Personal Loans 101

Personal loans can be a lifesaver when you need cash urgently, but you shouldn’t borrow them thoughtlessly. Planning your payments with a jeweler’s accuracy is a key to healthy loan use. Do the math with our personal loans calculator to avoid paying unexpected expenses.

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Where can I get a personal loan?

Personal loans for bad credit

Having bad credit doesn’t mean you won’t be able to get  a loan. If you have a fair or low credit score, you may not have a long list of lenders that willing to work with you. However, a few of them specialize in lending money for those with bad credit.

But don’t get stuck in a trap.

Try to avoid payday loans that come with astronomical APRs and carry a lot of fees. Do your best to find an option of an unsecured or secured loan lender that will offer you affordable terms.








From 3 to 36 months

OneMain Financial



From 24 to 60 months




From 24 to 60 months

*Our recommendations for bad credit personal loans.

Personal loans for debt consolidation

When things go really badly and your overall payment arrears are rapidly growing, it’s time to take action to get out of this debt “hole.” Debt consolidation is one of the options you can turn to to settle your financial problems.

How does it work? You simply group all of your outstanding balances into one debt,  then borrow a loan to pay it off. If you’re lucky, your interest rate will be much lower than that on your credit cards.

Once you free up your credit cards, try to prevent falling into debt again. Don’t overspend, and stick to healthy payment habits.






Up to $40,000


36 months or longer


Up to $35,000


From 3 to 72 months




From 36 to 60 months

*Our recommendations for personal loans for debt consolidation.

Personal loans for students

Paying for college can cost you a great deal. In most cases it’s quite difficult to do without a loan. At first glance, loans sound very appealing: you just grab your money and pay for college. But in spite of its accessibility, a loan can ultimately be an expensive tool for solving your financial hardships. Before you sign a loan application form, check to make sure you haven’t overlooked any ways to save money.

  1. Try to find an option that doesn’t require repayment. Do some research to find out if you qualify for a grant or scholarship. Why not put in a little effort to get free education instead of paying hefty sums?
  2. If no free options are in hand, try to get a federal subsidized loan. Federal loans often carry lower interest rates. This option can really work in your favor: even a minor difference in interest rates can save you a lot in the long run.
  3. Use a private loan when there are no alternatives. It’s not uncommon for unsubsidized private loans to be more expensive. They come at higher fixed rates and if the rate is variable, it can easily rise over time and make you pay more than you expect. However, the marketplace is full of decent offers you can choose from.






Min $5,000


From 5 to 20 years

SoFi Students Loans

Min $5,000


From 5 to 20 years


Min $5,000


From 5 to 20 years

*Our recommendations for student personal loans.

Personal loan with cosigner

Don’t qualify for a loan? Consider a co-signed one. This way, you can increase your chances of being approved and, moreover, you may get a lower interest rate. Remember that both you and a co-signer take on equal risk and responsibility for borrowed money. Your co-signer should have a good or excellent credit score and solid credit history. Lenders will assess his or her financial background alongside yours.

A co-signer can be anyone from a close relative to a person you hardly know. However, we strongly advise you to choose someone who is a close relation. Why do we stress this? If any payments are missed, it’s your co-signer who holds responsibility for delinquencies.








From 2 to 7 years




From 1 to 3 years

Wells Fargo



From 1 to 5 years

*Our recommendations for personal loans with cosigner

What amount of personal loan can I get?

After researching dozens of offers, we have found that you can get up to $100,000 to cover your expenses. You can get this maximum you from very few lenders, however. In most cases, amounts range from $2,000 to $50,000. It goes without saying that the lender always decides how much you can get. What guides their decision? Sometimes the results can be quite unpredictable, but there are a few determining factors that can influence the outcome considerably.

Your credit score. The higher your score, the more favorable terms you can get. Lenders are most interested in those with scores of 680 and higher. If, on the other hand, your credit leaves much to be desired, you can still count on getting a loan, but it is likely to carry higher interest rates.

Your income. Lenders assess your income and expenses to make a decision upon your “loanworthiness.” They consider a stable source of income proof that you can make full payments on time.

Your needs. Your loan limit depends on your needs. Whether you’re hoping to fund a house renovation or consolidate debts, amounts will differ. Moreover, some lenders have limitations and do not provide loans for certain needs.


TIP: For a clearer understanding of what to expect (your rate and approximate amount), get prequalified. Prequalification doesn’t count as a hard credit check and doesn’t hurt your credit score.

Best personal loan rates

To qualify for the best rates, you need to have credit that will satisfy your potential lender. How can you prove that you are a reliable customer? Keep your bank accounts in good standing, raise your credit score at least up to 680, and maintain a stable income.

If something went wrong for you financially and your credit is suffering, improve it. Raise your credit by making all payments accurately and on time. Lower or pay off any debts that burden your finances. If you have no source of income, think twice before diving into a new debt. You may consider a loan for bad credit, but be sure you have enough money to pay off the debt. Lenders want to see established proof that you are ready to borrow money.

Once again: to get the best rates, pay attention to the following:

Credit score. It plays a role of a visible proof, to what extent a lender can trust you with its money. The higher your score, the more reliable a customer you will seem to a potential lender.

Debt-to-income ratio. Lenders evaluate your income to calculate your debt-to-income ratio, which shows them how flexible you may be in terms of paying off the debt.

Loan repayment period. The shorter your repayment period is, the lower the interest rate you may have. Lenders offering shorter payment windows want to get their money back sooner.

Low-interest personal loans

Nobody minds paying less than needed. Even a small difference in your interest rate may save you a lot in the long run. However, we’d be lying if said that it’s easy to get a cheap loan. The truth is that very few customers can qualify for such sweet offers. If you have an excellent credit score, give it a try. We’ll never discourage you from applying. It’s not uncommon for the lenders to make decisions in your favor when you don’t expect it.









From 2 to 7 years

Excellent credit




From 3 or 5 years

Good credit




From 2 to 5 years

Bad credit

*Best low-interest personal loans

Where can I get low-interest personal loans?

Major banks

Although more and more new types of lenders appear, commercial banks still maintain high standards. These banks are big, established entities that have authority over millions of customers and are believed to be less risky than other financial institutions. However, they require a higher credit score from borrowers than other lenders. Those with a score of 680 and higher can count on lower APRs. Those with a worse score may get higher interest rates.

Note that not all banks offer personal loans (Wells Fargo, Citibank, Discover, and American Express do). You can borrow a maximum of $100,000 at interest rates ranging from 6.7% to 24.99%.

Credit unions

Credit unions offer fewer loan options than banks, but they still are good competitors. Many customers value credit unions for their friendly customer service and loyalty to their customers. This means that you may qualify even without excellent credit. More than a half of all credit union loans go to borrowers with credit scores of 660 and lower. This is good news for those who can’t boast solid credit, but need low interest rates. However, they tend to lend smaller amounts—around $3,000 on average.

To qualify for a loan from a credit union, you’ll need to pay a one-time entry fee to become a member.

Online lenders

Online-only lenders are gaining popularity nowadays because of their accessibility and convenience. It’s not uncommon for us to be too busy in our daily lives to drive to a physical branch of a bank.

Online providers save you time and offer a competitive range of services. They have developed user-friendly websites to help you quickly apply for any product, be it a loan or a credit card, without wasting a single minute standing in a queue. They tend to offer more appealing interest rates (starting as low as 5%), and a few of them are ready to deal with bad credit.

How to calculate personal loan payments

The fastest way to figure out how much you are expected to pay each month (in rare cases, each week) is to use our personal loans calculator. It may take you a few seconds to fill out the boxes with the necessary information.

But for especially curious readers, we’ll share a formula that can help you do the math by hand. This formula works for most amortizing loans (excluding credit cards and interest-only loans).

Loan Payment = Amount / Discount Factor
P = A / D

To do the calculations, you’ll need the following values:

n: number of periodic payments (how many payments you make per year);

i: periodic rate (annual rate divided by number of payment periods);

D: discount factor = {[(1 + i) ^n] – 1} / [i(1 + i)^n].

The outcome will be the fixed amount that you will pay monthly. Keep in mind that it consists of a monthly principal amount (your debt without interest) plus interest. If you want to know how much your monthly and total interest paid will total, read on.

How to calculate interest on personal loans

Getting and using a personal loan costs you money. When you borrow money from a lender, you have to pay back not only the loan amount itself, but also a fee called interest. That’s how lenders make a profit for giving you money when you need it.

Use our simple personal loans calculator to calculate your interest in a few seconds. You can calculate it by hand, but it’s quite a complicated process. But if you do want to try, follow these instructions:

  1. Divide your annual interest rate by 12 to see your monthly rate.
  2.  Multiply your loan balance by your monthly interest rate to see your monthly interest for the first month. It’s different each month, as it depends on the balance that changes each month as well.

For example: On a personal loan of $20,000 over a period of 3 years at 9%, you will have a $150 monthly interest to pay on top of principal.


To figure out how much interest you will have the following month, calculate a new balance:

  1. Subtract your monthly interest from your monthly payment to get your monthly principal.
  2. Subtract the monthly principal you have just calculated from your balance to get the new balance of your loan.

The bottom line

Personal loans can be very helpful when you urgently need cash. The idea is simple: you borrow money, use it for your needs, and make periodical payments, including interest. The process of balance repayment can go smoothly, if you clearly understand your paying potential. Our personal loans calculator was designed to help you make accurate calculations and borrow as much as you can afford.

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