Editor's Note: APRs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. CNBC will update as changes are made public.
Personal loans are the fastest-growing debt category, increasing about 12% year-over-year since 2015. That's due in part to the rise of fintech and peer-to-peer lending companies, which make accessing these loans cheaper and easier than ever before.
A form of installment credit, personal loans must be paid back in regular increments over a set period of time. Many see them as an affordable alternative to credit cards, because personal loans often have lower interest rates than credit cards, and consumers can use them to finance nearly every kind of expense, from home renovations to relocation costs. But that doesn't mean they're free money. Personal loan APRs average 9.34%, according to the Fed's most recent data. Meanwhile, the average credit card interest rate is around 16.43%.
When compiling our list of the best personal loans, CNBC Select evaluated dozens of lenders. We looked at key factors like interest rates, fees, loan amounts and term lengths offered, plus other features including how your funds are distributed, autopay discounts, customer service and how fast you can get your funds. (Read more about our methodology below.)
2.49% to 19.99%* when you sign up for autopay
Debt consolidation, home improvement, auto financing, medical expenses, wedding and others
$5,000 to $100,000
24 to 144 months*
Who's this for? LightStream, the online lending arm of SunTrust Bank, offers low-interest loans with flexible terms for people with good credit or higher. LightStream is known for providing loans for nearly every purpose except for higher education and small business. You could get a LightStream personal loan to buy a new car, remodel the bathroom, consolidate debt, cover medical expenses or pay for a wedding, according to the company's website.
You can receive your funds on the same day, if you apply on a banking business day, your application is approved and you electronically sign your loan agreement and verify your direct deposit banking account information by 2:30 p.m. ET.
LightStream offers the lowest APRs of any lender on this list, ranging from 2.49% to 19.99% APR when you sign up for autopay. Interest rates vary by loan purpose, and you can view all ranges on LightStream's website before you apply. Auto loans start at 2.49% and debt consolidation loans currently begin at 5.95% APR. This is subject to change as the Fed rates fluctuate.
If you select the invoicing option for repayment, your APR will be one half of a percentage point higher than if you sign up for autopay. The APR is fixed, which means your monthly payment will stay the same for the lifetime of the loan. Terms range from 24 to 144 months — the longest term option among the loans on our best-of list.
LightStream does not charge any origination fees, administration fees or early payoff fees.
6.99% to 19.99% APR when you sign up for autopay
Debt consolidation, home improvement, wedding, moving and relocation or vacation
$3,500 to $40,000
36 to 72 months
Who's this for? A Marcus by Goldman Sachs Personal Loan is a good choice if you're looking for a no-fee personal loan to finance debt consolidation.
When you're approved for a Marcus debt consolidation loan, the company will ask you if you'd like to use direct payments to send money to up to 10 creditors, which helps ensure that funds are used to directly wipe out your debt. To choose this option, you will need to provide your creditors' account numbers and addresses, as well as the amount(s) you'd like paid. Marcus deposits anything that's left over into your connected bank account.
There is no fee to use direct payments. You should continue making all required payments on your balance until you see your debt is paid off, even if you've already sent your loan money to a creditor. It may take as long as a billing cycle for the payments to be reflected on your account, but you don't want to miss a payment by mistake and get hit with additional interest charges or late fees.
Marcus also offers personal loans for home improvement, weddings, vacations or a cross-country move. Borrowers can qualify to take out a fixed-rate loan up to $40,000.
Marcus offers competitive APRs of 6.99% to 19.99% on its personal loans when you sign up for autopay. Term lengths vary from 36 to 72 months. It also offers a high-yield savings account with competitive APY, helping you both earn and save money where it counts.
5.99% to 22.56% when you sign up for autopay
Debt consolidation/refinancing, home improvement, relocation assistance or medical expenses
$5,000 to $100,000
2 to 7 years
Good to excellent
Who's this for? SoFi got its start refinancing student loans, but the company has since expended to offer personal loans up to $100,000 depending on creditworthiness, making it an ideal lender for when you need to refinance high-interest credit card debt.
If you have high-interest debt on one or more card, and you want to save money by refinancing to a lower APR, SoFi offers a simple sign-up and application process, plus a user-friendly app to manage your payments.
Another unique aspect of SoFi lending is that you can choose between variable or fixed APR, whereas most other personal loans come with a fixed interest rate. Variable rates can go up and down over the lifetime of your loan, which means you could potentially save if the APR goes down (but it's important to remember that the APR can also go up). However, fixed rates guarantee you'll have the same monthly payment for the duration of the loan's term, which makes it easier to budget for repayment.
By setting up automatic electronic payments, you can earn a 0.25% discount on your APR. You can also set up online bill pay to SoFi through your bank, or you can send in a paper check.
Once you apply for and get approved for a SoFi personal loan, your funds should generally be available within a few days of signing your agreement. You can both apply for and manage your loan on SoFi's mobile app.
While taking on a sizable loan can be nerve-wracking, SoFi offers some help if you lose your job: You can temporarily pause your monthly bill (with the option to make interest-only payments) while you look for new employment. You may still incur interest, but your payment history will remain unharmed. You can read more about SoFi's Unemployment Protection program in its FAQ.
6.49% to 17.99% APR
Debt consolidation, home improvement, medical expenses, auto financing and more
$500 to $20,000
1 to 5 years
Who's this for? PenFed is a federal credit union that offers membership to the general public and provides a number of personal loan options for debt consolidation, home improvement, medical expenses, auto financing and more.
While most lenders have a $1,000 minimum for loans, you can get a $500 loan from PenFed with terms ranging from one to five years. You don't need to be a member to apply, but you will need to sign up for a PenFed membership and keep $5 in a qualifying savings account to receive your funds.
While PenFed loans are a good option for smaller amounts, one drawback is that funds come in the form of a paper check. If there is a PenFed location near you, you can pick up your check directly from the bank. However, if you don't live close to a branch, you have to pay for expedited shipping to get your check the next day.
APRs range from 6.49% to 17.99%. Not all applicants will qualify for the lowest rate, and there's no discount for autopay.
6.99% to 24.99%
Debt consolidation, home improvement, wedding or vacation
$2,500 to $35,000
6 to 84 months
Who's this for? Discover Personal Loans can be used for consolidating debt, home improvement, weddings and vacations. While there are no origination fees, Discover does charge a late fee of $39 if you fail to repay your loan on time each month.
Discover offers fixed-rate APRs that you lock in at 6.99% to 24.99% depending on creditworthiness. There's no penalty for paying your loan off early or making extra payments in the same month to cut down on interest.
If you're getting a debt consolidation loan, Discover can pay your creditors directly. Once you're approved for and accept your personal loan, you can link the credit card accounts so Discover will send the money directly. You just need to provide information such as account numbers, amount you'd like paid and payment address information.
Any money remaining after paying your creditors can be deposited directly into your preferred bank account.
You can receive your money as early as the next business day provided that your application was submitted without any errors (and the loan was funded on a weekday). Otherwise, your funds will take no later than a week.
Personal loans are a form of installment credit that can be a more affordable way to finance the big expenses in your life. You can use a personal loan to fund a number of expenses, from debt consolidation to home renovations, weddings, travel and medical expenses.
Before taking out a loan, make sure you have a plan for how you will use it and pay it off. Ask yourself how much you need, how many months you need to repay it comfortably and how you plan to budget for the new monthly expense. (Learn more about what to consider when taking out a loan.)
Most loan terms range anywhere from six months to seven years. The longer the term, the lower your monthly payments will be, but they usually also have higher interest rates, so it's best to elect for the shortest term you can afford. When deciding on a loan term, consider how much you will end up paying in interest overall.
Once you're approved for a personal loan, the cash is usually delivered directly to your checking account. However, if you opt for a debt consolidation loan, you can sometimes have your lender pay your credit card accounts directly. Any extra cash leftover will be deposited into your bank account.
Your monthly loan bill will include your installment payment plus interest charges. If you think you may want to pay off the loan earlier than planned, be sure to check if the lender charges an early payoff or prepayment penalty. Sometimes lenders charge a fee if you make extra payments to pay your debt down quicker, since they are losing out on that prospective interest. The fee could be a flat rate, a percentage of your loan amount or the rest of the interest you would have owed them. None of the lenders on our list have early payoff penalties.
Once you receive the money from your loan, you have to pay back the lender in monthly installments, usually starting within 30 days.
When your personal loan is paid off, the credit line is closed and you no longer have access to it.
Most personal loans come with fixed-rate APRs, so your monthly payment stays the same for the loan's lifetime. In a few cases, you can take out a variable-rate personal loan. If you go that route, make sure you're comfortable with your monthly payments changing if rates go up or down.
Personal loan APRs average 9.34%, according to the Fed's most recent data. Meanwhile, the average credit card interest rate is around 16.43%. Given that the average rate of return in the stock market tends to be above 5% when adjusted for inflation, the best personal loan interest rates would be below 5%. That way, you know that you could still earn more that you're paying in interest.
However, it's not always easy to qualify for personal loans with interest rates lower than 5% APR. Your interest rate will be decided based on your credit score, credit history and income, as well as other factors like the loan's size and term.
As you shop for a low-interest loan or credit card, remember that banks are looking for reliable borrowers who make timely payments. Financial institutions will look at your credit score, income, payment history and, in some cases, cash reserves when deciding what APR to give you.
To get approved for any kind of credit product (credit card, loan, mortgage, etc.), you'll first submit an application and agree to let the lender pull your credit report. This helps lenders understand how much debt you owe, what your current monthly payments are and how much additional debt you have the capacity to take on.
Once you submit your application, you may be approved for a variety of loan options. Each will have a different length of time to pay the loan back (your term) and a different interest rate. Your interest rate will be decided based on your credit score, credit history and income, as well as other factors like the loan's size and term. Generally, loans with longer terms have higher interest rates than loans you bay back over a shorter period of time.
The loan's term is the length of time you have to pay off the loan. Terms are usually between six months and seven years. Typically, the longer the term, the smaller the monthly payments and the higher the interest rates.
Lenders offer a wide range of loan sizes, from $500 to $100,000. Before you apply, consider how much you can afford to make as a monthly payment, as you'll have to pay back the full amount of the loan, plus interest.
Some lenders charge origination, or sign-up, fees, but none of the loans on this list do. All personal loans charge interest, which you pay over the lifetime of the loan. The lenders on our list do not charge borrowers for paying off loans early, so you can save money on interest by making bigger payments and paying your loan off faster.
Here are some common personal loan terms you need to know before applying.
To determine which personal loans are the best, CNBC Select analyzed dozens of U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions, that come with no origination or signup fees, fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.
When narrowing down and ranking the best personal loans, we focused on the following features:
After reviewing the above features, we sorted our recommendations by best for overall financing needs, debt consolidation and refinancing, small loans and next-day funding.
Note that the rates and fee structures advertised for personal loans are subject to fluctuate in accordance with the Fed rate. However, once you accept your loan agreement, a fixed-rate APR will guarantee interest rate and monthly payment will remain consistent throughout the entire term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To take out a loan, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.
*Your LightStream loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.99% APR with a term of three years would result in 36 monthly payments of $295.20.