Is a Personal Loan a Good Idea?

If you’re considering a personal loan, you’re in good company.

According to Experian, 38% of consumers now have one, and that share has risen steadily since 2017. One reason they’re so popular is that they typically offer much lower interest rates than credit cards, making them an attractive option for consolidating high-interest debt.

But a personal loan isn’t a decision to take lightly. You’ll be committing to fixed monthly payments for a set term, and many lenders also charge origination fees. Before you apply, here’s what to consider to determine whether a personal loan is the right fit for your finances.

Avant accepts borrowers with FICO Scores as low as 550, though most approved applicants have scores between 600 and 700. You can borrow between $2,000 and $35,000 with repayment terms of 24 to 60 months. Avant funds may be deposited as soon as the next business day if approved, and there’s an administration fee of up to 9.99%.

Looking to cover a larger credit card balance? Achieve offers personal loan amounts from $5,000 to $50,000 with repayment terms of two, three, four or five years. The minimum credit score is 640. There’s no prepayment penalty and rate discounts are available if you have Achieve pay your creditors off directly or if you have a co-borrower or retirement asset. Funds are available within 24 to 72 hours. Achieve charges an origination fee of 1.99% to 8.99%.

A personal loan can be a smart way to finance a major one-time expense, such as a home repair, unexpected medical bill or wedding, especially if you don’t have enough savings to cover the cost and want to avoid high-interest credit card debt. Because personal loans have fixed repayment terms, typically two to five years, you’ll know exactly how much you’ll pay each month and when the loan will be paid off.

If you need to borrow a larger amount, SoFi offers personal loans of up to $100,000 (minimum $5,000). Funds can be ready as soon as the same day you sign, when loan is approved and the loan agreement is signed by 5:30 p.m. ET on a business day. There are no prepayment fees and no late fees.

LightStream also offers personal loans up to $100,000 (minimum $5,000). Terms range from 24 to 240 months. Same-day funding is available on banking business days when your application is approved and you review and sign, provide funding and complete verification by 2:30 p.m. ET.

Origination fees are one of the biggest costs to watch for when comparing personal loans. Many lenders charge between 1% and 10% of the loan amount upfront, deducting the fee before you receive your funds. For example, if a lender charges a 5% origination fee on a $10,000 loan and deducts it upfront, you’ll receive $9,500 but still owe the full $10,000 plus interest. Before taking out a loan, make sure the money you’ll save through a lower interest rate outweighs any upfront fees. If it doesn’t, you may be better off sticking with your current debt or considering an alternative, such as a balance transfer credit card.

If keeping fees to a minimum is your top priority, Citi is a strong option. The bank doesn’t charge origination, late or prepayment fees, and it offers a 0.5% interest rate discount when you enroll in autopay, which is twice the industry standard. You can borrow from $2,000 up to $30,000, or you may be eligible for up to $50,000 with an existing eligible Citi bank account or credit card. Repayment terms are between 12 and 60 months.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal loan article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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*Your LightStream loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 7.99% APR with a term of three years would result in 36 monthly payments of $313.32.

Fixed rates from 8.74% APR to 35.49% APR. APR reflect the 0.25% autopay interest rate discount and a 0.25% SoFi Plus interest rate discount. SoFi Platform personal loans are made either by SoFi Bank, N.A. or, Cross River Bank, a New Jersey State Chartered Commercial Bank, operating from its Delaware branch, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 02/23/26 and are subject to change without notice. Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors.