The 5 Best Personal Loans of January 2024

Last updated: Apr 12, 2024 at 01:20 am

Over the past decade, personal loans have become the fastest-growing category of debt. This growth can be attributed in part to the emergence of fintech and peer-to-peer lending companies, which have made it more affordable and easier for people to access these loans.

According to the most recent data from the Federal Reserve, the average Annual Percentage Rate (APR) for personal loans is 11.48%, while the average interest rate for credit cards hovers around 20.09%. This information highlights the comparative cost of borrowing through personal loans and credit cards.

Best overall


Annual Percentage Rate (APR)7.99%—25.99%* APR with AutoPay
Loan PurposeDebt consolidation, home improvement, auto financing, medical expenses, and others
Loan Amounts$5,000 to $100,000
Terms24 to 144 months* dependent on loan purpose
Credit NeededGood
Origination FeeNone
Early Payoff PenaltyNone
Late FeeNone


  1. Same-day funding available through ACH or wire transfer (conditions apply)
  2. Loan amounts up to $100,000
  3. No origination fees, no early payoff fees, no late fees
  4. LightStream plants a tree for every loan


  1. Requires several years of credit history
  2. No option to pay your creditors directly
  3. Not available for student loans or business loans
  4. No option for pre-approval on the website (but pre-qualification is available on some third-party lending platforms)

Who’s this for? LightStream, the online lending division of Truist Bank, caters to individuals with good credit or higher, offering low-interest loans with flexible terms. They cover various purposes such as purchasing a new car, home remodeling, debt consolidation, or addressing medical expenses. Notably, LightStream doesn’t provide loans for higher education or small business ventures.

Applying for a LightStream personal loan can result in same-day funding if your application is approved, and you electronically sign your loan agreement, verifying your direct deposit banking account information by 2:30 p.m. ET on a banking business day.

LightStream stands out for offering the lowest APRs, with an additional discount for autopay enrollment. Interest rates vary by loan purpose, and the company’s website provides a comprehensive range overview. Keep in mind that these rates may change with fluctuations in Fed rates.

Opting for invoicing instead of autopay increases your APR by 0.50%. LightStream’s fixed APR ensures a consistent monthly payment throughout the loan’s lifetime. The loan terms range from 24 to 144 months, depending on the loan purpose, making it the longest-term option among our best-of list. Importantly, LightStream doesn’t impose origination fees, administration fees, or early payoff fees.

Best for debt consolidation

Happy Money

Annual Percentage Rate (APR)11.25% – 24.50%
Loan PurposeDebt consolidation/refinancing
Loan Amounts$5,000 to $40,000
Terms24 to 60 months
Credit NeededFair/average, good
Origination Fee0% to 5% (based on credit score and application)
Early Payoff PenaltyNone
Late Fee5% of monthly payment amount or $15, whichever is greater (with 15-day grace period)
Pros– Peer-to-peer lending platform makes it easy to check multiple offers
– Loan approval comes with Happy Money membership and customer support
– No early payoff fees
– No late fees
– Fast and easy application
– U.S.-based customer service
Cons– Higher loan minimums ($5,000)<br>- Must submit a soft inquiry to see origination fees and other details

Who Should Consider a Happy Money Personal Loan?

A Happy Money personal loan is an excellent option if you aim to streamline and gradually pay off your credit card debt at a more favorable interest rate. The primary focus of Happy Money is to assist individuals in breaking free from credit card debt permanently, making their loans specifically tailored for debt consolidation. It’s important to note that Happy Money loans cannot be used for purposes such as home renovations, major purchases, or education.

Borrowers have the flexibility to secure loan amounts ranging from $5,000 to $40,000, with loan terms spanning from 24 to 60 months. The website features a soft inquiry tool, enabling you to explore potential loan options based on your credit report without impacting your credit score.

Happy Money stands out by not imposing late payment fees or early payoff penalties if you decide to settle your debt ahead of schedule. However, an origination fee is applicable, determined by your credit score and application. The higher your credit score, the lower your origination fee and interest rates are likely to be.

In a departure from some lenders, Happy Money offers the option to deposit the borrowed funds directly into your linked bank account or send them directly to your creditors. Additionally, borrowers enjoy access to various financial literacy tools, including free FICO score updates, quarterly check-ins during the first year, and assessments to enhance members’ relationships with money through personality, stress, and cash flow evaluations.

Best for refinancing high-interest debt

SoFi Personal Loans

Annual Percentage Rate (APR)8.99% to 25.81% (with autopay)
Loan PurposeDebt consolidation/refinancing, home improvement, relocation assistance, or medical expenses
Loan Amounts$5,000 to $100,000
Terms24 to 84 months
Credit NeededGood to excellent
Origination FeeNo fees required
Early Payoff PenaltyNone
Late FeeNone
Special ConsiderationsUnemployment protection for job loss, DACA recipients can apply with a creditworthy co-borrower who is a U.S. citizen/permanent resident (call 877-936-2269), multiple SoFi loans allowed (state-permitting), acceptance of job offer within the next 90 days as proof of income, co-applicants ma
y apply
ConsU.S. visa holders need more than two years remaining on visa, no co-signers allowed (co-applicants only)

Who Should Consider a SoFi Personal Loan?

SoFi initially focused on refinancing student loans but has broadened its services to include personal loans of up to $100,000, depending on your creditworthiness. This makes SoFi an excellent choice for those looking to refinance high-interest credit card debt. If you’re burdened by high-interest debt on one or more credit cards and want to reduce costs by switching to a lower Annual Percentage Rate (APR), SoFi provides a straightforward sign-up process and user-friendly app for convenient payment management.

One notable feature of SoFi’s lending options is the flexibility to choose between a variable or fixed APR. Unlike most personal loans that come with a fixed interest rate, SoFi allows you to opt for variable rates that may fluctuate during the loan term. While variable rates offer potential savings if the APR decreases, it’s essential to note that they can also increase. On the other hand, fixed rates ensure a consistent monthly payment throughout the loan’s duration, facilitating easier budgeting for repayment.

By enrolling in automatic electronic payments, borrowers can enjoy a 0.25% APR discount. SoFi facilitates convenient payment methods, allowing users to set up online bill pay through their bank or send a traditional paper check. Upon approval of a SoFi personal loan, funds are typically accessible within a few days, and the entire loan process, from application to management, can be conveniently handled through the SoFi mobile app.

Best for next-day funding 

Discover Personal Loans

Annual Percentage Rate (APR)7.99% to 24.99%
Loan PurposeDebt consolidation, home improvement, wedding, or vacation
Loan Amounts$2,500 to $40,000
Terms36, 48, 60, 72, and 84 months
Credit NeededGood
Origination FeeNone
Early Payoff PenaltyNone
Late Fee$39
Pros– No origination fees, no early payoff fees
– Same-day decision (in most cases)
– Option to pay creditors directly
– 7 different payment options from mailing a check to pay by phone or app
Cons– Late fee of $39
– No autopay discount
– No cosigners or joint applications

Who’s this for? Discover Personal Loans is a versatile option suitable for various purposes, including consolidating debt, home improvement, weddings, and vacations. If your application is error-free and the loan is funded on a weekday, you may receive the money as soon as the next business day; otherwise, it typically takes no longer than a week.

With Discover, there are no origination fees, but it’s important to note a $39 late fee if your monthly loan repayment is not made on time. The good news is that there are no penalties for early loan payoff or making extra payments within the same month to reduce interest.

For those seeking a debt consolidation loan, Discover offers the convenience of paying your creditors directly. Upon approval and acceptance of your personal loan, you can link your credit card accounts, providing details such as account numbers, the desired payment amount, and payment address information. Any remaining funds after settling your debts can be conveniently deposited into your preferred bank account.

Best for a lower credit score

Upstart Personal Loans

Annual Percentage Rate (APR)5.20% – 35.99%
Loan PurposeDebt consolidation, credit card refinancing, home improvement, wedding, moving, or medical
Loan Amounts$1,000 to $50,000
Terms36 and 60 months
Credit NeededCredit score of 300 on at least one credit report (applicants with insufficient credit history accepted)
Origination Fee0% to 12% of the target amount
Early Payoff PenaltyNone
Late FeeThe greater of 5% of last amount due or $15, whichever is greater
Pros– Open to borrowers with fair credit (minimum 300 score)
– Accepts applicants with insufficient credit history and no credit score
– No early payoff fees
– 99% of personal loan funds sent the next business day after completing required paperwork before 5 p.m. (Monday through Friday)
Cons– High late fees
– Origination fee of 0% to 10% of the target amount (automatically withheld from the loan before delivery)
– $10 fee to request paper copies of loan agreement (no fee for eSigned virtual copies)
– Requires a Social Security number

Who’s this for? Upstart is a great choice for individuals with a low credit score or those without a credit history. Unlike many other companies, Upstart considers various factors beyond just your credit score to determine eligibility. Additionally, if your credit isn’t strong enough, you can apply with a co-applicant to potentially secure a lower interest rate.

The company takes into account factors such as education, employment, credit history, and work experience when assessing your application. Upstart provides the option to check your APR with a soft credit inquiry before applying. However, once you submit your loan application, a hard credit inquiry will be conducted, causing a temporary decrease in your credit score.

With Upstart, you can choose between a three-year or five-year loan, with borrowing amounts ranging from $1,000 to $50,000. Notably, Upstart offers fast service, delivering your funds the next business day if you accept the loan before 5 p.m. EST from Monday to Friday.

How personal loans work

Personal loans are a type of credit that lets you borrow a lump sum of money to cover significant expenses more affordably. These loans can be used for various purposes, like consolidating debt, funding home improvements, covering wedding costs, travel expenses, or medical bills.

Before getting a loan, it’s important to have a clear plan. Figure out how much you need, how many months you’ll need to comfortably repay it, and how it fits into your monthly budget. Consider the loan term – ranging from six months to seven years – where longer terms mean lower monthly payments but higher overall interest costs. It’s usually best to choose the shortest term you can manage.

Once approved, the loan amount is typically deposited into your checking account. If it’s a debt consolidation loan, the lender may directly pay your credit card accounts, and any leftover cash goes into your bank account.

Your monthly loan bill covers the installment payment and interest charges. Be aware of any early payoff or prepayment penalties, as some lenders may charge fees if you want to pay off the loan sooner. Making extra payments could also incur fees since the lender loses potential interest income.


What is a good interest rate on a personal loan?

The ideal interest rate on a personal loan depends on various factors, including your credit score, financial history, and the lender’s policies. Generally, a good interest rate falls within the range of 6% to 12%. Borrowers with excellent credit may qualify for lower rates, while those with less favorable credit scores might face higher rates. It’s advisable to shop around and compare rates from different lenders to ensure you secure the most favorable terms.

How much do personal loans cost?

The overall cost of a personal loan comprises the principal amount, interest, and any applicable fees. Interest rates are a significant component of the cost, and they can vary widely. Additionally, keep an eye out for origination fees, late payment fees, and prepayment penalties, as these can contribute to the total cost of the loan. Understanding the complete cost of the loan is crucial for effective financial planning and decision-making.

How is my personal loan rate decided?

Lenders determine personal loan rates based on several factors, with the primary consideration being your creditworthiness. A higher credit score often leads to lower interest rates. Other factors include your income, employment history, debt-to-income ratio, and the loan amount requested. Some lenders may also take into account your relationship with them or whether you’re securing the loan with collateral. Understanding these factors and taking steps to improve your creditworthiness can positively impact the interest rate you receive.

What is a loan term?

A loan term refers to the duration within which you are expected to repay the borrowed amount, along with interest. Personal loan terms typically range from one to seven years, although they can vary depending on the lender and the specific terms of the loan agreement. Choosing the right loan term is important; longer terms may result in lower monthly payments but higher overall interest costs, while shorter terms may have higher monthly payments but lower total interest expenses.

How big of a personal loan can I get?

The maximum amount you can borrow through a personal loan depends on various factors, including your creditworthiness, income, and the lender’s policies. Lenders assess your ability to repay the loan by considering your debt-to-income ratio and other financial obligations. It’s important to borrow only what you need and can comfortably repay. Keep in mind that larger loan amounts may require stronger financial credentials and may come with higher interest rates. Evaluating your financial situation and needs can help you determine the appropriate loan amount for your circumstances.

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