Although unsecured personal loans are quick and easy to apply for online, they are some of the most expensive and riskiest loans available. Excessively high annual percentage rates (APRs) make them extremely expensive, and short-term due dates make them a challenge to pay back on time. Each state has different laws and regulations regarding personal loans. Currently only 43 states allow online personal loans or payday loans, so be sure to check your state laws even if a service advertises in your area.
Here’s how these loans work: a lender loans you funds until your next paycheck, at which point a single payment for the principal plus interest and fees is due. Because of their high interest rates and short payback terms, these loans should be the loan type of last resort, after the less expensive and less risky options—as in just about every other legal money source-- have been exhausted. If you're still unsure about whether you should take out a personal loan online, check out some of our latest articles about fast cash loans.
If you feel you must in fact resort to one of these loans, choose the lender with care. As our reviews show, interest rates and other provisions vary widely. In addition, a number of companies that offer these loans have been fined or otherwise disciplined for running afoul of state regulations. We continue to monitor these investigations to ensure that the companies included in our lineup have a clean track record. Some of the best personal loan companies, offering relatively low APR rates and payback terms, and an easy application process are 100 Day Loans, NetCredit and FaxFreeCash.
Cash loans online are not financially beneficial or cheap; they're simply good for quick emergency cash. Because they are easy to get, online personal loans are the best personal loans people with bad credit may be able to secure, especially in a hurry. If you have bad credit and need an overnight loan, look for the following key features in good online loans.
Depending on your financial need, you may need to look for a company that lends enough to cover your situation, so check the maximum loan amount first. APRs vary wildly: Avoid anything above 600 percent if at all possible! We provide the cost of a 14-day loan for $100 with an APR of 358 percent (an average rate), for some basis for comparison, but once you obtain a specific APR figure from a company, you can use that rate to calculate the cost of your loan. The APRs for the best loans online should be as low as possible. Other considerations include the option to cancel a loan within 24 hours of its deposit to your account, and the required wait time before you can apply for a second loan.
There are two types of online loan lenders: loan matching services and lending services. A loan matching service takes your information and matches you with a lender, which will then offer you a loan. Loan matching is best for bad-credit loans, as it gives you a higher likelihood of finding a lender for your situation than simply looking for a loan on your own.
Loan Application Information
Reputable personal loan companies will require you to be at least 18 years old and a U.S. citizen, and have a current source of income (employment, self-employment, Social Security income, disability, etc). You will also need a Social Security number, home address, valid email address, phone number and a checking account. Some services will also need a driver license and pay date information, and will have employment duration requirements. Not every loan service will run a formal credit check or disqualify you for having a bankruptcy on your financial history; a bad-credit personal loan is still a possibility from many good companies.
All of the best personal loan services have multiple repayment options to help you pay back your loan. Depending on the service or lender, you'll pay fees for late payments, missed payments, early payments, finder's fees and more. You can also incur fees if you apply for an extension, fees for renewals of your loans, fees for your fees and so on. The length of a loan can vary from two weeks to a few years. It's best to find a happy medium; two weeks to a few months is a safe bet. However, different term lengths are available depending on your situation. The longer the loan’s term, the more important it is to find the lowest possible APR.
Help & Support
Legitimate loans are backed by legitimate companies. When you're choosing an online loan service, look for phone numbers, email addresses and live chat features so you can contact real people.
Although many companies can lend $1,000 to $10,000 or more, you should be careful and conservative choosing an amount to borrow. Online personal loans are designed for short-term, small expenses, not for purchasing cars or boats. The interest rate on your loan will depend on your state of residence, credit history, loan provider and many other factors. If you stick with one of our top reviewed personal loan services, borrow responsibly and pay the loan back in a timely manner, you won’t go wrong.