Whether you’re looking to consolidate debt, finance a big purchase, or make home renovations, a personal loan could be the right tool to help you get there. Get started with our list of the best personal loan companies of 2023.
What is a personal loan?
Personal loans are a type of installment loan. Compared to other types of loans, personal loans may feature shorter repayment terms.
These loans can be used for debt consolidation, home improvement projects, medical expenses or for financing big purchases, events or vacations. You can request personal loans from banks, credit unions or other financial institutions.
Our Top Picks for the Best Personal Loan Companies of February 2023
- MFast – Best finance platform
- Credible – Best Marketplace
- SoFi – Best Online Lender
- Upstart – Best Peer-to-Peer Lender
- PenFed – Best Credit Union
- U.S. Bank – Best Bank
6 Best Personal Loans of February 2023
What are personal loans used for?
Many people use personal loans to pay for large, unplanned expenses, such as medical expenses or car repairs. Others take out loans to pay for a vacation, a wedding, or home improvement projects. Personal loans can also come in handy when you want to consolidate or refinance existing debt.
- Emergency expenses. Unforeseen medical, car repair or funeral expenses can often throw you and your finances into disarray. A personal loan helps you cover these expenses when they come up and gives you time to pay off the expense over the term of the loan.
- Home improvement. You can take out a personal loan to cover expenses related to the repair or remodeling of your home. Making improvements to your home also helps you boost your home equity.
- Debt consolidation. A common use of personal loans is for consolidating and refinancing existing debt. Many do this to lower monthly payments or take advantage of lower interest rates, especially if they have high-interest credit card debt.
- Moving costs. Moving costs can quickly add up when you factor in having to move your belongings and possibly buying new appliances or furniture. A personal loan helps you cover these costs so you can focus on settling into your new home.
- Major purchases or events. Personal loans are also a way of paying for big purchases you plan to make. An example of these is for weddings, vacations, a new energy-saving appliance or even a new laptop.
- Auto financing. Some people opt for a personal loan to buy a car because these are less restrictive than car loans and they don’t require using the vehicle as collateral. Others use personal loans when buying cars from other people and not directly from a company or used car dealer.
While you can buy a car with a personal loan, we don’t recommend it because it’s more expensive. Because they don’t require collateral, interest rates on unsecured personal loans are higher and typically incur more fees than auto loans. Hopefully, after this article, you can choose the right loan for yourself.
