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Taking out a loan is a personal and confidential decision. It could be to pay off a big purchase, consolidate credit card debt or to have some extra cash on hand on different occasions. However, finding the best personal loans in 2019 is a challenge, with so many valid and trustworthy loan companies at your door and even at your fingertips, through online loans.

The majority of personal loans do not even require you to put down collateral to get approved, meaning they are unsecured. A good credit score backing you up can even result in having the funds in your bank account in less than 24 hours.

There are a few criteria you need to consider, though, before applying to any personal loan programs, and we’re here to break them down for you.

MoneyTime’s Advice on Choosing the Best Personal Loan Programs for 2019

If you’re in a hurry to find the best personal loan for you, these are our top picks — choose one that matches your current credit standing:

There was a time when credit cards had become so popular, personal loans had dropped to a historical low. The wheels have turned, though and online lenders are competing head to head with traditional banks and credit card companies. 

Accessing personal loan programs has never been easier. Loan companies compete with each other to give you the best options and even with a poor credit score, you can still access online loans which fund your account in less than 24 hours.

When Should You Access Personal Loan Programs?

While banks usually have amazing credit card offers, applying for personal loan programs should be considered wisely. After all, you will spend the money and you do have to pay it back.

Statistics have shown that the best reason to apply for personal loans is to consolidate high-interest debt. Often, personal loan programs have lower interest rates, enabling a borrower to pay off more of the actual debts instead of those, even with cumulative credit card debt.

This is not the only reason to apply to personal loan programs or online loans, though. Personal expenses, like medical bills, a used car, relocation costs, a home remodel; these are all valid reasons to get personal loans.

And personal loan programs are your best option for unsecured loans when the borrowed amount is small. The better alternative, for higher amounts, is a home equity loan in which your APR can reduce by 50% or more. Getting a secured loan gives loan companies the trust they need to reduce their costs.

Do I have to Have Excellent Credit To Access Personal Loan Programs?

The short answer is no. However, the situation is not simple black and white. While a good or excellent credit score can help you get better interest rates, a fair or even poor one won’t exclude you. The downfall is that you will likely get a higher APR, to lessen the lender’s risk. 

What you need to be prepared for if you take out a bad credit loan, is to repay it as soon as possible. Make sure to divert any extra income to it. It will reduce the overall interest rate you pay and also help you increase your credit score.

You also have the option to go to your bank or credit union, as long as you keep your best interest at mind.

What we do advise, though, is that when something seems too good to be true, it usually is. Personal loan companies will sometimes try to catch you by offering more than you need, with a mild 1% added on your interest rate. Remember though, you calculate this to the main loan. If that’s larger, so your interest rate will be too.

Look out for payday lenders as well. Some of these companies disguise their offers as personal loans and you might end up with an APR of more than 100%, while your main interest rate was only 28% .

How to Secure the Best Personal Loans

Being unsecured, the best personal loan companies will take your credit score seriously. Just a few points can drop you in a lower category which involves higher interest rates and APRs.

The best example is when you’re trying to consolidate credit card debt. Transforming multiple debts into a bigger one is no good if you pay fairly the same amount. Debt consolidation involves better APRs, to help you eliminate (or even cope with) it.

Knowing how your APR can vary based on your credit score is mandatory, in order to prepare yourself for the best choice.

Credit RatingCredit Score RangeAverage APR
Excellent720-8509.8%
Good690-71915.0%
Fair/Average630-68921.3%
Poor300-62928.2%

There are several aspects which determine your credit scores:

  • Credit types
  • Amounts owed
  • Credit history length

Sometimes those few points can make a difference. You need to properly analyze your credit score and if waiting for 1-2 months is an option, you could even boost your credit score. Reaching the next tier can land you better interest rates and/or higher principals.

  • You are entitled to one free credit score report each year. Even if you have used it, pay for another. Analyze it in depth and make sure everything is correct. Sometimes delays can be reported if a due date was during weekends and you paid on Monday (which should not be considered a penalty)  
  • Try to increase your credit limit or pay down outstanding balances, This will help increase your credit utilization rate.  
  • Make multiple payments in a month. Your balance is reported monthly. If the credit score bureaus see lower number the algorithm helps you increase your credit score.

Tips for Accessing the Best Personal Loan Programs

Compare Several Offers

personal loan programs

Getting a personal loan is not a first come-first serve situation. Lenders have different ways of analyzing your files and what some might find unacceptable, others find plausible. This directly influences your interest rate, which should be as low as possible.

Using online loan comparison tools is one way you can take this on. Creating a spreadsheet with compatible offers is another one. What’s important is for you to keep track of every aspect in any offer you receive and make your choice accordingly.

There are also alternatives to a personal loan. With a great credit score you can choose for a 0% introductory APR credit card. This means you will need to be able to pay it fast and that your credit card limit is high enough to cover your needs.

Also, you need to make sure you don’t exceed the low interest rate period. These usually last for 12 to 18 months and during that time, you do not want to add to your balance.

Watch Out for Fees

Sometimes personal loans come with great interest rates. While this seems great, there are also personal loan fees you need to consider. The origination fee is the most common among personal loan programs. While most are around the 1% mark, there are some which go to 8% or higher.

Late payment fees are also a trend. The typical amount is 5% of your outstanding balance or $15, whichever is less. Charges for check payments or unsuccessful ones are also applied by some personal loan companies.

One important thing you need to look out for are prepayment fees. These fees apply if you want to pay your loan early. Since it affects the lender by not receiving the full interest amount as they would have by you paying monthly, they apply a prepayment penalty.

This is quite common and even traditional banks do it regularly, so make sure to see what this fee is, even though it revolves around the 1% of the remaining principal.

Choose the Right Term

Your lender should have flexible loan terms. Some of them impose mandatory three to five year terms. While they can lower your monthly payment, analyzing the overall cost of the loan is important, because it can increase exponentially. 

It is true, a longer term enables you to manage your monthly finances better and this is a good aspect for consolidation debt personal loan programs. However, if your expenses involve an occasional unforseen event, being locked into a long period of repayment can affect you.

On the other hand, shorter terms involve higher monthly payments. They do enable you to free yourself from debt faster at the same time. Analyze your income and spending habits and always thinks whether you can sustain higher payments or longer terms. 

Watch Out for Scams

Remember that for every safe and valid loan company, there are at least two scammers on the market. Unscrupulous lenders make their money from hidden fees, so read your full contract and any addendum they present as “which can be found online at …”. Some of the aspects you need to always scour for are:

  • Upfront fees. These should not exist in personal loan programs. Processing fees to evaluate your credit or any financial information are a sure sign of a scam so do not interact with them. Remember that some zero down mortgage programs include closing fees in the total loan so borrowers don’t have to pay for that upfront as well. 
  • Personal loan companies. Contacting personal loan companies is your duty, and not the other way around. Even if you interacted with a company in the past (consultancy only) they are not allowed to contact you more than 3 times after for an offer. Valid loan companies do not need to go after clients.
  • Guaranteed loans. There is no such thing as a guaranteed loan. Any promise made by any agent is simply a lie. Analyzing your finances, even with the help of software programs need to be validated by a person and someone promising you to get you a loan before you giving them at least proof of income is simply a liar. 
  • Confirmation. Check, check, check. Before signing any contract, make sure to verify the lender’s details. Transparency is key with any reputable company, even if they’re offering online loans. Accessing the Better Business Bureau’s directory is also wise, to see their interactions in the past.
  • Transparency. If a personal loan makes you feel trapped, it’s not worth it. Even though you may need a personal loan, the variety of the best personal loans is so wide, you can step back if you simply have a bad feeling about anything. Don’t be afraid to ask any question, no matter how hard or basic it may feel. Again, transparency should be key and their answers should not be evasive.
  • Advantages. Best business practice: a good lender will emphasise on their advantages. They will never try to slam the competition or force you to borrow more than you need. They can offer or suggest, but they should never tell you it’s the only offer they can make (one you do not want).

Access the Best Personal Loan Programs and Secure Your Future

As seen, personal loan programs come in a variety of shapes and sizes. You can choose from online lenders, banks and even credit unions. You goal is to get competitive APRs and increase your credit score.

Your search will not be easy and you should not make your choice just because you are tired of looking and you feel everyone’s the same. Don’t limit yourself. Using personal loan programs can help you achieve your goals, increase your credit score, access better offers in the future and improve your quality of life. Don’t shy away from it. Just do it wisely.



Advertiser Disclosure: Many of the listings that appear on this website are from companies which we receive compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The site does not review or include all companies or all available products.

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