At Motley Fool Money, a Motley Fool brand, we take our mission to make the world smarter, happier, and richer very seriously. That includes making sure the personal loans we feature on Motley Fool Money are heavily vetted by our team of experts, so you can feel confident the picks on our site are fantastic choices for most people.
Our personal loan rating philosophy
Our core objectives for our recommended selections are:
- Editorially independent (NOT influenced by partners)
- Easy to understand
- Applicable to any personal loan
- Scoring is weighted, and scaled to 5 stars
How we score personal loans
We consider more than 25 factors across five categories to evaluate personal loan lenders. Ratings are based on publicly available information from each provider’s website.
Personal loans are assigned a point value for each score, out of 3, then adjusted to a 5-star scale, rounded to the nearest half point.
- 3 = High
- 2 = Medium
- 1 = Low
Our scores are weighted as:
Cost of borrowing (35%)
- High: The lender’s minimum APR is at least 2 points lower than the national average for loans with similar terms. High-scoring lenders generally don’t charge prepayment penalties or application fees. Many offer discounts for things like autopay or having a bank account with the lender.
- Medium: The lender’s minimum APR is average or below average. Lenders in this category may charge a prepayment penalty or application fees, but they aren’t significantly higher than similar fees charged by peers.
- Low: The lender’s interest rates and fees are higher than the national average for loans with similar terms. Few, if any, discounts are available.
Terms and repayment options (25%)
- High: Top lenders have a minimum loan amount of no more than $2,500 and a maximum loan amount of at least $50,000. Terms range from 24 months (or less) to 60 months (or more). Many high-scoring lenders offer both secured and unsecured loans, as well as flexible payment dates. Loan funds can typically be used with few restrictions.
- Medium: Lenders in this category may have minimum amounts above $2,500 or maximums of less than $50,000, or they may have minimum terms longer than 24 months or maximum terms of less than 60 months. Loan funds may have some restrictions.
- Low: Loans in this category have little flexibility on loan terms and repayment options. A loan may also receive low marks in this category if the minimum loan amount is above $5,000, or if the maximum loan amount is less than $30,000.
Accessibility (15%)
- High: Top-scoring lenders have options for borrowers with credit scores of less than 680, as well as those with various income levels and debt-to-income ratios. These loans often allow borrowers to add a co-borrower or cosigner. Most loans that get our top marks are available in all 50 states and Washington, D.C.
- Medium: Lenders in this category may require at least a good credit score or have minimum income or DTI thresholds. If a lender caters to borrowers with various credit scores or income levels but has limited statewide availability, it may fall into this category.
- Low: The lender requires excellent credit and/or has strict income or DTI thresholds with no option to add a cosigner or co-borrower.
Application process (15%)
- High: The lender allows most borrowers to complete their application 100% online. Funds are available within 24 hours, with many top lenders offering same-day funding. Applicants can prequalify through a soft credit check, so they don’t affect their credit score. Information about loan terms, APRs, and fees are easily accessible through the provider’s website.
- Medium: Medium-scoring lenders generally allow borrowers to begin the application online, but they may require a loan officer to complete the process. Lenders with a fully online application may fall into this category if loans take several days to fund, they don’t offer prequalification, or important information isn’t disclosed on the lender’s website.
- Low: Low-scoring lenders may not have an online application, or loans take one week or more to fund. A lender may also fall into this category if it discloses little information about its products on its website.
Customer experience (10%)
- High: The lender has customer support available through multiple channels (phone, email, chat) and has a mobile app with an average rating of at least 4.5 stars. Lenders in this category generally receive above-average customer reviews.
- Medium: Lenders that receive a medium score have live customer service reps, but availability may be limited compared to top-scoring lenders. For example, phone support may not be available outside of regular business hours. A lender can also fall into this category if it has widely available customer service but its mobile app receives ratings lower than 4.5 stats on average. Lenders that fall into this category receive at least average customer reviews.
- Low: Low-scoring lenders have limited options for contacting human customer representatives and/or have a poorly rated mobile app. A lender may fall into this category if it’s rated poorly compared to other financial institutions.
Our credit card ratings methodology
At Motley Fool Money, we rate personal loans on a five-star scale (1 = poor, 5 = best). Our rating criteria includes costs of borrowing and terms and repayment options, as well as accessibility, application process, and customer service.
Our highest-rated personal loans have:
- Low overall borrowing costs through competitive APRs, no prepayment penalties, and discounts for autopay or banking relationships
- Flexible terms and loan amounts ranging from as little as $2,500 up to $50,000 or more, with repayment options from 24 to 60+ months
- Accessibility for a wide range of borrowers, including those with fair credit, varying incomes, or the option to apply with a co-borrower
- Fast, transparent application experiences with soft credit check prequalification, fully online applications, and funding in 1 day or less
- Top-tier customer support, highly rated mobile apps, and consistently strong user reviews
How our ratings translate to our Best Of lists
We combine the factors outlined above to ensure you’re getting the best loan recommendations on each of our pages. Our aim is to maintain a balanced best-of list featuring top-scoring personal loans from reputable brands.
It’s worth noting that the personal loans selected for any given best-of list won’t always be the loans with the highest ratings because we consider information specific to that category of products. For example, the best personal loans for debt consolidation or best personal loans for bad credit may not be the best personal loans overall.
Ordering within our lists is influenced by advertiser compensation, including featured placements at the top of a given list, but our product recommendations are NEVER influenced by advertisers. Our Ratings team operates totally independently of our Partnership team.
