Online personal loan companies
Best Personal Loan Companies
Updated on 01/31/2018
Personal Loan companies provide individuals with credit to buy now and pay back the amount borrowed over time. Many types of companies offer personal loans, including banks, credit unions, peer-lending companies and private lenders.
Personal loans offer customers financing with predictable monthly payments. They’re often used to consolidate high interest debt, fund a new business or finance a big purchase such as a home remodel. Consumers may borrow money for a personal loan online or in person.
Compare Reviews for Top Personal Loan Companies
Best Egg’s online application process makes it easier than ever to obtain a personal loan. With their quick and simple 3 step process, you can have the money you need in your account in 1 business day.
This company gives consumers the opportunity to choose from several different in an online marketplace. With no hidden fees, no prepayment fees and fast approval, you’ll be able to find a fixed-rate personal loan in no time.
FreedomPlus in an online lender that underwrites consumer loans under the brand Freedom Financial Network, LLC. Its underwriting process gives low-cost loans to borrowers ranging from $10,000 to $40,000.
CountryWide Debt Relief has several options for debt relief, including debt settlement, debt consolidation and consumer credit counseling services. They help people facing financial hardships, including people facing bankruptcy.
Avío Credit offers personal loans. You’ll have 30 days after you receive a lending decision to make sure the offer is right for you. If your loan is approved, you’ll receive funds directly in your bank account.
OneMain Financial offers personal loans to customers in 44 states. The company has roots going back over 100 years and previously operated as SpringLeaf Financial. It has made loans to over 10 million customers.
Founded in 2006, Lending Club is a peer-to-peer lending company that is based in San Francisco, California. Lending Club’s platform is Internet-based, and the company is extending its reach into car loans and mortgages.
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What should I consider before getting a loan?
Lenders make money on loans by charging customers interest and fees. Interest is calculated as a percent of the amount borrowed. There are many ways to calculate interest payments. Companies vary based on the amount of interest and fees they charge.
- High interest loans: Some personal loan companies charge high-interest rates, which encourage customers to repay loans quickly. Certain ‘pay day’ loans offer money with very high interest rates to tide you over until your next paycheck.
- Low interest loans: Many personal loan companies offer customers low-interest rate loans, which are often used to refinance debt with higher-interest rates. For example, if you have 3 credit cards which charge an average of 20% interest, you may want to pay off the balance due on those cards with a personal loan that has a lower interest rate of 12%. In general, to qualify for a lower interest rate, the borrower needs a credit score above a specific level.
- Varied interest rates: Many personal loan companies charge a wide variety of interest rates, which differ based on who is borrowing the money and how long it will take them to repay the loan. In general, borrowers with higher credit scores are charged lower interest rates. Additionally, smaller loans usually have higher interest charges.
Types of loans offered
- Secured loan: This type of loan requires an asset to secure the loan. If the borrower defaults on the loan, the lender has a right to take the collateral. Secured loans are commonly used when buying a vehicle.
- Unsecured loan: There is no collateral required on an unsecured loan, thus the interest rates are normally higher than for an unsecured loan due to the higher risk to the lender.
- Single payment loans: Single payment loans allow borrowers to borrow an amount of money, then agree to repay that amount in full at some point within a fixed amount of time.
- Monthly payment loans: These types of loans require the borrower to repay the loan principal and interest with a fixed amount each month. The repayment dates are scheduled at the start of the loan.
- Salary advance loans: People who borrow cash for a short time period, usually between paychecks, may use personal loan companies that offer salary advance loans; these are often short-term, low amount loans with high interest rates and fees.
Another way that personal loan companies differ is in their borrower application process. The application process gives the lender basic information about the client’s current expenses and income as well as their credit history. This allows the lender to find out whether the borrower is likely to repay the loan in a timely manner. Before applying for a personal loan it’s useful for a borrower to check his or her credit score. Also, gather all of the necessary paperwork in advance and to make certain to complete the application in full.
- Online application: Some personal loan companies allow customers to apply for loans by entering all the necessary information online, which the loan company then assesses to determine the borrower’s creditworthiness.
- Phone application: Loan companies that have a phone-based application require borrowers to apply for a loan over the phone. Before making the call, prospective borrowers should compile all of their related documents.
- Mixed process: Many personal loan companies require customers to fill out application forms with their personal information, and then follow up with phone calls to verify information and discuss loan options and terms.
Personal loan companies differ from one another based on the amounts of the loans that they offer. In general, the loan amounts vary from company to company. Personal loans may be for an amount as low as a few hundred dollars on up to $70,000 for a small business or home remodel loan.
- Maximum limits: Some personal loan companies put a cap on the maximum amount a customer can borrow.
- Minimum limits: Some personal loan companies require borrowers to take out at least a certain amount in order to borrow.
- Fee-free: Fee-free personal loan companies do not charge any fees for their loans and simply make money from the loan’s interest payments.
- Loan fees: Other personal loan companies charge standard fees such as an origination fee and a closing fee. These may be a set fee or calculated as a percent of the amount borrowed.
- Late and failure-to-pay fees: Most personal loan companies charge customers fees for late or missed payments.
- Bank funded: Historically, banks and credit unions use depositors’ money to fund borrowers’ loans. Banks and related financial institutions also fund payday lenders and other types of personal loan providers.
- Peer funded (individual): Individual peer support is a new type of funding alternative for both borrowers and lenders. Peer funded loans are provided by regular individuals or peers and not financial institutions.
- Peer funded (group): Similar to individually funded peer loans, many hedge funds, bank endowment funds and other large investors fund personal loans through the peer-to-peer or social lending platforms. The difference between individual and group peer funded loans is typically the amount of money lent-groups typically lend greater amounts than individuals.