Yes! Even with a bad or poor credit score, you can still get a personal loan online! Personal loans can be used for almost anything! Some of the most popular uses include:
According to research by Finder, roughly 83.5 million Americans have personal loans, with the most common use being credit card debt consolidation. Typically, credit cards can have APRs above 35%. Personal loans, on the other hand, typically have APRs around 7% to 30%.
Many Americans would rather pay 7% annually to borrow money, and use this borrowed money to pay off their higher interest debts, like credit cards.
Personal loans, often called “unsecured personal loans,” are loans that are issued to individuals based on their creditworthiness. One of the best things about personal loans is that there is no collateral involved. You don’t have to use your house, car, or any other asset to receive a personal loan.
We spent 500+ hours searching for the best personal loans of 2020, because not all personal loans are made equal. Many shady online lenders have high variable rates and lots of hidden fees. None of the lenders on this page have hidden fees, and all are highly rated and respected.
If you need to consolidate debt, finance a purchase or major event like a wedding, or if you just need cash, personal loans are a great option. The typical interest rates for personal loan range from 3.84% to 35.99%. This is significantly lower than the typical APR for a credit card, which is another common form of borrowing.
One of the most common misconceptions about personal loans is that a loan will harm your credit score.
Simply put, this is NOT true. Personal loans will actually improve your credit score with on-time payments.
For example, say you have $4,000 in credit card debt, and your total credit limit with your credit card company is $5,000. Since $4,000 out of the available $5,000 credit is being used, this is known as “high credit utilization” and is highly detrimental to your credit score.
Getting a loan of $4,000 will allow you to fully pay off your credit card and reduce your credit utilization. In turn, this will dramatically boost your credit score.
This is just one example of how getting a loan can actually lead to a credit score of 800+, but in general, personal loans do not hurt your credit score and are viewed as a good sign by the major credit bureaus.
When finalizing your personal loan, you will typically be presented with multiple offers from different lenders and banks. Make sure you pick the offer that works best for your financial situation.
Longer term loans tend to have slightly higher interest rates. Whereas, loans over shorter periods of time, like just 1 year, tend to have the lowest interest rates, but will typically see higher monthly payments.