Finding Personal Loans With Reward Programs

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Reviewed byAlvin Yam, CFP
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Updated: March 15, 2024

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A personal loan offers quick access to funds, which you can use for various purposes such as consolidating debt, financing a big purchase or covering unexpected expenses.

Some personal loans come with reward programs, making them a more attractive option for borrowers. However, they're not as common as rewards programs associated with credit cards. Usually, lenders that do offer rewards with personal loans provide benefits like interest rate reductions for certain behaviors or points redeemable for various rewards

By shopping around, you can select the right personal loan with a reward program that aligns with your financial needs and goals, ensuring you get the most out of the loan's benefits while managing your finances effectively.

Common Reward Programs for Personal Loans

Personal loan reward programs can vary significantly from one lender to another, each offering unique incentives designed to attract and retain borrowers. These rewards can enhance the loan's value for borrowers by providing tangible benefits for responsible loan management or for choosing specific features during the loan application process.


Always read the terms and conditions associated with any rewards program carefully. Some rewards, particularly cash back offers or points, may have specific requirements for eligibility, and interest rate reductions for automatic payments are usually contingent on maintaining those payments for the duration of the loan.


Remember that the availability of rewards programs and their specifics can change. It’s wise to continuously review your loan terms — don't just assume ongoing perks will stay the same, as lenders often update reward benefits. — Alvin Yam, CFP®

Benefits and Risks of Personal Loans With Reward Programs

Personal loans with reward programs can offer valuable perks that enhance the borrowing experience, but they also have potential drawbacks that could impact your financial health. You can determine whether this option aligns with your financial goals and needs by weighing the pros and cons.

Benefits of Personal Loans With Reward Programs
Risks of Personal Loans With Reward Programs

How to Choose the Right Personal Loan With a Reward Program

Choosing the right personal loan with a reward program can help you maximize the benefits while minimizing the costs and potential downsides. It involves understanding your financial situation, what you need the loan for and how a reward program can add value to your borrowing experience. Here's a step-by-step guide to help you make an informed decision:


Assess Your Financial Needs

Start by evaluating why you need the personal loan and how much you need to borrow. Consider your ability to repay the loan within the given term and how it fits into your overall financial plan. This step ensures you only borrow what is necessary, even if attractive rewards are available.


Research Available Reward Programs

Look into different lenders and the reward programs they offer with their loans. Compare the types of rewards (cash back, points, interest rate reductions, etc.), how you earn them and how you can redeem them. This process will help you identify which rewards align with your lifestyle and spending habits, offering the most value.


Compare Interest Rates and Fees

Even with reward programs, the cost of the loan is a critical factor. Compare interest rates and fees between different loans with reward programs to find the most competitive offer. Remember, a higher interest rate can quickly outweigh the benefits of any rewards.


Read the Terms and Conditions Carefully

Understanding the fine print of the reward program and the loan agreement is prudent. Pay attention to how rewards are accumulated and any restrictions or expiration dates. This ensures you know how to qualify for and maintain your rewards.


While a rewards program can add value to a personal loan, it shouldn't be the sole factor in your decision-making process. Prioritize finding a loan that offers the best terms for your financial situation, including the interest rate, loan term and monthly payment that best fits your budget.

Alternatives to Personal Loans With Reward Programs

Although personal loans with reward programs can offer added benefits, they might not always provide every borrower with the best value or terms. Considering other options ensures that you make the most financially sound decision, potentially saving money or finding more suitable terms for your situation.


FAQ About Personal Loans With Reward Programs

Navigating the world of personal loans with reward programs can be complex, sparking many questions from borrowers looking to understand how these financial products work and how they can benefit from them. Our answers to some frequently asked questions aim to demystify personal loans with reward programs.

Reward programs on personal loans work by rewarding the borrower for certain behaviors, such as making on-time payments or signing up for automatic payments. The specific rewards and how you earn them vary by lender but can include cash back, points toward purchases or travel rewards.

Not necessarily. While some personal loans with reward programs may have higher interest rates or fees to cover the cost of the rewards, this is not always the case. Compare the overall cost of different loans, including interest rates and fees, and any rewards' benefits.

It depends on the lender's specific reward program. Some programs may allow rewards to be redeemed for cash, while others might offer redemption options for gift cards, merchandise, travel or rewards you can apply to your loan balance.

No, not all lenders offer personal loans with reward programs. These types of loans are less common than other reward-bearing financial products like credit cards. It's helpful to research and find lenders that offer these programs.

When choosing a personal loan with a reward program, consider the type of rewards offered, how you earn them, the interest rate, fees, loan terms and how the rewards align with your financial goals and spending habits.

To maximize rewards, ensure you understand the reward program's terms, make payments on time and take advantage of any potential opportunities to earn rewards, such as signing up for automatic payments.

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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.

Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about our editorial policies and expert editorial team.