Unexpected expenses can come out of nowhere. Your car’s transmission gives out; a pipe bursts in your house; or you have an emergency medical procedure. There’s no avoiding these expenses, and maybe your bank account is tapped out. What do you do?
One option is a personal loan. As with any loan, you should be careful before you take out a $3,000 loan. You may be in a tough spot, but that doesn’t mean you have to act irrationally. Take stock of your situation, and make a level-headed choice.
Consider a Credit Union
If you don’t need the cash immediately, you can save a good deal of interest by taking the $3,000 loan from your bank or credit union. According to Nerdwallet, you can cut your interest rate by about half by borrowing from a credit union rather than an online personal loan lender. The downside is that it takes a week or more to get approval and your loan money from a credit union. An online lender typically can send your money to you in one to five days.
Personal Loans Have Better Rates than Credit Cards
Personal loans have higher interest rates than mortgages or auto loans, but their interest rate are almost always better than credit card advances and payday loans. So for many people, personal loans are just the tool to get them through a tough spot.
If you choose to pursue a personal loan, many online vendors can make this happen. Each one has its own qualifications and repayment terms. Here are several online lenders and some key factors to consider when picking one.
Personal loans through Discover are best suited to individuals with good or fair credit. If you want to consolidate your debt with a personal loan, Discover can pay your creditors directly. Plus, they give you real-time access to your FICO credit score. You can watch your score improve as you make good financial decisions.
- Interest Rates:9.9% to 24.99% APR
- Loan Amount: $2,500 to $35,000
- Minimum Credit Score Required: 660
- Minimum Gross Income Required: $25,000
- Origination Fee: None
- Turnaround Time to Receive Loan Funds: 1 to 7 days
- Repayment Period: 3 to 7 years
Though it does not require quite as high of a credit score as Discover, RocketLoans only makes personal loans to individuals with fair credit or better. The biggest reason to use this company is their claim that 90 percent of borrowers receive their funds the next business day. If you need the money fast, they’ll get it to you when you need it.
- Interest Rates:9.8% to 28.99% APR
- Loan Amount: $2,000 to $35,000
- Minimum Credit Score Required: 640
- Minimum Gross Income Required: Not disclosed
- Origination Fee: 1% to 6% of the loan amount
- Turnaround Time to Receive Loan Funds: Usually 1 day
- Repayment Period: 3 to 5 years
Young people with little or no credit history can turn to Upstart for personal loans. They take into account other factors when a potential borrower does not have a credit score. They also work with several technology boot camps to offer loans to students building their high-tech skills. One major qualification for a boot camp tuition loan is you have to have a college degree, but you do not have to have a steady income. With your boot camp skills, Upstart is confident you will earn enough to pay off your personal loan.
- Interest Rates:4.8% to 29.99% APR
- Loan Amount: $1,000 to $50,000
- Minimum Credit Score Required: 620, if you have one
- Minimum Gross Income Required: $12,000
- Origination Fee: Up to 8% of the loan amount
- Turnaround Time to Receive Loan Funds: Usually 1 day; 3 days for education loans
- Repayment Period: 3 or 5 years
When you notice the minimum interest rate of 15.49 percent APR, you might gasp or make some other sudden sound. But you must realize LendingPoint specializes in helping people with not-so-great credit. They bill themselves as the lender for people with credit scores in the 600s, so the higher interest rate is expected, and they actually have better rates than many of their competitors. They hold their own with competitors because they look at more than a person’s credit score when making the loan decision. LendingPoint operates in 32 states and the District of Columbia.
- Interest Rates:4.9% to 34.99% APR
- Loan Amount: $3,500 to $25,000
- Minimum Credit Score Required: 600
- Minimum Gross Income Required: $20,000
- Origination Fee: Up to 6% of the loan amount
- Turnaround Time to Receive Loan Funds: As soon as the next day
- Repayment Period: 2 to 4 years
Avant makes loans for the little guy. They focus their business on the average American. They only require a credit score of 580, but compared to other lenders, they require a high annual income. Avant may be a good option if you don’t have very good credit and want to consolidate high-interest debt.
- Interest Rates:9.5% to 35.99% APR
- Loan Amount: $2,000 to $35,000
- Minimum Credit Score Required: 580
- Minimum Gross Income Required: No firm figure, but generally more than $40,000
- Origination Fee: 75% of the loan amount
- Turnaround Time to Receive Loan Funds: 2 days, on average
- Repayment Period: 2 to 5 years
Getting you out of a jam
A personal loan could be just the tool to get you out of your financial predicament. As with any debt, enter into a personal loan agreement with a full understanding of your commitment and the consequences of not upholding your end of the deal. Remember, just because the original source of financial strain is satisfied, your obligations are not finished. You can breathe a little easier, but maintain a diligent attitude, and get that personal loan paid off as quickly as possible.
Compare the Best Student Loan Refinance Rates
Here are our top student loan refinance picks for 2019
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.