A personal loan can be a useful tool for achieving your financial goals. But, as with any debt instrument, it comes with costs, including interest rates and fees. To minimize those, you’ll want to find the best personal loan for your situation. The most competitive personal loans offer low, fixed rates, loan amounts suited to your financial goals, flexible repayment terms and outstanding customer support.
Regional banks and credit unions generally provide some of the best personal loan options. But for those who don’t have a bank or credit union relationship, there are several online lenders that provide personal loan services at competitive rates. In addition, online lenders typically have a faster application and funding process than brick-and-mortar institutions.
Consider how the lender will handle any special circumstances that may arise during your repayment period, such as job loss or divorce. The best lenders address these potential pitfalls, offering assistance like loan forbearance and unemployment protection. Some, such as SoFi, also address borrowers’ future financial health by adjusting monthly loan payments or providing career coaching.
Finally, look for a lender that will make it easy to pay off your loan early without incurring penalties or extra charges. A prepayment penalty – often called an origination fee – can add up to a lot of money over time. Avoid personal loans that come with these fees, which are designed to pad the lender’s bottom line. You should also consider whether the lender has unique perks, such as a rewards program, flexible lending criteria or a fast application processing timeline.