Best Personal Loan Companies If You Have Good Credit

When you apply for a personal loan, one of the factors that stands above all others in determining your rate is your credit score. The higher your credit score, the lower the rate. Generally speaking, a good credit score should be enough to qualify for an interest rate below the national average of 10.1%. An excellent credit score is needed to qualify for the lowest APRs of 5%-7%.

What is good credit? The definition varies slightly, depending who you ask. Experian, one of the 3 big consumer-credit agencies, defines good credit as anything between 670-739. Lending Tree and Credible, 2 of the largest personal-loan marketplaces, define good as 680-719 and 700-749 respectively.

Sources: Experian, myFICO

When a lender checks your credit, what this means is that they check your FICO score from the big credit agencies, Experian, Equifax, and TransUnion. Your FICO score is made up of 5 components:

    Payment history (35%): Scored by whether you made past credit payments on time.
    Amounts owed (30%): Scored by how much you currently owe creditors.
    Length of credit history (15%): Generally, the longer your credit history, the higher your score.
    New credit (10%): Penalizes you for opening too many credit accounts (e.g. loans or credit cards) in a short period of time.
    Credit mix (10%): Considers your mix of credit accounts.

Top 5 Personal Loan Companies for People with Good Credit

Credible
    Minimum credit score: 680
    Loan amount: $1,000 - $100,000
    Loan term: 24-84 months
    APR range: 4.99% - 35.99%

Why go with Credible: Lets you compare rates from top lenders with one application

Credible’s powerful online search tool matches good-credit borrowers with the best rates on personal loans from 10 top lenders, including Marcus, BestEgg, Lending Club, and LightStream. Rather than request a separate quote from each lender, borrowers can simply fill out Credible’s short online form to see the best quotes from all of them. The service is free to use, andit only takes a couple of minutes to fill out the form and see your results.

SoFi

    Minimum credit score: 680
    Loan amount: $5,000 - $1,000
    Loan term: 36-84 months
    APR range: 6.26%-15.12%

Why go with SoFi: Automated approval process with competitive rates

SoFi provides personal loans with favorable rates for borrowers with good credit through its fully digital platform. It has no fees, APRs of 6.26% - 15.12%, high loan limits up to $100,000, and flexible repayment terms of 36-48 months.

Unlike other lenders, SoFi also looks beyond credit scores and debt-to-income ratios to factors like estimated cashflow, career, and education. This means borrowers with less-than-excellent credit still have a chance of securing better-than-average rates, provided they tick all the other boxes.

LendingTree

    Minimum credit score: 640
    Loan amount: $1,000 to$50,000
    Loan term: 3-180months
    APR range: 4.79% - 35.99%

Why go with LendingTree: Lets you get quotes from dozens of lenders with one online form

LendingTree is an online marketplace for personal loans that lets borrowers compare the best rates from dozens of lenders. Like Credible, LendingTree lets you see and pre-qualify for multiple personal loans with just one online form. But its reach is broader, making it a more appealing option for borrowers with good credit or borrowers looking for unusually long loan terms.

Marcus Marcus

    Minimum credit score: 660
    Loan amount: $3,500 - $40,000
    Loan term: 36-72 months
    APR range: 6.99%-24.99%

Why go with Marcus: Fee-free digital lending platform from Goldman Sachs

Marcus is a new personal loan solution from one of the nation’s oldest banking institutions: Goldman Sachs. It is one of a new wave of digital loans platforms, using an automated assessment process to quickly come to a decision and have the funds in the customer’s hands within 2 business days. Marcus promises never to charge any fees. That means no origination fees, no processing fees, and no prepayment fees. It only earns money from interest.

Best Egg                                              

    Minimum credit score: 640
    Loan amount: $2,000 to $35,000
    Loan term: 36-60 months
    APR range: 5.99%-29.99%

Why go with Best Egg: Digital applications with next-day funding

Best Egg is Marlette Funding’s online lending brand, offering personal loans underwritten by New Jersey’s Cross River Bank to customers around the US. Best Egg is one of the quickest online lenders on the market, promising funding within as little as 1 business day following approval. The minimum borrowing amount is generally $2,000, although higher minimum amounts apply in the following states: Georgia, $3,000, New Mexico and Ohio, $5,000, and Massachusetts, $6,000.

How to Achieve Good or Excellent Credit

If your credit score is fair or poor, there are several ways to improve the situation and enjoy better rates and terms. Before doing anything else, you can check your credit report and inform the relevant credit agency if you notice any mistakes. Under federal law, everyone is entitled to see a copy of their credit report every year. To obtain a free credit report directly from the credit-reporting agencies, contact Experian, Equifax, or TransUnion. You can also get access to all 3 reports simultaneously via AnnualCreditReport.com. For free access to your combined FICO score, go to FICOScore.com.

As mentioned above, the most important component of your credit score is your payment history. Therefore, the most effective way of improving your credit history is to set up payment reminders and make sure you pay all your existing loans, credit cards, or mortgage payments on time every month. You can further improve your credit situation by paying off any debt you owe.

Bottom Line

It’s all about credit. If you have good or excellent credit, that puts you in a good or excellent standing with lenders and encourages them to offer you the best rates. Most lenders and lending marketplaces offer personal loans with APRs of as low as 4.99%-6.99%. What they don’t always tell you right away is that these rates are reserved for a minority of borrowers with near-perfect credit. The good news is anyone can achieve good or excellent credit. It requires some effort, but the rewards—and low APRs on personal loans—are worth it.

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Unsecured Personal Loan — Make Sure to Read the Fine Print

Are you thinking about making a large purchase in the near future but don't have the cash on hand to pay for it all up front? Then, think about taking out an unsecured loan from one of your local banks or credit unions. Unsecured personal loans allow you to borrow money for almost any purpose.

An unsecured loan is a loan that is not backed by collateral. These loans are also referred to as personal loans or signature loans. An unsecured loans is based solely on the borrower's credit rating, so as a result, they are much more difficult to obtain than a secured loan. But, before you get an unsecured loan, make sure you understand how they work and what the alternatives are.

Types of Unsecured Loans

• Signature Loans

 — This is most basis type of unsecured loan and they are secured by nothing other than your signature. You can use this type of loan for just about anything and they are available at banks and credit unions. If you have good credit, you will get a relatively low interest rate. If you have bad credit, this type of loan will help you rebuild your credit.

• Credit Cards

 — Credit cards are another way to borrow money. Credit cards may be easy to get but make sure to look at the interest rate before you sign up - you could pay as much at 24% if you have bad credit. Looks for low interest cards and ones with no annual fees.

• Student Loans

 — Another unsecured loan is a student loan which is designed to fund your education. Look for features such as flexible repayment options, grace periods, and subsidies. The only hitch with this type of loan is that you have to be a student.

What to Look For When Shopping for an Unsecured Loan
Penalties on Prepayment

APR Adjustments
Loan Insurance

There are several types of unsecured personal loans available, each one has it's pros and cons. It is best to pick the one the best meets your needs while minimizing cost to you.
If you are currently shopping for an unsecured personal loan, you should know that other than the interest rates, you should also be looking into the documents you will have to sign when you finally get your loan. Most contracts for unsecured loans contain provisions in small print that many borrowers take for granted and do not bother to read at all. Learn what you should be looking for in the small print provisions and do review the loan documents while you're still shopping and not when you're ready to sign them before the loan release. This way, you can be assured that you're getting the best possible terms for your loan. Lenders usually include in the small print their provisions covering loan insurance, penalties on prepayments, and adjustments on APR (annual percentage rate).
The means the lender will charge you a fee if you pay off your loan before the agreed term. While this is not especially common for unsecured loans, it is a requirement on secured mortgage loans. The fee is basically a penalty for your prepayment and is meant to compensate the lender for the additional interest income it would have earned had you kept the loan outstanding until the agreed term.
Some lenders may not be clear about their policy on prepayment but try to look for it in the small print section of the loan contract. You can always look for a loan provider that does not charge prepayment penalties or at least go with the lender that charges the least in penalties.
Another common policy in small print is the adjustment on APR. This type of loan was dubbed a "sub prime" loan in the mortgage industry and is one of reasons the housing market blew up.
Many lenders advertise a certain APR but this is usually given only to highly favored customers. So if your credit is less than perfect, expect a higher APR for your loan and any adjustments on your interest rate are customarily written in small print. By law, lenders are required to inform borrowers about their APR before signing any loan documents and by practice, lenders do so by putting them down in the small print section of the contract. Your signature on the same document signifies your knowledge of the APR you will have to pay. Therefore, you must read the small print to know how much they are charging you.
Loan insurance is not common on unsecured personal loans, but it does occur. In rare occasion lenders require loan insurance to cover your payments in case you cannot pay your loan because of injury or loss of employment. The insurance premiums are usually added to the loan payments you have to make.
There is no doubt that loan insurance will help protect your credit in case of adverse developments but you need to be concerned about its added costs to you. Know that lenders and the insurance company they endorse are normally affiliated and the insurance they're tacking in your loan is usually not the best offer you can get. Know also that you are not required to buy your insurance through the lender. You can shop around so you can get the best loan insurance deal you can find. However, you should shop for your insurance before getting your loan so you won't be forced to accept the lender's insurance when the time comes.
The only way you can avoid the usual small print tricks lenders use on unsecured personal loans is by asking lenders for a copy of their loan contract when you're still shopping. It should not be a problem for lenders to provide you with a copy of their standard contract. Do remember that the APR a lender will charge you is not going to be in the contract yet. You will get that information before you sign the document but at least, you'd know where to look for it.


Source By: https://www.creditinfocenter.com

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