EDITOR’S NOTE: This article has been updated for 2019.
Having good credit makes getting a personal loan easier and less expensive. Lenders are more likely to approve a personal loan with low annual percentage rates (APRs) for applicants with good credit. In turn, this gives you more options so that you can compare multiple lenders to find the one that offers the lowest rates and ideal repayment terms.
To get you started, we rounded up and reviewed some of the top personal loans for applicants with good credit to give you all the essential details. Read on to determine whether your credit is good or not, and learn about some of the top loan options available for people with clean credit.
What Is a Good Credit Score?
There’s no hard and fast rule or universally accepted number that determines the scores categorizing excellent, good, fair and poor. Instead, this is typically determined on a lender-to-lender basis because different lenders use different scoring systems to evaluate applicants. In general, if you have a credit score above 700 with the major credit bureaus — Experian, TransUnion and Equifax — you can rest assured that you’ll fall into the “good” category.
What Impacts Your Credit Score?
Although there are several different types of credit scores, most lenders and major credit bureaus use Fair Isaac Company (FICO) scores as their preferred scoring method. FICO scores range from 300 to 850. The higher the score, the better your credit is considered to be. Having a score of 700 or higher demonstrates positive financial habits and responsible money management. The credit bureaus use several factors to determine your credit score, including:
- Payment history, which makes up 35% of the score
- The amount of debt owed makes up 30% of the score
- Age of credit history makes up 15% of the score
- New credit inquiries make up 10% of the score
- Types of credit make up 10% of the score
Paying your bills on time, keeping your balances low and using credit often all contribute to your personal number. Because lenders view applicants with good or excellent credit as a lower risk for default (not paying back what they borrowed), they offer the lowest interest rates and preferred terms to those applicants.
Top Lenders for Good Credit
Whether you’re shopping online or in person at well-known financial institutions, knowing what to look for in a personal loan can help you make the right decision about whether the terms are suitable for you. The ideal personal loans come with transparent terms and no hidden fees, low APRs and no prepayment penalties. The following table provides a quick, at-a-glance comparison of some of the top loans for good credit.
| Lender | APR | Loan Amount | Loan Term |
|---|---|---|---|
| LightStream | 3.34%–16.99% | up to $100K | 2-12 years |
| Lending Club | 6.95%–35.89% | up to $40K | 3 or 5 years |
| Payoff | 5.9%-24.99% | $5-$35K | 2-5 years |
| Upstart | 8.16%-35.99% | $1K- $50K | 3 or 5 years |
| SoFi | 6.99%-14.99% | $5K-$100K | 3-7 years |
Many of these lenders let you research your options without negatively affecting your credit score by performing a soft credit check during the initial application phase. Keep reading for a more detailed look at the options each of these lenders offer.
LightStream
LightStream stands out with its unique lending model. In addition to meeting the lender’s requirements for creditworthiness, applicants get an interest rate based on what they buy with the money. With no origination fee and rates that are low enough to compete with secured personal loans, LightStream’s personal loans are a fantastic option for borrowers who have:
- Very good credit
- At least five years of credit history
- Several types of credit, including credit cards and auto loans
- A retirement account, which proves the borrower has the ability to save
- Minimal payment delinquencies
LightStream is one of the few lenders to factor in the reason for the loan as part of its process in calculating interest rates. To demonstrate how LightStream’s APR structure works, consider the loans of Borrower A and Borrower B:
- Borrower A gets an auto loan for $10,000 for 48 months. Because he has excellent credit and signs up for autopay, Borrower A qualifies for the low APR of 3.34%, which brings his monthly payment to $223, and he pays about $696 of interest over the life of the loan.
- Borrower B gets a loan for the same dollar amount and repayment term, but she wants to use it to consolidate her debt. She also has excellent credit, but the lowest APR she can get for debt consolidation is 6.14%, which brings her monthly payment to $235 and the total interest paid to nearly $1,307.
LightStream customers often receive funds the same day. This lender doesn’t charge any origination, prepayment or late fees, but it does add 0.5% for non-autopay payments.
Earnest
Earnest is another lender that doesn’t charge any fees, which makes it a particularly good option for borrowers looking for a good deal. Although it doesn’t publish a minimum credit score, most Earnest borrowers have a FICO score of 700 or higher.
Where Earnest distinguishes itself is its short repayment terms and flexible payment options. This lender offers personal loans with a three to five year term. For their most recent variable and fixed rates, visit Earnest. Additionally, this lender looks at more than just your credit score. It also considers numerous data points such as your savings patterns, growth potential, employment history and investments. This more personalized approach to lending reduces the company’s risk, which makes it possible to offer lower rates to save you money.
Lending Club
Lending Club was one of the first lenders to use the Internet as part of its lending process. Additionally, it’s among the pioneers of peer-to-peer lending, an innovative method that connects borrowers with investors who fund the loans instead of financial institutions. Lending Club performs all screening and servicing of a Lending Club personal loan, but the decision to lend the money is up to investors. Borrowers must have a credit score of 600 or better, a credit history with at least a few years of information, a steady income and a low amount of debt compared to income.
You can check your rates in minutes, apply for the loans that match your needs and verify your personal information while Lending Club finds investors to back the loan. This gives you a good shot at snagging the most competitive rates, but if you need money immediately, a peer-to-peer personal loan may not be the right choice. It can take up to one week to gain access to your funds, depending on how quickly investors respond.
Payoff
Payoff (from Happy Money) is a top lender for consolidating credit card debt. To qualify, you need to have good credit history. A higher credit score may mean you get a more favorable APR, which can help pay off credit card debt faster. In addition to helping you take control of your financial health, Payoff sends handwritten welcome notes to new borrowers and arranges goal-setting calls with member advocates, who provide financial guidance and support.
As part of the process, Payoff gives you quizzes to assess your financial personality before giving you the tools and resources you need based on the results. This provides personalized insight into your spending and saving habits. The lender also provides monthly access to FICO scores, a rare bonus benefit that can help keep you on track.
Although Payoff doesn’t charge any application, prepayment, check processing, annual or late fees, the lender does charge an origination fee of 0% to 5% of the loan amount depending on the repayment term you choose.
Upstart
Upstart is an excellent choice for borrowers who are new to credit. This lender caters its loans to upcoming and recent college graduates who haven’t had enough time to build the long credit history that many other lenders require. Although Upstart does prefer a minimum credit score of 620, the lender looks at more than the number. For example, your job history, education and area of study all play a role. This allows the company to identify borrowers who are most likely to build a positive credit history.
Upstart isn’t a direct lender. Instead, it helps borrowers find investors to fund the loan. The downside of this lending model is that it takes longer to get access to funds, and Upstart charges an origination fee of 0% to 8% of the loan amount in return for its services.
SoFi
Social Finance (SoFi) began as a student loan refinancing lender when it was founded in 2011. It has since expanded to offer personal loans and mortgages. SoFi has high credit standards, but it’s willing to accept applicants who are new to credit, which makes this a great option for anyone with a slightly thin credit history. SoFi doesn’t publish a minimum required score, but most of its borrowers have scores that are considered excellent.
No origination fees makes this a good choice if you’re looking for low fees. What makes SoFi shine is its elite “club-like” feel. This lender facilitates networking for its clients by holding happy hours and other social events. SoFi also provides career counseling and the ability to pause your payments if you become unemployed.
How to Get a Personal Loan
There are two types of personal loans: secured and unsecured. Secured loans use an asset as collateral, which reduces the lender’s risk and yields lower APRs. Unsecured loans, which are the most popular, rely heavily on your credit score to assess your creditworthiness and the degree of risk you pose for the lender. In general, the lower your credit score, the more at risk you are of missing payments or defaulting on the loan. That’s why borrowers with poor credit pay more in fees and interest than borrowers with good or excellent credit.
You can use a personal loan for anything from paying off other debts to funding major purchases. The key to making the most of it is to avoid borrowing more than you can afford to repay. Consider the monthly payment and the total interest you pay over the lifetime of the loan. You may decide it’s smarter to simply save up the money if time is not a major issue. Additionally, consult the Better Business Bureau and the Federal Trade Commission to verify the legitimacy of lesser known online lenders. Compare rates and terms among several options before applying for a loan.
Alternatives to Personal Loans
When you have great credit, you can get a great deal on a personal loan. But don’t forget that there might be less expensive options available, including:
- Secured loans: Even if you have good credit, a home equity loan or home equity line of credit might be a less expensive option than an unsecured personal loan.
- Zero-interest balance transfers: If your credit is good and you need money for a short-term situation, a zero-balance introductory credit card offer could be a better alternative.
