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Quick Personal Loan Guide:

 

 

What are personal loans?

 

It’s an installment loan paid back on a regular schedule and not backed by collateral such as your car or house. It’s different from a car loan and mortgage because the lender cannot seize assets if you can’t pay back your loan. On the flip side our credit score still will be damaged if you can’t paid your personal loan back.

 

What are lenders requirement for a personal loan?

 

Good lenders will almost always check your credit history and ask about your income and debt before offering you a loan and deciding on your loan interest. Your loan interest is linked to your credit history (the worst your credit the higher your interest will be), and as you can imagine a higher interest will make it costlier to repay your loan. Personal loan rates always vary between lenders and you can see below how the average interest rates on personal loan can look below.

 
 

July 2019 Personal Loans Rates by State and Credit Score:

 

Credit Score
 State Excellent Good Average Bad Poor
720 – 850 690 – 719 630 – 689 580 – 629 below 580
Nationally 6.5% 8.7% 11.3% 17.5% n/a
Banks 7.6% 9.8% 11.6% 19.8% n/a
Credit Unions 6.5% 7.4% 11.1% 16.2% 19.6%
Online lenders 6.7% 7.8% 12.1% 17.6% 21.3%
Alabama 6.4% 8.8% 13.4% 18.1% 22.4%
Alaska 7.0% 9.4% 13.4% 17.2% 21.4%
Arizona 6.7% 9.6% 12.4% 18.2% 21.6%
Arkansas 6.7% 9.5% 11.1% 17.2% 22.0%
California 6.4% 8.6% 12.2% 17.5% 21.4%
Colorado 7.0% 9.7% 13.6% 17.1% 21.7%
Connecticut 6.3% 8.7% 12.3% 18.5% 21.2%
Delaware 5.5% 10.1% 14.1% 18.3% 21.0%
DC 7.7% 9.9% 13.2% 18.1% 22.2%
Florida 7.4% 10.1% 13.3% 16.3% 20.0%
Georgia 7.1% 10.0% 15.5% 18.2% 21.1%
Hawaii 6.6% 9.4% 12.8% 16.8% 24.11
Idaho 6.8% 9.1% 12.1% 17.2% 20.1%
Illinois 5.6% 9.3% 12.9% 16.1% 23.4%
Indiana 6.4% 9.6% 14.0% 18.2% 22.2%
Iowa 7.1% 9.4% 15.1% 18.6% 24.0%
Kansas 7.1% 10.1% 14.6% 18.2% 23.1%
Kentucky 6.6% 9.5% 13.4% 17.1% 21.1%
Louisiana 6.3% 9.1% 12.2% 18.2% 21.5%
Maryland 6.5% 9.4% 13.6% 17.4% 23.0%
Massachusetts 6.5% 9.1% 14.1% 17.8% 22.4%
Michigan 6.6% 9.2% 14.2% 18.5% 24.3%
Minnesotta 6.6% 10.2% 14.3% 18.2% 24.1%
Missisippi 6.3% 9.2% 13.5% 18.3% 22.1%
Missouri 7.4% 10.0% 14.3% 17.4% 24.8%
Montana 6.8% 10.0% 14.3% 17.2% 20.1%
Nebraska 6.5% 9.8% 13.2% 17.5% 19.7%
Nevada 6.7% 9.9% 14.3% 18.3% 22.3%
New Hampshire 7.1% 10.1% 16.5% 18.4% 23.2%
New Jersey 6.7% 9.3% 14.3% 17.5% 19.5%
New Mexico 6.7% 9.7% 12.6% 16.1% 21.1%
New York 5.4% 9.0% 12.2% 16.6% 20.1%
North Carolina 6.6% 11.0% 15.3% 18.5% 23.1%
North Dakota 7.1% 9.5% 12.7% 16.1% 19.5%
Ohio 6.4% 9.6% 12.1% 16.2% 21.0%
Oklahoma 6.6% 9.7% 14.0% 18.3% 20.3%
Oregon 6.7% 10.0% 13.5% 17.2% 21.1%
Pennsylvania 6.4% 9.6% 14.1% 18.5% 21.0%
Rhode Island 7.1% 9.2% 12.3% 15.0% 21.0%
South Carolina 6.5% 10.1% 15.2% 18.5% 22.0%
South Dakota 5.7% 8.7% 11.7% 16.5% 21.1%
Tennessee 6.3% 9.5% 12.3% 16.5% 22.9%
Texas 6.5% 10.1% 14.2% 18.6% 22.5%
Utah 6.7% 9.5% 12.2% 16.6% 20.6%
Vermont 6.4% 10.0% 12.8% 16.2% 20.1%
Virginia 7.1% 10.4% 14.4% 17.9% 20.4%
Washington 6.8% 10.0% 15.5% 18.9% 22.2%
West Virginia 6.6% 9.5% 13.4% 16.5% 21.0%
Wisconsin 7.4% 10.1% 15.6% 17.8% 20.5%
Wyoming 5.8% 9.2% 14.5% 16.5% 19.1%
Source: MFP’s Users survey (over 24,921 users) who shared personal loan APR interest rate between June 1 to 30 2019.

 
 

What are the minimum requirements for a loan?

 

If you have a poor or average credit you could still get an unsecure personal loan if you have a regular income and little debts but your rate is usually higher.

Lenders requirements is you need to be 18 or older, a resident of the U.S., have an available bank account and not be in bankruptcy or foreclosure.

 

What about lenders not verifying your credit?

 

Some lenders do not require you to have a minimum credit score but it doesn’t mean your credit score isn’t checked.

Some lenders provide loans with zero credit check but they’ll charge rates greater thanks 200-300% just like a payday loan lender.

Few lenders approve loans for borrowers with poor credit. With those lender you can expect your rate to be at the higher end (up to 36%). If you don’t qualify for a loan with a normal lender don’t use a payday lender (take a look at alternative lenders such as NixLending.com and BuildingSkills.org instead).

 

Personal loan for bad credit

 

Having bad credit, typically under 630, doesn’t keep you from having a personal loan but makes it harder and means you have less options. Your interest rate will be on the higher end compared to someone with better cretit and your monthly paiement will accordingly be higher.

The quickest option is looking at online lenders and your best option is going to your local credit unions or community banks. They’re the ones being more open to consumers with bad credit. Your local credit union will probably require you to open an account with them, but it’d be a good idea as they usually also offer better services, less fees and better rates for other financial services.

We recommend you always compare rates and fees from a few lenders whether they a credit union, community bank or online lender.

 

The pros of personal loans:

 

  • You can consolidate your debts (credit cards included). You can use a personal loan to consolidate high-interest credit card debt into one payment at a lower interest rate in order to accelerate paying off your debt.
  • It can improve your credit score. You may increase your credit score by moving credit card debt to an installment loan because you lower of your credit use ratio and diversify your debts types.

 

The cons of personal loans:

 

  • You usually get a higher interest rates than a secured loan and most credit cards. When you have good credit and can pay off your debt in 12 to 18 months, you can usually get a 0% balance transfer credit card for a year and pay your balance transfer free of interest. Homeowners can also use a home equity loans with a lower interest rates than a personal loan, and you save money. The con of a home equity loan is your home become collateral.
  • Longer application process. Getting your loan approved may take a few days and require more information that credit cards.

 
 

Online Lenders Rates & Terms July 2019:

 

You can see rates, terms, credit credit scores and amount for popular online lenders below. You can apply to only one, apply one by one to many, or use some of our partners above to get multiple quotes at once.

 

Lenders Rates (APR) Terms (months) Credit Score Amount
Avant 5 to 14.7% up to 36 600+ Up to $35,000
Barclays 5.7 – 20.9% up to 72 700+ Up to $35,000
Best Egg 6.0 to 18.5% up to 36 700+ Up to $35,000
Discover 6.9% – 24.9% up to 84 660+ Up to $35,000
Earnest 6 to 12% up to 36 680+ Up to $75,000
FreedomPlus 11 to 21% up to 36 640+ Up to $35,000
Laural Road 8.0% – 16.3% up to 62 700+ Up to $45,000
Lending Club 6.9 to 35.9% up to 36 540+ Up to $40,000
Lending Point 15.5 – 35.9% up to 24 600+ Up to $25,000
LightStream 5 to 14.5% up to 36 660+ Up to $100,000
Marcus 8 to 16% up to 36 660+ Up to $40,000
Payoff 18% up to 36 640+ Up to $35,000
Prosper 7 to 31.9% up to 36 640+ Up to $40,000
OneMain 16.0 to 22.7% up to 36 600+ Up to $30,000
Rocket Loans 7.1 to 29% up to 36 640+ Up to $30,000
SOFI 5.9 to 14.7% up to 84 680+ Up to $100,000
Upgrade 7 to 29.5% up to 36 620+ Up to $50,000
Upstart 10.5 to 17.5% up to 36 620+ Up to $50,000

 
 
 

Banks’ Personal Loans Rates & Terms July 2019

 

Traditional banks’ rates are usually higher than other lenders like credit unions and online lenders (see above). They only offer loans to people with good or great credit and you’ll need to have an acount at the bank to obtain a loan.

 

Banks Rates (APR) Terms (months) Credit Score Amount
Citizen Bank 7.89 to 19.49% 12 to 84 680+ Up to $50,000
Wells Fargo 7.24 to 20.24% 12 to 36 700+  Up to $35,000
Citi Bank 7,99 to 17.99% 12 to 60 680+ Up to $50,000
US Bank 7,49 to 17.99% 12 to 60 720+ Up to $25,000
PNC 4.99 to 19.99% 6 to 60 680+ Up to $35,000
TD Bank 6.99 to 18.99% 12 to 60 680+ Up to $50,000
BBT Hide rates Hide Terms Hide scores Hide amounts
Fifth Third Bank 6.99 to 19.24% 12 to 60 680+  Up to $25,000
Key Bank 8.74 to 14.29% 12 to 84 680+ Up to $25,000

 
 

When are personal loans good?

 

Personal loans are best when you’ve a long term plan to improve your finances.

You can borrow for other thing (car repairs, wedding, vacation or other things) but only if you know you can make your loan payments.

Don’t borrow to push away the unavoidable. If you want to be debt-free make a plan to do it. If you not able to deal your existing debt, look at your debt-relief options.

When you have decided a personal loan is the right choice, calculate your payments for different range of interest rates and amounts. This way you’ll have a good idea of what you can afford when you get loan offers.

If you have good credit and have already do business with a bank compare online offers with your bank and use online offers as negotiation with your bank and credit union.

Lenders on MFP offer rates no higher than 36%. They also all follow the Consumer Financial Protection Bureau standards and take into consideration of your credit history and ability to repay.

 

Common questions about personnal loans:

 

What does it cost to apply for a loan?

 

Applying is always free. (If someone wants to charge to verify your credit and approved be ware!) Once the loan is approved some lenders usually take an origination fee. This fee is taken from your loan amount before you receive your funds. For example if you applied for $5,000 and the orgination fee is 2% ($100) you’ll receive $4,900.
 
Most good lenders don’t have an origination fee so look out to see if the lender interesting you have one.

 
 

Can I pay my loan early without a prepayment penalty?
 
Most good lenders don’t have an early pay off fee. This mean some lenders, a minority, may charge you a fee if you increase your payments and pay off your loans earlier than planned. This mean if you want to pay if off early and save on your interest payment some lenders may charge you a fee. Be on the lookout for those with no prepayment penalty.
 
 
How fast do I get my loan once I’m approved?
 
The lenght vary greatly. It can be as little as 24h for many online lenders and up to one month for other traditional lenders.
 
 

Once I get a loan, can I get another one?

 
Most of the time yes. Your lender would make it easier for you to get a new loan once you pay off your first one. If you paid on time and fulfilled the lender payments as planned they’ll be more flexible to lend you again.
 
 

Can I appeal if the lender refuse my application?

 
Yes, if the refusal is due to an error on your credit report or new information you can provide them they may change their decision. But if you were declined beause you don’t meet their underwriting criteria you can’t appeal their decision.
 
 

What if I’m facing difficulties making a monthly payment?

 
It’s important you reach out to your lender and let them know of your situation (you’re not the only one in your shoes). Your lender should help you figure a way to get back on track of making regular payments.
If you can’t make regular payment and don’t stay behind on your payment the lender should not report it to credit agencies.
 
 

If my credit isn’t good enough can some lenders ask me for collateral?

 
Yes some lenders may be flexible enough to offer you a loan if you can provide some collateral like a co-signer or a car tittle for example. If you can provide collateral you should be able to get a lower rate and/or a bigger loan amount.