Why You Can Trust the MarketWatch Guides Team
Here’s a breakdown of how we reviewed and rated top personal loan providers
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Providers RatedOur team researched more than two dozen of the country’s most popular personal lenders, including large online companies like SoFi, big banks like Wells Fargo, and peer-to-peer lenders like Upstart.
660
Data Points AnalyzedTo create our rating system, we analyzed each personal loan company’s disclosures, licensing documents, marketing materials, sample loan agreements and websites to understand their loan offerings and terms.
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Loan Features TrackedOur team regularly collects data on each company’s loan offerings and terms, such as minimum and maximum loan amounts, origination fees and discounts.
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Professionals ConsultedBefore we began our research process, we consulted with financial advisors and industry experts to ensure our evaluations covered the banking product aspects that matter most to potential customers.
The Best Lenders for a $5,000 Personal Loan
If you’re shopping for a $5,000 personal loan, it’s best to shop around to find the best loan terms and features for your needs. Here are the top recommendations from the MarketWatch Guides team.
- LightStream: Our top pick
- SoFi: Best customer service
- PenFed: Best for small loans
- Discover: Best for low rates
- Upstart: Best for bad credit
- U.S. Bank: Best for bank switchers
- Upgrade: Best discounts
- Wells Fargo: Best for in-person service
LightStream
Our Top Pick
5.0
Our Rating
Affordability: 33/35
Loan Features: 29/35
Customer Experience: 18/20
Company Reputation: 10/10
Interest Rate (APR)7.49% to 25.49%Term Options24 months to 144 monthsLoan Size Offered$5k to $100k
LightStream Overview
LightStream offers personal loans for different purposes, including debt consolidation, home improvement and auto financing. This lender also has a fast turnaround time with funds available the same day if approved before 2:30 p.m. EST. LightStream also doesn’t charge any prepayment or origination fees. Prepayment fees are charged if you pay off your loan early, while origination fees refer to money deducted from the amount you receive on the loan.
Pros & Cons
Pros No fees Same-day funding possible Interest rate discount for autopay Cons No option to prequalify on the website Lower credit scores may not qualify No co-signer option, but co-applicants are allowed
LightStream Eligibility Requirements
LightStream specializes in providing loans for borrowers with good to excellent credit. However, having good credit doesn’t guarantee you’ll be approved for a loan. LightStream also looks at other factors like your income, debt-to-income (DTI) ratio and payment history to determine if you qualify. Your DTI measures your monthly income against your existing loan payments, like an auto loan or student loan.
SoFi
Best Customer Service
4.9
Our Rating
Affordability: 30/35
Loan Features: 29/35
Customer Experience: 19/20
Company Reputation: 10/10
Interest Rate (APR)8.99% to 29.49%Term Options24 months to 84 monthsLoan Size Offered$5k to $100k
SoFi Overview
SoFi is an online lender that offers personal loans that start at a low interest rate. SoFi also offers same-day loan funding and doesn’t charge origination fees, application fees or prepayment penalties. Customer support is available seven days a week by phone or online chat support.
Pros & Cons
Pros Lower starting interest rate than some lenders Can get prequalified online Same-day funding available Cons Lower credit scores may not qualify No co-signer option but co-applicants are allowed Won’t qualify for unemployment protection program if your loan is not in good standing
SoFi Eligibility Requirements
To qualify for a personal loan, you must be a U.S. citizen, a permanent or non-permanent resident and at least 18 years old. SoFi doesn’t disclose specific credit score requirements on its website, but it does typically require you to have good to excellent credit and demonstrate a history of financial responsibility, including paying your bills on time. SoFi also looks at your monthly income and professional experience when considering your loan application.
PenFed Credit Union
Best for Small Loans
4.8
Our Rating
Affordability: 35/35
Loan Features: 24/35
Customer Experience: 17/20
Company Reputation: 10/10
Interest Rate (APR)7.99% to 17.99%Term Options12 months to 60 monthsLoan Size Offered$600 to $50k
PenFed Overview
PenFed is a credit union that offers personal loans with a competitive interest rate and flexible terms of up to 60 months. You can get prequalified online and check your personal loan rate without impacting your credit score. If approved, you can receive your loan funds in one to two business days for an ACH transfer or direct deposit and within five to seven days by check. PenFed doesn’t charge origination fees or prepayment penalties and doesn’t have any hidden fees.
Pros & Cons
Pros No hidden fees Get preapproved online Lower interest rates than many competitors Cons Must be a current member or become a member to accept your loan No same-day funding Late fee for payments made more than five days after due date
PenFed Eligibility Requirements
While you don’t need to become a PenFed member to apply for a loan, you will need to become a member if you get approved and want to accept your loan terms. You will also need a form of ID and proof of income, such as recent pay stubs, tax returns or bank statements.
Discover
Best for Low Rates
4.6
Our Rating
Affordability: 35/35
Loan Features: 21/35
Customer Experience: 16/20
Company Reputation: 10/10
Interest Rate (APR)7.99% to 24.99%Term Options36 months to 84 monthsLoan Size Offered$2.5k to $40k
Discover Overview
While well-known for its credit cards, Discover also offers personal loans.Discover’s personal loansdo not have any upfront fees and come with low interest rates and flexible repayment terms of up to seven years. You can receive your funds as early as the next business day. Discover also allows you to prequalify for a loan and estimate your monthly payment online.
Pros & Cons
Pros Low fees and flexible repayment terms Can receive funds quickly Able to prequalify online Cons No co-borrowing option Late fee of $35 may apply No same-day funding option
Discover Eligibility Requirements
Discover doesn’t disclose any specific credit score requirements on its website. In order to be eligible for a personal loan, you must be at least 18 years old and a U.S. citizen or permanent resident. You’ll also need a physical address and a minimum household income of $25,000.
Upstart
Best for Bad Credit
4.4
Our Rating
Affordability: 28/35
Loan Features: 25/35
Customer Experience: 17/20
Company Reputation: 10/10
Upstart Overview
Upstart is an online loan marketplace that considers alternative credit data, such as education* and employment history, to help determine your creditworthiness. Upstart offers personal loans with terms of up to five years** and no prepayment penalties. You can check your rate online in minutes, and if approved, Upstart can send the funds as early as one business day.
Pros & Cons
Pros Considers lower credit scores No prepayment penalties Check your rate and get preapproved online Cons Higher maximum interest rates than many lenders, as high as 35.99% APR** Interest rates vary by state Shorter maximum loan terms than some lenders
Upstart Eligibility Requirements
Upstart does not have any minimum credit score requirements. However, it will consider your current credit in addition to your income, education and employment.
U.S. Bank
Best for Bank Switchers
4.4
Our Rating
Affordability: 34/35
Loan Features: 28/35
Customer Experience: 12/20
Company Reputation: 5/10
Interest Rate (APR)8.74% to 24.99%Term Options12 months to 60 months (for non-customers)Size Offered$1k to $50k
U.S. Bank Overview
U.S. Bank offers personal loans of up to $50,000 for account holders and up to $25,000 for non-customers. If you only need a $5,000 loan, U.S. Bank is a solid option that has low interest rates to help you consolidate debt and pay for unexpected expenses. U.S. Bank doesn’t have any loan origination fees, but there are strict credit score requirements, and some loan products are not available in all states.
Pros & Cons
Pros Funds can be disbursed within hours for current customers. No origination fees Repayment terms range from 60 to 84 months Cons Limited loan options if you’re not a customer May need to visit a local branch to close your loan (if not a customer) Higher credit score requirements for non-customers
U.S. Bank Eligibility Requirements
To qualify for a personal loan, U.S. Bank requires that applicants have a minimum credit score of 660 if they are a customer of the bank. Non-customers must have a credit score of at least 720 to qualify.
Upgrade
Best Discounts
4.3
Our Rating
Affordability: 22/35
Loan Features: 28/35
Customer Experience: 18/20
Company Reputation: 10/10
Interest Rate (APR)8.49% to 35.99%Term Options24 months to 84 monthsLoan Size Offered$1k to $50k
Upgrade Overview
Upgrade offers fixed-rate personal loans of up to $50,000. You can prequalify online and receive your loan funds within one business day in most cases. Upgrade doesn’t have prepayment penalties, but it does have an origination fee ranging from 1.85% to 9.99%. You can receive a slight interest rate reduction when you set up automatic payments. Upgrade also offers secured loan options where you can use your car as collateral and potentially secure further discounts.
Pros & Cons
Pros Get prequalified online Fast funding Accepts co-borrowers Cons Origination fee applies Lowest interest rates reserved for debt consolidation loans High maximum interest rate compared to competitors
Upgrade Eligibility Requirements
To be eligible for a personal loan with Upgrade, you must be at least 18 years old (or 19 in select states), have a verifiable bank account and have a valid email address. Upgrade will also consider your credit score and payment history.
Wells Fargo
Best for In-Person Service
4.3
Our Rating
Affordability: 35/35
Loan Features: 26/35
Customer Experience: 17/20
Company Reputation: 0/10
Interest Rate (APR)7.49% to 23.24%Term Options12 months to 84 monthsLoan Size Offered$3k to $100k
Wells Fargo Overview
Wells Fargooffers personal loans for major expenses and doesn’t charge any origination fees, closing fees or prepayment penalties. Only current bank customers can submit a form online to prequalify and get a quote on a loan. Once you’re approved, Wells Fargo can send your loan funds as early as the next business day.
Pros & Cons
Pros No fees or prepayment penalty Same-day credit decisions available Flexible repayment terms of up to seven years Cons Must be a current customer to get prequalified Late fees may apply Interest rate reduction only available to Wells Fargo customers
Wells Fargo Eligibility Requirements
While Wells Fargo doesn’t disclose a specific minimum credit score requirement on its website, personal loan eligibility is based on your credit score and loan details, such as the amount financed and the loan term. To apply, you’ll need your Social Security number, proof of income and proof of your monthly mortgage or rent payment.
How To Get a $5,000 Personal Loan
You can apply for a $5,000 personal loan with just a few steps. Depending on your lender, you may be able to complete the entire application process online and upload your supporting loan documents.
Applying for a $5,000 Personal Loan
To get a $5,000 personal loan, you’ll generally take the following steps:
- Check your credit score: Lenders may require a minimum credit score for approval, so it’s important to check your credit report. A good credit score can help you secure a lower interest rate and better loan terms. A good to very good credit score ranges from 670 to 799,according to FICO.
- Compare lenders: Once you have an idea of what your credit score range is, you can start considering which lenders you want to use. Shopping around and comparing quotes from a few lenders can help you narrow down the best loan option for your situation. Many lenders allow you to get prequalified online with no impact to your credit score.
- Choose a lender and apply:Once you’ve narrowed down the lender you’d like to use, you will need to submit an official application. The application will be more detailed than the prequalification process, and, at this time, you could get a hard inquiry on your credit report since the lender needs to check your credit score.
- Submit supporting documents: Once you submit your application, it will be processed, and the lender may require supporting documents, such as recent pay stubs, previous tax returns, proof of address and your employer’s information.
- Review loan terms and receive funding:If your loan is approved, you’ll receive the final loan terms to review before receiving your funds. It’s important to make sure you carefully review your loan agreement and understand all the terms before accepting your loan. Each lender has its own timeline for approving your loan and providing the funds, and how you choose to receive the money can further alter the timeline. However, some lenders provide same-day approval and can send your funds as soon as the same day or next business day.
Requirements for a $5,000 Personal Loan
Each lender has its own eligibility standards, so the requirements for a personal loan can vary. In general, lenders will typically check your income, credit score, payment history and DTI ratio.
Some lenders may have a strict minimum credit score requirement, while others may be willing to approve you with a lower credit score. You will also need to have a source of income and a history of paying bills and past debts on time. Your DTI ratio is a percentage that represents your total monthly debt payments divided by your gross monthly income.
A higher DTI ratio means that more of your income is already going toward existing debt payments and that a loan may be risky. A lower DTI ratio indicates that you can manage to take on another debt and afford to repay it along with your other existing expenses.
Alternatives to a $5,000 Personal Loan
A personal loan isn’t always the best way to obtain the funds you need. If you don’t qualify for a personal loan or just want to weigh your options, here are some alternatives to consider.
Home Equity Line of Credit
A home equity line of credit (HELOC) is a revolving line of creditthat you can get by borrowing against the equity in your home. This is a secured loan that uses your home as collateral. HELOCs usually have a variable interest rate, and you can draw from your line of credit for a specific time frame, known as the draw period. After the draw period is over, you will need to start repaying the amount you borrowed.
Due to the variable interest rate, your payments may vary and be unpredictable. HELOCs also require upfront fees, like an appraisal fee, an application fee and closing costs. If you need to borrow a lump sum of money, you may prefer a home equity loan to a HELOC.
Home Equity Loans
A home equity loan is similar to a HELOC since it’s a secured loan that lets you borrow from the equity in your home. With a home equity loan, however, you receive your loan as a lump sum and must pay monthly installments to repay the loan amount plus interest. Home equity loans usually have a fixed interest rate, so your loan payments will be the same each month.
Home equity loan lenders may charge upfront fees, such as an appraisal fee for your home and closing costs. Repayment terms are longer than a personal loan and generally range from five to 20 years or longer. Like a HELOC, if you fail to repay your loan, the bank can seize your home.
Peer-to-Peer Lending
Peer-to-peer (P2P) lending platforms cut out the middleman and allow you to borrow money directly from investors. P2P lending companies present opportunities for you to borrow amounts similar to what you could borrow with a personal loan, and you can use the money for home improvements, debt consolidation or unexpected costs.
Some peer lending platforms have more lenient requirements for credit scores and allow you to check your rate or get prequalified online without impacting your credit score. While P2P loans may be easier to qualify for with fair or bad credit, they can also have fees and high interest rates.
The Bottom Line
There are myriad options for a $5,000 loan among various banks, credit unions and online lenders. While approval for a personal loan isn’t guaranteed, it’s best to shop around and compare rates and loan offers for such a loan before narrowing down your decision. This can help ensure a lower interest rate, fewer fees and better loan terms overall.
While $5,000 may be a relatively small amount to borrow, it’s still important that you calculate or estimate your monthly payment to make sure you can comfortably afford to repay your loan each month. You may consider speaking with a financial adviser to weigh your options more closely and discuss whether a personal loan is best for your unique situation.
Frequently Asked Questions About $5,000 Personal Loans
The amount of time it takes to pay off a $5,000 loan can vary depending on your interest rate and repayment term. When you take out a personal loan and choose your term, you’ll see how much your minimum monthly payment is. Most of the best personal loan lenders offer terms ranging from five to seven years, but you can also choose to make extra payments to pay your loan off early. Consider using a loan calculator and plug in your specific loan details to see how long it might take you to pay off a $5,000 loan.
Credit score requirements can vary depending on the lender. Some lenders require a good or excellent credit score, while others may still approve you for a personal loan with a lower credit score. Keep in mind that if you have a fair or poor credit score and get approved for a personal loan, you could receive a higher interest rate and pay more overall during the life of your loan.
The maximum amount you can borrow for a personal loan will depend on which lender you choose. Some lenders offer loans for as much as $100,000 or $200,000. In order to borrow this much money, you’ll need to meet certain credit, income and DTI ratio requirements.
The easiest loan to get approved for will depend on your personal situation and credit score range. While banks and credit unions tend to offer several personal loan options, you may want to shop around through an online lender marketplace to compare loan rates and terms. If you can get preapproved early on, this can improve your chances of getting approved for a personal loan when you eventually submit all the application details.
Methodology: Our System for Ranking the Best Personal Loans
Our team put together a comprehensive100-point rating systemto evaluate personal loan companies. We gathered data points from 28 of the most prominent lenders in the U.S. and analyzed disclosures, licensing documents, sample loan agreements, marketing materials and websites. Our rating system takes into account four broad categories.
- Affordability(35%): How expensive each company’s loans are to pay back
- Loan features(35%): The breadth of loan terms and features available to prospective customers
- Customer experience(20%): Ease of application, prequalification and customer service interactions
- Company reputation(10%): An exploration of lenders’ Better Business Bureau files, customer reviews and outstanding regulatory actions
Our top-rated lenders may not be the best fit for all borrowers. To learn more,read our full personal loans methodology.
Editor’s Note: Before making significant financial decisions, consider reviewing your options with someoneyou trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.
Choncé MaddoxContributing Writer
Choncé is a freelance personal finance writer who enjoys writing about mortgages, credit cards, loans and helping people achieve financial wellness.
David GregoryEditor
David Gregory is a sharp-eyed content editor with more than a decade of experience in the financial services industry. Before that, he worked as a child and family therapist until his love of adventure caused him to quit his job, give away everything he owned and head off to Asia. David spent years working and traveling through numerous countries before returning home with his wife and two kids in tow. His love of reading led him to seek out training at UC San Diego to become an editor, and he has been working as an editor ever since. When he’s not working, he’s either reading a book, riding his bicycle or playing a board game with his kids (and sometimes with his wife).
