24 million Americans will take out an unsecured personal loan this year, and that number is expected to rise in the years to come. So what exactly can you do with a personal loan? Debt consolidation is one of the most popular uses because many consumers with credit card debt can find a better interest rate with a personal loan.

online personal loans

Instead of making monthly payments to one or more credit card companies, each with a different due date and interest rate, you might be able to beat that expensive APR with a loan and then pay off all of your credit cards (or other debts with high interest levels). Then, you simply make one fixed payment for a predetermined period of time. With more than $729 billion of credit card debt in America, it’s no surprise why using a personal loan for debt consolidation is a common choice.

But many people use personal loans for other expenses as well. They’re usually reserved for expensive items that are difficult, if not impossible, to pay for all at once even if you have a beefed up savings account. For example, you might need a new roof or want to update your kitchen before you sell your house. Or perhaps your wedding plans cost more than your current cash flow or you need money to help pay for an adoption.

Personal loans make it easy to finance big ticket items without draining your savings all at once. And while banks and credit unions have historically been the place to go for personal loans, online lenders now offer easy access to financing, often with lower interest rates.

Why Online Lenders?

Online lenders are a fast-growing segment in the personal loan space. In fact, in 2015 they closed between $20 and $40 billion in loans. By 2020, that number is expected to grow to $90 billion. It’s still a drop in the bucket compared to the $3.5 trillion consumer lending market, but it goes to show just how much room for growth there actually is.

So why choose an online lender instead of a national bank or local credit union? Compared to many traditional financial institutions, online lenders typically help people from all types of backgrounds, even underserved markets of individuals with bad credit or no credit history at all. But online loans can be beneficial to those with good and excellent credit as well.

Rates are often more competitive than banks because online lenders don’t have to worry about paying for brick and mortar branches and the staff members they would hold. With much lower overhead costs, many online lenders pass those savings onto borrowers.

When looking for the best online personal loan, it’s important to understand how the lenders are different. There are three basic types: a direct lender, a loan marketplace, and a peer to peer (P2P) lender. A direct lender actually finances and services the loan you take out, while a loan marketplace, on the other hand, allows you to fill out one application and receive multiple offers from different lenders. A P2P lender services your loan but actually finances it through one or more investors.

What’s the Application Process Like?

Most online lenders provide a quick and easy application process that — you guessed it — you can complete online. Many offer a pre-approval process where you can enter in your basic information and get a loan offer. That way you can check your rates before having a hard check on your credit report. Then, you verify all of your personal and financial information by completing the full application. You’ll answer more questions and upload supporting documents (i.e. copies of your driver’s license or passport, pay stubs/ bank statements, etc.).

Don’t be disheartened! The whole process is extremely fast. Whereas a traditional lender might take a couple of weeks to qualify you for a loan and get back to you, with an online lender you can complete the whole process and get your money within days.

How We Found the Best Online Personal Loans

We reviewed countless lenders to come up with our five best places to get a personal loan online. To make it to our list, each lender had to meet the following five criteria: 1) diversity in options, 2) wide borrower approval rate, 3) dependability (or strong reputation and reviews from borrowers), 4) competitive rates — because regardless of what you’re using your loan funds for, you want it to cost as little as possible — and 5) special features, since many online lenders provide convenient perks and services for borrowers.

Side note: Geographic availability was also an important factor we considered. Because each state has different regulations, many online lenders only focus on a few select locations when they first open. Then as they gain traction, they move into more and more states. We know our readers live all over the country, so we focused on lenders with a large geographic footprint.

Without further adieu, we present the five best online personal loans. Because we included lenders focusing on different types of borrowers, we encourage you to read through the list to find the best fit for you.


Avant has served close to half a million borrowers since opening its doors online in 2012. It’s a great middle-of-the-road option because most Avant borrowers have either average or above average credit. The average score range is actually between 600 and 700.

If you have strong credit, you can get an APR as low as 9.95%. Loan sizes range anywhere from $1,000 to $35,000; with such a low minimum, you can get a low-rate loan for a short-term need, whereas many other lenders require a minimum of $5,000.

Many Avant borrowers use their loan for debt consolidation and the lender states that six months into the loan, those borrowers see an average 12 point increase in their credit scores. You actually get to track your VantageScore for free each month as an Avant borrower. And as an added bonus for borrowers in debt consolidation, you get access to ReadyforZero, a free online debt management tool.

Another unique feature offered by Avant is the late fee forgiveness program. If you’re late making your payment, you’ll be charged a late fee. If, however, you pay your next three consecutive bills on time, your fee will be refunded in full. Avant also holds true to the idea of a high-tech online lender. You can access your loan dashboard either online or through a smartphone app, making this online lender user-friendly and competitive.

Read our full review of Avant here.


Upstart offers personal loans particularly for younger individuals who may not have an extensive credit history. Most borrowers are actually in their early 20s to mid-30s, and many of whom have recently graduated from college.

Rather than focusing solely on credit score, Upstart considers other factors as well when considering each loan application. For instance, the lender also looks at your education and work history. If you’re just out of college, they may look at things like SAT score and GPA. If you’re older, they’ll look more extensively at your work history.

Upstart’s interest rates start at 6.4% and go up to 29.99% — quite a competitive range. You can borrow anywhere between $1,000 and $50,000 for up to five years, but you’ll need a credit score of at least 620 (with the average coming in at 692). If you hit financial troubles, Upstart also offers flexible repayment terms.

Another neat feature is that you can get a loan for a partnering coding bootcamp, even if you don’t have a job or a college degree. This helps you invest in yourself by getting experience in a high demand industry. It’s no surprise Upstart places a high value on tech skills since it was founded by three former Google staff members.

If you have a solid work or education history that shows you’re a reliable person, you could find the online personal loan you need with Upstart. Each underwriting process is tailored specifically to the individual giving you the best chance for success.

Read our full review of Upstart here.


Discover doesn’t just offer credit cards, it’s also a lender with a strong presence in the online loan market. One of the standout features of a Discover loan is that the repayment term lengths are extremely flexible. While most lenders only offer loan terms up to three or maybe five years, your loan can be spread out as much as seven years with Discover. Their rates are also competitive, ranging between 6.99% and 24.99% APR. You can qualify for a loan amount ranging anywhere from $2,500 to $35,000.

Discover could be a good fit for you if you need to make a large purchase and want to spread out your payments to minimize your monthly bill. You’ll need an average credit to qualify for a Discover personal loan— the minimum requirement is 660, but the average borrower’s score is 750.

Another interesting feature of a Discover loan is that you can change your mind even after funds are disbursed. If you decide the loan isn’t right for you, you can return the loan funds within 30 days without having to pay any interest. We also like Discover because unlike many other online lenders, it’s available in all 50 states. If you live in a state that tends to have tough regulations against online lenders, Discover is a safe bet.

Read our full review of Discover here.


LightStream has the interface of a modern online lender with the institutional backing of a major bank. That’s because it’s actually a division of SunTrust Bank; but don’t worry, you don’t have to be a member in order to qualify for a personal loan. You do need good to excellent credit to qualify for a LightStream loan, but credit alone doesn’t affect your APR.

The lender also uses extremely specific loan categories that also contribute to your loan offer because LightStream believes that some personal loans are riskier than others. Debt consolidation, for example, would be viewed less favorably in the application process compared to something like your child’s private school tuition (please note: LightStream loans may not be used for college education).

If you have the credit to qualify, you can access some great rates through LightStream. Depending on your application and your loan term, APRs start as low as 1.99% and go up to 13.09%, assuming you sign up for the lender’s autopay program; otherwise, you’ll have to tack on an extra 0.5% to your interest rate. One thing to be aware of with a LightStream loan is the loan amount range. The minimum loan is $5,000, so this isn’t a good option if you’re looking for a relatively small amount of funds; however, the maximum is $100,000, so it is a good option if you need a higher amount than most other lenders offer.

Read our full review of LightStream here.

Citizens Bank

Rounding out our favorite online personal loans is Citizens Bank, which has been in business since 1828. It’s a long standing institution that is committed to creating a strong online lending presence. So what does that mean for you as a borrower? First, there’s no set minimum credit score, except that it should be “reasonably strong.” The minimum income level is set at $24,000 but there aren’t a ton of set guidelines beyond that.

A nice perk about Citizens Bank is that you can apply jointly with a co-applicant. That could help strengthen your application if you need help or want to get the loan with a spouse or partner. Typical APRs start off around 5.99% and can go up to 16.24% or more. You can borrow anywhere between $5,000 and $50,000. With a reputation spanning centuries and flexible qualification standards, Citizens Bank leaves options for many different types of borrowers.

Read our full review of Citizens Bank here.