Ratings Methodologies for Personal Loans
NerdWallet’s overall ratings for personal loans are weighted averages of ratings in five major categories:
• Affordability
• Customer experience
• Underwriting and eligibility
• Loan flexibility
• Application process.
Data collection and review process
We survey more than 35 financial technology companies and financial institutions that offer personal loans in more than one state. These lenders include:
• The largest national banks based on asset volume.
• The largest credit unions based on search volume.
• The largest digital lenders and lending platforms based on search volume.
• The largest high-interest installment lenders based on search volume.
Data accuracy
Personal loan reviews are thoroughly reassessed annually. Writers and editors also make updates to data such as rate changes, new features and star ratings throughout the year as necessary. We establish and maintain contact with providers’ primary point people to ensure current information.
The review team
The personal loans review team is made up of reporters, writers and editors who cover traditional and high-interest personal loans as well as credit products such as paycheck advance and "buy now, pay later" apps. Each team member adheres to NerdWallet’s strict guidelines for editorial integrity.
Our writers’ bylines have appeared in The New York Times, The Associated Press, USA Today, MSN, MarketWatch, Yahoo Finance and other national and regional media outlets in addition to NerdWallet. External media frequently tap our personal loans experts for input on industry trends and developments that impact consumers.
Our writers’ bylines have appeared in The New York Times, The Associated Press, USA Today, MSN, MarketWatch, Yahoo Finance and other national and regional media outlets in addition to NerdWallet. External media frequently tap our personal loans experts for input on industry trends and developments that impact consumers.
Methodology, broken down by category
We assess five weighted categories and 27 subcategories for all lenders. Here’s how we weigh these categories.
Affordability (25%)
We review lenders’ annual percentage rate offerings at least twice per year and the competitiveness of each lenders’ APR range. We also assess whether a lender charges an origination fee and any opportunity for borrowers to receive a rate discount.
Consumer experience (20%)
We consider the experience of the consumer trying to manage a personal loan, which means accessibility of customer service representatives, whether borrowers can choose and change their payment due date, and the ability to track their loan on a mobile app.
Underwriting and eligibility (20%)
We consider the rigorousness of each lender’s underwriting practices and how widely available their loans are. This category includes whether a lender does a hard credit check before providing a loan, the range of credit profiles they accept and how many states their loans are offered in.
Loan flexibility (20%)
We assess how flexible lenders can be with borrowers, including whether they offer multiple loan types, personal loan amounts and repayment term options and whether they offer direct payment to creditors on debt consolidation loans.
Application process (15%)
We consider the lender’s full application process, including a borrower’s ability to preview their loan offer via pre-qualification, whether basic loan information such as APR range and repayment terms are available and easy to find online and how quickly a loan can be funded after approval.
Discretionary (not weighted)
A lender’s rating may be lowered if it has faced governmental regulatory action in the past three years or been accused of predatory practices by a reputable source. A lender that offers a unique, consumer-friendly feature (outside of the scored categories above) that few others offer may earn a higher score.
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