Online Loans
We define online loans in this article as unsecured, fixed-rate loans that are typically paid back in monthly payments over two to five years. Eligibility is typically based on multiple considerations including credit history, existing debts, and income profile. Some lenders have also started incorporating additional factors into their underwriting such as employment and education. The loans are most often used for debt consolidation or to cover a larger expense.
Online loans on average offer larger loan amounts, charge lower interest rates, and have longer terms than installment loans but they also require a stronger credit profile. In general, FICO® credit scores above 600 are required with the larger loans and lower rates only available to those with credit scores above 720.
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Upstart
$1,000 - $50,000 (See Additional Disclosure in review)
Loan amounts
8.27% - 35.99% (See Additional Disclosure in review)
APRs
Fair
Credit type ⓘ Visit Upstart for product eligibility. Our eligible credit type estimate is a general guide based on FICO® Scores:
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Lending Platform with Regulated Lenders
Lender status
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Upgrade
$1,000 - $35,000
Loan amounts
8.49% - 35.97%
APRs
Good
Credit type ⓘ Visit Upgrade for product eligibility. Our eligible credit type estimate is a general guide based on FICO® Scores:
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State Licensed Lender
Lender status
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OneMain Financial
$1,500 - $20,000
Loan amounts
18.00% - 35.99%
APRs
Fair
Credit type ⓘ Visit OneMain Financial for product eligibility. Our eligible credit type estimate is a general guide based on FICO® Scores:
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State Licensed Lender
Lender status
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Net Credit
$2,000 - $10,000
Loan amounts
34% - 155%
APRs
Fair
Credit type ⓘ Visit Net Credit for product eligibility. Our eligible credit type estimate is a general guide based on FICO® Scores:
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State Licensed Lender
Lender status
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Payoff
$5,000 to $35,000
Loan amounts
5.99% to 24.99%
APRs
Fair
Credit type ⓘ Visit Payoff for product eligibility. Our eligible credit type estimate is a general guide based on FICO® Scores:
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State Licensed Lender
Lender status
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SoFi
$5,000 - $100,000
Loan amounts
5.99% - 20.01%
APRs
Good
Credit type ⓘ Visit SoFi for product eligibility. Our eligible credit type estimate is a general guide based on FICO® Scores:
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State Licensed Lender
Lender status
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Lending Club
$1,000 - $40,000
Loan amounts
6.95% - 35.89%
APRs
Good
Credit type ⓘ Visit Lending Club for product eligibility. Our eligible credit type estimate is a general guide based on FICO® Scores:
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State Licensed Lender
Lender status
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Avant
$2,000 - $35,000
Loan amounts
9.95% - 35.99%
APRs
Fair
Credit type ⓘ Visit Avant for product eligibility. Our eligible credit type estimate is a general guide based on FICO® Scores:
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State Licensed Lender
Lender status
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- Rates and fees vary by state. Not all lenders operate in all states. Check each lender's website for up-to-date information.
Who Makes Online Loans
Traditionally, only banks and credit unions made personal loans but in the past few years, there have been many new players entering the space. Improvements in data capture, access, and technology have driven many of these changes. Some of these lenders are focused on online lending, others are focused on specific credit profiles, and others are focused on process efficiencies. The increased focus has made the space more competitive providing borrowers with more options and possibly more competitive rates.What is a Line of Credit
We include unsecured, lines of credit in the personal loans category. A line of credit is kind of like a renewable personal loans. With a line of credit, a lender will agree to make a certain amount of money (a credit line) available to the borrower over a defined period of time. The borrower can withdraw money up to the credit limit whenever they need it. Payback terms vary but there is generally a minimum monthly payment. Once the borrowed money is paid back, the line of credit remains available to the borrower without reapplying. The advantage of a line of credit is not having to apply for a loan every time you need cash. Fees vary for lines of credit and can include application fees and unused line fees. Lines of credit will also expire and need to be renewed. It is important to review all terms before accepting a line of credit.
When Considering Online Loans
Determine if you really need a loan. These loans work best as part of a balanced personal finance plan and can be a valuable tool to consolidate debt helping to bring down total interest payments. If instead, they increase financial strain consider if there are other options to borrowing money.
If you decide a personal loan is right for you it is a good idea to shop around. Compare rates and calculate the expected payment to see if it works with your spending budgets. You may also consider other borrowing options like getting a secured loan like a home equity loan. These loans are often significantly cheaper.
Direct Lenders Versus Matching Service
A direct lender is a company that underwrites your loan. A matching service matches you up to a direct lender. The main advantage of using a matching service is that only one application is required to apply to multiple lenders. The matching service will take your online application and attempt to find you a lender from its network. This all happens almost instantly because the "match" is based on pre-determined criteria. The downside to a matching service is you are unable to pick the lenders to whom you are applying. This means you won't get to shop around for rates or choose a specific lender.
Related terms are emergency loans and direct cash advance lenders.