Online lenders are becoming more and more popular these days. They are a convenient option for people who need money fast and don’t have time to go through a traditional bank. With their specialties ranging from personal loans to business loans, online lenders offer a variety of options for borrowers.
There are many benefits of using an online lender, however, as more people are becoming aware of these online lenders, more and more companies are popping up. So it can be difficult to know which ones are the best, so we’ve compiled a list of th
e top 5 best online lenders. In this article, we’ll give you an overview of each company, what they specialize in, and what their strengths are. So if you are interested in learning more about online lending, this article is for you.
Who are online lenders and what is online lending?
Before we jump into the top 5 online lending companies, it is always a good idea to revise what we are talking about.
So, online lenders are companies that provide loans over the internet. Online lending is a process where people can apply for and receive loans without having to go through a traditional bank. The entire process is done online, from start to finish. It is a hassle-free process with almost no paperwork involved.
The online lending process is simple. You just fill out an online application and within minutes, you will know if you are approved or not. If you are approved, the money will be deposited into your account within a few days or even on the same day.
Benefits of online lenders
There are many benefits of using online lenders, here are some of the main ones:
1. Extremely fast application process
The main benefit of using an online lender is the speed of the application process. Once you find the ideal lender, you just have to fill out an online form. The entire process from start to finish can be done within minutes. Once you are approved, the money will be deposited into your account within a few days. It is way faster than the traditional methods of lending money.
2. Convenient
Speed is not the only benefit of using an online lender. Another great thing about them is that they are extremely convenient. You can apply for a loan from anywhere in the world as long as you have an internet connection. You don’t have to take time out of your busy schedule to go to a bank or financial institution
3. Minimal documentation
Another great thing about online lenders is that there is very little documentation involved. In most cases, all you need is your ID and bank account information. On the other hand, traditional lenders will ask for a lot of documents such as you
r tax returns, pay stubs, and more. So if you want to avoid the hassle of dealing with mountains of paperwork, online lenders are the way to go.
4. Competitive interest rates
Interest rates offered by online lenders are usually lower than those offered by banks. This is because online lenders have fewer overhead costs. They also don’t need to worry about things like brick-and-mortar locations and tellers. All they need is a website and customer service representatives. This allows them to pass on the savings to you in the form of lower interest rates.
Top 5 online lenders
So now that we know what online lending is and what the benefits are, let’s take a look at the top 5 online lenders
1. SoFi
SoFi is a great option for those who are looking for a personal loan. If your credit score is above 650, you can qualify for a loan with SoFi. The interest rates offered by SoFi are very competitive. They also have a great customer service team that is always willing to help. The loan amount is also higher than other lenders. It ranges from $5,000 to $100,000. The APR is 5.74% - 21.78% depending on the term and amount.
Pros:
Bonus for members
Great customer service
High loan amount
Zero origination fees, late fees, or returned payment fees
Cons:
A high credit score recommended
Large loan amounts may take time to process
2. Upgrade
Upgrade is known as one of the most generous online lenders. Unlike other lenders, Upgrade doesn't charge higher fees to people who have low credit scores. If you have a credit score of at least 550, you can qualify for a loan with Upgrade. The interest rates are also very competitive. They range from 6.99% to 35.89%. The loan amount is also higher than other lenders. It ranges from $1,000 to $50,000.
Pros:
Low minimum credit requirements
Good customer service
Positive reviews from customers
Cons:
No refinancing options
2.9%-8% origination fee
3. Rocket loans:
As the name goes, Rocket loans are one of the fastest online lenders. They can approve your loan in just a few minutes and the money will be deposited into your account within the same day. The interest rates are very competitive. They range from 5.98% to 29.99%. The loan amount is also higher than other lenders. It ranges from $2,000 to $45,000.
Pros:
Fast transaction
Low minimum credit score requirement (580)
Good customer service
Cons:
1%-6% origination fee
No joint account and co-signer option
4. Discover
Discover is one of the most reputed and reliable online lenders. They have been in the business for a long time and have a good track record. They offer debt consolidation options where you can combine all your debts into one and make a single monthly payment. The interest rates are very competitive and range from 5.99% to 24.99%.
Pros:
Reputed and reliable lender
Loan refinancing options
1-day funding option
Cons:
No co-signer and joint account option
Low loan amount
5. LightStream
And last but not least, LightStream is one of the best online lenders in terms of customer service. They offer a very personal approach and their representatives are always willing to help you with anything you need. The interest rates are also very generous as they range from 4.99%-19.99%. Also, the loan amount limits are higher than others, you can take a loan up to $5,000-$100,000. The only downside is that you will need a 660 credit score to get approved.
Pros:
Very good customer service
High loan limits
Low-interest rates
Cons:
Borrowers must have a strong credit score (660+) to qualify
Conclusion
So there you have it! These are the top 5 online lenders that you can consider if you're in the market for a personal loan. Remember to shop around and compare rates before you decide on a lender. And always make sure you can afford the monthly payments before you take out a loan.
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