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Having good credit is something you've likely worked hard for, and it pays off when you're in need of a personal loan. When you have good credit, you'll qualify with more lenders and can secure a more competitive rate than an applicant with fair or bad credit. In fact, you may even qualify for a lender's lowest advertised rate.
That said, since rates and terms vary by lender, it's wise to shop around to find the option that best matches your needs. Keep reading to learn how to choose a personal loan as a good credit borrower. We've also compiled a list of some of the best personal loans for good credit to jumpstart your search.
What is Considered Good Credit?
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What a good credit score is varies based on the credit model a lender uses. According to the widely-used FICO® credit scoring model, good credit sits between 670 and 739.
FICO scores generally range from 350 to 850. The higher your score, the better your credit. Below is a look at the typical FICO credit scoring range:
- Very poor: 350 to 579
- Fair: 580 to 669
- Good: 670 to 739
- Very Good: 740 to 799
- Excellent: 800 to 850
Average Rates on Good Credit Loans
The average rate for a good-credit personal loan ranges from 13.50% to 19.90%, according to the latest data from Bankrate.
Here's what the highest average rate looks like based on different credit score ranges, according to the same data.
| Credit Scoring Range | Highest Average Rate |
|---|---|
|
630 to 689 |
19.90% |
|
690 to 719 |
15.50% |
|
720 to 850 |
12.50% |
Best Personal Loans for Good Credit
Many lenders prefer borrowers with good credit, so you have quite a few options to choose from. We've helped you narrow down your choices below with our list of the best good credit loans to consider:
- Best for Large Loan Amounts: SoFi
- Best for Fast Funding: LightStream
- Best for Consolidating Credit Card Debt: Happy Money
- Best for Small Loan Amounts: PenFed Credit Union
- Best for Competitive Rates: Axos Bank
Loan results will vary based on creditworthiness, loan purpose, loan amount, and other factors.
Best for Large Loan Amounts: SoFi
SoFi offers personal loans up to $100,000 and no fees; it could be a good fit for an applicant seeking a large loan amount.
SoFi Personal Loans
- Loan Amounts$5,000 – $100,000
- Loan Terms24 – 84 months
- APR Range8.99% – 24.18%
- Minimum
Credit Score680 or aboveA credit score is used to indicate the creditworthiness of an applicant, but it is only one of several factors considered for approval. These credit scores alone are not guarantees for approval and should only be used as guidelines.
SoFi's personal loan offering comes with no fees required and a high loan maximum that may be a good fit for those seeking large loans.
Overview
SoFi offers a competitive personal loan product that boasts no origination fees, no late fees, and a high maximum loan amount of $100,000. SoFi is one of only a handful of lenders offering loans as large as $100,000. If you need a substantial loan to cover a considerable expense, like a home renovation, SoFi’s high maximum can be a strong option. One standout feature of SoFi is that it offers unemployment protection, which might allow you to pause payments if you lose your job. Same-day funding is also available for qualified borrowers
Pros
- No origination fees, no prepayment penalties and no late fees
- Loans up to $100,000
- Unemployment protection available
- Autopay rate discounts
- Co-borrower allowed
- Same-day funding available
Cons
- No physical branches
- High minimum loan amount
- Good credit likely required
Best for Fast Funding: LightStream
Borrowers who need funds for an emergency can turn to LightStream, which can deposit funds as soon as the same day after approval.
LightStream
- Loan Amounts$5,000 – $100,000
- Loan Terms24 – 144 months
- APR Range7.99% – 25.49% (with autopay)
- Minimum
Credit Score660 or aboveA credit score is used to indicate the creditworthiness of an applicant, but it is only one of several factors considered for approval. These credit scores alone are not guarantees for approval and should only be used as guidelines.
LightStream is a solid online lender offering no fees, high loan maximums and low-rate personal loans for several purposes.
Overview
LightStream offers personal loans for several purposes, including debt consolidation, medical expenses, home improvement, weddings, car purchases and more, making this worth considering for those seeking flexibility. The lender offers relatively low rates compared to competitors, including autopay discounts. Its personal loans also have no origination fees or late fees, which can help keep borrowing costs low. However, borrowers will likely need to have good-to-excellent credit in order to be approved for a LightStream personal loan. Overall, it’s a good lender to add to your shortlist if you’re looking for flexible funding, no fees and a low APR. Lightstream may also disburse loans as soon as the same day you’re approved, making this lender a worthy choice if you need fast funding.
Pros
- Low minimum APR
- No origination fees, no late fees
- High loan maximum of $100,000
- Autopay discount
- Joint applications allowed
Cons
- Rates and terms vary by loan purpose
- No soft pull prequalification
- Must have good-to-excellent credit
- No physical branches
Best for Consolidating Credit Card Debt: Happy Money
Those looking to consolidate credit card debt may appreciate the fact that Happy Money can send payments directly to their credit card issuer.
Happy Money
- Loan Amounts$5,000 – $40,000
- Loan Terms24 – 60 months
- APR Range11.52% – 24.81%
- Minimum
Credit Score640 or aboveA credit score is used to indicate the creditworthiness of an applicant, but it is only one of several factors considered for approval. These credit scores alone are not guarantees for approval and should only be used as guidelines.
Happy Money can help pay off and consolidate credit card debt into one fixed monthly payment.
Overview
Happy Money, formerly known as Payoff, offers loans for credit card debt payoffs. Eligibility is clearly stated online, so borrowers will appreciate the transparent criteria. Borrowers have the option to have Happy Money deposit funds directly to their credit cards to help streamline the payoff process. Funding can take between three to six business days, which is longer than other lenders, but still considered a decent turnaround time.
Personal loans are accessible to borrowers with fair credit, and there are no options for co-signers or joint applicants. Unfortunately, the loans are not available in Massachusetts or Nevada, so borrowers will need to look elsewhere for lending options.
Pros
- No late fees
- Direct payment to creditors
- Prequalification with no hard credit check
- All loans come with a hardship payment protection plan
Cons
- Most loans can only be used to pay off credit card debt
- Has origination fees
- High loan minimum
- No joint or co-signed loans
- Not available in all states
- Funding slower than other lenders
Best for Small Loan Amounts: PenFed Credit Union
If you only need to take out a small loan, Penfed can be a good fit because of their low minimum loan amount, which starts at just $600.
PenFed Credit Union
- Loan Amounts$600 – $50,000
- Loan Terms12 – 60 months
- APR Range7.74% – 17.99%
- Minimum
Credit Score700 or aboveA credit score is used to indicate the creditworthiness of an applicant, but it is only one of several factors considered for approval. These credit scores alone are not guarantees for approval and should only be used as guidelines.
PenFed offers no fees and small personal loans as low as $600.
Overview
While you will need to become a PenFed member if you decide to get a personal loan there, anyone can apply for membership and the process is quick and simple. Many lenders have relatively high minimum loan amounts, but PenFed offers loans as small as $600, with no origination fees and competitive APRs. If you’d like to view personal loan rates with PenFed, you can do so without impacting your credit score.
Pros
- Pre-qualification is available
- No origination fee, hidden fees or prepayment penalties
- Borrow as little as $600
- Allows co-borrower
- Funding as early as 1-2 business days after approval
Cons
- Must be a member to receive the loan
- No option for direct payment to creditors for debt consolidation
Best for Competitive Rates: Axos Bank
Axos Bank is an online bank that offers competitive-rate personal loans that can be used for many purposes, including debt consolidation, home improvements and weddings.
Axos Personal Loans
- Loan Amounts$7,000 - $50,000
- Loan Terms36 - 72 months
- APR Range7.99%-14.99%
- Minimum
Credit Score700 or aboveA credit score is used to indicate the creditworthiness of an applicant, but it is only one of several factors considered for approval. These credit scores alone are not guarantees for approval and should only be used as guidelines.
Axos offers personal loans with impressively low APRs and quick funding within 2 days of accepting a loan agreement.
Overview
Axos personal loans are available in all 50 U.S. states, and borrowers benefit from flexible loan amounts and terms, as well as an impressively low APR range. Loan funds may also be available within two days of approval. While this lender’s personal loans have their perks, its minimum credit score requirement is 700 and its minimum loan amount is quite high. Given this, it’s best for borrowers with very good or excellent credit who are seeking a larger loan.
Pros
- Flexible repayment terms
- Relatively low APRs
- Funds disbursed within 2 days of accepting loan offer
Cons
- High minimum loan amount
- High minimum credit score requirement
- Four years of established credit history required
Factors That Lenders Consider
Although your credit score is essential, it's not the only factor lenders consider.
To qualify for a personal loan, you must also meet other eligibility requirements, such as:
- Income. Lenders typically require you to prove you have sufficient income to repay the loan.
- Debt-to-income. Your debt-to-income (DTI) measures your gross monthly income in relation to your monthly debts. If your DTI is too high, it could indicate to a lender that you're stretched financially. As a result, you may have trouble getting approved for a personal loan, even with good credit.
- Documentation. Most lenders require you to share financial documents, like W-2s, tax returns, and recent pay stubs.
- Age. You generally need to be at least 18 years old to sign a contract — including a personal loan contract.
- Bank account. Many lenders will require you to have a bank account where they can deposit your funds, typically a savings or checking account.
Related Article
How to Prequalify for a Personal Loan, and Why It Can Be a Good Idea
How to Choose a Good Credit Personal Loan
If you need to take out a personal loan, shopping around is a good idea. Here are some things to focus on when comparing your options.
- Rates. While shopping for a good credit personal loan, compare annual percentage rates (APRs) across multiple lenders. If possible, prequalify to get a preview of the rate you might receive if your loan is approved.
- Fees. Check to see if the lender charges loan fees that can increase your borrowing costs, such as origination fees, application fees, and prepayment penalties.
- Repayment terms. Choosing a longer repayment term can decrease your monthly payment, but you may pay more interest over the life of the loan. Conversely, a shorter loan term can save you money but comes with a higher monthly payment.
- Loan amounts. Search for a lender that offers the amount you want to borrow..
- Funding speeds. Some lenders fund loans as soon as the next business day, but others may take longer. If you need funds quickly choose a lender known for fast funding.
How to Apply for a Personal Loan with Good Credit
Although the application process varies by lender, here are the typical steps to apply for a personal loan:
- Shop around. Compare rates, terms, fees, and repayment terms from as many lenders as possible to find the best deal for your unique financial situation.
- Submit a formal loan application. Once you find a lender that best matches your needs, submit a loan application.
- Review and sign a loan agreement. A lender will send you a loan agreement if your application is approved. Read it carefully to ensure you understand the terms, fees, and other fine print before signing.
- Repay the loan as promised. After you receive the funds, repay the loan as promised to avoid late fees and damage to your credit.
Alternatives to Personal Loans
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Although a personal loan can be a great tool, it’s not suitable for everyone. Here are some alternatives to consider.
- 0% Intro APR Credit Card. Some credit card issuers offer 0% APR credit cards to borrowers with good to excellent credit. You can avoid paying interest if you pay your balance in full before the promotional period expires. But you'll have to pay interest on any outstanding balance when the promotion ends.
- Home Equity Loan. A home equity loan allows you to tap your home’s equity to borrow a lump sum. Although you may receive a lower rate than you’d receive with a personal loan, a lender can foreclose on your home if you fail to repay the loan as promised.
- Home Equity Line of Credit (HELOC). A HELOC is another way to tap your home’s equity. However, unlike a home equity loan, you borrow against a line of credit as needed. This option also comes with the risk of losing your home.
- High-Yield Savings Account: If the expense can wait, consider saving for the purchase through a high-yield savings account. You'll earn higher interest than traditional savings, and you won't need to pay personal loan fees or interest costs.
Explore the Best High-Yield Savings Accounts
Visit the Marketplace
Bottom Line
Qualifying for a personal loan might be easier with good credit. But you still have to do some research to find a loan that best matches your needs. While shopping around, compare rates, terms, fees and repayment terms across as many personal loan lenders as possible.
Frequently Asked Questions
-
The amount you can borrow if you have good credit varies by lender. That's because different lenders offer different loan amounts. Plus, when you apply for a loan, a lender will only loan you an amount it thinks you can repay.
You can prequalify online with some lenders to get a preview of how much you could borrow if you qualify. But note that prequalifying doesn't guarantee approval.
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Although having good credit can increase your approval odds and chances of securing a competitive rate, it doesn't guarantee approval. When you submit a loan application, lenders consider factors beyond your credit, like your income and how much debt you have.
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Yes, qualifying for a personal loan with good credit but a low income is possible. Some lenders have minimum income requirements as low as $24,000 per year, while others don't have any income requirements. That said, you still likely need to have enough income to show you can repay the loan.
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Lenders reject personal loan applications for many reasons even if a borrower has good credit, such as too high of a debt-to-income (DTI) ratio or not enough income. If a lender denies your loan request, the Equal Opportunity Credit Act (EOCA) requires them to send you a notice explaining why.
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A personal loan can positively or negatively affect your credit score. When you apply for one, a lender typically performs a hard credit check, which can temporarily ding your credit score.
Paying your loan on time can help you improve your credit score. But on the other hand, if you make late payments or default on the loan, it can cause major harm to your credit.
Jerry Brown
Jerry Brown is a personal finance writer and owner of the Peerless Money Mentor blog. He's written for major publications, such as Forbes Advisor, Fox Business, Business Insider, and Rocket Mortgage. Financial products he enjoys covering include credit cards, personal loans, and mortgages.
Awards & Distinctions
Jerry was nominated for the 2020 Plutus Award for Best Social Media for personal finance, where he was also a presenter.
