Upgrade: Best for Borrowers with bad credit
Qualifications:
Key Facts:Upgrade personal loans come with multiple rate discounts and offer direct payment to creditors. This lender has a low minimum credit score requirement, making the perks stand out even more.
Qualifications:- Minimum credit score: 580.
- Minimum number of accounts on credit history: One account.
- Maximum debt-to-income ratio: 75%, including mortgage payments.
- Minimum length of credit history: Two years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security, disability benefits and other sources.
Available Term Lengths:2 to 7 yearsFees:- Origination fee: 1.85% to 9.99%.
- Late Fee: $10.
- Failed payment fee: $10.
LendingClub: Best for Borrowers with good to excellent credit
Qualifications:
Key Facts:LendingClub loans have limited term lengths, but you can add a co-borrower to help your chances of qualifying for a lower rate.
Qualifications:- Minimum credit score: 600; average borrower score is above 700.
- Minimum income: None; lender requires proof of income. Borrower average is $100,000 per year.
- Maximum DTI: 40%.
- Minimum credit history: 36 months and two accounts.
Available Term Lengths:2 to 6 yearsFees:- Origination fee: 0%-8%
- Late fee: 5% of payment or $15 after 15-day grace period.
- Insufficient funds: $15.
Universal Credit: Best for Borrowers with bad credit
Qualifications:
Key Facts:Universal Credit personal loans have a low minimum credit score requirement, credit-building features and perks for debt consolidation. The lender charges high rates but offers autopay and debt consolidation discounts.
Qualifications:- Minimum credit score: 580.
- Minimum number of accounts on credit history: 1 account.
- Maximum debt-to-income ratio: 75%, including mortgage and the loan you’re applying for.
- Minimum length of credit history: 2 years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security and other sources.
Available Term Lengths:3 to 5 yearsFees:- Origination fee: 5.25% to 9.99%.
- Late fee: Up to $10.
- Non-sufficient funds fee: $10.
Upstart: Best for Borrowers with bad credit
Qualifications:
Key Facts:Upstart personal loans offer fast funding and may be an option for borrowers with low credit scores or thin credit histories. Upstart is a solid financing choice for large purchases.
Qualifications:- Must be a U.S. citizen or permanent resident living in the U.S.
- Must be at least 18 years old in most states.
- Must have a valid email address and Social Security number.
- Must have a full- or part-time job, a full-time job offer starting within six months or another source of regular income.
- Must have a personal bank account at a U.S. financial institution with a routing number.
- No bankruptcies in the last 12 months.
- No current delinquent accounts on your credit reports.
- Fewer than six hard inquiries on your credit report in the last six months, excluding student, auto and mortgage loans.
- Minimum credit score: None.
- Minimum annual income: $12,000.
Available Term Lengths:3 to 7 yearsFees:- Origination: 0% to 12%.
- Late fee: 5% of the unpaid amount or $15, whichever is greater.
- Insufficient funds fee: $15.
Rocket Loans: Best for Borrowers with fair credit
Qualifications:
Key Facts:Rocket Loans personal loans stand out for fast funding, but they lack some features other lenders offer.
Qualifications:- Minimum credit score: 640.
- Minimum annual gross income: $24,000.
- Maximum debt-to-income ratio: 40% or 70% including a mortgage.
- Minimum credit history: 2 years.
- Must be at least 18 years old.
- Must be a U.S. resident living in one of the states where the lender does business.
Available Term Lengths:3 to 5 yearsFees:- Origination fee: Up to 9%.
- Late fee: $15.
- Non-sufficient funds fee: $15.
Best Egg: Best for Borrowers with fair credit
Qualifications:
Key Facts:Best Egg personal loans are available to borrowers who want to consolidate debt and secure a loan, but they lack some features offered by other lenders.
Qualifications:- Minimum credit score: 600.
- Maximum debt-to-income ratio: 70% including a mortgage.
- Minimum credit history: 3 years and 1 account.
- Acceptable income sources: Employment, household income, alimony, retirement, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or permanent resident and at least 18 years of age.
Available Term Lengths:3 to 5 yearsFees:- Origination fee: 0.99% - 9.99%.
Prosper: Best for Borrowers with fair credit
Qualifications:
Key Facts:Prosper's platform gives borrowers access to a wide range of loan amounts and terms. Funding can take up to a few days.
Qualifications:- Minimum credit score: 560; borrower average is 709.
- Minimum income: $15,000; borrower average is $137,000.
- Maximum debt-to-income ratio: 50% (excluding mortgage); borrower average is 41.05% (including mortgage).
- Must be at least 18 years old.
- Must provide Social Security number and a U.S. bank account.
Available Term Lengths:2 to 5 yearsFees:- Origination fee: 1% to 9.99%.
- Late fee: The greater of $15 or 5% of the unpaid amount.
- Insufficient funds fee: $15.
- Mailed-in payment fee: $5.
SoFi Personal Loan: Best for Borrowers with good to excellent credit
Qualifications:
Key Facts:Qualified borrowers will find few lenders better than SoFi, thanks to zero fees and thoughtful perks like unemployment protection and free financial advising.
Qualifications:- Must be at least 18 years old in most states.
- Must be a U.S. citizen, permanent or non-permanent resident, including DACA recipients and asylum seekers.
- Must be employed, have sufficient income from another source, or have an offer of employment to start within the next 90 days.
- Acceptable income sources: Employment, spouse’s income, retirement, alimony, child support, Social Security payments and disability benefits.
Available Term Lengths:2 to 7 yearsFees:- Origination fee: 0% to 7%.
- Late fee: None.
LightStream: Best for Borrowers with good to excellent credit
Qualifications:
Key Facts:LightStream’s low rates and zero fees make it one of the top lenders for borrowers with good or excellent credit.
Qualifications:- Minimum credit score: 660, but can vary depending on the loan purpose and amount.
- Maximum debt-to-income ratio: 50%.
- Minimum credit history: 3 years.
- Income sources accepted: Employment, retirement, rental income, alimony, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or permanent resident who is at least 18 years old and has a U.S. bank account.
Available Term Lengths:2 to 7 yearsFees:- Origination fee: None.
- Late fee: None.
Laurel Road Personal Loan: Best for Borrowers with good to excellent credit
Qualifications:
Key Facts:Laurel Road’s personal loans are a strong fit for good-credit borrowers who qualify for a low rate or fair-credit borrowers who can add a co-signer.
Qualifications:- Minimum credit score: 680.
- Minimum credit history: 2 years and 2 active accounts.
- Maximum debt-to-income ratio: 43%, including housing costs, for most applicants (48% for some).
- Acceptable sources of income: Employment, retirement, alimony, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or a permanent resident with a valid I-551 card.
- No bankruptcies.
Available Term Lengths:3 to 5 yearsFees:- Late fee: 5% of the payment amount or $28, whichever is less.
- Non-sufficient funds fee: $20.
Upgrade: Best for Borrowers with bad credit
Qualifications:
Key Facts:Upgrade personal loans come with multiple rate discounts and offer direct payment to creditors. This lender has a low minimum credit score requirement, making the perks stand out even more.
Qualifications:- Minimum credit score: 580.
- Minimum number of accounts on credit history: One account.
- Maximum debt-to-income ratio: 75%, including mortgage payments.
- Minimum length of credit history: Two years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security, disability benefits and other sources.
Available Term Lengths:2 to 7 yearsFees:- Origination fee: 1.85% to 9.99%.
- Late Fee: $10.
- Failed payment fee: $10.
LendingClub: Best for Borrowers with good to excellent credit
Qualifications:
Key Facts:LendingClub loans have limited term lengths, but you can add a co-borrower to help your chances of qualifying for a lower rate.
Qualifications:- Minimum credit score: 600; average borrower score is above 700.
- Minimum income: None; lender requires proof of income. Borrower average is $100,000 per year.
- Maximum DTI: 40%.
- Minimum credit history: 36 months and two accounts.
Available Term Lengths:2 to 6 yearsFees:- Origination fee: 0%-8%
- Late fee: 5% of payment or $15 after 15-day grace period.
- Insufficient funds: $15.
Universal Credit: Best for Borrowers with bad credit
Qualifications:
Key Facts:Universal Credit personal loans have a low minimum credit score requirement, credit-building features and perks for debt consolidation. The lender charges high rates but offers autopay and debt consolidation discounts.
Qualifications:- Minimum credit score: 580.
- Minimum number of accounts on credit history: 1 account.
- Maximum debt-to-income ratio: 75%, including mortgage and the loan you’re applying for.
- Minimum length of credit history: 2 years.
- Minimum income requirement: None. Lender accepts income from alimony, retirement, child support, Social Security and other sources.
Available Term Lengths:3 to 5 yearsFees:- Origination fee: 5.25% to 9.99%.
- Late fee: Up to $10.
- Non-sufficient funds fee: $10.
Upstart: Best for Borrowers with bad credit
Qualifications:
Key Facts:Upstart personal loans offer fast funding and may be an option for borrowers with low credit scores or thin credit histories. Upstart is a solid financing choice for large purchases.
Qualifications:- Must be a U.S. citizen or permanent resident living in the U.S.
- Must be at least 18 years old in most states.
- Must have a valid email address and Social Security number.
- Must have a full- or part-time job, a full-time job offer starting within six months or another source of regular income.
- Must have a personal bank account at a U.S. financial institution with a routing number.
- No bankruptcies in the last 12 months.
- No current delinquent accounts on your credit reports.
- Fewer than six hard inquiries on your credit report in the last six months, excluding student, auto and mortgage loans.
- Minimum credit score: None.
- Minimum annual income: $12,000.
Available Term Lengths:3 to 7 yearsFees:- Origination: 0% to 12%.
- Late fee: 5% of the unpaid amount or $15, whichever is greater.
- Insufficient funds fee: $15.
Rocket Loans: Best for Borrowers with fair credit
Qualifications:
Key Facts:Rocket Loans personal loans stand out for fast funding, but they lack some features other lenders offer.
Qualifications:- Minimum credit score: 640.
- Minimum annual gross income: $24,000.
- Maximum debt-to-income ratio: 40% or 70% including a mortgage.
- Minimum credit history: 2 years.
- Must be at least 18 years old.
- Must be a U.S. resident living in one of the states where the lender does business.
Available Term Lengths:3 to 5 yearsFees:- Origination fee: Up to 9%.
- Late fee: $15.
- Non-sufficient funds fee: $15.
Best Egg: Best for Borrowers with fair credit
Qualifications:
Key Facts:Best Egg personal loans are available to borrowers who want to consolidate debt and secure a loan, but they lack some features offered by other lenders.
Qualifications:- Minimum credit score: 600.
- Maximum debt-to-income ratio: 70% including a mortgage.
- Minimum credit history: 3 years and 1 account.
- Acceptable income sources: Employment, household income, alimony, retirement, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or permanent resident and at least 18 years of age.
Available Term Lengths:3 to 5 yearsFees:- Origination fee: 0.99% - 9.99%.
Prosper: Best for Borrowers with fair credit
Qualifications:
Key Facts:Prosper's platform gives borrowers access to a wide range of loan amounts and terms. Funding can take up to a few days.
Qualifications:- Minimum credit score: 560; borrower average is 709.
- Minimum income: $15,000; borrower average is $137,000.
- Maximum debt-to-income ratio: 50% (excluding mortgage); borrower average is 41.05% (including mortgage).
- Must be at least 18 years old.
- Must provide Social Security number and a U.S. bank account.
Available Term Lengths:2 to 5 yearsFees:- Origination fee: 1% to 9.99%.
- Late fee: The greater of $15 or 5% of the unpaid amount.
- Insufficient funds fee: $15.
- Mailed-in payment fee: $5.
SoFi Personal Loan: Best for Borrowers with good to excellent credit
Qualifications:
Key Facts:Qualified borrowers will find few lenders better than SoFi, thanks to zero fees and thoughtful perks like unemployment protection and free financial advising.
Qualifications:- Must be at least 18 years old in most states.
- Must be a U.S. citizen, permanent or non-permanent resident, including DACA recipients and asylum seekers.
- Must be employed, have sufficient income from another source, or have an offer of employment to start within the next 90 days.
- Acceptable income sources: Employment, spouse’s income, retirement, alimony, child support, Social Security payments and disability benefits.
Available Term Lengths:2 to 7 yearsFees:- Origination fee: 0% to 7%.
- Late fee: None.
LightStream: Best for Borrowers with good to excellent credit
Qualifications:
Key Facts:LightStream’s low rates and zero fees make it one of the top lenders for borrowers with good or excellent credit.
Qualifications:- Minimum credit score: 660, but can vary depending on the loan purpose and amount.
- Maximum debt-to-income ratio: 50%.
- Minimum credit history: 3 years.
- Income sources accepted: Employment, retirement, rental income, alimony, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or permanent resident who is at least 18 years old and has a U.S. bank account.
Available Term Lengths:2 to 7 yearsFees:- Origination fee: None.
- Late fee: None.
Laurel Road Personal Loan: Best for Borrowers with good to excellent credit
Qualifications:
Key Facts:Laurel Road’s personal loans are a strong fit for good-credit borrowers who qualify for a low rate or fair-credit borrowers who can add a co-signer.
Qualifications:- Minimum credit score: 680.
- Minimum credit history: 2 years and 2 active accounts.
- Maximum debt-to-income ratio: 43%, including housing costs, for most applicants (48% for some).
- Acceptable sources of income: Employment, retirement, alimony, child support, Social Security payments and disability benefits.
- Must be a U.S. citizen or a permanent resident with a valid I-551 card.
- No bankruptcies.
Available Term Lengths:3 to 5 yearsFees:- Late fee: 5% of the payment amount or $28, whichever is less.
- Non-sufficient funds fee: $20.
Can you get a personal loan for your business?
A personal loan is money borrowed from a bank, credit union or online lender that can be used for any number of purposes, including to fund a business.
Most personal loans are unsecured, which means they don’t require collateral, and you pay them back in fixed monthly payments — typically over one to seven years.
Benefits of using a personal loan to start a business
Flexibility: As long as your lender has no restrictions against using a personal loan for your business, you can use the money however you want, including to purchase equipment and inventory, stock up on office supplies, kick-start your marketing efforts or cover other costs.
Low rates: Depending mostly on your credit score, personal loans can have lower annual percentage rates than other financing products — such as credit cards — saving you money over the lifetime of the loan. They also have fixed payments that ensure your loan is paid back within a certain time frame so you'll avoid compound interest, or interest on top of the original interest.
Easier to qualify: If you’re just starting your business, you may have more luck qualifying for a personal loan than a business loan. When underwriting business loans, lenders look at your company’s revenue and time in business, along with your personal credit score. For a first-time business owner seeking to fund a new business idea, you won’t have some of the history that small-business lenders are looking for.
Personal loans are underwritten based primarily on your credit score and your income. That means you can include other income sources — maybe you still have your 9-to-5 job, or maybe you have rental properties — to supplement the initial trickle of income you’ll earn from your new venture.
» COMPARE: Best business loans for bad credit
Fast funding: The majority of personal loans are funded within one week of approval, though if you choose to apply with an online lender, you’ll likely receive funds by the next or even same business day. This may be faster than some business loans. For example, the process of applying for and receiving a traditional SBA loan can take 30 days to a few months.
» Get started: Pre-qualify for a personal loan on NerdWallet
Drawbacks of using a personal loan to start a business
May not receive a full tax deduction: Interest paid on a personal loan is typically not tax deductible, unlike interest paid on business loans. However, there’s an exception for when you use a personal loan to cover business expenses. To get the full deduction, you’ll need to make sure no portion of the loan is used for another type of expense.
Personal credit or assets could be at risk: If you take out an unsecured personal loan and fail to repay it, your credit may take a hit. This will make it harder to access affordable financing in the future. If you take out a secured personal loan and tie it to an asset like your car or home, the lender can seize that asset if you default.
Small loan size: Personal loans tend to have smaller loan amounts — ranging from about $1,000 to $50,000 for most lenders — than business loans. For a small startup, the size might be just right, but if you own a more established company or plan on making big purchases, you’ll want to look for loans that offer more financing.
Shorter repayment terms: Most personal loan terms range from one to seven years, so if you need a longer repayment term, you’re better off looking at other small-business financing options. SBA loans tend to have the longest repayment terms, ranging from 10 to 25 years.
Alternatives to personal loans for business
Small-business loan: If you're an established business and want to explore other options, NerdWallet has a list of the best small-business loans. These loans are typically issued only for businesses with a year or more of history and revenue.
Business line of credit: A business line of credit is a type of small-business loan but with more flexibility. It works like a credit card, letting you borrow up to a certain limit and then paying interest only on what you borrow, so it’s ideal for business owners who aren’t sure of the scope of their financial need.
Business credit card: A business credit card offers revolving credit that’s ideal for short-term expenses and may be easier to qualify for than a small-business loan. Business credit cards also offer rewards, like cash back or travel points, and can help keep your business and personal finances separate.
Last updated on December 22, 2022
Frequently asked questions
The best loan will depend on your business’s needs. If your business does not have a year or more of history or revenue, a personal loan can make sense as a potential financing option.
You can typically use funds from a personal loan for almost anything, including to fund your business.
To get a personal loan for business, you will need to apply and be approved with a lender. Approval is typically based on your credit, and once approved, you can receive funds within one week.
How we chose the best personal loans
35+
Lenders reviewed
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Categories assessed
70+
Data points analyzed
Star rating categories
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Overall score
NerdWallet's Personal Business Loans: What You Need to Know
- Upgrade: Best for Borrowers with bad credit
- LendingClub: Best for Borrowers with good to excellent credit
- Universal Credit: Best for Borrowers with bad credit
- Upstart: Best for Borrowers with bad credit
- Rocket Loans: Best for Borrowers with fair credit
- Best Egg: Best for Borrowers with fair credit
- Prosper: Best for Borrowers with fair credit
- SoFi Personal Loan: Best for Borrowers with good to excellent credit
- LightStream: Best for Borrowers with good to excellent credit
- Laurel Road Personal Loan: Best for Borrowers with good to excellent credit
