How We Review and Rate Personal Loan Lenders

Online Experience

This criterion rates the lender’s online presence, including website usefulness, ease of navigation, organization, design, and more. Our researchers rated each website using a 5-point scale. No lender earned a rating of 5, and just two scored a 4 (Discover and Happy Money); 42 lender websites earned a 3 rating. One lender’s website, Zable, earned a 1 rating. We then converted the results to a continuous scale, where a rating of 1 earned 0 points, and a rating of 4 earned 1 point. We weighted this criterion 2% of the total score.

Educational Resources

We evaluated the depth and breadth of the educational materials, planning guides, calculators, and other resources on lender websites. First, researchers rated each lender’s educational resources on a 5-point scale. Then, we converted the results to a continuous scale, with the lowest rating of 2 earning 0 points and the highest rating of 5, scored by Navy Federal Credit Union, earning 1 point. Thirty-six lenders scored a 3 or a 4. We weighted it 2% of the total score.

Pre-qualification

Pre-qualification allows borrowers to check rates without a hard credit check (and a hit to their credit scores). We scored this on a binary scale where lenders that offer pre-qualification scored 1 point, and lenders that do not scored 0 points. Forty of the 59 lenders we researched offer pre-qualification, including SoFi and Citibank. Among those that do not offer pre-qualification are LightStream and Old National Bank. This criterion was worth 8% of the total score.

Refinance Available

We scored this on a binary scale based on whether or not a lender will refinance a loan with a different rate or term, with “Yes” earning 1 point and “No” earning 0 points. Forty-eight of the 59 lenders we researched offer this feature, including Wells Fargo and Patelco Credit Union. Those that do not offer refinancing are U.S. Bank and Rocket Loans. We weighted this as 1% of the total score.

Creditor Direct Pay

For borrowers using a personal loan to consolidate more expensive debt, having the lender pay creditors directly can be more convenient. It can also result in reduced interest rates. We scored this on a binary scale: “Yes” earned 1 point, and “No” earned 0 points. Thirty-two of the 59 lenders we researched offer this service, including Discover. Lenders that do not offer this service include LightStream and American Express. We weighted this feature 1% of the total score.

Allows Co-Borrowers or Co-Signers

A co-borrower or co-signer can help a borrower meet lender underwriting requirements. We scored on a binary scale, with lenders that allow co-signers or co-borrowers scoring 1 point and lenders that do not scoring 0 points. Thirty-six of the 59 lenders we evaluated allow co-signers or co-borrowers, including LightStream and PenFed. Among those that do not are Discover and Wells Fargo. This criterion is worth 3% of the total score. 

Loyalty or Other Discounts Available

Many lenders offer discounts, such as loyalty discounts for existing customers (for example, Citibank shaves 0.25 percentage points off the APR for Citigold and Citi Priority customers) or repayment discounts for consistent loan repayment (for example, Patelco Credit Union discounts up to 1.5 percentage points off APR for borrowers with reliable payment histories). We scored this on a binary scale, with lenders that offer discounts earning 1 point and those that do not earning 0 points. This is worth 2% of the total score.

Reports to All Major Credit Bureaus

Most of the lenders in our database report to all three major credit bureaus (49 of the 59, including LightStream and SoFI), but not all do (for example, Patelco Credit Union). Consistent, timely loan repayment can help a borrower improve their credit. This was scored on a binary scale where lenders that report to all three bureaus earned 1 point, and those that do not earned 0 points. This criterion is worth 1% of the total score.

Hardship Assistance

We examined whether lenders offer relief for borrowers struggling to make mortgage payments. We scored this on a binary scale where lenders that offer such assistance earned 1 point and lenders who do not earned 0 points. Nearly all of the lenders we evaluated, 54 of 59, offer such assistance. This criterion is worth 1% of the total score.

Combined Customer Review Rating

We collected customer ratings of lenders from two third-party review sites: Trustpilot, and the Better Business Bureau (BBB). Since each lender had a different number of ratings at each site, we used weighted averaging combined with an exponential weighting model to create an aggregated customer review rating for each lender. This gave more confidence to ratings with higher numbers of raters. The following data points are included in this combined rating:

• Trustpilot Rating
• Number of Trustpilot Reviews
• BBB Rating
• Number of BBB Reviews

We converted our aggregated ratings to a continuous scale of 0 to 5. The lender with the highest aggregate customer rating is Upstart, with a rating of 4.9. The lender with the lowest combined consumer review rating is Patelco Credit Union, with a rating of 0.08. Aggregate customer ratings were then scored on a continuous scale between 0 and 1 to contribute to our star ratings, with higher ratings getting better scores. The combined customer review rating is weighted 2% of the total score.

Transparency

When contacted, some lenders were more forthcoming with information than others. We counted the instances of “not disclosed” in our database for each lender and scored the sum on a continuous scale, with 0 being the fewest (earning 1 point) and six being the most (earning 0 points). We recorded zero “not disclosed” data points for 41 lenders. This criterion is worth 1% of the total score.

Criteria Collected But Not Weighted and Scored

The following criteria were collected but not weighted and scored. Some were not weighted because they were collected for editorial richness, such as whether or not the lender has an online application process or a mobile app. Other features, such as third-party details from Trustpilot or Google Reviews, were not weighted individually but combined into an aggregated score.

Cost of Loan

• Autopay discount
• Minimum late fee

Loan Terms

• Automated approval process
• Minimum repayment terms

Borrowing Requirements

• Credit union
• State or federal charter (credit unions)
• Existing banking relationship
• Financial factors considered

Lender Features

• Online application
• Mobile app
• Year established
• Trustpilot rating
• Number of Trustpilot reviews
• Number of CFPB regulatory actions
• JD Power consumer lending ranking
• BBB rating
• BBB review rating
• Number of BBB reviews
• Chat function 

Articles That Use Our Methodology

Our research has appeared in dozens of personal loan roundups and reviews on Investopedia. You’ll find it in our roundups of the Best Personal Loans and the Best Personal Loans for Bad Credit. You’ll also find it in individual lender reviews, like our reviews of SoFi personal loans and Upgrade personal loans.

Meet the Personal Loans Reviews Team