- Installment loans come with a fixed term, monthly payment and interest rate. There are no surprises.
- Funds can be used for nearly any purpose.
- You can borrow up to $50,000, and even $100,000 in some cases.
- Installment loans are one of the best ways to eliminate credit card debt.
- Many personal loans are available without a requirement for collateral.
- It’s possible your credit score will increase if you use an installment loan to pay off multiple credit cards.
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Updated February 26, 2024
If you’re tired of running on the credit card treadmill, an installment loan may be the best way to get control of your finances. That’s because you'll be able to consolidate multiple credit cards under a single installment loan, with a single monthly payment and a fixed rate of interest. For that reason, we’re providing the best installment loans in this article.
We’ve selected seven of what we believe to be the best installment loans available, out of the dozens being offered. The table below provides a list of the lenders, along with the interest rates they charge, the loan amounts they offer, the minimum required credit score, and what each is best for. A more detailed description of each lender and the loan programs will follow the table.
| Lender | APR | Loan amount | Minimum credit score | Best for |
|---|---|---|---|---|
7.49% - 25.49% | $5,000 - $100,000 | Good or Excellent | Good credit | |
9.116% - 29.99% | $2,000 - $45,000 | 640 | Rocket Mortgage customers | |
6.4% - 35.99% | $1,000 - $50,000 | All credit scores considered | Bad credit | |
8.99% - 35.99% | $2,000 - $35,000 | 640 | Unsecured and secured installment loans | |
8.99% - 35.99% | $5,000 - $50,000 | 620 | Short loan terms | |
9.95% - 35.99% | $2,000 - $35,000 | 580 | Low origination fee | |
7.99% to 17.99% | $600 - $50,000 | 580 | Fair/average credit |
LightStream
Good credit
LightStream
Good credit
LightStream
APR
7.49% - 25.49%
Loan amount
$5,000 - $100,000
Min. credit score
Good or Excellent
Term
24 to 144 months
Fees
None
LightStream is a loan program offered by Truist, one of the largest banks in the country. They focus primarily on providing installment loans for borrowers with good or excellent credit. (No specific minimum credit score is indicated.) Loans are available for just about any purpose, including debt consolidation, home remodeling, purchasing recreational equipment or even paying for uncovered medical costs.
LightStream also offers some of the best interest rates on installment loans in the industry. Loan terms can be as long as 144 months, which is much longer than most lenders that provide installment loans. Since you can borrow as much as $100,000, there’s plenty of flexibility as to what you can do with that kind of money.
Rocket Loans
Rocket Mortgage customers
Rocket Loan
Rocket Mortgage customers
Rocket Loan
APR
9.116% - 29.99%
Loan amount
$2,000 - $45,000
Min. credit score
640
Term
36 or 60 months
Fees
Origination fee, 0% to 9%
If you’re familiar with Rocket Mortgage you already have an idea who Rocket Loans is. Rocket Loans is part of the Rocket organization that provides personal loans. You can check your rates for a personal loan online without affecting your credit score. If you decide to make a formal application, only then will Rocket Loans perform a hard credit inquiry.
Like other types of personal loans, Rocket Loans can be used for just about any purpose.
Upstart
Bad credit
Upstart
Bad credit
Upstart
APR
6.4% - 35.99%
Loan amount
$1,000 - $50,000
Min. credit score
All credit scores considered
Term
36 or 60 months
Fees
0% to 8%
Upstart is an online lending marketplace that has worked with more than 2.8 million customers. Like other installment loan lenders on this list, the entire loan application process takes place online. Loan proceeds can be used for just about any purpose.
The big advantage of Upstart is that they may have a loan available for any credit score, even if you don’t have traditional credit. This is one of the advantages of being an online lending marketplace, rather than a direct lender.
Best Egg
Unsecured and secured installment loans
Best Egg
Unsecured and secured installment loans
Best Egg
APR
8.99% - 35.99%
Loan amount
$2,000 - $35,000
Min. credit score
640
Term
36 or 60 months
Fees
Origination fee, 0.99% to 8.99%
Best Egg offers a variety of loan types, including both secured and unsecured personal loans, as well as credit cards. Funds can be borrowed for just about any purpose, including debt consolidation, credit card, refinancing, home improvement, major purchases, adoptions and even vacations. Secured loans are available for automobiles.
Achieve
Short loan terms
Achieve
Short loan terms
Achieve
APR
8.99% - 35.99%
Loan amount
$5,000 - $50,000
Min. credit score
620
Term
24 to 60 months
Fees
Origination fee, 1.99% to 6.99%
Achieve provides loans primarily for debt consolidation, though they do make financing available for other purposes, including making major purchases. They also offer fixed-rate home equity loans of up to $150,000 if you need more funds, and you are a homeowner. The company has provided more than $10 billion in loans to more than 1.5 million customers.
Avant
Low origination fee
Avant
Low origination fee
Avant
APR
9.95% - 35.99%
Loan amount
$2,000 - $35,000
Min. credit score
580
Term
12 to 60 months
Fees
Administration fee, 4.75%
Avant provides personal loans that are similar to other lenders on this list. But instead of an origination fee, which can be as high as 10% with some lenders, Avant charges an administration fee of 4.75% of the loan amount. They also offer a rewards credit card.
Personal loans are available for just about any purpose. They are installment loans, with a fixed rate and monthly payment and a term as long as 60 months.
PenFed
Fair/average credit
PenFed
Fair/average credit
PenFed
APR
7.99% to 17.99%
Loan amount
$600 - $50,000
Min. credit score
580
Term
12 to 60 months
Fees
None
Short for Pentagon Federal Credit Union, PenFed is one of the largest credit unions in the country. They offer loans to residents in all 50 states. To be eligible for a PenFed personal loan, you must become a member of the credit union by opening a checking account.
The credit union has the advantage of providing low-interest rates for lower credit scores compared with the competition. You can borrow as much as $50,000 for nearly any purpose, and there is no origination or administration fee.
Pros and cons
Pros:
Cons:
- The interest rates charged on personal loans can be as high or even higher than credit cards if you have fair or poor credit.
- Most personal loan lenders charge origination fees or administration fees that can be as high as 10% of the loan amount.
How to get an installment loan
You can apply for an installment loan from many different providers. These include banks, credit unions and online lenders, such as several we’ve included in this guide.
The terms tend to be similar from one lender to another, but you can generally expect the most favorable pricing arrangements from banks or credit unions, especially if you are already doing business with them.
To qualify, you’ll need to meet a lender's minimum credit requirements. This may not be limited to your credit score. The lender may have other criteria, like no bankruptcies within the past couple of years or no recent late payments.
You also need to be qualified based on your income. Personal loan lenders typically limit your monthly payment, plus the amount of all recurring monthly payments you have, to not more than 50% of your stable monthly income.
You generally will not be required to pay an application fee, and there will be no prepayment penalties if you decide to pay off the loan early. However many lenders do charge an origination fee of between 1% and 10% of the loan amount. This fee will be deducted from the loan proceeds so that you will receive a reduced amount. You should adjust the loan amount requested to reflect the payment of this fee.
When should you get an installment loan?
You will generally need to take an installment loan when you are making a major purchase, like a house or a motor vehicle. But you should also consider an installment loan any time you are either trying to eliminate credit card debt or trying to avoid taking any on.
One of the inherent limitations of credit cards is their revolving nature. When you make repayments against your credit line, you restore the available credit limit. If you’re like most people, you’ll make new charges against that credit limit on a regular basis. That can make it impossible to get out of credit card debt.
An installment loan has the advantage of having a definite term, at the end of which your loan will be fully repaid. They also have the advantage of having a fixed monthly payment and rate of interest, which avoids the potential for rate increases that are common with credit cards.
Alternatives to installment loans
If you are not interested in an installment loan, there are several alternatives to consider:
Savings. If you have sufficient savings to cover your financial needs you will avoid taking on a monthly payment by paying cash instead.
Credit card advances and balance transfers. Many credit cards provide cash advance and balance transfer privileges. Cash advances can be used to cover a sudden need for cash, and balance transfers for consolidating debt. And of course, you can always make major purchases using your credit cards in the usual way.
Retirement plan loans. Many employer retirement plans offer loan privileges. If so, IRS rules can enable you to borrow up to 50% of the vested balance in your plan, up to a maximum of $50,000. Loan terms are generally not more than five years, and you can make repayments out of your paychecks. Best of all, you will not need to be credit-qualified for a retirement plan loan.
Methodology
In coming up with this list of the best installment loans, we used the following criteria:
- The interest rate range charged on the loan.
- Minimum and maximum loan amounts offered.
- The minimum credit score requirement.
- What each lender is best for or specializes in.
- Available loan terms.
- Loan fees charged, if any.
- Lender reputation, as evidenced by their rating by the Better Business Bureau.
- Other products or services each lender makes available to its customers.
Frequently asked questions (FAQs)
Does an installment loan hurt your credit?
There may be a small hit to your credit of a few points when the lender does a hard credit pull during the application. But your credit score may increase by even more points if you are consolidating several credit card lines into a single installment loan. That’s because the reduction in the number of credit lines with outstanding balances will be reduced, giving you a bump up in your score.
What is the minimum credit score for installment loans?
Because there are so many installment loan lenders, there is no single minimum credit score that’s industrywide. Each lender sets its own minimum credit score, making it possible to get a personal loan, no matter what score you have.
But apart from minimum score requirements, understand that your credit score will have a major impact on the interest rate you’ll pay and the loan amount you’ll be able to borrow, even if you are approved. For example, the lender may provide loans for credit scores below 600, but if your score is 580, you may get the maximum rate of 35.99%.
Which is better: a flex loan or an installment loan?
Flex loans are a specific type of financing in which the lender extends you a credit line that you can access for cash. They are commonly offered to borrowers with bad credit, but they also come with very high interest rates. They are typically used by consumers who have no other credit options.
An installment loan is a better option because it provides a fixed loan amount, for a very specific term, with a flat interest rate and a fixed monthly payment.
What are the easiest loans to get approved for?
The easiest type of installment loan to be approved for is a secured loan. That’s where you pledge collateral – a house, motor vehicle, recreational vehicle or other asset – that will be security for the loan. Because the lender can seize the property if you default on the loan, the underwriting process is often simpler.
Are there no-credit-check installment loans?
There are a small number of lenders who will provide installment loans without a credit check. But those are usually reserved for people who don’t use traditional credit and therefore have little or no information on their credit reports.
But an increasingly common type of installment loan is what is known as a credit builder loan. These are secured loans, so the lender does not perform a credit check. For example, the lender will provide you with a loan of $2,000, with a fixed interest rate and monthly payment. The $2,000 will be deposited into a savings account that will act as collateral for the loan. Once the loan is paid off, the savings account will be released to the borrower, and the borrower will have a credit rating on the loan.
What are the most common types of installment loans?
The most common types of installment loans are mortgages, car loans, student loans, purchase loans (furniture, equipment, etc.) and personal loans.
Personal loans have become much more popular in recent years as the number of online lenders has increased. This has also caused many banks and credit unions to provide personal loans as well.
AP Buyline’s content is created independently of The Associated Press newsroom. Our evaluations and opinions are not influenced by our advertising relationships, but we might earn commissions from our partners’ links in this content. Learn more about our policies and terms here.