Borrowers with good to excellent credit (690 and above) have the widest options when it comes to shopping for personal loans. Lenders view borrowers with average or bad credit as higher risks, and some may not offer loans as a result. But a bad credit score doesn’t mean you can’t get a personal loan.
The three main options for where to get a personal loan are:
- Online lenders: These lenders offer a convenient way to search and compare personal loans.
- Credit unions: A local credit union may offer personal loans with lower interest rates and more flexible terms than loans from other lenders.
- Banks: A few major banks and financial institutions offer personal loans, including Wells Fargo and Citibank.
Personal loans from online lenders
Most online lenders quote rates and terms during a pre-qualification process after a soft credit check. That’s just an inquiry and doesn’t hurt your credit; a hard credit check is an actual application for credit that may briefly ding your credit score.
The sheer competitiveness of the personal loan market means online lenders try harder to set themselves apart from traditional lenders, either with lending guidelines that go beyond traditional credit-scoring models or with extras like flexible payments, no fees, or ways to lower your interest rate during repayment.
Some online lenders are geared to strong-credit borrowers, offering high loan amounts and low-interest rates. Credit scores of 690 to 719 are considered good, while those 720 and above are excellent.
Other lenders cater to borrowers with average or below credit. Rates are higher, but a lender may consider other factors beyond your average (630 to 689) or bad (300 to 629) credit score.