What's the best place to get a personal loan?

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When you're looking for a personal loan, shopping around can help you get the lowest rate and best repayment terms. But what's the best place to get a personal loan?

Banks aren't your only choice. Though banks may be a good option for a personal loan, credit unions and online lenders are sometimes a better fit for your needs and preferences.

There's no one answer that works for every borrower — which lender is right for you depends on how much you want to borrow, when you need the cash, and your credit profile.

Many lenders offer unsecured personal loans — loans that don't require any form of property as collateral. The three major categories are traditional banks, credit unions, and online lenders, and each type of lender has its own perks and drawbacks.

Best for: Borrowers who need larger loan amounts

Many major banks, including Citibank, Wells Fargo, and U.S. Bank, offer personal loans. While some lenders have relatively low loan maximums, such as $35,000 or less, major banks that operate brick-and-mortar locations tend to have high loan maximums and longer repayment term options. And, if you're an existing customer, you could receive your money faster.

However, some banks only offer loans to existing customers, and you must have a checking or savings account open for at least six months to qualify. And, personal loan rates from banks may have higher interest rates.

Best for: Borrowers who need smaller amounts or who have less-than-perfect credit

As nonprofit organizations, credit unions often offer their customers lower rates on personal loans than you can find from a bank. Plus, credit unions may have programs that make loans more accessible if you have poor credit or no credit. You may find second-chance or emergency loans that are lower-cost options compared to other bad-credit loans or payday loans.

The downside? Credit unions serve specific groups, such as those living in particular communities or employees of specific employers. That means you may not be eligible to become a member of a given credit union. These loans also tend to have lower borrowing amounts than loans from banks or online lenders.

Best for: Quick loan applications and disbursement

If you're in a bind and need a relatively large sum quickly, an online lender could be a good choice. These lenders often allow you to apply entirely online, and they can review and approve your application within minutes. If the lender approves your application, you can receive your loan funds quickly; some lenders offer same-day or next-day disbursement. That's a major asset if you have an emergency like a vet bill or a car repair you need to pay for ASAP.

There are online lenders that cater to different borrower types, including those with excellent or poor credit. To qualify for higher loan amounts and lower rates, you need very good to excellent credit.

How to choose the best place to get a personal loan

There are hundreds of lenders to choose from. When considering your loan options, these are a few key factors to keep in mind.

You want a lender that's responsive to questions, easily accessible when you have a problem, and has a solid reputation for handling customer issues. The J.D. Power Consumer Lending Customer Satisfaction Study is a great starting point. Look for a lender that scored above the segment average, as they are highly rated for the ease of their applications, digital platforms, and customer support.

It's also a good idea to look up lender reviews on sites like TrustPilot and the Better Business Bureau. These sites feature reviews from real customers, so you can get an idea of what it's like to take out a loan from that lender.

Some lenders cater to those with very good to excellent credit, while others have more relaxed eligibility criteria. Similarly, some lenders allow you to apply with a co-borrower or co-signer, but not all do. If you'll need a co-borrower due to a low credit score or insufficient income, look for a lender that permits it.

Consider how much you need to borrow, as loan amounts vary by lender type. With most lenders, you can borrow between $1,000 and $50,000. But lenders such as SoFi, Lightstream, and Alliant Credit Union offer personal loans up to $100,000.

For personal loans, the standard repayment options range from two to five years. However, you might be able to find extended repayment term options. For example, some lenders offer loan terms of seven or even 10 years.

A longer repayment term will give you a more affordable monthly payment, but you'll likely pay a higher interest rate and pay more in interest over the life of your loan.

As of June 2025, personal loan rates range from about 6.5% to 35.99%. The lowest rates are usually reserved for borrowers with excellent credit who choose a shorter repayment term, such as one to three years. For longer repayment terms or lower credit scores, expect a rate in the double digits.

While some lenders can take several days after approving a loan application to disburse loan funds, there are some — particularly online lenders — that boast loan disbursements as soon as the same day you apply.

Before you finalize a loan, make sure the lender is reputable. Banks and credit unions are both regulated by the FDIC and NCUA, respectively, and must adhere to certain rules and regulations. In addition, lenders must follow the federal Truth in Lending Act (TILA), which requires them to provide you with documentation about your loan, such as interest rate and repayment terms, before you're legally bound to pay it back.

Where things may get fuzzy is with some online lenders — those that aren't banks or aren't partnered with one. To make sure you're working with a legitimate online bank, avoid lenders that:

Offer guaranteed approval before you even apply

Require fees or payment before receiving the loan

Pressure you into applying or signing for a loan

Payday loans are short-term, high-interest loans that are, in general, due on your next payday. Payday loans tend to be small — around $500 or so — and are paid back through a post-dated check or by giving the lender authorization to debit your bank account on the agreed-upon due date.

But payday loans may be dangerous. They can carry high APRs of nearly 400% and may also come with excessive fees. In some states, payday lenders can roll over or renew a loan, charging fees to extend the due date past the next pay period, which can trap consumers in a cycle of debt.

Payday lenders, in general, don't look at your credit or personal finances when you apply for a loan. They only consider your income (since repayment is based on the lump sum of your next payday). And because it's common to need a payday loan when you're in a pinch — for example, if your car broke down or you have unexpected medical bills — it's easy for an unscrupulous lender to take advantage.

Some states prohibit or regulate payday loans, capping the maximum interest rate and fees you can be charged. Still, payday loans are rarely the best choice, even if you're strapped for cash, so it's best to pursue other options first.

What's a good interest rate for a personal loan?

Borrowers with excellent credit may qualify for personal loans with an annual percentage rate (APR) of about 7%. According to Federal Reserve data , the average APR for 24-month personal loans was 11.66% as of February 2025.

How do I qualify for the best personal loan rates?

The lowest personal loan rates typically go to borrowers with stable incomes and very good to excellent credit. If you don't meet that criteria, you may be able to secure a lower APR by adding a creditworthy co-borrower to your loan application.

Some lenders offer same-day loan disbursements, but typically, you can expect to receive loan funds within one to three business days after your loan paperwork is finalized.

Personal loans may have origination fees — a fee that covers the lender's administrative costs and is charged at the time of loan disbursement — and late fees if you miss a payment. Fees vary by lender, so carefully review the loan agreement to make sure you know all of the fees that you'll have to pay before signing.

How much can I borrow with a personal loan?

With most personal loans, you can borrow between $1,000 and $50,000, but there are some lenders with loan maximums of $100,000 or more.

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