Top Personal Loans In The United States

It doesn’t matter how much we want to live in a cashless society. The truth is that there’s nothing quite like having a wad of cash in your hand and several more in the bank.

But what do you do when you don’t have the kind of cash you need to fulfill a need or a wish?

Get a personal loan from your friendly neighborhood bank or an online platform! Many Americans opt for personal loans to meet cash shortfalls when purchasing houses, land, cars, paying for higher education, weddings, vacations, and medical contingencies. These loans also help fund everyday expenses and home improvement projects.

Let’s explore your best options for personal loans in further detail.

Characteristics Of Personal Loan

When a financial institution approves your loan, you get the money you requested in a lump sum.

All you need to do is enjoy your newfound financial freedom as you see fit and repay the loan with fixed monthly payments over a few months or years, depending on the details you agreed on with the lender. If you chose a shorter tenure, the repayments would be bigger, while a longer tenure gives you the facility to make smaller repayments.

Here are some other benefits of a personal loan that you can count on:

Lower Interest Rates

Personal loans offer lower interest rates than credit cards. These rates are usually calculated on a fixed basis and the amount borrowed, not the balance, at the end of the month/year.

As of January 31st, 2022, the average interest rate is 10.28%, and with a better credit score, you can qualify for a personal loan with an even lower interest rate.

Flexibility And Versatility

If you get a car loan, you can only use it to buy a vehicle, and home loans are only for home improvement projects, etc. But personal loans are yours to do as you please. These can be used for a wide range of purposes, for example, for travel, debt consolidation, travel, and more.

No Collateral Requirement

Unsecured personal loans never require collateral to get approved, so your assets remain secure if you cannot make the loan payments on time.

This is also an advantage when you don’t own any assets but still need a personal loan. Banks and other lending institutions won’t ask for your belongings when approving your application.

Quick Disbursal

Personal loans usually don’t take a long while to disburse. In most cases, you’ll only have to wait 24 to 72 hours at most. It does help to have a good credit score and all your paperwork in order.

Minimal Documentation

Personal loans can be applied online and offline and require very little documentation. If a loan provider asks you for excessive documents, consider this a red flag.

Almost all banks and NBFCs have the same personal loan requirements. Below is a generic list of documents you need to submit.
- Proof of identity - Proof of residence - Income proof - If you own a business, you need to submit documents for that]

How Do Personal Loans Work?

The application process consists of the following steps:

Run The Numbers

Determine the amount of cash needed, and keep in mind that some lenders also charge an origination fee, which is deducted from your loan proceeds. So make sure to borrow enough.

Check Credit Score

The applicant’s credit score is the most important factor that the lender considers, and it consists of credit payment history, amount of outstanding debt, and length of the credit. The average credit score to secure a personal loan is around 600; however, it depends on the individual and lender.

Consider Your Options

Depending on your creditworthiness, the personal loan terms are decided.

Choose Loan Type

There is plenty of different loan type available, ranging from fixed to variable, choose the one that better meets your personal goal. Also, some loans are fully flexible, while others can only be used for a specific purpose.

Check For Best Personal Loan Rates

Avoid settling for the first offer you receive, instead, do proper research and shop around for the best interest rate. Compare several banks and loan types and keep an eye on the prequalification process.

Pick The Lender And Apply

Once you have done your homework, select the best lender with the best offer to meet your needs to start your application process. At times, the entire application process is conducted online. On the contrary, one has to be physically present in the bank to complete the application process.

Provide All The Necessary Documentation

Every lender is different when it comes to documentation. In order to get approved for a personal loan, you need to provide additional documents which offer an insight into personal and financial information. - Loan application - Proof of identity (certification of citizenship, passport, driver’s license, birth certificate, and others) - Employer and income verification (paystubs, tax returns, bank statements, employer’s contact information) - Proof of address (property tax receipt, credit card statement, voter registration card, utility bill, rental agreement)

Top 5 Personal Loan Providers In The USA

Here is your guide to the best and top 5 loan providers in the USA with all their requirements:

1. SoFi

SoFi offers a variety of amounts and repayment terms for personal loans. The best part, it doesn’t charge any extra fees. The loans usually range from $5,000 to $100,000, provided for up to 7 years. It charges fixed APR starting from $6.99% and can go up to 22.78%. Individuals earning a minimum annual income of $30,000 can apply with SoFi. Remember that the minimum credit score must be 680 to qualify for a personal loan with them.

2. LightStream

LightStream allows you to choose when to receive the money, supporting your financial plans. This option is ideal for borrowers looking for a longer repayment term with lower monthly payments. It charges a fixed APR of 5.73% with a term length of 2 to 7 years. The loan amount varies from $5,000 to$100,000. However, it does require borrowers to have an annual income of $50,000 with a credit score of 660.

3. Avant

Avant is another popular lender for borrowers with fair or poor credit scores, as it requires a credit score of just 550, which is a bare minimum. The loan amount ranges from $2,000 to $35,000 with a length of 2 – 5 years. The best part, borrowers only need to show an annual income of $14,400.

4. Marcus By Goldman Sachs

Marcus allows borrowers to choose from 9 different repayment options along with deferred payments and no added interest. Of course, these parameters make it easier to acquire a personal loan and customize their experience. It’s great for consolidating existing debt without too many added costs. However, it requires a minimum credit score of 660, a fixed APR ranging from 6.99% to 19.99%, and a loan amount of $3,500 - $40,000 with a 3 to 6 years term.

5. Upgrade

Upgrade offers a broad range of loan amounts starting from just $1000 and going up to $50,000 with a reasonable rate cap of 35.97% and a term length of 3 to 5 years. The credit score must be 560, and an annual income of $30,000 is its main two requirements.

Final Verdict On Personal Loans

Now that you have a better understanding of getting a personal loan and the best lenders in the market, it’s time to efficiently utilize the cash to meet your individual needs.

Personal loans can be pretty helpful in a host of scenarios. Applying for it doesn’t have to be stressful as long as you are prepared to answer questions and provide relevant documents. Be sure to go over its features to ensure you and your money are safe. Rest assured, it’s a smooth process.