Personal Loans for Business: Compare These Lenders

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Written by
Carol Pope
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Written by
Tara Mastroeni
Updated July 31, 2024
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Getting a personal loan for business use can be risky, but they are usually easier to qualify for than business loans.

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Personal loans for business at a glance

Best Egg: Best for secured loans

7.99% - 35.99%

36 to 84 months

$2,000 - $50,000

580

0.99% - 9.99%

Pros
  • APR discount of up to 20% for using your home’s fixtures as collateral
  • Can change your payment due date twice during the life of your loan
  • May get your loan the next business day
Cons
  • Must be a homeowner with equity to qualify (but renters can apply for an unsecured loan instead)
  • Best Egg’s mobile app only applies to its credit cards
  • Best Egg will put a lien on your home and can repossess your fixtures if you don’t pay

What to know

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Best Egg offers unsecured loans, but its secured loans are especially unique. Instead of putting your home itself on the line (like you would with a home equity loan), you’ll use your home’s permanent fixtures as collateral. Examples of permanent fixtures are bathroom vanities or kitchen cabinets.

However, secured loans can be risky. If you don’t pay back what you borrowed, Best Egg can repossess your fixtures. Best Egg will also put a lien on your home, making it complicated if you want to sell it before you’ve paid your loan in full.

Read our full Best Egg personal loan review.

How to qualify

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Unlike with most secured loans, you don’t need to get your collateral appraised. Instead, Best Egg considers your credit history and home equity, not the value of your property, to ensure you qualify. You must also meet the following qualifications:

  • Citizenship status: Be a U.S. citizen or permanent resident living in the U.S.
  • Age: Be the age of majority in your state
  • Administrative: Have a personal checking account, email address and physical address
  • Residence: Not live in the District of Columbia, Iowa, Vermont, West Virginia or U.S. Territories
  • Credit score: 580+
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Discover: Best for exceptional customer service

7.99% - 24.99%

36 to 84 months

$2,500 - $40,000

720

None

Pros
  • Repayment assistance programs available in case of financial hardship
  • Rated 4.9/5.0 stars by LendingTree users
  • Maximum APR caps at 24.99%
Cons
  • Requires good credit and a moderate income
  • Can only borrow up to $40,000, which might not provide the business funding you need
  • Charges $39 for late payments

What to know

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No one takes out a personal loan with the intention of falling behind, but life happens. Discover has three repayment options that can help get you back on track. You could defer (or put off) some of your payments, temporarily reduce them or extend your loan term.

Keep in mind, though, that the longer you take to pay off your loan, the more overall interest you’ll probably pay. Use a personal loan calculator to see how these loan modifications might impact your bottom line.

Read our full Discover personal loan review.

How to qualify

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You must meet the following requirements to qualify for a loan with Discover:

  • Age: Be at least 18 years old
  • Citizenship status: Have a valid Social Security number
  • Income: Make at least $40,000 per year
  • Administrative: Have a valid address and working email address and be able to complete the application online
  • Credit score: 720+
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LightStream: Best for large loans

7.49% - 25.29% (with autopay)

24 to 84 months

Loan Term Disclosure

Your 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 $25,000 loan at 7.49% APR with a term of 3 years would result in 36 monthly payments of $777.54. © 2024 Truist Financial Corporation. Truist, LightStream and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.

$5,000 - $100,000

Not specified

None

Pros
  • Can borrow up to $100,000, which could cover bigger business expenses
  • No fees whatsoever
  • May beat a competitor’s offer if you get a lower rate elsewhere
Cons
  • Can be hard to qualify for
  • No live chat
  • Can’t check rates without dinging credit

What to know

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You could borrow up to $100,000 with LightStream, and best of all, it doesn’t charge an origination fee. Skipping an origination fee on a large loan could save you thousands of dollars. LightStream’s 84-month loan term may also give you ample time to pay back what you borrow.

But unlike the other lenders on this list, LightStream doesn’t offer prequalification. In other words, you’ll have to agree to a hard credit pull to see if you’re eligible and what kind of interest rates you might get.

Read our full LightStream personal loan review.

How to qualify

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LightStream doesn’t specify its minimum credit score requirements, but it only accepts borrowers with good to excellent credit. A good FICO score starts at 670. Aside from credit score, LightStream tends to favor borrowers with:

  • A positive payment and credit history with a variety of accounts (credit cards, loans and the like)
  • Retirement assets, a healthy savings account and investments
  • Enough income to cover their debt and other living expenses
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Rocket Loans: Best for fair-credit borrowers

8.99% - 29.99% (with autopay)

36 or 60 months

$2,000 - $45,000

640

Up to 9.00%

Pros
  • Competitive rates for fair credit
  • Quick online application and fast funding
  • Lower annual income requirements
Cons
  • Not the lowest rates if you have excellent credit
  • Only two loan repayment terms to choose from
  • Mobile app applies to Rocket’s mortgages only, not personal loans

What to know

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Many lenders that offer fair-credit loans charge a maximum annual percentage rate (APR) of 35.99%. Rocket Loans, on the other hand, caps its rates at 29.99%. To illustrate, if you took out a $20,000 loan with a 29.99% APR and a five-year term, your monthly payment would be about $647 a month. At 35.99%, you’d pay about $722 a month, a difference of around $75.

Still, people with credit scores in the mid-700s and beyond might find better rates somewhere else. Rocket Loans’ minimum APR is on the higher end.

Read our full Rocket Loans personal loan review.

How to qualify

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Rocket Loans asks that its borrowers meet the following eligibility criteria:

  • Age: Must be at least 18 years old
  • Citizenship status: Must be a permanent citizen of the U.S.
  • Income: Must make annual income of at least $24,000
  • Residency: Cannot reside in West Virginia, Nevada or Idaho
  • Credit score: 640+
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Upgrade: Best for small loans

9.99% - 35.99% (with discounts)

24 to 84 months

$1,000 - $50,000

580

1.85% - 9.99%

Pros
  • Borrow as little as $1,000
  • Can apply with another person to boost approval odds
  • Offers secured and unsecured loans (many lenders only offer unsecured)
Cons
  • Mandatory origination fee
  • Online chat is only available after you’ve gotten your loan and is not for application questions
  • Can’t take advantage of all discounts unless you’re taking out a debt consolidation loan

What to know

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Small business owners looking for startup capital might want to consider loan marketplace Upgrade. It allows you to borrow as little as $1,000, and you don’t need perfect credit to qualify. Plus, if someone with good credit is willing to go in on a joint loan, you could qualify for a lower rate.

Note that Upgrade charges an origination fee on every loan. Some lenders only charge an origination fee if you have so-so credit.

Read our full Upgrade personal loan review.

How to qualify

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To qualify for a personal loan from Upgrade, you must meet the following requirements:

  • Age: Be the age of majority in your state
  • Citizenship status: Be a U.S. citizen or permanent resident, or have a valid visa
  • Administrative: Have a valid email address and verifiable bank account information
  • Credit score: 580+
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Upstart: Best for bad-credit borrowers

7.80% - 35.99%

36 or 60 months

$1,000 - $50,000

300

0.00% - 12.00%

Pros
  • One of the lowest credit score requirements around
  • Don’t always need credit to qualify
  • Can compare multiple offers at once
Cons
  • Potential for high origination fee
  • Only offers two different loan terms
  • Mobile app only available to Apple users

What to know

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Upstart connects potential borrowers with its partner lenders. Some of these partners are willing to work with those with bad credit. Uniquely, college students and graduates can still qualify with no credit.

Upstart loans don’t always come cheap, though. You could end up with a double-digit origination fee and an APR of 35.99%. Choose Upstart’s 36-month loan term to cut down on the overall interest you’ll pay.

Read our full Upstart personal loan review.

How to qualify

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To qualify for a loan through Upstart, borrowers must meet the following requirements:

  • Age: Be 18 years or older
  • Identity: Have a verifiable name, date of birth and Social Security number
  • Income: Make at least $12,000 per year
  • Employment: Have a stable job, a job offer starting within six months or another source of income
  • Administrative: Have a working email address and bank account
  • Other history: No bankruptcies in the last year, fewer than six inquiries on your credit report in the last six months and no delinquent accounts
  • Credit score: 300+
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What is a personal loan for business?

A personal loan for business is simply a personal loan that’s used to fund business expenses. Personal loans come as a lump sum of cash, which you will pay back in equal monthly installments.

Personal loans tend to be easier to qualify for than traditional small business loans. Your ability to get a personal loan only depends on your own credit factors, like your FICO score and your debt-to-income (DTI) ratio. Your DTI ratio measures how much debt you have compared to how much money you make.

When you apply for a business loan, the lender will also review your business’s financial health as well as yours. It will consider things like how long you’ve been in business, your revenue and your business credit score.

Still, getting a personal loan for business has downsides. One of the biggest is liability. If you don’t pay back your personal loan, your credit score will tank. With a traditional business loan, liability may only fall on the business itself, shielding your personal credit score.

On this page

Personal loans vs. business loans

Lenders set their own eligibility requirements, loan amounts and loan terms. Even so, the information below is a good launching point when comparing your loan options.

Business loanPersonal loan for business
What is it?Loans that are specifically designed for business expenses. Examples here are small business administration (SBA loans) and equipment loans.A personal loan that you use for business purposes.
Common eligibility requirements A business credit score of at least 80 for the best rates
 A solid personal credit score
 $36,000 or more in annual revenue
 At least six months’ time in business
 A workable business plan and balance sheet
 Personal and business tax returns
 Articles of incorporation
 Collateral, in some cases		 Might qualify with at least fair credit (580+), but need at least good credit (670+) for affordable rates
 DTI ratio below 36%
 Several years of positive payment history on your credit cards and other installment loans
 Regular source of income
Key takeaways Can shield you from personal liability if you can’t repay
 Tend to have lower rates, and interest is usually tax deductible
 Offers larger loan amounts and in some cases, longer repayment terms
 Helps you build business credit
 Longer application process and tougher eligibility requirements		 Interest may be tax deductible as long as you use the loan for business purposes
 You may qualify with bad credit, but prepare to pay an APR of 35.99% (or higher)
 Smaller loan sizes might not meet your needs
 Has no impact on your business credit
 Application process is generally quick, and some lenders can provide same-day funding

When could getting a personal loan for your business make sense?

  • You’re a new business owner or founding a startup. You might not qualify for a business loan if you’ve been operating for a short time and/or you don’t bring in a lot of revenue.
  • You have good personal credit. Even though it’s generally easier to get approved for a personal loan than a business loan, you’ll still want good credit. Personal loans usually have lower APRs than credit cards, but only for people who have good to excellent credit.
  • You know you can repay your loan. Defaulting on a personal loan will have a disastrous effect on your personal credit score.

When could a business loan be a better option?

  • You’re running a successful, longstanding business. Business loans usually have lower rates than personal loans, and they provide more money, too. They’re also harder to qualify for. You’ll have to provide a lot of documentation to prove your business is capable of paying back the loan.
  • You want extra liability protection. Your personal credit score might not be affected if you can’t pay your business loan.
  • You need a loan for a specific business purpose. Some types of business loans are better for meeting specific business-related needs. For instance, if you need to buy a forklift, business equipment financing might be a good fit.

How to get a personal loan for your business

Applying for a personal loan is straightforward. Here’s what you can expect:

  1. Check your credit score: Get your free credit score with LendingTree Spring. Your credit score will help you figure out what lenders you could qualify for and whether your offers are competitive. If your score is on the lower end, consider working to improve your score before applying to get the best possible rate.
  2. Get prequalified: Prequalification allows you to see estimated rates and terms without impacting your credit score. Try to get at least three offers. According to a LendingTree study, borrowers who compared at least three offers could save an average of $2,516 over the life of their loan.

    Compare Personal Loan Offers
  3. Formally apply for the loan: After you’ve picked the best lender for you, the next step is to formally apply for the loan. In most cases, this will involve filling out an online application and uploading documents (more on that next).
  4. Provide supporting documentation: Your lender is likely going to want to verify the information you provided on your application. Typically, it will perform a hard credit pull and ask you to provide documents like your W-2 and government-issued ID. Find these ahead of time so they’re ready to go when you apply.
  5. Close on the loan: Once the lender approves your loan, read over the paperwork and sign on the dotted line. From there, the lender will send you your funds (usually by direct deposit).

How to compare personal loans for business

Once you’ve gotten a handful of loan offers, compare them so you can find the best deal.

APR: Your annual percentage rate tells you how much your loan will cost you, including interest and fees. The higher this percentage, the more expensive the loan.

Fees: The most common personal loan fees you’ll see are origination fees, late payment fees and returned payment fees. An origination fee is an upfront fee that the lender will deduct from your loan before sending you your money. Some lenders only charge these if you have rocky credit. Others apply them to every loan.

Loan term: Your loan term is how long it will take to repay your loan in full if you stick to your repayment schedule. With a short-term loan, you’ll likely pay less interest overall, but your monthly payment will probably be higher. Long-term loans usually offer more affordable monthly payments, but you’ll likely pay more interest over time.

Funding time: The funding timeline tells you how long it will take to receive your funds. Some lenders can offer quick loans with same-day funding, while others may require a few business days.

Lender perks: Some lenders may also offer perks, such as free credit monitoring, live chat or zero-fee loans. Outside of rates, think about what’s important to you and seek out lenders that can accommodate.

How we chose the best personal loans for business

We reviewed more than 32 lenders to determine the overall best six personal loans for business. To make our list, lenders must offer personal loans for business with competitive APRs. From there, we prioritize lenders based on the following factors:

  • Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
  • Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

Frequently asked questions

Usually, but not all lenders offer personal loans for small businesses. If a lender lets you use a personal loan for business, you’ll have to take it out in your name, not your business’s. You can usually find a lender’s loan restrictions on its website.

Personal loan interest is usually a tax deduction if you use it toward business expenses. That said, it’s a good idea to verify your returns with a professional before filing.

Personal loans are often easier to qualify for than small business loans, which may be beneficial to some borrowers. Yet, they require the business owner to accept personal responsibility for paying back the loan. That means your personal credit score is on the line if you make late payments or default.