What are the best personal loans of 2020? See our top personal loan recommendations for you.
Best Personal Loans for 2020
|$1,000 to $100,000||4.99% to 35.99%|
|$100 to $15,000||5.99% - 35.99%|
|Up to $100,000||5.99% - 16.19%|
|$1,000 to $35,000||7.99% - 35.99%|
*All rates, terms and other student loan related information listed on the My Millennial Guide website and blog is provided without warranty or guarantee and is not intended to legally bind My Millennial Guide or the lenders listed on this site. The rates and terms listed for each lender are estimates and will change depending on your credit profile and other information you provide to lenders (for instance, you will only be entitled to a lower rate if you have a good credit rating). My Millennial Guide is not a lender and is not involved in the lender loan approval process. Should you require a loan offer, please visit the lender’s website and review their terms and conditions for more details.
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Personal Loans 101: Everything you need to know
Personal loans become part of everyone’s life at one point or another and nowadays, direct lenders are on every page of the internet offering you the best deals.
But it’s for good reason.
A personal loan could be used to:
✅ pay off credit cards
✅ consolidate debt
✅ refinance student loans
✅ finance home improvement
…& so much more.
There are some types of personal loans which gained more popularity than others due to their several benefits, but this doesn’t mean they’re right for you.
Find out what types of loans you can find on the market and which ones better suit your needs.
Fortunately, a personal loan from a reputable lender can be a low-cost solution when you need to borrow money. You can learn more about personal loans here or keep reading for more information about whether a personal loan is right for you.
Secured loans are typically backed by collateral, like your vehicle, house or some other assets which you pledge to the direct lender in exchange for a loan. The advantage of these types of loans is that they usually have lower interest rates and are easier to obtain since they are less of a risk due to the collateral.
The disadvantage, however, is that the other important criteria to get approved will be your Credit Score, which needs to be somewhere in between 580 – 739 or higher. In case you have a bad credit situation, you’ll most likely not going to get a secured loan. If your credit score is on the lower end, you can easily improve it in just 5 easy steps or check out personal loan options for those with bad credit.
Unsecured loans are not backed by collateral, therefore, they tend to have higher interest rates. The main factor to get approved for an unsecured personal loan is your Credit Score. Direct lenders became more flexible with time, so if you’re lucky and dig a little deeper, you’ll find reputable companies which will do their best to get you approved for a loan.
For example, MoneyGator is an online direct lender which offers short-term installment loans and apart from your credit situation, they will ask if you have a secure monthly income source, or if you’re employed – just so they can have a proof you can pay off what you borrow. Also, they discuss with you the repayment schedule so the installments will meet your needs and financial possibilities and they don’t charge extra in case you want to make pre-payments, this is an advantage which can have a huge impact on your overall pay off process.
Pay attention to the Interest Rate
Fixed-Rate Personal Loans
Fixed-rate personal loans are the ones that carry fixed rates and monthly payments. They are a great choice if you allow a certain sum of money from your budget to the monthly pay off process.
At some point, you might find their lack of flexibility very inconvenient, so it is one thought-provoking disadvantage. Just a tip, it’s always a better choice to opt for more flexible lenders.
Variable-Rate Personal Loans
Variable-rate personal loans have interest rates connected to the benchmark rates, also known as the index rates, which are set by banks. As a result, your monthly payments, as well as their interest rates, will follow their course.
Depending on the economic condition, this can be a good thing, as index rates tend to have a lower APR (Annual Percentage Rate) when they go down; it allows you to pay off your loan balance at a lower cost. However, when the index rate rises, that means your loan balance cost will grow as well, which can be very … pricey!
Loan Repayment Terms
If you’ve never been one to borrow money, you’re probably not familiar with all of the available loan options out there such as short term loans and long term loans.
Short-term loans typically involve borrowing a small amount of money over a short period of time (a few months up to maximum one year). They are the best solution if you’re dealing with a financial emergency or you’re in need of some extra cash.
They are fast, flexible; it takes only a few minutes to get approved by the online direct lenders and they have a lot of other benefits. However, you should be careful as some short-term loan types have very high interest rates, for example, payday loans, which can lead to bigger financial problems.
Short term loans are the most common for individuals. However, they are available to businesses as well. Even if you aren’t approved for a major personal loan, most times, you can still pursue a one-time, short term loan to get your hands on much-needed working capital.
Long-term loans are credit based and they can be secured or unsecured. They can be taken over a bigger period of time (one or more years).
The most common from this category are student loans, mortgages or wedding loans.
How to Improve Your Credit Score with a Personal Loan
Thinking about taking out credit building loans? Here are some easy steps to follow so you can use personal loans to build credit.
One of the easiest ways to get instant cash is by opting for a personal loan. Unlike other loans, personal loans generally don’t require security or collateral. The documentation and approval processes are also smooth and hassle-free. Moreover, you can use the amount for anything you want – for planning your wedding, for medical purposes, for a vacation, or for renovating your home.
However, defaulting on a loan could adversely affect your credit score. Let’s look at some of the ways how applying for a personal loan can help you improve your credit history.
Personal Loans Can Be Used to Pay High-Interest Rate Loans
When you have a high-interest loan, it could be difficult to repay the amount every month. The two common financing options people opt for are personal loans and credit cards. People generally shy away from taking a personal loan as they are known to come with high rates of interest. However, they are still a cheaper alternative to credit cards.
When you have more than one credit card, you will have to pay a high rate of interest on the outstanding amount of all the cards. Even if you opt for a credit card that comes with a 0% balance transfer plan, you will have to finish paying off the amount during the introductory period. Once the introductory period is over, the interest rate will shoot up to a two-digit figure.
When you use the personal loan amount to finance a high-interest loan, you not only reduce the burden on your overall finances but also improve your credit score immensely. Due to competition from fellow banks, you will come across some banks offering personal loans at attractive rates. Generally, the banks with which you have an account already will offer loans at great rates. You could also get a pre-approved loan!
Can Be Used to Consolidate Debt
One of the common financial problems most people face is accumulating different debts and not being able to pay them off. Even if you have more than one credit card, it will be difficult to pay the debts and also your cards’ soaring interest rates. Moreover, with many debts to pay off, at some point there are chances you could miss repaying maybe one or two of them. Yes, you have the option to make the late payment charges, but your credit score has already been affected with the delayed payment.
Instead of paying debts with different interest rates, you could opt for a personal loan. The financing amount can be used to consolidate your total debt and you could pay off the amount until the end of the tenure. It saves you from the hassle of missing payments as you have consolidated all the payments into one.
Can Help in Establishing a Credit History
Companies that check an individual’s credit score assess different parameters before giving a score. The individual’s payment history is one of the most important factors which is considered. The other factors include the total amount owned by an individual, the duration of the credit history, new credit as well as credit mix. But what If you don’t have a credit history at all?
Not having a credit history is just like having a bad credit score. You need to establish a credit history so that banks and financial institutions know your creditworthiness and your ability to repay them. There are several ways to create your credit history, one of the ways is by applying for a personal loan. However, you must ensure to make your loan repayments on time, as loan defaulters get a bad credit score.
A Few Tips to Keep in Mind When You Apply for a Personal Loan
Go Through Your Credit Report
No matter if you have defaulted on a payment or have applied for too many loans, you need to go through your credit report. By analyzing your report, you will be able to know the areas you need to work on and look for ways to improve the score. While applying for a personal loan can help to a great extent, there are many other factors that could increase your score. Understand the available options and work towards building a good credit history.
Make Your Loan Payments on Time
Did you know that late payments will stay on your credit reports for years? Banks and other lenders go through an individual’s credit report when they offer financing. If they come across late payment, they will doubt your creditworthiness. Even before applying for the loan, learn how to manage your finances properly so that you don’t have to struggle with the additional burden.
Don’t Apply for Multiple Loans
A bank will know how many loans you have applied for and how many times you have applied for a loan. This is because whenever you approach lenders for loans, it will be recorded in your credit history. This may give the impression that you have poor repayment capacity and your application could be declined. Even if you manage to get more than two or three loans, you need to see if you will be able to manage your monthly expenses properly before opting for a loan again.
Borrow What You Actually Need
One of the mistakes people make is applying for a higher loan amount than they actually need. You end up paying a high interest rate for the entire amount, including the amount you didn’t require in the first place. Apply for an amount you actually need to meet your short-term financial goals.
Compare Loans Offered by Various Banks
All prominent banks across the world offer personal loans. However, you will come across some banks with better interest rates than others. Before applying for a loan, do your research and compare the loans offered by different banks. Then, shortlist the ones which come with the least interest rates. Also consider the tenure of the loan, the other fees and charges you need to pay, and the total amount of financing.
Have Bad Credit?
Short term loans can be rather useful, especially when you’re in a financial pinch. Whether you have an unusually large bill that needs paying immediately, you have a vacation coming up, or you’d like to put a down payment on a new car, short term loans can be your best option even if you have bad credit.
How Many Types of Short Term Loans Are There?
If you find yourself considering applying for a short term loan, you’ll want to be as informed as possible before making any final decisions. As with most financial options these days, there are several types of short term loans available to the general public.
Here are but a few of the most popular forms of short term loans to apply for in 2019.
One of the most popular short term loan options comes in the form of cash advances. Most times, cash advances are small amounts of money and require repaying within a couple of weeks. Sometimes cash advance repayment may be extended for up to a month or two.
For those who find themselves in need of a bit more cash than what a basic cash advance allows may consider a short term installment loan. The main difference between a cash advance and an installment loan is that installment loans require smaller payments over a longer period of time. Typically, they also have less interest attached to the payments than cash advances.
Bad Credit Loans
Last but not least of the most popular short term loan options are bad credit loans. These loans normally come with pretty steep interest rates even in comparison to cash advances. It is not recommended to take a bad credit loan unless it is absolutely necessary.
Best Short-Term Cash Advance Loans
1. Money Mutual
Money Mutual is one of the most popular short term loan options, period. To date, over two million customers have been approved for loans from Money Mutual. Their application takes less than five minutes and your money is available in as little as 24 hours. You can get short term loans up to $2,500.
Cash Advance is another great option for a short term loan in 2019. All you need to be approved for a loan is an income of at least $1,000 per month (90 days on the job) and you can be approved for as much as $1,000 even if you have far from perfect credit.
BingoLoans can simplify the process of finding a short loan option if you’re in the United Kingdom. This short term loan option will allow you access to some of the largest short term lenders in all of the United Kingdom. With the aid of the latest digital technology, Bingo Loans is convenient, easy, and efficient. Matching their clients with the very best lenders is the aim of Bingo Loans. The entire process takes place online, goes rather quickly compared to other short term loan options, and is completely secure.
Best Short-Term Installment Loans
CashUSA offers short term installment loans from $500 to $10,000. The best part is that all credit types are accepted. You generally can receive a loan decision in minutes and get funds directly to your bank account. You can use the loan for any purpose.
Bad Credit Loans offers installment loans from $500 to $5000 and has been in business since 1998. They help those with bad credit by connecting them with different lenders. They offer a quick application process and quick funding as soon as the next business day.
PersonalLoans.com is another option and offer installment loans from $500 to $35,000. So if you need more money, this would be your best bet. Like the other installment loan options, all credit types are welcome. They have a very large lender network and is available in all 50 states. You can use the loan proceeds for any purpose and you can get funded as soon as one business day.
The Bottom Line
Remember! Requesting and getting the money you need is that easy, however, when it comes to borrowing money you must always do it responsibly!
Keep in mind that quick personal loans, such as short term loans, carry a higher interest rate than conventional personal loans. This is because they are considered risky loans since they are approved without taking into account the credit history of the applicant.
So if you’re looking for the best short term loan to suit your needs, consider the options listed in this article and you’re guaranteed to find it. To sum up our personal loan guide, there are numerous possibilities out there, the first step is to identify your needs, financial possibilities and find a lender which will understand them as well. The road to a debt free life can be easy if you make it!
Compare Personal Loan Options