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Personal Loans

Fixed-rate installment loans for consolidation, repairs and big expenses.

By Fountain Finances Editorial TeamUpdated

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How personal loans work

A personal loan is usually an unsecured installment loan: you receive a lump sum and repay it in fixed monthly payments over a set term, commonly two to seven years. The rate is typically fixed, so your payment never changes. Lenders set your APR based on your credit, income, existing debts and the loan amount and term.

What affects personal loan rates

  • Credit score and history — the strongest factor in most pricing.
  • Debt-to-income ratio — how much of your income already goes to debt.
  • Loan term — longer terms often carry higher rates.
  • Origination fees — some lenders charge a fee, often deducted from the proceeds; it is included in the APR.
  • Autopay or relationship discounts — many lenders reduce the rate slightly for automatic payments.

How to compare offers

  1. Prequalify with several lenders using soft credit checks.
  2. Compare APRs, not interest rates, since APR includes fees.
  3. Compare total cost — monthly payment × number of payments, plus any fees not in the APR.
  4. Check flexibility — prepayment penalties, due-date changes and hardship options.

Run the numbers with our personal loan calculator and see widely available lenders on our personal loans comparison.

Personal loans for bad credit

If your credit is limited or damaged, consider a credit union, a secured loan backed by savings, or a co-signer with strong credit. Be cautious of lenders advertising “no credit check” loans with very high costs, and read the FTC’s guidance on spotting advance-fee loan scams.

Frequently asked questions

What are personal loans used for?

Common uses include consolidating credit card debt, home repairs, medical bills, moving costs and large planned purchases. Most personal loans are unsecured and can be used for most personal purposes.

Does checking personal loan rates hurt my credit?

Prequalification with a soft credit check does not affect your score. A formal application usually triggers a hard inquiry, which may lower your score slightly and temporarily.

Can I get a personal loan with bad credit?

Some lenders work with fair or poor credit, but APRs are much higher. Credit unions, secured loans and a creditworthy co-signer may offer better terms. Avoid lenders that guarantee approval or demand upfront fees.

Part of our Loans hub and our complete personal finance guide. Read our editorial standards.

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