Best Unsecured Personal Loans of 2023

Here’s our list of some of the best personal loans to consider. To create this list, we evaluated over two dozen lenders based on various factors, such as affordability, customer experience, company reputation and loan terms offered.

• LightStream: Our Top Pick
• SoFi: Best Customer Service
• PenFed: Best for Small Loans
• Discover: Best for Low Rates
• Upstart: Best for Bad Credit
• U.S. Bank: Best for Bank Switchers
• Upgrade: Best Discounts
• Wells Fargo: Best for In-Person Service

To figure out whether taking out a loan is the right move based on your unique financial circumstances, consider contacting a certified credit counselor or financial planner. You can find a government-approved credit counselor in your area by visiting the Department of Justice’s website. 

That said, here are some scenarios where it could make sense to take out an unsecured personal loan:

• Debt consolidation: Taking out a personal loan to pay off existing debt might save you money if you qualify for a lower interest rate.
• Home improvement projects: Using a loan for a home improvement project could help boost your home’s value.
• Emergency expenses: If you need funds to cover an emergency expense, such as a car repair or medical bill, a personal loan can help.

The main advantages of using an unsecured loan are that funding is usually quick, and you don’t have to pledge collateral. That said, these loans can be expensive.

By comparison, a secured loan, such as a home equity loan, requires you to risk your home, and it could take weeks for you to receive your funds.

While shopping around for a personal loan, it’s a good idea to compare as many lenders as possible based on several factors, such as rates, terms, eligibility requirements and fees. Some lenders offer prequalification, which allows you to preview rates and terms you might receive if approved without affecting your credit. But note that prequalifying doesn’t guarantee approval, and lenders usually perform a hard credit check when you submit a formal loan application, which may temporarily ding your credit.

Before you apply for a loan, you may also want to consider how the annual percentage rate and repayment term might affect your monthly payment and total borrowing costs. That way, you can better assess which lender offers terms that best fit your budget. For example, selecting a longer repayment term can lower your monthly payments, but it leads to paying more interest over the life of the loan. By contrast, a shorter loan term usually means less overall interest but higher monthly payments.

Unsecured personal loans may be a good solution if you need money quickly and don’t have or want to risk collateral. However, these loans come with their own potential downfalls, including higher APRs and monthly payments. 

Before you take out a loan, consider how it can affect your budget and financial goals, plus consider alternatives. If you decide to move forward, compare rates, terms and fees from as many lenders as possible to find the loan option that best matches your needs.

Our team put together a comprehensive 100-point rating system to evaluate personal loan companies based on factors that mean the most to you, the potential borrower. We then gathered scores of data points from across the industry, analyzing disclosures, licensing documents, sample loan agreements, marketing materials and websites for more than two dozen of the most prominent personal loan companies in the United States.

Our rating system takes into account four broad categories. Here’s a brief breakdown of each one.

• Affordability (35%): We gauge how expensive each company’s loans are to pay back, taking into account both interest rates and fees. The highest-scoring lenders will have low minimum and maximum annual percentage rates (APRs) and low or no origination fees.
• Loan features (35%): This category measures the breadth of loan terms available to prospective customers. The most points go to lenders with a wide range of loan lengths, small minimum loans, large maximum loans, and fast funding. 
• Customer experience (20%): We review each company’s application, prequalification and customer service policies and procedures to create this category score. The best companies will have simple online applications and multiple ways for customers to get their problems solved.
• Company reputation (10%): Our team analyzes each company’s Better Business Bureau file, customer reviews and any outstanding regulatory actions. The most points will go to companies with an A+ rating with the BBB, a track record of addressing customer complaints and no active regulatory orders.

This rating system is intended to give readers a comprehensive overview of each personal loan company. However, our top-rated lenders may not be the best fit for all borrowers. To learn more, you can read our full personal loans methodology.

Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.