Contents
Introduction
A personal loan serves as a versatile financial tool, suitable for various needs such as emergencies, vacations, home improvements, and more.
Unlike credit cards, personal loans typically offer lower interest rates, particularly for individuals with good or excellent credit scores.
These loans are available through banks, credit unions, online lenders, and fintech companies, catering to a diverse range of borrowers.
However, navigating through the multitude of options available can prove challenging, turning a seemingly straightforward process into a complex endeavor.
Comprehensive Data Collection and Review Process
Data Collection Period
- Duration: August 4-23, 2023.
- Scope: 60 personal loan lenders and 10 finance companies.
Consumer Survey
- Timeframe: August 14, 2023 – September 15, 2023.
- Participants: 962 borrowers.
- Method: Online self-administered questionnaire.
- Interviews: 17 semi-structured interviews conducted.
Data Collection and Scoring
- Criteria: 31 data points collected per lender.
- Scoring Method:
- Binary criteria: 1 or 0.
- Discrete scale criteria: 0.00, 0.25, 0.50, 0.75, 1.00.
- Continuous scale criteria: Rescaled to 0.00-1.00.
Personal Loan Evaluation Categories
Loan Costs
- Weight: 29.5% of total score.
- Features Evaluated:
- Minimum and Maximum Fixed APR.
- Minimum and Maximum Origination Fee.
- Maximum Late Payment Fee.
Loan Terms
- Weight: 22.25% of total score.
- Features Evaluated:
- Minimum Days to Receive Funds.
- Minimum and Maximum Loan Amount.
- Maximum Repayment Term.
Borrowing Requirements
- Weight: 28.50% of total score.
- Features Evaluated:
- Co-Signer.
- Offers Secured Loans.
- List of States Available.
- Membership Requirement.
- Hard Credit Check Required.
- No Credit History.
- Minimum Credit Score.
Additional Features
- Weight: 20% of total score.
- Features Evaluated:
- Pre-Qualification/Pre-Approval Available.
- Refinance Available.
- Creditor Direct Pay.
- Restrictions on Loan Use.
- Allows Joint Applications/Co-Borrowers/Co-Applicants.
- Discounts Available.
- Reports to All Major Credit Bureaus.
- Credit Insurance Available.
Articles That Use Our Methodology
- Investopedia’s personal loan reviews and roundups.
- Featured in Best Personal Loans and Best Bad Credit Loans roundups.
- Individual lender reviews, e.g., SoFi, Upgrade.