Personal Loan Review Methodology

Personal loans may be a good option when you want to consolidate debt, pay for home improvements, cover medical bills, or fund a wedding. But with so many lenders, it can be tough to know which company offers the best personal loan for your situation. 

Between online lenders, brick-and-mortar banks, credit unions, and peer-to-peer lenders, you may qualify for several personal loans. To narrow down each selection, we have completed extensive research on the top 38 personal loans. The guide covers the criteria we used to grade each company's options.

Related: See who made it as a top provider in our Best Personal Loans roundup.

Rating Criteria

We created a robust methodology to rank each personal loan across eight categories. Based on our criteria, each personal loan earned a numeric score, which offered a data-driven way to compare each product. We rated each data point on a five-point scale and weighted each rating based on importance.

To compare personal loans, we used these eight categories:

  1. Annual Percentage Rate (APR)
  2. Origination Fee
  3. Prepayment Fee
  4. Late Payment Fee
  5. Minimum Credit Score Required
  6. Prequalification Option
  7. Complaint Index 
  8. Membership Details

Annual Percentage Rate (APR)

The annual percentage rate, or APR, is the total cost of borrowing, including interest, fees, and other charges. The APR makes it easier to compare the cost of borrowing money between lenders.

This entire section makes up 50% of the total weighted score in our evaluation. To rank each company’s APR, we looked at each of these factors:

  • Minimum Fixed APR (5%)
  • Maximum Fixed APR (5%)
  • Average Fixed APR (40%)

Minimum Fixed APR

The lowest fixed APRs are typically only available to the most creditworthy borrowers. We ranked each personal loan's minimum APR on a five-point scale. The lowest APR across all the lenders we reviewed is 0%

Minimum Fixed APR Numerical Score
<4% 5
4%–5.99% 4
6%–7.99% 3
8%–9.99% 2
10%–11.99% 1
≥12% 0

Maximum Fixed APR

When your credit score is less than perfect, you may only qualify for higher fixed APRs. We ranked each personal loan's maximum APR on a five-point scale. The highest APR across all the lenders we reviewed is 11.99%.

Maximum Fixed APR Numerical Score
<10% 5
10%–18.99% 4
19%–24.99% 3
25%–29.99% 2
20%–35.99% 1
≥35.99% 0

Average Fixed APR

We assigned the most weight to each lender's average APR. Like the minimum APR and maximum APR, we ranked each one on a five-point scale.

Average Fixed APR Numeric Score
<10% 5
10%–12.99% 4
13%–15.99% 3
16%–20.99% 2
21%–24.99% 1
≥25% 0

Origination Fee

An origination fee is the upfront fee a lender charges to process your personal loan application.

This entire section makes up 25% of the total weighted score in our evaluation. To review each company’s APR, we compared the following:

  • Minimum Origination Fee (5%)
  • Maximum Origination Fee (0%)
  • Average Origination Fee (20%)

Minimum Origination Fee

The most competitive personal loans may not have an origination fee. Other lenders may offer a flat origination fee or a range based on your creditworthiness. We ranked each personal loan's origination fee on a five-point scale.

Minimum Origination Fee % Numerical Score
no origination fee 5
0% 4
<0.5% 3
<1% 2
<1.5% 1
≥1.5% 0

Maximum Origination Fee

Less competitive personal loans may have higher origination fees. These companies may have a flat origination fee or a range based on your creditworthiness. We ranked each lender's origination fee on a five-point scale. The highest origination fee across all the lenders we reviewed is 10%.

Maximum Origination Fee % Numerical Score
no origination fee 5
<4% 4
<6% 3
<8% 2
<10% 1
≥10% 0

Average Origination Fee

We assigned the most weight to each lender's average origination fee. Like the minimum and maximum origination fees, we ranked each average origination fee on a five-point scale.

Average Origination Fee % Numerical Score
no origination fee 5
<3% 4
<4% 3
<5% 2
<6% 1
≥6% 0

Prepayment Fee

A prepayment fee, or prepayment penalty, is the fee charged for paying off your personal loan before the loan term ends.

This section makes up 8% of the total weighted score in our evaluation. We looked at each lender to see which ones charged a penalty for paying off the personal loan early. Lenders without a prepayment fee earned five points, and those charging the fee earned zero points.

Prepayment Fee Numerical Score
no 5
yes 0

Late Payment Fee

Borrowers may incur a late payment fee if they miss the loan's payment deadline. Some lenders also charge a fee for returned payments.

This section makes up 4% of the total weighted score in our evaluation. To compare personal loans, we looked at which lenders charge a fee for late payments. For those that charge a late payment fee, we also considered the amount for our scoring.

Minimum Late Payment Fee

The most competitive personal loans may not charge a fee for late payments. For those that do, we used a five-point scale to rank them. Many lenders charge a minimum fee for late payments, and the highest fee among the lenders we reviewed was $39.00.

Minimum Late Payment Fee Numerical Score
no late payment fee 5
<$10 4
<$20 3
<$30 2
<$40 1
≥$40 0

Maximum Late Payment Fee

Some lenders may have a cap on how much the company charges for late payments. We ranked each lender's maximum late payment fee on a five-point scale. The highest maximum late payment fee among the lenders we reviewed was $100. 

Maximum Late Payment Fee Numerical Score
no late payment fee 5
<$15 4
<$25 3
<$35 2
<$45 1
≥$45 0

Average Late Payment Fee

We assigned the most weight to each lender's average late payment fee. We took an average of each lender's late payment fees and ranked each one on a five-point scale.

Average Late Payment Fee Numerical Score
no late payment fee 5
<$15 4
<$25 3
<$35 2
<$45 1
≥$45 0

Minimum Credit Score Required

This category doesn't factor into the total weighted score in our evaluation. However, we know borrowers want to know their likelihood of qualifying for each personal loan. While lenders consider more than credit scores to determine borrower's eligibility, it may help to know each lender's minimum cutoff to qualify, especially for the lenders without the option to prequalify.

Prequalification Option

The ability to pre-qualify for a personal loan before applying is a popular feature. Pre-qualification shows borrowers the rates and terms they may qualify for without a hard inquiry on their credit. 

This section makes up 9% of the total weighted score in our evaluation. Lenders offering the ability to pre-qualify for a personal loan received five points. But the companies without a prequalification option received zero points.

Option to Prequalify Numerical Score
yes 5
no 0

Complaint Index

This section doesn't factor into the total weighted score in our evaluation. However, we have included data from our complaint index because it may help borrowers make a more informed decision.

The data from our complaint index comes from the Consumer Financial Protection Bureau's Consumer Complaint Database. We looked up each personal loan to see a list of complaints over the past year. We based our complaint index ranking on the number of complaints about each lender.

It's important to keep in mind this is only one source of customer satisfaction data. For more in-depth research, you may also look for complaints from third-party sources like the Better Business Bureau, Google, and other reviews websites.

Complaint Index Numerical Score
0 5
1–24 4
25–49 3
50–99 2
100–149 1
≥150 0

Membership Details

Some companies may require an existing relationship to apply for their personal loan. Membership may be a standard requirement among credit unions, although it may be easy to join for a small fee.

This section makes up 4% of the total weighted score in our evaluation. We used a five-point scale to assess the difficulty of applying for a personal loan, based on each company's membership requirements.

Membership Requirements Numerical Score
Anyone can join 5
Can join if you pay a fee 4
Can join if already a customer 2
Can join if you meet specific requirement 1

Choosing the Right Personal Loan

When you are ready to borrow money, it's always a good move to compare personal loans from multiple companies. We assessed 38 top companies to uncover the best personal loans, and our reviews cover everything you should know before applying. 

When it comes to the best personal loans, no single company works for everyone. Our personal loan reviews cover each company’s APRs, origination fees, prepayment and late payment fees, pre-qualification details, customer complaints, and any membership restrictions. We have also summarized each company's pros and cons to help you make an informed decision.