The Best Personal Loans for a Good Credit Score
When you’re looking for a personal loan, you need some quick cash to pay a bill or handle a financial emergency.
If you have good credit, you have the advantage of being able to qualify for most loans and paying less interest than people with worse credit will.
We looked at 48 different lenders in the U.S. to find the lenders that give the best deals to people with good credit. This includes:
- Lower interest rates
- Higher borrowing amounts
- Faster approval
Though any personal loan will get you the money you need, these lenders are the best options for people with good credit.
Though we cannot predict your exact needs for a personal loan, our data has let us choose three clear winners. For 2018, our winners are Earnest, SoFi, and PNC Bank.
If you need a personal loan and have a good credit score, consider these options.
Earnest
Earnest is a great lender that specifically targets consumers who have good financial habits and good credit.
Unlike other lenders, Earnest doesn’t just look at your credit score.
It also looks at things like your savings pattern, employment history, and career potential.
This wider look at your finances lets Earnest better gauge the risk of each loan.
If you have good credit and a good history of saving, you’re likely to get a great deal from Earnest.
Earnest Personal Loans Pros & Cons
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SoFi
SoFi is a very flexible lender, letting you borrow as much as $100,000 for as long as seven years. That means you can get enough cash to handle almost any need and take plenty of time to pay it back.
If you have good credit, SoFi offers a great, low interest rate. You can drive the rate even lower by signing up for automatic payments. The rate will be lower still if you already have a loan through SoFi.
If you’re concerned about your ability to pay back your loan, especially if you choose a long loan term, SoFi offers unemployment protection.
If you lose your job without being at fault, you won’t be required to make monthly payments.
Interest will continue to accrue, so do your best to find a new job and keep making payments.
SoFi Personal Loans Pros & Cons
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PNC Bank
PNC Bank offers both secured and unsecured personal loans. Since you have good credit, you’ll easily qualify for an unsecured loan with a great interest rate.
Unsecured loans let you borrow as much as $25,000. If you need more than that, you can borrow up to $100,000 with a secured personal loan.
You can request a loan with a term of 6, 12, 24, 36, 48, or 60 months.
PNC Bank Personal Loans Pros & Cons
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How We Picked
Here, we recommend three of the best lenders for people with good credit who need a personal loan.
How did we settle on these choices? We looked for lenders who target borrowers with good credit because they tend to offer the best loan features. Then, we compared every aspect of each loan, the lending limits, rates, fees, and extra features.
We know there’s no silver bullet when it comes to choosing a personal loan. Every person is unique and has a unique financial situation so a loan that works for one person might be the wrong choice for someone else.
This article is intended to provide advice that works for the majority of people with good credit who are in search of a loan. Despite your good credit, you might not qualify for a loan from all three lenders. Some lenders might not even operate in your state.
If you feel that these choices aren’t right for you, we hope that the advice in the article can give you a leg up when you start your search.
If you want to know more about credit scoring and how to maximize your chances to qualify for a loan, we’ve provided more information below.
What to Look for in a Personal Loan
Because there are so many personal loans available, you have many options due to your good credit.
So, how do you go about choosing the best one for you?
Generally, these are the major factors to consider:
Interest rates
The interest rate is a clear concern as it accounts for the bulk of the costs of having a personal loan. Not surprisingly, you'd want the lowest rate possible. And, with good credit, you're likely to get a great interest rate.
However, some personal loans have a specific range of interest rates based on the applicant's creditworthiness.
The minimum APR may still be high compared to other personal loans.
That's why it is important to look at the APR range offered by any specific lender. Your good credit should match you to the lower end of that rate spectrum.
Borrowing amount
Each lender will also have a range of how much you can borrow -- a minimum amount and a maximum amount.
Those with better credit scores are likely to qualify for higher borrowing amounts.
If you believe that you'll need to take out a larger loan, then be sure to check that the lender has a maximum borrowing limit that will accommodate your financial needs.
Borrowing period
You get to decide how long the repayment period will be for your loan.
Ultimately, this determines the amount of your monthly payment -- shorter loan terms means bigger monthly payments -- and the total interest paid over the life of the loan -- longer loan terms means more interest paid.
Fees
Fees are very common with personal loans. There are upfront fees such as origination fees (for simply getting the loan). You may also encounter prepayment penalties for repaying your loan faster than the agreed upon term.
Personal Loans Fees
| Lender Name | Origination Fees |
|---|---|
| Santander Bank | None |
| Upstart | 2.8% - 8.0% |
| Lending Club | 1.0% - 6.0% |
| Discover Bank | None |
| Avant | 1.50% - 4.75% |
| Citibank | None |
| SoFi | None |
| Wells Fargo | None |
| USAA | None |
| TD Bank | None |
| Marcus | None |
| Citizens Bank | None |
| M&T Bank | None |
| Prosper | 1.0% - 5.0% |
| American Express | None |
| One Main Financial | Varies by state |
| RocketLoans | 1.0% - 6.0% |
| PNC Bank | None |
| Best Egg | 0.99% - 5.99% |
| Earnest | None |
What is a Credit Score?
A credit score is a numerical representation of someone’s trustworthiness when it comes to borrowing money. When people talk about their credit score, they’re usually referring to their FICO score.
FICO scores were introduced in 1989 by Fair Isaac Corporation. Today, three companies, Experian, Equifax, and TransUnion track consumers’ FICO scores and provide that information to lenders as they need it. The exact formula for the FICO credit score is not disclosed to the public.
How is Your Credit Score Calculated?
Your credit score is calculated from five different factors on your credit report.
Your payment history measures how good you are at making on-time payments on your debts. Every on-time payment increases your score. Every late payment reduces it. The later the payment, the bigger the hit to your credit.
The best way to improve your score is to never miss a single loan payment.
Debt burden
Your debt burden is made up of two different parts.
One is the total amount of money you owe to lenders. The less you owe, the better.
The second is the percentage of your total credit limits you are using. The lower the balance on your credit cards when compared to their limits, the better.
Lenders care about these things because they want to know you can make payments on a new loan. The less you currently owe, the easier it will be for you to make payments on a new one.
Length of credit history
The length of your credit history is another two-part factor of your credit score.
The first part is simply how long you’ve been on file with the credit bureaus. The longer you’ve been borrowing money, the better it is for your score since you have more experience with handling debt.
The second part is the average age of your existing loan accounts. The older your average credit card or loan is, the better. Lenders like to see long-term relationships, so if you open and close credit cards on a regular basis, your score will be lower than it could be.
Types of credit
Your credit score takes into account the different types of loans you have experience with. If you’ve only ever had credit cards, it’s harder to tell how you’ll handle a mortgage. If you’ve never had a personal loan before, a lender might not know if you’ll know how to deal with paying one off.
The more different types of loans (credit card, mortgage, car loan, personal loan) that you’ve had, the better it is for your score.
Recent applications for credit
Every time you apply for a loan, the lender will pull your credit report from a credit bureau. It will then use the information on that report to make a lending decision.
Each time your credit report is requested by a lender, the credit bureau will make note of that fact. That “hard pull” on your credit will stay on file for two years.
Each hard pull reduces your credit score by a few points, so applying for lots of loans in a short time will hurt your score.
This is because applying for a lot of loans at once is a sign of financial distress.
If you need to take out a lot of loans at once, you might have trouble managing all of them or wind up in a situation where you have to decide which to pay and which to default on.
Lenders want to know that they’ll get paid back, so they’ll avoid lending to someone who could wind up in that situation.
What Does It Mean to Have a “Good” Credit Score?
FICO scores range from 300 to 850, with a higher score being better. Despite the large range, there’s actually a small range of scores that are considered good. Starting at 700, you've got good credit. Any higher than 750 and you've got excellent credit.
People with a poor credit score will have trouble qualify for a loan. People with bad credit scores will find it almost impossible.
If you have a good credit score, it means that you have a history of making on-time payments and don’t carry too much debt. It also means you probably don’t apply for new loans very often.
There are many benefits of having a good credit score. You’ll qualify for most of the loans that you apply for.
You’ll also pay less interest on the loans you do qualify for. Many of the loans that you can qualify for with good credit that people with poor credit cannot have advantages such as lower fees and added features.
How to Improve Your Score
The best way to improve your score is also the one that takes the longest. Make on-time payments on all of your loans over the course of months and years. If you do this consistently, your credit score will increase.
In the short-term, there are some steps you can take to improve your score.
One is to improve your debt burden -- meaning make it lower. There are two aspects of your debt burden that affect your credit score.
The first is the total amount you owe. This is simple enough to improve. Just pay down your debts without getting new ones.
The second is your credit utilization. This is the ratio of how much you have borrowed on credit cards to the total credit limits of all your cards. You can improve this ratio by paying your credit card balances, avoiding using your cards, or requesting credit line increases.
While you’re working to improve your score, take the time to request a copy of your credit report. You might notice that there are mistakes on it. If you find an error, like a missed payment that never actually happened, dispute the record. If you can get it removed, your score will jump.
