How We Review and Rate Personal Loan Lenders

To help you find a personal loan that meets your needs, we evaluated 59 lenders, reviewing each company’s loan terms, loan costs, borrower requirements, lender features, and more. This guide explains the categories and criteria we used to evaluate each lender’s offerings and our scoring process for determining the best personal loan lenders.

Our editors and researchers independently evaluate all recommended products and services. If you click on the links we provide, we may receive compensation. Our advertising partnerships are not a factor in how we evaluate products, although they may affect the order of products you see listed in our articles.

Data Collection and Personal Loan Review Process

We followed a robust data collection and quantitative evaluation process. To identify the lenders to include in our research, we conducted a competitive analysis, reviewed our own research and analysis developed in 2022 and 2023, and analyzed public interest and trends via Google user behavior (such as search volume). This work resulted in the final list of 59 lenders to research and evaluate.

We began with media and partner outreach, followed by online research and customer calls to verify and collect details. We collected 45 data points for each of the 59 lenders we identified. This effort resulted in 2,655 total data points. The research, data collection, and verification processes were conducted between July 23 and Oct. 18, 2024. 

Data Evaluation and Scoring

After collection and verification, we then created a quantitative model to score each lender in four major categories across 26 weighted criteria important to people looking for a personal loan. In all, we considered 1,534 data points in Investopedia’s star ratings. Some of the research criteria we collected and didn’t include in the star rating calculations provided additional context for our writers and editors (for example, J.D. Power rankings or hardship programs offered). Others were consolidated into a single weighted criteria (combined consumer review ratings, for example).

We used the following method to generate our scores:

• Each lender was scored on an overall “Star Rating” scale of 0.00–5.00.
• Data points are scored on a 0.00–1.00 scale
• Binary criteria = [0,1]
• Continuous criteria were scored such that the minimum data value was re-scaled to 0.00 and the maximum value was re-scaled to 1.00
• Aggregated criteria scores were calculated based on scores of individual criteria, and the results were scored on a continuous scale.
• Any data point not disclosed by a company was given a score of 0.

Loan Evaluation Categories

We arranged the 45 criteria into four categories and weighted them based on insights from industry research and subject matter expertise.

How Investopedia Ranks Loan Features

As described above, we converted 26 data points to a score between 0 and 1 and assigned weights to each one. A weight of 8%, for example, means that the criterion is worth 8% of the lender’s total score.

Cost of Loan

Our pre-data collection research found that loan costs are very important for borrowers. We weighted this category as 30% of the total score for lenders in our rubric. To evaluate loan costs, we scored and weighted the following features:

Minimum Fixed APR

The interest rate (annual percentage rate, or APR) borrowers pay is the largest component of a loan's cost. Using a continuous scale, we scored lenders on advertised minimum and maximum fixed APRs.

The lowest minimum APR we recorded was 5.99% from Reach Financial, earning 1 point. The highest minimum was 18.00%, charged by OneMain Financial, earning 0 points. The weight for the minimum fixed APR is 4% of the total score.

Maximum Fixed APR

The lowest maximum APR in our data is from Alliant Credit Union at 11.49%, earning 1 point. The highest maximum APR we recorded was 295.00% from MoneyKey, earning 0 points. Because MoneyKey and short-term, no-credit-check lenders like it are outliers, we adjusted the continuous scale so that 35.99% earned 0 points. Many lenders adopt 35.99% as their maximum for all borrowers (including 13 of the 59 lenders we researched) because the federal government caps maximum APRs at 36.00% for loans made to military members. The weight for the maximum fixed APR is 9% of the total score.

Minimum and Maximum Origination Fee

The origination fee can be another significant cost, although 36 of the lenders we evaluated do not charge it. We scored this criterion on a continuous scale. The lowest minimum origination score was 0.00%, earning 1 point for 42 lenders. The maximum origination fee was 12.00%, earning 0 points for Upstart. The weight for the minimum origination fee is 5%, and the weight for the maximum is 7% of the total score.

Maximum Late Fee

We collected both minimum and maximum penalty fees but only scored the maximum penalty fee to measure how punitive a lender is to borrowers who pay late. We scored this on a continuous scale between 0 and 1. Regions Bank scored 0 points for charging a $100 fee, the highest in our data. Eleven lenders charge no late fee, and each earned 1 point. The maximum late fee weight is 5% of the total score.

Loan Terms

This category covers details related to the loan itself. We scored four criteria in this category for a total weight of 22%:

Funding Time

This is the number of days to receive funds following approval. We scored this criterion on a continuous scale, where the same day (or 0 days) was scored as 1 and seven days, the highest we found, was scored as 0. Eleven lenders scored 1 point for same-day funding. Laurel Road scored 0 points for a funding time of seven days. Funding time is worth 4% of the total score.

Minimum Loan Amount

We collected the minimum loan amount for each lender and scored it on a continuous scale. Lake Michigan Credit Union’s $250 minimum was the lowest in our research and earned 1 point. BHG Financial’s minimum of $20,000 was the highest and earned 0 points. The weight for minimum loan amount is 4% of the total score.

Maximum Loan Amount

BHG Financial’s maximum loan amount of $200,000 was the highest in our research and earned 1 point. Blue Federal Credit Union's maximum loan amount of $10,000 was the lowest, and it earned 0 points. The weight for maximum loan amount is 6% of the total score.

Maximum Repayment Term

We collected data for both minimum and maximum repayment terms but focused the weight on the maximum repayment term length only. That’s because no lenders in our data charge a pre-payment fee, which means borrowers can repay their loans as early as they like, without paying a fee. We scored it on a continuous scale, with the longest term of 240 months (from LightStream) earning 1 point. The shortest maximum term was 60 months, from 28 lenders, earning 0 points. Note, Fig Loans offers an extremely short repayment term of 10 months, which we excluded from our continuous scoring as it is an outlier and distorts the scoring model. The weight for maximum repayment term is 8%.

Borrowing Requirements

This category represents what lenders seek in a borrower—creditworthiness and other factors. Six of the 26 weighted criteria are in this category, worth 24% of the total score.

Offers Secured Loans

Most personal loans are unsecured and not backed by collateral. Some lenders allow borrowers to use collateral to help with creditworthiness or to get lower rates. We scored this criterion on a binary scale where lenders that offer secured personal loans, like Patelco Credit Union, earned 1 point, and lenders that do not offer secured loans, like Citibank, earned 0 points. Forty of the 59 lenders we researched do not have a secured personal loan option. This criterion is worth 3% of the total score.

States Available

Most of the lenders (31 of 59) we researched offer loans nationwide—each of those earned 1 point on a continuous scale. Greenstate Credit Union and Old National Bank both scored 0 points since both are only available in eight states. This criterion is worth 4% of the total score.

Membership Requirement

All of the credit unions in our database and some of the banks require membership to be eligible for a loan. So a credit union like Patelco Credit Union earned 0 points due to its membership requirement, and a fintech lender like SoFi earned 1 point because it does not have such a requirement. This criterion is worth 10% of the total score, which is relatively high. This reflects the exclusivity of the requirement (for a lender like American Express) and the added inconvenience of securing membership before loan application (such as with credit unions).

Hard Credit Check Required

We scored this criterion on a binary scale where a hard credit check requirement earned 0 points and no hard credit check earned 1 point. Most lenders perform a hard credit check at some point during the process—53 of the 59 lenders we researched do a hard credit check. Seven lenders in our rubric, including American Express, do not perform a hard credit check during loan approval, which earned them 1 point. This criterion is worth 1% of the total score.

Credit History Required

Like hard credit checks, some lenders approve loans for borrowers with no credit history. This was also scored on a binary scale, where lenders that offer loans to borrowers with no credit history received 1 point, while those who did not were awarded 0 points. Forty-three lenders we researched, including LightStream and Patelco Credit Union, have no credit history requirement and earned 1 point. The remaining 16, including Navy Federal Credit Union, require a credit history. This criterion is worth 1% of the total score. 

Minimum Credit Score

Lenders look at several aspects of your financial life when approving a loan, including your credit score. In our research, 23 of 59 lenders reported a minimum credit score requirement.  We scored this on a continuous scale, where the lowest credit score requirement, 300, from Upstart, earned 1 point, while the highest, 700, from Axos Bank and Old National Bank, earned 0 points. We split lenders that did not report a minimum credit score into two categories: “not disclosed” for those that did not share any details about their underwriting process and “no stated minimum” for lenders that described their process in some detail. “Not disclosed” earned 0 points, and “no stated minimum” earned 0.3 points on our continuous scale. The minimum credit score is worth 5% of the total score.

Lender Features

This category includes 11 of the 26 criteria we scored and is a total weight of 24%. We looked at lender and loan features that are helpful to borrowers:

Online Experience

This criterion rates the lender’s online presence, including website usefulness, ease of navigation, organization, design, and more. Our researchers rated each website using a 5-point scale. No lender earned a rating of 5, and just two scored a 4 (Discover and Happy Money); 42 lender websites earned a 3 rating. One lender’s website, Zable, earned a 1 rating. We then converted the results to a continuous scale, where a rating of 1 earned 0 points, and a rating of 4 earned 1 point. We weighted this criterion 2% of the total score.

Educational Resources

We evaluated the depth and breadth of the educational materials, planning guides, calculators, and other resources on lender websites. First, researchers rated each lender’s educational resources on a 5-point scale. Then, we converted the results to a continuous scale, with the lowest rating of 2 earning 0 points and the highest rating of 5, scored by Navy Federal Credit Union, earning 1 point. Thirty-six lenders scored a 3 or a 4. We weighted it 2% of the total score.

Pre-qualification

Pre-qualification allows borrowers to check rates without a hard credit check (and a hit to their credit scores). We scored this on a binary scale where lenders that offer pre-qualification scored 1 point, and lenders that do not scored 0 points. Forty of the 59 lenders we researched offer pre-qualification, including SoFi and Citibank. Among those that do not offer pre-qualification are LightStream and Old National Bank. This criterion was worth 8% of the total score.

Refinance Available

We scored this on a binary scale based on whether or not a lender will refinance a loan with a different rate or term, with “Yes” earning 1 point and “No” earning 0 points. Forty-eight of the 59 lenders we researched offer this feature, including Wells Fargo and Patelco Credit Union. Those that do not offer refinancing are U.S. Bank and Rocket Loans. We weighted this as 1% of the total score.

Creditor Direct Pay

For borrowers using a personal loan to consolidate more expensive debt, having the lender pay creditors directly can be more convenient. It can also result in reduced interest rates. We scored this on a binary scale: "Yes” earned 1 point, and “No” earned 0 points. Thirty-two of the 59 lenders we researched offer this service, including Discover. Lenders that do not offer this service include LightStream and American Express. We weighted this feature 1% of the total score.

Allows Co-Borrowers or Co-Signers

A co-borrower or co-signer can help a borrower meet lender underwriting requirements. We scored on a binary scale, with lenders that allow co-signers or co-borrowers scoring 1 point and lenders that do not scoring 0 points. Thirty-six of the 59 lenders we evaluated allow co-signers or co-borrowers, including LightStream and PenFed. Among those that do not are Discover and Wells Fargo. This criterion is worth 3% of the total score. 

Loyalty or Other Discounts Available

Many lenders offer discounts, such as loyalty discounts for existing customers (for example, Citibank shaves 0.25 percentage points off the APR for Citigold and Citi Priority customers) or repayment discounts for consistent loan repayment (for example, Patelco Credit Union discounts up to 1.5 percentage points off APR for borrowers with reliable payment histories). We scored this on a binary scale, with lenders that offer discounts earning 1 point and those that do not earning 0 points. This is worth 2% of the total score.

Reports to All Major Credit Bureaus

Most of the lenders in our database report to all three major credit bureaus (49 of the 59, including LightStream and SoFI), but not all do (for example, Patelco Credit Union). Consistent, timely loan repayment can help a borrower improve their credit. This was scored on a binary scale where lenders that report to all three bureaus earned 1 point, and those that do not earned 0 points. This criterion is worth 1% of the total score.

Hardship Assistance

We examined whether lenders offer relief for borrowers struggling to make mortgage payments. We scored this on a binary scale where lenders that offer such assistance earned 1 point and lenders who do not earned 0 points. Nearly all of the lenders we evaluated, 54 of 59, offer such assistance. This criterion is worth 1% of the total score.

Combined Customer Review Rating

We collected customer ratings of lenders from two third-party review sites: Trustpilot, and the Better Business Bureau (BBB). Since each lender had a different number of ratings at each site, we used weighted averaging combined with an exponential weighting model to create an aggregated customer review rating for each lender. This gave more confidence to ratings with higher numbers of raters. The following data points are included in this combined rating:

• Trustpilot Rating
• Number of Trustpilot Reviews
• BBB Rating
• Number of BBB Reviews

We converted our aggregated ratings to a continuous scale of 0 to 5. The lender with the highest aggregate customer rating is Upstart, with a rating of 4.9. The lender with the lowest combined consumer review rating is Patelco Credit Union, with a rating of 0.08. Aggregate customer ratings were then scored on a continuous scale between 0 and 1 to contribute to our star ratings, with higher ratings getting better scores. The combined customer review rating is weighted 2% of the total score.

Transparency

When contacted, some lenders were more forthcoming with information than others. We counted the instances of “not disclosed” in our database for each lender and scored the sum on a continuous scale, with 0 being the fewest (earning 1 point) and six being the most (earning 0 points). We recorded zero “not disclosed” data points for 41 lenders. This criterion is worth 1% of the total score.

Criteria Collected But Not Weighted and Scored

The following criteria were collected but not weighted and scored. Some were not weighted because they were collected for editorial richness, such as whether or not the lender has an online application process or a mobile app. Other features, such as third-party details from Trustpilot or Google Reviews, were not weighted individually but combined into an aggregated score.

Cost of Loan

• Autopay discount
• Minimum late fee

Loan Terms

• Automated approval process
• Minimum repayment terms

Borrowing Requirements

• Credit union
• State or federal charter (credit unions)
• Existing banking relationship
• Financial factors considered

Lender Features

• Online application
• Mobile app
• Year established
• Trustpilot rating
• Number of Trustpilot reviews
• Number of CFPB regulatory actions
• JD Power consumer lending ranking
• BBB rating
• BBB review rating
• Number of BBB reviews
• Chat function 

Articles That Use Our Methodology

Our research has appeared in dozens of personal loan roundups and reviews on Investopedia. You’ll find it in our roundups of the Best Personal Loans and the Best Personal Loans for Bad Credit. You’ll also find it in individual lender reviews, like our reviews of SoFi personal loans and Upgrade personal loans.

Meet the Personal Loans Reviews Team

Isaac Braun

Research Manager

Isaac Braun has analyzed data for over a decade, with over five years in the digital media landscape. Isaac is the research manager for Investopedia and believes it is paramount to provide the most accurate data-driven product recommendations to help readers make educated decisions.

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Sana Siddiqui

Research Analyst

Sana is a research analyst with Investopedia. She focuses on financial products and services through direct research and by evaluating consumer surveys and interviews. Her experience in lending and underwriting gives her broad insight into financial industry business practices. Prior to joining the team, Sana worked in loan originations and processing before pivoting back to a reporting and analytics role focused on competitive analysis and market share reporting for various financial institutes. This experience has given Sana broad insight into financial products and services and the ability to "tell the story” behind the data and convey it to stakeholders—and readers—in a meaningful way.

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Ben Woolsey

Associate Editorial Director, Financial Products and Services

Ben is an Associate Editorial Director, Financial Products and Services for Investopedia. He is responsible for the news, education, and rating methodologies that Investopedia creates around the various products and services it reviews, including personal loans, mortgages, credit cards, and warranties, among other things. Ben has over 30 years of experience in financial services and has spent his career in marketing, operations, and content management roles for banks, credit card issuers, and credit card marketplace websites, including CreditCards.com and Bankrate.com. His area of specialization over the past 20 years has been credit cards.

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Lars Peterson

Senior Editor, Financial Product Reviews

Lars Peterson joined Investopedia in 2023 as a senior editor of financial product reviews after four years as an editor with The Balance. Lars's primary areas of focus are personal loans, credit cards, banking, mortgages, and other financial products and services, with the goal of helping consumers make the most of these offerings while avoiding pitfalls or catches. With nearly 15 years of experience as a writer and editor in personal finance and small business, Lars has written and edited for The Balance, Wise Bread, US News, and Amex OPENForum, among others. His 20+ years as an editor and writer have included roles in book publishing, marketing, technical writing, travel, and personal finance.

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