Best Personal Loans and Rates in February 2026

More details on the best personal loan lenders

When not to get a personal loan

Borrowing money via a personal loan or any other type of loan is not a decision to take lightly. At a minimum, make sure you can afford monthly payments for the duration of the loan’s term and that you actually need the money. While that covers the basics, there are a number of scenarios in which a personal loan may not be the best choice. 

Hold off on getting a personal loan if:

• Another borrowing option is better: Personal loans are best for mid-term borrowing needs — between two and seven years — and when you don’t have or want to secure the loan with collateral, like your home or car (you can secure some personal loans to lower your rate). But other loan types, like a credit card or home equity loan, could be more cost-effective, depending on how much you need to borrow, how soon you can pay off the loan, and if you’re willing and able to provide collateral.
• You’ll apply for a mortgage within the year: Unless you’re consolidating credit card debt, it’s often best to avoid applying for any new credit before you apply for a mortgage. This is because when you apply for most loans, a hard credit pull is recorded on your credit report, which can drag your score down up to 10 points. In turn, this could increase the rate you get on a mortgage. But if you use an installment loan (and not another credit card) to consolidate credit card debt, you could substantially lower your credit utilization. This, in turn, could increase your credit score more than enough to offset the hard credit check. Another benefit is that you could potentially lower your monthly payment, thereby reducing your DTI (debt-to-income ratio) — which could help you get a lower rate or larger loan amount on a mortgage.
• You want to consolidate debt, but can’t get a lower interest rate: Generally, you should only replace one loan (or loans) with another if you can save money. So, if you can’t, it doesn’t make sense to. The exception is if you can’t afford to make your monthly payments. In that case, it could make sense to accept a higher interest rate with a longer repayment term to avoid credit damage from missing payments. You also might want to mix and match in this case — only consolidate your higher interest debts and keep the low-rate loans. 

How applying impacts your credit score

If you are approved for and accept a personal loan, it will be recorded on your credit report, along with a hard credit check — the latter can ding your score by up to 10 points for one year, but most people’s scores drop less than five points.

The difference is when the hard credit check is applied. Here’s a rundown of which actions can impact your credit score and how:

• Prequalifying won’t hurt your credit: A soft credit check is run to determine APRs, loan amounts, and terms you’re likely to qualify for — it won't affect your credit score.
• Applying for a loan with most lenders will ding your score: When you submit your application is when most lenders perform a hard credit check. Even if you don’t move forward with the loan, the hard check would still apply and your score could drop. A few exceptions include BHG Financial, 60 Month Loans, and Upgrade. These lenders place the hard pull after you accept the loan, but not if you don’t. 

While prequalification won’t hurt your credit, prequalification quotes are not lender offers. Your rate could change once you formally apply (or you might not be offered a loan at all). You’ll need to apply to receive an actual loan offer, which is why it’s advantageous to apply with lenders that don’t hard-pull your credit until you accept an offer.

How to get a loan with bad credit

Getting a loan with bad credit (a FICO score below 580) can be difficult. According to 12 months of Credible personal loans data, less than 1% of borrowers with bad credit were able to prequalify for a personal loan. So how are the bad-credit borrowers who do qualify able to? There are a few steps that can make a big difference:

• Improve your credit score: A FICO score closer to 580-669 (fair credit) could make you eligible for a loan with more lenders. Start by checking your credit report for errors — if a paid account has been misreported, for example, file a dispute with the bureau reporting the error. Otherwise, practice good credit habits by paying debts on time and keeping your credit utilization low. On-time payments can lead to score improvements within six months. 
• Reduce your debt-to-income ratio: It may seem counterintuitive, but if there’s a way for you to pay down debt before you apply for a loan, you could improve your chances of qualifying. Your debt-to-income ratio (DTI) represents the percentage of your income that goes toward debt — add up all your minimum monthly debt payments and divide that by your total monthly income (before taxes). The lower your DTI, the better. A DTI above 50% could be a red flag that might lead to a loan denial, especially if paired with bad credit.
• Apply with a cosigner or co-applicant: A cosigner or co-applicant with a good credit history and/or a high income can help you qualify for a loan. A cosigner guarantees that you’ll make payments, so if you don’t make payments or make late ones, they (and their credit) are on the hook. Lenders that allow cosigners on personal loans are not common, but a few exist. On the other hand, a co-applicant or co-borrower is someone who also benefits from the loan — they have equal access to the loan funds and share responsibility for repayment. This is also known as a joint applicant. Joint loans are more widely available. Either way, the lender considers the other person’s income, credit score, and debt along with yours. 
   

Disclosure: Credible's prequalification form is not able to accept requests to add cosigners or co-applicants to personal loans at this time. If you wish to request a personal loan with a cosigner or co-applicant, please visit your preferred lender directly. You can still check prequalified rates individually on Credible.

Methodology

Credible's rating system incorporates 1,216 data points across 32 partner and non-partner lenders. We rate lenders based on these weighted categories:

• Rates and fees: 18.75%
• Eligibility and options for bad and no credit: 17.5%
• Availability: 12.5%
• Loan amounts and terms: 10%
• Customer satisfaction: 10%
• Customer service: 10%
• Efficiency and fund delivery: 10%
• Discounts: 7.5%
• Credible proprietary data: 3.75%

Credible's team of experts gathers information from lender websites and directly from our partners. We consider partner lenders' statistics over a 12-month period — including average rates, average funding times, and average credit scores for approved applicants. Each data point is verified by a senior editor to make sure it's accurate at the time of publication. 

Learn more about how Credible rates lenders by exploring our personal loans lender rating methodology.

Where we get our data

Credible is a personal loans marketplace that partners directly with lenders to offer loans for a wide range of credit profiles and loan purposes. Because of these relationships, we have access to the most current interest rates that real borrowers are being approved for, along with average rates by credit score and loan purpose, approval rates overall and by lender, and more. The data we use is primary source data, updated weekly, and does not include any personally identifiable information about borrowers.