Best Personal Loans in Alabama for 2024
Updated: April 11, 2024
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First Tech and PenFed are the best personal loan providers in Alabama, with MoneyGeek scores of 97 and 96, respectively. First Tech excels in customer support and low costs, while PenFed is praised for flexible terms and competitive rates.
Before you choose a loan, consider your credit score, income history and debts compared to that income. These will affect the loan terms you get. The average credit score in Alabama is 692, based on 2023 Experian data. This means the average borrower might get a loan with good terms because lenders consider a score above 700 to be solid.
MoneyGeek's ranking considers each lender's honesty, costs, credit score needs, and flexible terms. This helps you find a lender that fits your financial situation.
- First Tech
- 97MoneyGeek Score
- 9.29% to 14.09%APR Range
- UndisclosedMinimum Credit Score
- $500 to $50,000Loan Amount Range
- 24 to 84 monthsRepayment Terms
First Tech is MoneyGeek's top choice for personal loans in Alabama, boasting a score of 97 out of 100. The lender's APR range is 9.29% to 14.09%, which is notably competitive, especially compared to other lenders' higher upper limits. With flexible repayment terms stretching from 24 to 84 months, customers are afforded a variety of options to suit their financial circumstances. First Tech particularly excels in offering transparent and thorough information upfront, as well as competitive rates and fees, setting a high bar for the personal loan market in the state.
Pros
- Insured by the National Credit Union Administration (NCUA)
- Provides detailed APR data for a variety of loan terms
- Lots of educational resources available for consumers
Cons
- Need to be a member to apply
Overall Best Personal Loan Lender in Alabama
- PenFed
- 96MoneyGeek Score
- 7.99% to 17.99%APR Range
- UndisclosedMinimum Credit Score
- Up to $50,000Loan Amount Range
- Up to 60 monthsRepayment Terms
PenFed Credit Union is MoneyGeek's runner-up for best personal loan lender in Alabama with a score of 96 out of 100. Offering an APR range of 7.99% to 17.99%, which averages lower than many competitors, PenFed stands out in loan term flexibility, rates and fees. While repayment periods are up to 60 months, aligning with the needs of diverse borrowers, the lender is also recognized for its up-front transparency and solid reputation.
Pros
- Offers some of the lowest APRs available
- No origination fee
- Insured by the National Credit Union Administration (NCUA)
Cons
- Need to be a member to apply
Runner-Up for Best Personal Loan Lender in Alabama
The amount of monthly debt payments you have relative to your monthly gross income is called your debt-to-income ratio, or DTI.
Most lenders prefer to see a debt-to-income ratio of 35% to 40% or below for secured loans and 40% to 45% or below for unsecured personal loans. Debt includes items like mortgages, car loans, credit cards, and existing personal loans. A debt-to-income ratio above 50% is considered high, so approval may be more difficult, or your loan may come with higher interest rates. — Alvin Yam, CFP®
Calculate Your Monthly Loan Payment
According to our analysis, lenders in Alabama offer personal loan products averaging about 49 months. Use our personal loan calculator to help gauge the financial implications of a loan before applying, as it provides the ability to estimate monthly payments and the total cost of the loan over its lifetime based on your specific loan conditions.
- Happy Money
- 93MoneyGeek Score
- 11.72% to 17.99%APR Range
- 640Minimum Credit Score
- $5,000 to $40,000Loan Amount Range
- 24 to 60 monthsRepayment Terms
Happy Money is MoneyGeek's pick for the best personal loan provider for borrowers with low credit in Alabama, with a MoneyGeek score of 93 out of 100. Despite not being a traditional lender, it connects borrowers with a network of institutions offering competitive rates. Happy Money provides personal loan APRs ranging from 11.72% to 17.99%, lower than the average considered by MoneyGeek, with a minimum credit score requirement of 640. It particularly stands out for its high customer service quality and exceptional transparency in business operations, facilitating a smoother borrowing process.
Pros
- Works with 10 federally insured lenders to originate all loans
- Transparent eligibility requirements, including credit score minimum
- No application fee
Cons
- The lenders they work with charge an origination fee
- Longer time to wait for loan approval compared to other lenders analyzed
Best Personal Loan Lender in Alabama for Bad Credit
- Truist
- 96MoneyGeek Score
- 8.74% to 17.39%APR Range
- UndisclosedMinimum Credit Score
- Starting from $3,500Loan Amount Range
- 24 to 60 months Repayment Terms
Truist is MoneyGeek's pick for the best personal loan provider for debt consolidation in Alabama, with a score of 96 out of 100. MoneyGeek's analysis recognizes Truist for its competitive APR range of 8.74% to 17.39%, which positions it well among other lenders. Truist particularly excels in areas related to application processing, with an efficient approval experience, as well as offering interest rates and fees that are among the best. For borrowers in Alabama seeking favorable terms and straightforward processing for debt consolidation, Truist stands out as the recommended choice.
Pros
- FDIC insured
- No origination fees
Cons
- High minimum loan requirement compared to competitors
- Difficult to qualify for the lowest rates
Best Personal Loan Lender in Alabama for Debt Consolidation
Interest on personal loans is generally not tax deductible as personal loans are considered consumer debt. But there are some exceptions where the interest may qualify:
- When consolidating high-interest qualifying debts like credit cards or student loans, if used to pay off those debts.
- If used for home improvements that increase the home's value.
- If the loan proceeds can be demonstrated as used exclusively for business expenses or starting a business.
- In some cases, if the loan is used for investment purposes related to income-generating assets.
— Alvin Yam, CFP®
Impact of Credit Score on Loan Repayment in Alabama
It's important to consider your credit score, income and debt-to-income ratio, as these factors will largely determine your eligibility and the terms of a personal loan. MoneyGeek's ranking of the best personal loan lenders in the state also weighs transparency, lender reputation, APR ranges, minimum credit scores required for approval and the flexibility of loan terms.
Having a higher credit score can secure you more favorable APRs, so it may be a good idea to focus on improving your credit score prior to applying for a loan. Use the table below to see how your credit score could potentially affect your monthly loan payments.
This table offers an approximation of monthly payments, calculated using median personal loan interest rates typical for various credit score ranges. Please remember that these numbers are median estimates, provided for general guidance. They should not be taken as precise rates for everyone in each credit score category. Actual interest rates can differ due to lender-specific policies, prevailing market conditions and unique borrower profiles.
Pros and Cons of Personal Loans in Alabama
Personal loans consolidate high-interest debt and provide quick access to capital, often with lower interest rates than credit cards. They also grant borrowers the versatility to manage a variety of financial needs, from unexpected expenses to home improvements, with the potential to improve one's credit history when repaid responsibly.
Despite these advantages, there are potential drawbacks, such as origination fees or the risk of collateral loss with secured loans, which can introduce additional financial strain. For a good view on this matter, consider the pros and cons of personal loans.
FAQ About Personal Loans in Alabama
If you have questions about personal loans, MoneyGeek has answers to help you decide before applying for a loan.
The best lender in Alabama for personal loans is First Tech, with a MoneyGeek score of 97. The average APR for First Tech is 12%.
Personal loans in Alabama can be obtained from online lenders, banks and credit unions. Local credit unions such as Alabama Credit Union, Alabama Central Credit Union and MAX Credit Union offer personal loans for those who prefer in-person services.
LendingPoint offers the lowest starting APR in Alabama for personal loans at 7.99%. However, the best rates depend on individual financial circumstances and obtaining a low rate is often linked to having an excellent credit score.
In Alabama, you can use personal loans for various needs such as consolidating debt, covering medical expenses or for emergencies. However, they are typically not used for gambling or illegal activities.
When considering personal loans, be wary of extremely high APRs, a lack of transparency about the loan originator, negative customer reviews and red flags such as no requirement for identity or income verification.
Yes, but income level is just one factor. Lenders also evaluate your debt-to-income ratio, credit score, employment history and your overall credit history. Opening new lines of credit while seeking a loan could influence your application success.
sources
- Experian. "What is the Average Credit Score in the US?." Accessed April 6, 2024.
The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.
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