for a variety of purposes, including debt consolidation, home renovation, medical expenses, education costs, or even a dream vacation. As they are unsecured, these loans do not require collateral, such as a house or car. The borrower repays the loan amount, along with interest, in monthly installments over a predetermined period known as the loan term. Personal loan interest rates are typically determined based on the borrower’s creditworthiness, and a good credit score can often secure a lower interest rate. These loans offer flexibility and can be a viable financial solution for those needing immediate access to funds.
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Frequently Asked Questions
What is a personal loan?
A personal loan is a type of unsecured loan that provides borrowers with funds they can use for various purposes. It does not require collateral like a house or car. Borrowers repay the loan, along with interest, in monthly installments over a set period.
What can I use a personal loan for?
You can use a personal loan for a variety of purposes, including debt consolidation, home renovations, medical expenses, education costs, or a vacation. The flexibility is one of the key advantages of personal loans.
How is the interest rate determined for a personal loan?
The interest rate on a personal loan is usually determined based on the borrower's credit score, income level, employment status, and the lender's policies. Generally, a higher credit score can lead to a lower interest rate.
How do I repay a personal loan?
A personal loan is typically repaid in monthly installments over a predetermined period, known as the loan term. Each installment consists of a portion of the principal amount borrowed and the interest accrued.
Does a personal loan affect my credit score?
Yes, a personal loan can affect your credit score. Timely repayment of the loan can positively impact your credit score. Conversely, late or missed payments can negatively affect your credit score. It's important to borrow responsibly and ensure you can comfortably make the repayments.