- Get preapproved online without impacting your credit score.
- Loans may be funded in just one business day.
- Unsecured and secured loan options are available.
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An installment loan can be either secured, such as an auto loan or a home mortgage, or unsecured, such as a personal loan, student loan, or credit card. The former use collateral, such as a car, a house, or jewelry, to guarantee the loan and are often used to pay for that collateral. The latter provide borrowers with a lump sum of cash that they can use for a variety of purchases or to pay off debt. Both must be repaid monthly over a predetermined period of time.
Here’s a look at some of the best installment loans from a variety of lenders.
If you’re looking for a lender with excellent consumer ratings, Upgrade qualifies. It has a 4.5 out of five stars rating on TrustPilot with more than 39,500 reviews. It’s also A+ accredited through the Better Business Bureau (BBB) with a 4.47 out of five stars rating.
As far as installment loans go, Upgrade offers from $1,000 to $50,000 with repayment terms ranging between 24 to 84 months. Funding can be as soon as the next business day, though it can take up to two weeks if you want your loan funds sent directly to your creditors.
Joint loans are accepted, as are unsecured and secured loan options. You can get preapproved online and check your rate in just minutes without affecting your credit score, but borrowers with a score of less than 600 may have trouble getting approved. Loans through Upgrade have an origination fee that can be as high as 9.99%, adding to your overall loan costs. Additionally, while the lower end of Upgrade’s annual percentage rates (APRs) can be very competitive, its upper end is the highest on our list, even higher than many credit cards.
600
While Avant isn’t a no-fee lender, it does have a lower maximum loan fee than other lenders on this list. It also offers unsecured personal loans from $2,000 to $35,000 that can be funded as quickly as the next business day. Borrowers can check rates and get preapproved online without impacting their credit, and even those with fair credit can get approved.
However, the administrative fee can be as high as 4.75%, loan repayment terms are a bit limited, and the upper end APR is, like Upgrade, the highest on our list.
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When taking out an installment loan, two of the most important factors are how much the monthly payment will be and the length of time it will take to pay the loan off. LightStream offers the most flexible loan repayment terms of any lender on this list, allowing you to choose a repayment period anywhere from 24 to 240 months. LightStream also has competitive interest rates and lets you borrow from $5,000 to $100,000 for almost any purpose.
There is no option for getting preapproved or checking your interest rates without causing a hard inquiry that may affect your credit score. Borrowers will also need good credit (or better) to qualify. LightStream won’t be the lender for you if you need a smaller amount than its minimum of $5,000. However, funding can be as fast as the same business day in many cases.
If you don’t want to waste money on fees—such as origination fees, application fees, administrative fees, or even late fees—Discover should be on your short list, because it doesn’t have them. It does offer loans from $2,500 to $40,000 with competitive interest rates. Funding can come as quickly as the next business day, and repayment terms range from 36 to 84 months.
Discover doesn’t accept co-borrowers or cosigners, and while you can use its loan funds to consolidate existing debt, you can’t use them to pay off a current Discover credit card balance. Additionally, Discover doesn’t offer any online preapproval options if you want to check rates without affecting your credit.
Happy Money is an installment loan marketplace that makes it easy to shop for the right loan, lender, and terms all in one place. You can find loans ranging from $5,000 to $40,000 with repayment terms of 24 to 60 months. Online preapproval is available, so you can check rates and terms without affecting your credit, loans are funded quickly, and the money can go directly to your existing creditors.
Happy Money makes it easy to consolidate debt. The downside is that’s all you can do with the money; no other purposes are allowed (unlike the other lenders on our list). All of Happy Money’s participating lenders charge origination fees, some may charge administration fees, and loans aren’t available in Massachusetts or Nevada at this time. Interest rates are competitive overall, but the lowest APRs are reserved for loans of $15,000 or less.
If you need an installment loan funded fast, OneMain Financial can give you between $1,500 to $20,000 in as little as an hour. Repayment terms range from 34 to 60 months.
There are both secured and unsecured loan options, depending on your needs and qualifications.
OneMain Financial’s interest rates are as high or higher than the other lenders on our list, even greater than some credit card rates, while the $20,000 maximum loan limit is the lowest. Additionally, loans will be subject to an origination fee ranging from 1% to 10% of the total loan amount, which can mean hundreds or even thousands of extra dollars in loan costs.
PenFed Credit Union has installment loans of Up to $50,000 with a minimum credit score of only 580. However, you must become a member of the credit union to qualify. There are no origination or application fees, and you can check your rate and get preapproved online without impacting your credit. APRs are very competitive, starting at 7.99% and ending at just 17.99%, the lowest upper limit on our list.
However, PenFed loan terms only range from one to five years, shorter than the others on our list. Also, getting information about its loans is difficult, as it doesn’t publish much online, at least to nonmembers.
Best lender | APR | Min. credit score | Loan amount |
---|---|---|---|
Upgrade | 8.49% to 35.99% | 580 | $1,000 to $50,000 |
Avant | 9.95% to 35.99% | 600 | $2,000 to $35,000 |
LightStream | 6.99% to 25.99% | Good | $5,000 to $100,000 |
Discover® Bank | 7.99% to 24.99% | 660 | $2,500 to $40,000 |
Happy Money | 11.72% to 17.99% | 640 | $5,000 to $40,000 |
OneMain Financial Personal Loan | 18% to 35.99% | Undisclosed | $1,500 to $20,000 |
PenFed Credit Union | 7.99% to 17.99% | 580 | Up to $50,000 |
To form our list we only looked at top-rated and well-known lenders, considering factors such as borrowing limits, interest rates, and repayment terms. We also looked at the ease of application, approval, and funding, as well as any limits on the use of the funding.
There are many different installment loan lenders from which to choose. Your specific needs will inform your selection. These include:
If you only need to borrow $2,000, LightStream and Happy Money would be out, as they have a minimum limit of $5,000. On the other hand, if you’re tackling a big home improvement project and need $80,000, a lender such as LightStream, which has a maximum loan amount of $100,000, would be required.
Are you borrowing money for an upcoming purchase or to consolidate existing debt, in which case you probably don’t need the cash immediately? Or are you facing an emergency expense that needs payment now, such as an unexpected medical bill? Some lenders offer funding as quickly as the same day, while others may take a few days (or even weeks) to get the cash to you. Choose accordingly.
Your monthly payment is a factor of how much you borrowed, the interest rate you’re offered, and the loan’s repayment term. You should shop around to find the lowest interest rates and a repayment term that fits your needs. This could mean choosing a longer term to get a monthly payment that fits your budget.
On our list only Upgrade, LightStream, and OneMain Financial allow joint or cosigned loans (or both). The former let you borrow funds with someone else who is equally responsible for the debt, such as a spouse. The latter make it easier to qualify for larger loan amounts, lower interest rates, and better repayment terms if your cosigner has better credit than you have.
Not sure if an installment loan is really the best choice for you? Here are some alternative funding options to consider.
If you have available credit on a credit card, you may be able to take out a cash advance or utilize a balance transfer instead of applying for an installment loan from a lender. A cash advance will give you funds that you can use for pretty much any purpose, while a balance transfer allows you to consolidate or repay existing debt balances.
It’s important to note that both cash advances and balance transfers are subject to additional fees and special interest rates, so they may cost more than an installment loan. Still, some credit cards have introductory 0% APR balance transfers for a certain period of time, allowing you to pay off debt with no additional interest as long as you do it before the rate changes.
If you have at least partially paid off your mortgage, you have equity in your home. A home equity line of credit (HELOC) allows you to tap into that value with a revolving line of credit. You can pull from those funds as needed at any time during your draw period (usually 10 years). Whether you want to pay off existing debt, make a large purchase, or cover an unexpected expense, funds from a HELOC are available on demand.
If you’re still not sure about an installment loan and whether it will meet your financial needs, here’s a little more about how it works.
An installment loan is taken out to cover any number of purposes, such as paying off debt, covering a large purchase, funding a home improvement project, or paying for unexpected expenses. Unsecured loans don’t require the borrower to put up any form of collateral and often come with a fixed interest rate that won’t change over time. Secured loans require collateral, which the lender can take if the loan goes unpaid.
An installment loan is typically taken out in one lump sum, meaning you receive the full loan amount (minus any fees) up front. The debt is then paid back in installments, usually equal monthly payments, over a set period of time.
You can usually repay the debt ahead of schedule, though prepayment penalties may apply with certain lenders. If you need additional funds, you’ll have to take out another loan.
While the most versatile type of installment loan is an unsecured personal loan, there are many other types that you might encounter. These include:
An installment loan allows borrowers to take out one lump sum that they can use for almost any purpose, including to make a large purchase, consolidate and pay off debt, cover an emergency expense, or fund a big project. It’s repaid in equal monthly payments over a set number of years, at the interest rate and terms offered at the time the loan is disbursed.
It may or may not require collateral to secure it and can often be funded as quickly as the same or next business day. As long as you are careful to make sure you can afford the monthly repayment, an installment loan can be a responsible method of funding, especially for large-ticket items.
You have to meet certain eligibility criteria, which may involve your age, citizenship status, location, income, debt-to-income (DTI) ratio, credit score, and more. These requirements will vary depending on how much you need to borrow and whether the loan will be secured or unsecured.
Paying off an installment loan early can free up your monthly budget while saving you money in interest charges over the life of the loan. However, some lenders may charge penalties for paying early, so it’s important to check that before committing to the loan.
Your credit score and history are important factors in qualifying for an installment loan. If you have bad credit, you may improve your chances of approval by asking for a smaller amount, choosing a shorter loan term, applying with a creditworthy co-borrower or cosigner, or securing the loan with collateral.
It’s easier to get approved for a secured installment loan than an unsecured one. It’s also easier to get a joint or cosigned loan (assuming you apply with someone who has good credit) than to get approved for a loan on your own, especially if you have a poor credit score or little to no credit history.
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