Personal loans are extremely popular. From 2017 to 2019 they were America’s fastest-growing form of credit[1]. That growth slowed during the pandemic, but the versatility of personal loans still makes them very common. Personal loans for good credit are available at reasonable interest rates, increasing their popularity.
What to Expect
A credit score between 670 and 739 is considered good. The US average FICO score of 711 falls in this range. If your score is in this range you will have no problem finding a lender, and you’re likely to have multiple offers.
Interest rates for borrowers in this range may vary considerably. One source cites the following data[3]:
| Credit Score | Avg. Personal Loan Interest Rate |
|---|---|
| 640-679 | 22.16% |
| 680-719 | 17.82% |
| 720-759 | 13.32% |
Credit scores at the low end of the “good” range obviously carry much higher rates than those at the high end of the range. Where you stand in that range – and the rate you’re likely to get – may affect your borrowing plans, and in some cases, it might not be the best alternative.
Should You Use a Personal Loan?
You’ll have to decide whether a personal loan is the right move for you. One thing to consider is that personal loan interest rates are currently at their lowest point in some time.
Borrowers with good (prime) credit are also among the most frequent users of personal loans. This chart uses VantageScore, but the range is very similar.
The popularity of personal loans among borrowers with good credit doesn’t mean a personal loan is the best move for you. That will depend on your personal goals and requirements. Consider these situations:
- Debt consolidation may not be worthwhile if you are at the lower end of the “good” credit score range. Consolidation is usually only worthwhile if your new loan has a lower interest rate than the debts you’re consolidating.
- Using a personal loan to pay off credit card debt makes sense only if your credit is still good enough to qualify for a personal loan with a competitive interest rate.
- Using a personal loan to pay medical bills may also not be the best option. Consider setting up an installment plan with your healthcare provider instead. You may not pay any interest at all. Remember that you can negotiate medical bills!
- If you’re borrowing for home improvements, you presumably own a home. A home equity loan or home equity line of credit is a secured loan that will almost certainly carry a much lower interest rate than an unsecured personal loan. Just be sure you have the means to pay it back!
- If you’re borrowing to make a purchase, think carefully. Be sure you’re including the fees and interest cost in your assessment of the item’s price. Unless it’s something you absolutely need, it might be better to wait.
As with any loan, you should compare several offers and read the loan agreements carefully, especially the fine print.
If you have decided on a personal loan, you’ll be wondering about the best loan options.
Best Personal Loans for Good Credit
Here’s where to start looking for a personal loan with fair credit.
Your Own Bank or Credit Union
The discussion of the best lenders for personal loans tends to focus on large online lenders with a national presence. Sometimes the solution you need is closer to home. The bank or credit union that handles your everyday banking needs is always worth a try.
Your bank or credit union knows you and they have access to your records. You can talk directly to the people who make a decision on your application. If your credit is flawed because of an old problem or if you have evidence of creditworthiness that is not part of your credit score, such as your income or employment record.
Online Personal Loans
With a good credit score, you will have access to many top personal loans online. You can expect competitive rates, though rates may vary considerably from the high end to the low end of the “good” range.
Prequalify for a Personal Loan
Check your personal loan rates by answering a few questions. It only takes two minutes and has no impact on your credit score.
Sofi
SoFi is a well-known student lender that has branched out to handle other loan types. The minimum credit score for personal loans is 680, and a higher score will get you better terms and a better chance of approval.
LightStream
LightStream makes loans of $5,000 to $100,000. They have a wide variety of loan products and a reputation for fast approval and fund release. The minimum credit score is 660.
Happy Money
Happy Money lends up to $40,000. Their Payoff Loan is specifically intended for consolidating credit card debt and are limited to that purpose. There are no prepayment fees. Your credit score will need to be over 640.
Best Egg
Best Egg provides loans from $2,000-$50,000 to borrowers with credit scores of 600 and above and has consistently good customer reviews.
All of these companies serve borrowers with a range of credit scores. If your score is at or near the lower end of the range you will not get the best available rates and you may not be approved at all.
| Loan amount | APR | Term length | Origination fee | |
|---|---|---|---|---|
| SoFi | $5,000-$100,000 | from 8.99% to 25.81% | from 24 to 84 months | No |
| LightStream | $5,000-$100,000 | from 7.49% to 25.49% | from 24 to 84 months | No |
| Happy Money (formerly Payoff) | $3,000-$40,000 | from 11.52% to 24.81% | from 24 to 60 months | Yes |
| Best Egg | $2,000-$50,000 | from 8.99% to 35.99% | from 24 to 60 months | Yes |
Loan Matching Services
Many of the first choice destinations for personal loans are not lenders at all. They are matching services that pass your information to a network of lenders and let them make offers. That makes comparison shopping easy and can help you get a better deal. That gives you access to multiple lenders with a single application, and lets you compare the results.
Some services, especially those serving bad credit borrowers, have earned a questionable reputation. With good credit, though, you will have access to companies that are legitimate and who will match you with quality lenders without selling your contact details or compromising your personal information.
It’s still worth running searches on any company you’re considering. Some customers are never satisfied, and all companies will have some complaints. If there’s a pattern of similar complaints, beware.
Here are some top options for borrowers with good credit.
Credible
Credible is a highly regarded loan marketplace. Lenders in Credible’s network will make loans up to $200,000. They serve borrowers with credit scores over 620. Close with a better rate than you prequalify for on Credible and get a $200 gift card. Terms apply.
Bankrate
Bankrate can help you match with lenders whose rates are no greater than 35.99% APR* with terms from 6 months to 84 months.
LendingTree
LendingTree is a loan matching service with a minimum credit score of 600. They require evidence of income and employment and your debt-to-income ratio will need to be under 36%. Loan amounts are $200,000 and under.
LendingClub
LendingClub lenders will make loans up to $40,000. A minimum credit score of 600.
Many of these services will work with borrowers at the lower end of the “good” range and even those with “fair” credit, but with a good score will get you lower interest rates and better terms.
| Loan amounts | APR | Term Length | |
|---|---|---|---|
| Bankrate | varies by lender | 6.40%–35.99% | 6 to 84 months |
| Credible | from $600 to $200,000 | 6.40%–35.99% | 12 to 84 months |
| LendingTree | from $1,000 up to $200,000 | 6.99%–35.99% | varies by lender |
| LendingClub | from $1,000 up to $40,000 | 9.57%– 35.99% | 24 to 60 months |
What to Do Next
Your good credit score will get you a personal loan. You will be approved; that’s not a problem. You may not get the interest rate or terms that you want, especially if your score is at the lower end of the “good” range.
If you’re not getting the terms and rates that you want, you have a strong reason to improve your credit. If you can make it to “good”, you can make it to “very good” or even “excellent”. At that point, lenders will roll out the red carpet and cough up their very best deals, and that’s worth working for!
Building better credit takes time, but the basic strategies are simple. The first step is right in front of you: you have a new personal loan, and making every payment on time will give your credit a boost. Don’t stop there. Start by understanding your credit score and follow these steps to improve your credit!
