November 29, 2022

Best Online Loans

You can get just about anything online, including loans to buy a house or pay off high-interest debt. Some online loans can be approved in less time than it takes to drive to a bank branch.

As with any financial product, you will want to work with a reputable company and make sure your loan is a good fit for you.

Here’s a look at some pluses and minuses of online loans and what to look for to get the best deal.

  • What is an online loan?
  • Can you get an online loan instantly?
  • How can you get an online loan?
  • Are online loans legitimate?

Best Online Personal Loans of 2021

LightStream

2.49% to 19.99% APR
$100,000 Max. Loan Amount
660 Min. Credit Score

Upstart

8.69% to 35.99% APR
$50,000 Max. Loan Amount
620 Min. Credit Score

Payoff

5.99% to 24.99% APR
$40,000 Max. Loan Amount
640 Min. Credit Score

Rocket Loans

7.16% to 29.99% APR
$45,000 Max. Loan Amount
Not disclosed Min. Credit Score

Avant

9.95% to 35.95% APR
$35,000 Max. Loan Amount
550 Min. Credit Score

SoFi

5.99% to 18.28% APR
$100,000 Max. Loan Amount
680 Min. Credit Score

Best Egg

4.99% to 29.99% APR
$50,000 Max. Loan Amount
640 Min. Credit Score

LendingClub

10.68% to 35.89% APR
$40,000 Max. Loan Amount
600 Min. Credit Score

Lender

Learn More

APR

Max. Loan Amount

Min. Credit Score

2.49% to 19.99% $100,000 660

6.49% to 17.99% $20,000 Not disclosed

8.69% to 35.99% $50,000 620

5.99% to 24.99% $40,000 640

7.16% to 29.99% $45,000 Not disclosed

9.95% to 35.95% $35,000 550

6.99% to 19.99% $40,000 660

5.99% to 18.28% $100,000 680

4.99% to 29.99% $50,000 640

10.68% to 35.89% $40,000 600

Best for low interest

LightStream is the national online consumer lending division of SunTrust Bank, which in 2019 became Truist after merging with BB&T. The key feature of LightStream’s online personal loans is that they can be up to $100,000 and used for nearly any reason, outside of refinancing existing LightStream loans. Personal loans are available to borrowers with good to excellent credit in all 50 states.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $5,000 to $100,000
  • Repayment terms: 24 to 144 months
  • Better Business Bureau rating: A+

Best Features

  • A variety of loan uses are available.

  • Loans of up to $100,000 are available.

See full profile

Best for low minimum loan amounts

PenFed Credit Union serves members of the Armed Forces, Department of Defense, Department of Homeland Security, military associations, eligible veterans and retirees, and their families. However, military association is not required to apply for a loan or become a credit union member. The credit union offers personal loans for eligible members and eligible co-borrowers in all 50 states.

Before You Apply

  • Minimum FICO credit score: undisclosed
  • Loan amounts: $500 to $20,000
  • Repayment terms: up to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Terms of up to 60 months.

  • There are no origination fees.

  • Borrowers can get access to funds as early as the day after approval.

See full profile

Best for borrowers with no credit or poor credit

Upstart is an online marketplace lender that connects borrowers and investors to originate personal loans. It offers loans of up to $50,000 to borrowers with fair to excellent credit nationwide, with the exception of Iowa and West Virginia residents. Since it was established in 2012, more than $7 billion in loans have been originated. Many loan decisions made through the platform are automated and use artificial intelligence.

Before You Apply

  • Minimum FICO credit score: 620
  • Loan amounts: $1,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Upstart may accept applicants with fair credit or even those with no credit history, using artificial intelligence to quantify risk.

  • Upstart loans as low as $1,000 are available in most states.

  • The lender’s credit dashboard allows borrowers to see the impact of loan repayments and to modify payment dates.

See full profile

Best for debt consolidation

Payoff offers personal loans designed to consolidate credit card and other high-interest debt. It operates in most states and provides loans of up to $40,000.

Payoff is not a bank; instead, it works with lending partners that originate loans. The company, which considers itself a financial wellness firm, is based in California.

In 2017, Payoff launched a sister company called Happy Money, which takes a psychological approach to money matters. Today, Payoff is a service under the Happy Money umbrella.

Before You Apply

  • Minimum FICO credit score: 640
  • Loan amounts: $5,000 to $40,000
  • Repayment terms: 24 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Borrowers don’t face prepayment or late fees.

  • Borrowers can get preapproved with no hard credit check.

  • Some borrowers with fair credit may be eligible.

See full profile

Best for digital customer care

Rocket Loans offers personal loans to qualified borrowers in all U.S. states except Iowa, West Virginia and Nevada. These loans are designed for people with fair to excellent credit who need to borrow up to $45,000 for debt consolidation, home improvements, medical expenses and business or other expenses.

Before You Apply

  • Minimum FICO credit score: undisclosed
  • Loan amounts: $2,000 to $45,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Same-day loan funding is available in some cases.

  • No prepayment penalties apply.

  • An online application process is available.

See full profile

Best for risky borrowers

Since 2012, Avant has provided access to personal loans to more than 800,000 borrowers nationwide. Borrowers may qualify with fair to excellent credit and can borrow from $2,000 to $35,000.

Before You Apply

  • Minimum FICO credit score: 550
  • Loan amounts: $2,000 to $35,000
  • Repayment terms: 24 to 60 months
  • Better Business Bureau rating: A

Best Features

  • Loans as low as $2,000 are available.

  • Funding can happen as early as the next business day after approval.

See full profile

Best for no origination fee

Marcus is the consumer bank and lending arm of investment bank Goldman Sachs. Established in 2016, the lender offers personal loans of up to $40,000.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $3,500 to $40,000
  • Repayment terms: 36 to 72 months
  • Better Business Bureau rating: A+

Best Features

  • Marcus does not charge any fees on its personal loans.

  • Borrowers can adjust their payment due date.

See full profile

Best for loans of up to $100,000 with no fees

SoFi, short for Social Finance, offers personal loans of up to $100,000 to borrowers with very good to excellent credit. The lender operates nationwide, but does not offer personal loans in Mississippi, and is known for offering loans with no fees. In addition to personal loans, SoFi offers student loans, student loan refinancing, home loans and small business financing.

Before You Apply

  • Minimum FICO credit score: 680
  • Loan amounts: $5,000 to $100,000
  • Repayment terms: 24 to 84 months
  • Better Business Bureau rating: A

Best Features

  • SoFi offers no-fee loans, including no late fees.

  • Loans of up to $100,000 are available.

  • Co-borrowers are accepted.

See full profile

Best for bad credit

Best Egg is a national online lender offering personal loans starting at $2,000 for a variety of purposes. Loans can be funded in as little as one business day.

Before You Apply

  • Minimum FICO credit score: 640
  • Loan amounts: $2,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Loan funding typically takes one to three business days upon approval.

  • The minimum loan amount is $2,000 in most states.

  • Borrowers incur no prepayment penalty.

See full profile

Best for fair credit

LendingClub is an online marketplace that connects borrowers and investors through its network of lending partners. LendingClub initially launched on Facebook and has evolved into an extensive peer-to-peer lender. Borrowers in all U.S. states except Iowa and U.S. territories who have fair to excellent credit can get $1,000 to $40,000 loans with LendingClub.

Before You Apply

  • Minimum FICO credit score: 600
  • Loan amounts: $1,000 to $40,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: not rated

Best Features

  • Loans of $1,000 or more are available.

  • Joint applications are accepted.

  • Borrowers can qualify with fair to excellent credit.

See full profile

Best Online Mortgage Lenders of 2021

PNC Bank

3% Min. Down Payment
Not disclosed Min. Credit Score

Lender

Learn More
3% Min. Down Payment
Not disclosed Min. Credit Score

Best for bad credit

Carrington Mortgage Services makes a range of mortgages, including refinancing, available to borrowers nationwide. The company, which provides conventional and government-backed mortgages, has funded $22 billion in home loans since 2011.

Before You Apply

  • Mortgage types: conventional, FHA, VA, USDA, ARM, Carrington Flexible Advantage, first-time buyers, refinancing
  • Minimum FICO credit score: 500
  • Maximum loan amount: $2.5 million
  • Better Business Bureau rating: A+

Best Features

  • Applicants with credit scores as low as 500 are accepted for some products.

  • Conventional loans are offered with down payments as low as 3%.

See full profile

Best for product availability

Fairway Independent Mortgage Corp. is based in Madison, Wisconsin, and has funded billions of dollars in loans since the company began in 1996 – and more than $58 billion in 2020 alone. The lender offers several mortgage products, including conventional, Federal Housing Administration, U.S. Department of Agriculture, U.S. Department of Veterans Affairs and refinancing loans. Fairway Independent Mortgage also provides jumbo loans for home purchases in high-cost markets, renovation loans, adjustable-rate mortgages and reverse mortgages. Fairway is an independent mortgage company and serves as a mortgage broker and direct lender.

Before You Apply

  • Mortgage types: fixed rate, ARM, conventional, USDA/Rural Development, FHA, VA, jumbo, refinance, renovation, reverse mortgage
  • Minimum FICO credit score: 580
  • Maximum loan amount: undisclosed
  • Better Business Bureau rating: A+

Best Features

  • The selection of mortgages includes VA and USDA loans, which often have no down payment requirements.

  • The company has an A+ customer service rating with the Better Business Bureau.

  • Renovation loan options include the HomeStyle Renovation Loan, which combines the cost of remodeling and the mortgage into one loan.

See full profile

Best for consumers with credit scores between poor and good

NBKC Bank is a Kansas-based mortgage lender. It originates home loans in all 50 states.

Before You Apply

  • Mortgage types: conventional, fixed rate, ARM, FHA, refinance, VA, FHA Streamline Refinance, Refi Plus, VA Streamline Refinance
  • Minimum FICO credit score: 620
  • Maximum loan amount: Not disclosed
  • Better Business Bureau rating: A+

Best Features

  • Borrowers with fair credit may qualify.

  • It features a simple online application process.

  • VA loan borrowers aren’t charged lender fees.

See full profile

Best for product selection

Guild Mortgage, founded in 1960, specializes in home loans and serves borrowers nationwide. The lender’s full suite of products includes conventional and government-backed mortgages and home renovation loans.

Before You Apply

  • Mortgage types: conventional, FHA, VA, USDA, ARM, refinancing, renovation, jumbo
  • Minimum FICO credit score: 620
  • Maximum loan amount: $2 million
  • Better Business Bureau rating: A+

Best Features

  • A broad range of mortgage products are offered.

  • Special mortgage programs for first-time buyers and manufactured homebuyers are available.

See full profile

Best for VA loans

Veterans United Home Loans provides mortgages to veterans and military families in all 50 states and Washington, D.C., and specializes in VA loans.

Before You Apply

  • Mortgage types: VA, VA jumbo, refinance
  • Minimum FICO credit score: 640
  • Maximum loan amount: $1.5 million
  • Better Business Bureau rating: A+

Best Features

  • No down payment or PMI are required.

See full profile

Best online bank for customer service

Ally Bank is a Detroit-based online bank. Ally offers traditional banking products and services, such as conventional mortgages, as well as refinance loans and jumbo home loans.

Before You Apply

  • Mortgage types: fixed rate, ARM, home equity loans, refinancing, HomeReady for first-time homebuyers
  • Minimum FICO credit score: 620
  • Maximum loan amount: $4 million
  • Better Business Bureau rating: A+

Best Features

  • A program is available for first-time homebuyers.

  • Existing Ally customers can get a closing cost discount.

See full profile

Best for large loan amounts

Bank of America serves roughly 66 million customers in all 50 states. The lender offers conventional, Federal Housing Administration, Department of Veterans Affairs and jumbo loans, as well as home equity lines of credit and mortgage refinancing.

Before You Apply

  • Mortgage types: fixed rate, Affordable Loan Solution, FHA, VA, ARM, home equity line of credit, fixed-rate refinancing, FHA refinancing, VA refinancing, cash-out refinancing, adjustable-rate refinancing, jumbo
  • Minimum FICO credit score: Not disclosed
  • Maximum loan amount: $2.5 million
  • Better Business Bureau rating: A+

Best Features

  • Bank of America has a wide variety of mortgage products.

  • The lender offers origination fee discounts for qualifying Bank of America and Merrill Lynch clients.

  • Home equity lines of credit have no annual, application or cash advance fees or closing costs.

  • Bank of America offers a first-time homebuyer program.

See full profile

Best for low down payment

PNC Bank is one of the largest U.S. banks, serving more than 8 million customers in all 50 states. PNC offers most types of mortgages.

Before You Apply

  • Mortgage types: fixed rate, FHA, VA, USDA, ARM, home equity line of credit, refinancing, medical professional mortgage program, jumbo, PNC Community
  • Minimum FICO credit score: Not disclosed
  • Maximum loan amount: $5 million
  • Better Business Bureau rating: A+

Best Features

  • Multiple types of mortgages are available.

  • Some mortgage options require no or low down payments.

  • PNC supplies an online home ownership cost tool.

See full profile

Best for no down payment

Alliant Credit Union is a nonprofit financial cooperative. The credit union serves customers in all 50 states. Mortgage products include conventional, jumbo and refinancing loans, and home equity lines of credit.

Before You Apply

  • Mortgage types: Traditional, ARM, refinancing, home equity line of credit, Alliant Advantage Mortgage
  • Minimum FICO credit score: 620
  • Maximum loan amount: $2.5 million
  • Better Business Bureau rating: A+

Best Features

  • No-down-payment mortgages are available for first-time homebuyers with excellent credit.

  • Mortgages are available to borrowers with FICO credit scores as low as 620.

See full profile

Best Online Student Loans of 2021

Earnest

3.34% to 12.78% with autopay Fixed APR
No maximum Max. Loan Amount
650 Min. Credit Score

College Ave

3.34% to 12.99% with autopay Fixed APR
No maximum Max. Loan Amount
Not disclosed Min. Credit Score

Sallie Mae

4.25% to 12.59% * Fixed APR
Not disclosed Max. Loan Amount
Mid 600s Min. Credit Score

Discover

4.24% to 12.99% with autopay Fixed APR
No maximum Max. Loan Amount
Not disclosed Min. Credit Score

Splash Financial

2.54% to 6.25% with autopay Fixed APR
No maximum Max. Loan Amount
650 Min. Credit Score

U-fi

3.59% to 12.34% Fixed APR
$125,000 Max. Loan Amount
680 Min. Credit Score

Laurel Road

2.80% to 6.00% with autopay Fixed APR
No maximum Max. Loan Amount
650 Min. Credit Score

LendKey

3.99% to 8.49% with autopay Fixed APR
Cost of attendance, minus aid Max. Loan Amount
660 Min. Credit Score

PNC

4.44% to 9.59% with autopay Fixed APR
$50,000 yearly Max. Loan Amount
Not disclosed Min. Credit Score

Find the Best Student Loan Refinance Lenders

Best for fair credit

Earnest is an online lender offering private student loans to current college and graduate students and student loan refinancing to graduates. The company was founded in 2013. Borrowers can choose their loan terms to fund up to the full cost of their education.

Before You Apply

  • Loan types: undergraduate, graduate, co-signer, refinancing, Parent PLUS refinancing, MBA, law, medical
  • Minimum FICO credit score: 650
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Earnest doesn’t charge origination, application or late fees.

  • You can choose your monthly payment and loan term length.

  • You can use a co-signer on undergraduate or graduate student loans, and student loan refinancing is available.

See full profile

Best for customer service

Education Loan Finance, also known as ELFI, is a student loan refinancing program offered by SouthEast Bank. Options are available in all 50 states and Puerto Rico to refinance private and federal student loans, including undergraduate, graduate, parent and MBA loans, as well as loans for law, dental and medical school. ELFI also offers private loans for students at eligible institutions.

Before You Apply

  • Loan types: undergraduate, graduate, parent loans, refinancing, parent refinancing, MBA, law, health care
  • Minimum FICO credit score: 680
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • There are no application, origination or prepayment fees.

  • All types of student loans are eligible for refinancing.

See full profile

Best for instant approval

College Ave Student Loans offers student loans to borrowers in all 50 states. Undergraduate, graduate and parent loans are available. The lender specializes in simple applications with an instant decision.

Before You Apply

  • Loan types: undergraduate, graduate, parent loans, refinancing, MBA, law, dental, medical, career, international
  • Minimum FICO credit score: undisclosed
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Loans are available from $5,000.

  • Prequalify for a rate in less than 1 minute.

  • Loan terms are available from 5 to 20 years.

See full profile

Best for product availability

Sallie Mae is a publicly traded consumer bank that offers private student loans to pay for undergraduate, graduate and specialty degrees. The company started in 1972 as a government entity that serviced federal student loans. It went private in 2004 and has served nearly half a million students and families with its range of student loan products. Beyond student loans, Sallie Mae Bank offers savings products to help families plan and pay for college, and credit cards with incentives for using cash back rewards to pay back student loans.

Before You Apply

  • Loan types: undergraduate, career training, parent, K-12, graduate, MBA, medical, medical residency, dental, dental residency, health professions, law school, bar study
  • Minimum FICO credit score: undisclosed
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Student loans completely cover school-certified expenses such as tuition, fees, books, housing, meals, travel or a laptop.

  • Customer service is 100% U.S.-based.

  • Borrowers don’t have to pay a loan origination fee.

See full profile

Best for no fees

Discover Bank has been operating for more than 100 years, and since 2010, it has offered private student loans to students attending more than 2,400 colleges and universities. Loans of up to 100% of education costs with fixed or variable rates are available.

Before You Apply

  • Loan types: undergraduate, graduate, parent, refinancing, MBA, law, international, consolidation, health professions, residency, bar exam. International loans require a co-signer who is a U.S. citizen or permanent resident.
  • Minimum FICO credit score: undisclosed
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Loans as small as $1,000 are available.

  • Discover has no origination, application or late fees.

See full profile

Best for speedy credit decisions

Splash Financial is a student loan refinance lender marketplace based in Cleveland, with its own lender network of banks and credit unions. Splash Financial gives borrowers quotes from its partner lenders with loans available in all 50 states. Refinancing is available for federal, private and Parent PLUS loans. A specialized refinance program is designed for doctors completing residencies or fellowships.

Before You Apply

  • Loan types: refinancing, parent refinancing
  • Minimum FICO credit score: 650
  • Co-signer accepted: yes
  • Better Business Bureau rating: A-

Best Features

  • Refinancing is available for a range of student loans.

  • Splash Financial works with a network of banks and credit unions to provide the best possible rates.

  • There are no application fees, origination fees or prepayment penalties.

See full profile

Best for flexible loan terms

U-fi from Nelnet offers private student loans and refinancing loans to borrowers in all U.S. states except Vermont. Undergraduate, graduate and refinancing loans are available. The lender specializes in offering flexible repayment options.

Before You Apply

  • Loan types: undergraduate, graduate, MBA, law, health professions, refinance
  • Minimum FICO credit score: 680
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • Borrowers can get up to 15 years to pay off the loan.

  • The lender offers an interest rate discount for automatic payments.

  • Borrowers can make full payments or pay interest only while in school, or defer payments.

See full profile

Best for graduate health care program loans.

Laurel Road, which became part of KeyBank in 2019, offers graduate student loans and refinancing on a variety of student loans.

Before You Apply

  • Loan types: student loan refinancing, health care graduate, Parent PLUS refinancing
  • Minimum FICO credit score: 650
  • Co-signer accepted: yes
  • Better Business Bureau rating: A

Best Features

  • Loans are available from $5,000 up to 100% of the student’s school-certified cost of attendance.

  • Borrowers can make full payments while in school, or choose to pay interest only, a flat fee or defer payments.

  • Laurel Road student loans have no application, origination or prepayment fees.

See full profile

Best for minimal fees

LendKey is a student loan lending platform that connects credit unions and community banks with online borrowers. Founded in 2009, LendKey has served more than 99,000 borrowers with more than $3.1 billion in loans from partner lenders. Undergraduate and graduate student loans are available, as well as student loan refinancing.

Before You Apply

  • Loan types: undergraduate, graduate, refinance
  • Minimum FICO credit score: undisclosed
  • Co-signer accepted: yes
  • Better Business Bureau rating: A

Best Features

  • Students can consider multiple lenders with a single application.

  • LendKey has no origination or application fees.

See full profile

Best for ACH discount

PNC Bank was established in 1845 and operates in all 50 states. The bank is engaged in a number of community efforts, including its Grow Up Great program in conjunction with Sesame Workshop and various financial literacy efforts. For students, PNC offers opportunities to win $2,000 scholarships toward education expenses. PNC provides a range of loans for students at all stages of postsecondary education, including professional training loans and refinancing.

Before You Apply

  • Loan types: undergraduate, graduate, refinancing, MBA, law, dental, medical, bar and residency
  • Minimum FICO credit score: undisclosed
  • Co-signer accepted: yes
  • Better Business Bureau rating: A+

Best Features

  • PNC offers a range of loans for undergraduate, graduate and professional education.

  • Loans are available in all 50 states.

  • Borrowers can receive an interest rate discount for automatic payment from a checking or savings account.

See full profile

Best Online Business Loans

Methodology: U.S. News selected national small-business loan companies for this guide based on consumer ratings and availability of products.

Best for bad credit

Established in 2013, BlueVine has delivered more than $9 billion in financing to more than 200,000 customers. The entrepreneurial lender focuses on small businesses, offering business lines of credit up to $250,000 and invoice factoring with credit lines up to $5 million. BlueVine also offers an online vendor and bill payments program and business checking accounts. The lender serves borrowers across the country and has three brick-and-mortar locations in Redwood City, California; Gretna, Louisiana; and Jersey City, New Jersey.

Lender Highlights

  • Loan types: invoice factoring, lines of credit, term loans
  • Minimum FICO credit score: 530
  • Maximum loan amount: $5 million
  • Better Business Bureau rating: A+

Best Features

  • Invoice factoring credit lines as large as $5 million

  • Disbursement within 24 hours

See full profile

Best for loan options

Biz2Credit was founded in 2007 as a platform to match small businesses with funding based on their needs by connecting borrowers with lenders that offer a range of loan and credit options. The platform has arranged more than $3 billion in small business funding for thousands of U.S. companies.

Lender Highlights

  • Loan types: lines of credit, merchant cash advances
  • Minimum FICO credit score: undisclosed
  • Maximum loan amount: $5 million
  • Better Business Bureau rating: A+

Best Features

  • Loans come from a network of financial institutions

  • Borrowers matched with loan options

See full profile

Best for large loan amounts

Established in 2013, Fundbox has served more than 70,000 small businesses with loans backed by investor partners. Borrowers can obtain revolving lines of credit of up to $100,000.

Lender Highlights

  • Loan types: lines of credit
  • Minimum FICO credit score: undisclosed
  • Maximum loan amount: $100,000
  • Better Business Bureau rating: A+

Best Features

  • Loan amounts from $1,000 to $100,000

  • Some funds with next-business-day availability

See full profile

Best for fixed monthly payments

Funding Circle is an online lender that connects small-business borrowers with investors. The platform has linked 81,000 businesses worldwide with more than $11.7 billion in funding.

Lender Highlights

  • Loan types: term loans
  • Minimum FICO credit score: 660
  • Maximum loan amount: $500,000
  • Better Business Bureau rating: A+

Best Features

  • Term loans of up to $500,000

  • No annual revenue minimums for loans

  • Loans available in every state except Nevada

See full profile

Best for short loan terms

OnDeck is an online lender providing small businesses with term loans and lines of credit. The company has extended $13 billion in loans using data analytics and digital technology to assess the creditworthiness of borrowers.

Lender Highlights

  • Loan types: lines of credit, term loans
  • Minimum FICO credit score: undisclosed
  • Maximum loan amount: $2 million
  • Better Business Bureau rating: A+

Best Features

  • Term loans and lines of credit

  • Loans of up to $2 million

See full profile

Best for product availability

Rapid Finance offers lines of credit, merchant cash advances and Small Business Administration bridge loans from $5,000 to $1 million. Approval in 24 hours is available, with one-day disbursement.

Lender Highlights

  • Loan types: bridge loans, invoice factoring, lines of credit, merchant cash advances, term loans
  • Minimum FICO credit score: undisclosed
  • Maximum loan amount: $1 million
  • Better Business Bureau rating: A+

Best Features

  • Loans charge monthly fee instead of annual percentage rate

  • Smallest loan amount is $5,000

See full profile

What Is an Online Loan?

Online loans allow you to complete the loan process online, from comparing rates to applying for and receiving funds. Typically, you can obtain your loan and manage your account without setting foot in a brick-and-mortar space.

Some online lenders offer three choices for customer service. They provide not only online resources, but also options for phone and in-person service.

Most online loans are personal loans, with uses ranging from debt consolidation to home improvement loans. But mortgages, business loans, student loans and other loan types can also be obtained online.

“Personal loans have been the fastest-growing type of loan over the last couple of years,” says Peter Klipa, senior vice president of creditor relations for the nonprofit National Foundation for Credit Counseling. “A lot of that is driven by the category of debt consolidation.” Debt consolidation loans are popular because personal loan rates tend to be lower than credit card rates.

Adds Yasmin Farahi, a policy counsel at the Center for Responsible Lending, a consumer advocacy group: “So much of what consumers are doing is online these days, so in that way, (the growth) is not surprising.”

Can You Get an Online Loan Instantly?

One main benefit of online loans compared with traditional loans is speed. Application, approval and the chance to review multiple offers happens quickly, so you can obtain online loans fast.

Some online personal loan companies say they can obtain loan approval in five minutes or less. And you might be able to get funds as soon as the next business day.

Where Can You Get an Online Loan?

Many types of lenders let you borrow money online: traditional banks, credit unions and online financial technology, or fintech, companies. The latter issues almost half of all unsecured personal loans, according to a 2019 report from the credit bureau Experian.

Some of the largest online loan companies for personal loans include SoFi, LightStream, Prosper and Upstart. Like traditional lenders, they require a hard credit check and have set minimum annual income and other eligibility criteria, such as good to excellent credit.

Unlike traditional lenders, though, online lenders use automated underwriting for quicker and easier online loan approval. And you won’t have to visit a bank branch or make a phone call to get a loan.

How Can You Get an Online Loan?

Follow these steps as you choose an online loan:

Decide how much you need, and budget for monthly payments. First, figure out how much money you need to borrow, such as the minimum loan amount to consolidate high-interest debt. Determine what you can reasonably afford to pay on the loan each month.

Get quotes. Many online lenders allow you to prequalify for loan offers with basic information such as your Social Security number, which can tell you how much you may be able to borrow, term lengths, your interest rate and other loan terms. Prequalifying is a good way to assess competitive interest rates and potentially get a lower interest rate. Check that the lender only does a soft credit inquiry for rate quotes, which won’t affect your credit score.

A hard credit inquiry, used when you formally apply for a loan, could affect your credit history and score. But that’s only if you are piling up inquiries in a short span of time.

Review costs. Compare loan rates, terms, loan amounts and other factors to find the best online loan for your needs. Look closely at the loan costs disclosed by the lender, which should include the interest rate and fees, including the origination fee and late fees. Your annual percentage rate can tell you what your loan costs with interest and fees.

“Think about interest as the rent you must pay for borrowing,” says Nandita Das, founder of Das Financial Health in Newark, Delaware. “Along with the interest, you have other fees that become the total cost of the loan.”

The federal Truth in Lending Act requires lenders to provide you with clear information about the costs of a loan. It also allows borrowers to cancel certain loans within three days of signing up for them.

Loan terms should be clear, including loan amount, fees and interest, finance charge and payoff amount.

Are Online Loans Legitimate?

Most online loans are safe, but scams – and really bad deals – can be pitfalls of online loans. Here’s how to tell the difference between legitimate online lenders and ones you should avoid.

Online loan companies fall into two groups: firms that rely on credit report checks before they approve your loan and payday-type lenders that only use soft credit checks and may consider wages or bank accounts instead. Although a loan with no hard credit check might sound like a good deal, especially if you have bad credit, a full credit check is a good sign an online lender is legitimate.

Because they have few approval requirements, payday loans can help you borrow if you have bad credit. But easier access to bad credit loans comes at a cost.

A consumer will pay much higher interest rates for not going through a credit check, Klipa says. “As much as the consolidation loans have been growing, the payday lenders have also been growing,” he adds.

Payday lenders target consumers with a below-average credit score.

If an offer seems too good to be true – such as fast funding for anyone, with no minimum credit score – be careful. Getting payday loans online is rarely a good choice because the cost of borrowing can quickly become overwhelming.

  • The offer seems too good to be true.
  • Loan costs aren’t clear, or information is limited.
  • High interest rates or fees are well above average.
  • No credit check is required.
  • Payments aren’t reported to credit bureaus.

Online payday-type lenders “are the same thing in a different package,” Farahi says. “Because of a new shiny package, people think of them as different, like they’re not payday loans or have the same kinds of issues, but they do.”

Look for online lenders that perform credit checks and provide clear terms, with fees that are within reason for the type of loan you want.

Is an Online Loan the Right Choice?

Sometimes a loan of any kind just isn’t the right choice. Maybe you’re buried under credit card debt and credit counseling would be more helpful than credit card refinancing with another bill to pay. Or if you want to take a vacation, saving money could be a better option than borrowing.

Online loans can be faster and easier than traditional loans, but those aren’t the most important factors to consider. If you want an online loan, get prequalified for offers from all types of lenders to see whether you’re getting the best deal on rates, terms and fees.

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