Finding the perfect personal loan lender options for fair credit based on your need
Everyone has different circumstances which cause the need to borrow money. If you have a credit score between 620 and 680, it can be especially hard to find the lender that matches your particular situation. Having Fair credit puts you in that range where some lenders will deny you and others will give you a great rate. It sometimes feels arbitrary. That’s just because each lender is different. They have different features, benefits, and policies. How are you supposed to know which lender would be best for you?
That’s what this video is all about. We know something about personal loans. We spent years in the lending industry and we currently track the details of a hundred different national lenders. We’ve collated the differences amongst them so we can help you see which lenders might be best for you.
Loan Amount
Let’s start with loan amount. Not every lender will offer you small loan amounts. Some lenders don’t think it’s worth it to offer loans that are too small. So, if you just need a little bit of money, say under $2,000 the best lenders include: LendingClub, Oportun, Upgrade, and Upstart. On the other hand, if you are looking for a substantial amount of money, say over $40,000 dollars, the best lenders include: Achieve, Best Egg, Prosper, Upgrade, and Upstart.
Unsecured Option
If you can help it, it’s always nice to stick with unsecured debt. Why risk putting your collateral at risk if you don’t need to? However, sometimes you just can’t get approved for the amount of money you need or the interest rate you want unless you take out a secured loan. The lenders offer secured options include: Achieve, Best Egg, Oportun, Prosper, and Upgrade. Best Egg deserves particular note because they have a secured option that uses the permanent fixtures on your house as collateral. This doesn’t put your home equity directly at risk.
Debt Consolidation
If you are shopping for a personal loan in order to consolidate credit card balances or other debt, it’s nice to work with a lender who has features to help you do that. First of all, you will want an APR that is at least 2-3 percentage points lower than the interest rate on the debt you are consolidating. Second, it’s nice to work with a lender who will directly pay off your creditors for you with the proceeds of the loan. Lenders who do that show that they understand that the new loan will pay off the other debt and not stack on top of them. Because it doesn’t change your debt-to-income ratio, it should be easier to be approved by them. The lenders who offer this service include: Achieve, Best Egg, LendingClub, Sofi, and Upgrade.
Cosigners
Some loans will allow you to include a cosigner on the application. A cosigner agrees to pay off the loan if you fail to. If your cosigner has higher income or a stronger credit profile than you do, it can significantly improve your chances of being approved, qualifying for more money, or scoring a lower interest rate. If your spouse or significant other is your cosigner, it can be particularly baffling for a lender to not accept them. The following lenders will accept cosigners:
Achieve, Prosper, Sofi, and Upgrade.
Fast Payback
It’s always a good idea to pay back your loans as fast as you can. None of the lenders we track charge a prepayment penalty on their personal loans. But even then, if you know you are only going to hold a loan for a few months, there are some lenders that would be better than others. Why? Well, you don’t get reimbursed for an origination fee if you pay the loan off early. The origination fee is included in the APR. So, if two loans have the same APR, but one has a higher origination fee, then it must have a lower interest rate. If you pay both loans off early, you save more in future interest with the one that has a higher interest rate. That means the one with the lower origination fee would ultimately be cheaper for you. Remember, you don’t get a reimbursement for the origination fee if you pay the loan off early. Lenders often have a range of origination fees, so you need to apply to know what they will offer you. But these are the lenders with the lowest overall origination fees: Achieve caps out at 7%; LendingClub and Prosper cap out at 8%; and, Sofi doesn’t have an origination fee at all.
Perpetually Late
If you are the kind of person who finds themselves late on a payment a few times a year, it would be important to know which lenders charge the lowest late fee. Late fees can really add to the cost of borrowing. Sofi charges no late fees at all; Upgrade charges a flat $10; Best Egg charges a flat $15; Achieve, LendingClub, Oportun, Prosper, and Upstart charges $15 or 5%, whichever is greater.
Shopping Around
These are good clues for the kind of lender that might align with your needs and lifestyle. But, the best way to make sure you are getting the best overall deal is to shop around. If you can, get two or three approved offers in hand before you accept a loan. That will ensure you are getting the best deal you can in your circumstances.
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