The Best Personal Loans of 2023 – Awards

Last updated Jul. 31, 2024 by Okechukwu Nkemdirim

In an increasingly digitalized financial landscape, personal loans have become an invaluable resource for individuals seeking to manage debt, finance large purchases, or cover unforeseen expenses. We’re celebrating the best personal loans of 2023 with a comprehensive awards guide, spotlighting lenders who have stood out due to their exceptional terms, customer service, and innovation.

Categories of Awards

To accurately distinguish between the various merits of personal loan providers, we have categorized our awards as follows:

1. Best Overall Personal Loan
2. Best for Fair Credit
3. Best for Debt Consolidation
4. Best for Large Loans
5. Best for Small Loans
6. Best for Quick Approval
7. Best for Customer Service
8. Best for Flexible Terms
9. Best for No Fees

Each category was rigorously vetted through multiple lenses, including interest rates, repayment options, customer reviews, and the overall customer experience.

Best Overall Personal Loan: SoFi

SoFi takes home the top honor for Best Overall Personal Loan, primarily due to its competitive interest rates, inclusive eligibility criteria, and a suite of additional financial tools and resources. Unlike many lenders, SoFi doesn’t charge origination fees, late fees, or prepayment penalties, setting a new industry standard for transparency.

Pros:

• No fees
• Competitive APR
• Offers unemployment protection

Cons:

• Requires good to excellent credit

Best for Fair Credit: Upstart

For borrowers with fair credit, Upstart is a standout. This lender employs artificial intelligence to assess creditworthiness, thereby offering competitive rates to those who might be overlooked by traditional scoring models. Additionally, Upstart’s quick approval process ensures that funds are often available the next business day.

Pros:

• AI-driven approval process
• Fast disbursal of funds

Cons:

• Higher origination fees compared to other lenders

Best for Debt Consolidation: Marcus by Goldman Sachs

Marcus by Goldman Sachs excels in the debt consolidation category. With no fees and decent rates, Marcus allows borrowers to consolidate multiple debts into a single, manageable monthly payment. The lender also provides personalized loan options through soft credit pulls.

Pros:

• No fees of any kind
• Soft credit pulls for pre-qualification

Cons:

• Limited to borrowers with good or excellent credit

Best for Large Loans: LightStream

LightStream, a division of SunTrust Bank, is the best bet for those seeking large loans. It offers loan amounts up to $100,000 with low-interest rates and flexible repayment terms. What sets LightStream apart is its “Rate Beat Program,” which vows to beat any competitor’s rate by 0.10 percentage points.

Pros:

• High loan amounts
• Flexible terms
• Rate Beat Program

Cons:

• Requires excellent credit for the best rates

Best for Small Loans: PenFed Credit Union

PenFed Credit Union shines among lenders offering small loan amounts. With its low minimum loan amount starting at $500 and a straightforward application process, PenFed is perfect for those needing a small infusion of cash.

Pros:

• Low minimum loan amounts
• Competitive rates

Cons:

• Membership requirement

Best for Quick Approval: Discover Personal Loans

Discover Personal Loans stands out due to its fast approval and funding process. With no origination fees and same-day approval, Discover is an excellent option for those in urgent need of funds. Its transparent terms and conditions further solidify its position in this category.

Pros:

• No origination fees
• Fast approval process

Cons:

• Requires good credit score for approval

Best for Customer Service: American Express Personal Loans

When it comes to stellar customer service, American Express Personal Loans leads the pack. Known for its exceptional customer relations, Amex offers dedicated support, competitive rates, and flexible payment schedules, making it the preferred choice for those valuing superior service.

Pros:

• Excellent customer support
• Competitive rates

Cons:

• Only available to Amex cardholders

Best for Flexible Terms: FreedomPlus

FreedomPlus excels in offering flexible loan terms, tailoring loan features to meet individual needs. With customizable repayment periods and a range of loan amounts, FreedomPlus provides borrowers the flexibility to manage their finances more conveniently.

Pros:

• Customizable loan terms
• Wide range of loan amounts

Cons:

• Higher APRs for longer terms

Best for No Fees: Discover Personal Loans

Discover Personal Loans wins another category, owing to its strict no-fee policy. No origination fees, no prepayment fees, and no late fees make Discover the top choice for those seeking a clear and predictable repayment plan.

Pros:

• No fees
• Transparent terms

Cons:

• Requires good credit

FAQs

What is a personal loan?

A personal loan is a type of unsecured loan that borrowers can use for various purposes, ranging from debt consolidation to home improvements or medical expenses. These loans do not require collateral and are usually repaid in fixed monthly installments.

How do I qualify for a personal loan?

Qualification criteria vary between lenders but generally include a good to excellent credit score, stable income, and a low debt-to-income ratio. Some lenders also consider alternative data like education and employment history.

What are origination fees?

Origination fees are charges imposed by lenders to process a new loan application, typically ranging from 1% to 8% of the loan amount. Not all lenders charge these fees.

How does a soft credit pull differ from a hard credit pull?

A soft credit pull is a preliminary credit check that doesn’t affect your credit score and is usually used for pre-qualification. In contrast, a hard credit pull occurs when a lender reviews your entire credit report as part of the final approval process, which can temporarily lower your score.

What should I consider when choosing a personal loan provider?

Key factors to consider include the APR, loan amounts, repayment terms, fees, eligibility criteria, and customer service. Comparing these elements can help you find a loan that best suits your financial needs.

Can personal loans be used for business purposes?

Though personal loans are intended for individual use, they can generally be used for similar purposes, including business expenses. However, using personal credit for business expenses might entail higher risks and fewer tax advantages compared to business loans.

In conclusion, the best personal loans of 2023 cater to a wide range of financial needs while offering transparency, flexibility, and competitive terms. Whether you’re consolidating debt, making a big purchase, or in need of quick funds, these top lenders provide valuable and trustworthy options for your financial journey.