Author: AskMyFinance Editorial Team

Debt-to-Income Ratio Calculator: What Is a Good DTI for a Loan?

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What Is a Debt-to-Income Ratio?

Your debt-to-income ratio is a simple number. It shows how much of your monthly income goes to debt payments. Lenders use it to decide if you can handle a new loan.

The lower your DTI, the better. A low DTI means you have room in your budget for a new payment.

How to Calculate Your DTI

The math is simple. Follow these three steps.

Step 1: Add up all your monthly debt payments. Include your mortgage or rent, car loans, student loans, credit card minimum payments, and any personal loans.

Step 2: Find your gross monthly income. This is your income before taxes are taken out.

Step 3: Divide your total debt payments by your gross income. Multiply by 100.

Here is the formula: (Total Monthly Debt / Gross Monthly Income) x 100 = DTI%

DTI Example

Say you earn $5,000 per month before taxes. Your monthly debts look like this:

Rent: $1,200
Car payment: $350
Student loan: $200
Credit card minimum: $50

Total debt payments: $1,800

DTI = ($1,800 / $5,000) x 100 = 36%

That puts you right at the edge of what most lenders want to see.

What Is a Good DTI for a Loan?

Different loans have different DTI rules. Here is a quick breakdown.

Personal Loans

Most personal loan lenders want a DTI under 36%. Some will go up to 45% if your credit score is strong. A DTI above 50% makes approval very hard.

If you are shopping for a personal loan, check out our guide to the best personal loans of 2026 to see which lenders are most flexible.

Mortgage Loans

For conventional mortgages, most lenders cap DTI at 43%. Some programs allow up to 50% if you have other strong factors like a high credit score or large down payment.

FHA loans often allow DTI up to 50%. VA loans also tend to be more flexible.

Auto Loans

Auto lenders do not always publish strict DTI rules. But most prefer your total DTI to stay under 50%. A high DTI can push you into a higher interest rate even if you get approved.

DTI Ranges at a Glance

DTI Range	What It Means
Under 20%	Excellent. You have a lot of room for new debt.
20% to 35%	Good. Most lenders will approve you easily.
36% to 49%	Fair. You may still qualify, but expect more scrutiny.
50% and above	High. Most lenders will decline or require a cosigner.

What Counts Toward Your DTI?

Lenders count regular debt payments. They do not count everyday living costs.

What counts:

Mortgage or rent payment
Car loans
Student loans (even if in deferment with some lenders)
Credit card minimum payments
Personal loan payments
Child support and alimony
Any other installment debt

What does not count:

Utilities
Groceries and food
Gym memberships
Streaming services
Insurance premiums
Gas and transportation

DTI by Loan Type: Detailed Breakdown

Conventional Mortgages

Fannie Mae and Freddie Mac set the rules for most conventional loans. They allow a back-end DTI up to 45% in most cases. Some lenders go to 50% with strong compensating factors.

Your front-end DTI matters too. This only includes your housing costs. Most lenders want the front-end DTI under 28%.

FHA Loans

FHA loans are backed by the government. They are more flexible. The standard limit is 43% DTI. But if your credit score is 580 or higher, many lenders will go up to 50%.

VA Loans

VA loans do not have a hard DTI cap. Instead, lenders look at residual income. This is the money left over after all debts and living expenses. As a rule of thumb, most VA lenders want DTI under 41%.

USDA Loans

USDA loans have a front-end DTI limit of 29% and a back-end DTI limit of 41%. These can be waived with strong compensating factors.

Personal Loans

Personal lenders are not regulated the same way as mortgage lenders. Each company sets its own rules. Most want DTI under 40%. If your DTI is too high, check our guide to the best debt consolidation loans of 2026 as an option to combine your debts into one payment.

Front-End vs. Back-End DTI

You may hear lenders talk about two types of DTI.

Front-end DTI only counts your housing costs. This includes your mortgage payment, property taxes, homeowners insurance, and HOA fees. Lenders often want this under 28%.

Back-end DTI counts all debts, including housing. This is the main number most lenders focus on.

When a lender says they want a DTI of 43%, they almost always mean back-end DTI.

How to Lower Your DTI

There are two ways to lower your DTI. You can pay down debt, or you can raise your income. Both work.

Pay Off Small Debts First

Look at your debt list. Find the smallest balance. Pay it off completely. This removes that monthly payment from your DTI right away.

Even paying off a $50 monthly credit card minimum can move your DTI down by 1%. That may be enough to get approved.

Make Extra Payments

If you cannot pay off a debt completely, try to pay it down fast. Focus on debts with the highest monthly payments relative to their balance.

Avoid New Debt

Do not open new credit cards or take out new loans while you are trying to qualify for financing. Each new debt payment raises your DTI.

Even if you get approved for a new credit card, the minimum payment gets counted in your DTI once it shows up on your credit report.

Increase Your Income

A side job, freelance work, or overtime at your current job all raise your gross income. A higher income means the same debts take up a smaller share of your budget.

Some lenders will count part-time income if you have a two-year history of it. Ask your lender what income they will count.

Refinance to Lower Monthly Payments

If you can refinance a car loan or personal loan to a lower rate, your monthly payment goes down. A lower monthly payment means a lower DTI.

Be careful here. Stretching a loan term to lower the payment also means paying more interest over time.

Pay Down High-Balance Credit Cards

Credit card minimums are often a small percent of the balance. If you carry a $5,000 balance, your minimum might be $100 to $150 per month. Paying that card off removes $100 to $150 from your monthly debt obligations.

This also improves your credit score by lowering your utilization rate. A better credit score can help you get better loan terms even if your DTI is borderline. See our step-by-step guide on how to consolidate credit card debt if you are carrying balances across multiple cards.

DTI and Your Credit Score: Are They the Same?

No. They are very different.

Your credit score measures how well you manage debt. It looks at payment history, credit age, and how much credit you use.

Your DTI measures how much of your income goes to debt. It does not appear on your credit report at all.

Both matter when you apply for a loan. A great credit score with a high DTI can still get you denied. And a low DTI with a poor credit score may also cause problems.

Work on both at the same time for the best results.

How Lenders Use DTI in Their Decision

Lenders look at DTI as a risk signal. A high DTI tells them you are already stretched thin. If something goes wrong, like a job loss or emergency, you may not be able to make your loan payment.

A low DTI tells lenders you have breathing room. Even if your income drops a little, you can still cover your debts.

DTI is not the only factor. Lenders also look at your credit score, employment history, assets, and the size of your down payment.

Common DTI Mistakes to Avoid

Mistake 1: Forgetting small debts. Even a $25 minimum payment counts. Add up everything.

Mistake 2: Using net income. Always use gross income, meaning before taxes. Using take-home pay will make your DTI look worse than it is.

Mistake 3: Taking on new debt before applying. Opening a new credit card or car loan right before applying for a mortgage can push your DTI over the limit.

Mistake 4: Ignoring student loans in deferment. Some lenders count deferred student loan payments at a percentage of the balance even if you are not paying now.

Tools to Calculate Your DTI

You can use the calculator built into this page. Enter your monthly income and monthly debt payments. The tool shows your DTI right away.

Most lenders will also calculate your DTI as part of the application process. But knowing your number before you apply gives you time to fix it if needed.

Summary

Your debt-to-income ratio is one of the most important numbers in lending. A good DTI is 36% or lower for most loans. Keep it under 43% for mortgages. The lower, the better.

To improve your DTI, pay off small debts, raise your income, and avoid taking on new payments before you apply for a loan.

Use the tool above to find your DTI today. Then take steps to lower it before you apply.

Frequently Asked Questions

What is a good debt-to-income ratio?

Most lenders want a DTI of 36% or lower. Some will go up to 43% for mortgage loans. Below 36% gives you the best loan terms.

How do I calculate my debt-to-income ratio?

Add up all your monthly debt payments. Divide that number by your gross monthly income. Multiply by 100 to get your DTI percentage.

What debts count in DTI?

Mortgage or rent, car loans, student loans, credit card minimum payments, personal loans, and child support all count. Utilities and groceries do not count.

Can I get a loan with a 50% DTI?

It is hard to get approved with a 50% DTI. Some FHA loans allow up to 50%, but you will need a strong credit score and good assets to qualify.

How fast can I lower my DTI?

You can lower your DTI by paying off small debts, increasing your income, or avoiding new debt. Paying off a car loan or credit card can make a big difference in 30 to 60 days.

Rates as of May 2026.

May 7, 2026

Best Money Market Accounts 2026: Higher Rates Than Savings?

Disclosure: Some links in this article are affiliate links. We may earn a commission if you apply for a product through our links, at no extra cost to you. Our team researches and reviews each product independently. This does not affect our editorial opinions.

Money market accounts are a solid middle ground between checking and savings accounts. They typically offer higher interest rates than traditional savings accounts, easy access to your money, and FDIC or NCUA insurance. This guide compares the best money market accounts in 2026 and explains how they stack up against high-yield savings accounts.

What Is a Money Market Account?

A money market account (MMA) is a deposit account offered by banks and credit unions. It is insured up to $250,000 by the FDIC (for banks) or NCUA (for credit unions). MMAs typically earn more interest than standard savings accounts and often come with check-writing and debit card access.

Despite the name, a money market account is different from a money market fund (which is an investment product). A money market account is a safe deposit account, not an investment.

Money Market Account vs. High-Yield Savings Account

The most common question about MMAs is: how are they different from a high-yield savings account (HYSA)?

Feature	Money Market Account	High-Yield Savings Account
Average APY (2026)	4.5% – 5.5%	4.5% – 5.5%
Check-writing	Often yes	Rarely
Debit card access	Often yes	Rarely
Min. balance requirement	Sometimes higher	Usually lower
FDIC/NCUA insured	Yes	Yes
Withdrawal limits	May apply	May apply

In practical terms, the two are very similar in 2026. The main advantage of an MMA is the option to write checks or use a debit card directly from the account. This is useful if you need occasional direct access to your savings without a transfer step.

Best Money Market Accounts in 2026

1. Sallie Mae Bank Money Market Account — Best Overall Rate

Sallie Mae has consistently offered some of the highest MMA rates with no minimum balance requirement.

APY: 5.10%
Min. balance to earn APY: $0
Min. opening deposit: $0
Monthly fee: None
FDIC insured: Yes

2. UFB Portfolio Money Market — Best for High Balances

UFB Direct offers a top-tier rate with no monthly fees. The rate applies to all balance tiers, making it a strong choice for larger balances.

APY: 5.15%
Min. balance to earn APY: $0
Monthly fee: None
FDIC insured: Yes

3. Discover Money Market Account — Best Combination of Rate and Features

Discover offers a strong rate plus check-writing and debit card access — features many online MMAs lack.

APY: 4.75% (under $100K), 5.00% ($100K+)
Min. balance: $2,500 to open, $0 to maintain after that
Monthly fee: None
Check-writing: Yes
Debit card: Yes
FDIC insured: Yes

4. CIT Bank Platinum Savings — Best for Flexibility

CIT Bank’s Platinum Savings earns a high rate with a low opening deposit requirement and no monthly fees.

APY: 5.00% with $5,000 minimum balance; 0.25% below that
Min. opening deposit: $100
Monthly fee: None
FDIC insured: Yes

5. Vanguard Federal Money Market Fund — Best for Investors

Note: this is a money market fund, not an FDIC-insured MMA. It is for investors who want a cash-like position inside their brokerage account. Not suitable as an emergency fund.

7-day SEC yield: approximately 5.00% (varies)
Expense ratio: 0.11%
Not FDIC insured

Full Comparison Table

Account	APY	Min. Balance	Monthly Fee	Check Writing
Sallie Mae MMA	5.10%	$0	None	No
UFB Portfolio MMA	5.15%	$0	None	No
Discover MMA	4.75% – 5.00%	$2,500 to open	None	Yes
CIT Bank Platinum	5.00% (with $5K)	$100 to open	None	No

Are Money Market Accounts Better Than Savings Accounts?

It depends on what you need:

Choose an MMA if: You want check-writing access, you prefer the features of a bank account with higher-than-average interest, or your institution offers a top rate on its MMA.
Choose an HYSA if: You want the absolute highest rate with no minimum balance, or you do not need check-writing access.

In 2026, the rate difference between the best MMAs and the best HYSAs is minimal. Compare both types at your institution before deciding.

See our comparison of best savings account interest rates in 2026 and our picks for the best high-yield savings accounts for beginners to compare your options side by side.

How to Open a Money Market Account

Compare rates at online banks and credit unions — they typically offer better rates than traditional banks
Check minimum deposit and balance requirements
Open an account online — most take less than 10 minutes
Fund the account via ACH transfer from your checking account
Set up automatic deposits if you are using it as a savings goal

Who Should Open a Money Market Account?

Anyone who wants higher interest on savings they may need to access occasionally
People who want check-writing access to a savings-like account
Those building an emergency fund who want a safe, FDIC-insured account with top rates
Retirees who want a safe, accessible place for cash reserves

Frequently Asked Questions

Are money market accounts safe?

Yes. Money market accounts at FDIC-insured banks are covered up to $250,000 per depositor, per institution. Accounts at NCUA-insured credit unions have the same coverage. Your principal is protected.

Can I lose money in a money market account?

Not in an FDIC-insured MMA. You can only lose money in a money market fund, which is an investment product. The two are often confused because of the similar name.

What is the best money market account rate right now?

In May 2026, the highest rates on insured money market accounts range from 5.00% to 5.15% APY at online banks like UFB Direct and Sallie Mae. Rates change frequently, so check current offers before opening an account.

Is there a limit on withdrawals from a money market account?

The federal regulation that capped savings withdrawals at 6 per month was lifted in 2020, but some banks still impose limits. Check your institution’s current policy before opening an account.

Should I use a money market account for my emergency fund?

Yes, a money market account is one of the best places for an emergency fund. It combines FDIC insurance, competitive rates, and easy access to your money without penalties.

Rates as of May 2026. Rates and terms change often. Check with each institution for the most current information.

May 6, 2026

Emergency Fund Calculator: How Much Should You Save?

An emergency fund is money you set aside for unexpected expenses — a job loss, a medical bill, a car repair. Having one can keep you out of debt when life throws a curveball. This guide explains how much to save, where to keep it, and how to build it faster.

How Much Should You Have in an Emergency Fund?

The standard advice is to save 3 to 6 months of essential living expenses. But the right number depends on your situation.

3 Months: Who It Is Right For

You have a stable job with steady income
Your household has two incomes
You have few financial dependents
You have additional safety nets (strong benefits, family support)

6 Months: Who It Is Right For

You are the sole earner in your household
You have variable or freelance income
You work in an industry with high turnover or layoff risk
You have dependents who rely on your income
You have a chronic health condition or high medical expenses

More Than 6 Months

Some financial planners suggest up to 12 months for self-employed people, business owners, or those in highly specialized careers where finding a new job takes longer.

Emergency Fund Calculator

Use this simple formula to find your target:

Monthly Essential Expenses x Target Months = Emergency Fund Target

What Counts as an Essential Expense?

Rent or mortgage
Utilities (electricity, water, gas, internet)
Groceries
Transportation (car payment, insurance, gas or transit)
Health insurance and medications
Minimum debt payments
Child care or elder care

What to exclude: dining out, streaming services, gym memberships, clothing, vacations. Strip it down to what you truly need to survive.

Example Calculation

Expense Category	Monthly Cost
Rent	$1,400
Utilities	$150
Groceries	$400
Car payment + insurance	$500
Health insurance	$200
Minimum debt payments	$250
Total Monthly Essentials	$2,900

3-month target: $2,900 x 3 = $8,700

6-month target: $2,900 x 6 = $17,400

Where to Keep Your Emergency Fund

Your emergency fund should be:

Liquid: You need to access it quickly, without penalties.
Safe: The money should not be at risk of loss.
Separate: Keep it in a different account so you are not tempted to spend it.
Earning interest: It should grow while it sits there.

The best home for an emergency fund is a high-yield savings account (HYSA). Online banks regularly offer rates of 4% to 5% APY, far better than the national average for traditional savings accounts.

See our picks for the best high-yield savings accounts for beginners and the best savings account interest rates in 2026 to find the right account.

What Not to Use for Your Emergency Fund

Checking account: Easy to spend accidentally. Earns little to no interest.
Stock investments: Values can drop right when you need the money most.
CDs: Early withdrawal penalties can eat into your money if you access it before maturity.
Retirement accounts: Penalties and taxes for early withdrawal can cost you 30% to 40% of the funds.
Credit cards: Emergency debt at 20%+ interest rate makes a bad situation worse.

How to Build Your Emergency Fund

Step 1: Set a Starter Goal

Do not try to save 6 months right away. Start with $1,000 as your first milestone. It covers most single-event emergencies like a car repair or small medical bill.

Step 2: Open a Dedicated Account

Open a high-yield savings account specifically for your emergency fund. Keeping it separate makes it psychologically easier to leave it alone.

Step 3: Automate Your Savings

Set up an automatic transfer from your checking account to your emergency fund on each payday. Even $50 per paycheck adds up to $1,300 a year.

Step 4: Fund It with Windfalls

When you get a tax refund, bonus, or any unexpected money, put a portion directly into your emergency fund.

Step 5: Keep Saving Until You Hit Your Target

Do not stop at $1,000. Work toward 3 months, then 6 months. Once you hit your target, redirect that automatic transfer to another financial goal.

What Counts as an Emergency?

A true emergency is unexpected and necessary. Examples:

Job loss or sudden income reduction
Major car repair you need to get to work
Emergency medical or dental expense
Critical home repair (burst pipe, broken furnace)
Unexpected travel for a family emergency

What does not count:

Holiday shopping
Annual expenses you knew were coming (car registration, insurance renewal)
A sale on something you want

Frequently Asked Questions

How much should I have in my emergency fund?

Most financial advisors recommend 3 to 6 months of essential living expenses. Single-income households, freelancers, and those with dependents should aim for the higher end.

Should I pay off debt or build an emergency fund first?

Build a small starter fund of $1,000 first, then focus aggressively on high-interest debt. Once that debt is gone, build your full emergency fund. Without any cushion, one unexpected expense will push you right back into debt.

What if I need to use my emergency fund?

Use it — that is what it is for. After the emergency passes, make rebuilding the fund your top savings priority. Get back to your target as quickly as possible.

Is a high-yield savings account the best place for an emergency fund?

Yes. High-yield savings accounts combine easy access, FDIC insurance, and rates of 4% to 5% APY in 2026. That is the ideal combination for emergency fund storage.

Should my emergency fund cover only bills or all expenses?

Focus on essential expenses — the bills that must be paid to keep your household running. Discretionary spending can be cut significantly in a true emergency, so you do not need to fund every current expense.

Rates as of May 2026. Rates and terms change often. Check with each institution for the most current information.

May 6, 2026

Best Secured Credit Cards to Build Credit 2026 (Full Comparison)

A secured credit card is one of the most reliable ways to build or rebuild credit from scratch. You put down a deposit, use the card responsibly, and your credit score grows over time. This guide covers the best secured cards in 2026, including which ones make it easiest to graduate to an unsecured card.

What Is a Secured Credit Card?

A secured credit card requires a cash deposit as collateral. That deposit usually becomes your credit limit. For example, a $200 deposit gives you a $200 credit limit.

The card works just like a regular credit card for purchases. The issuer reports your payment history to the three major credit bureaus, which is how you build credit. If you pay on time every month, your score should improve steadily.

Who Should Get a Secured Card?

People with no credit history at all
Those rebuilding after bankruptcy, collections, or missed payments
People who have been denied for unsecured cards
Anyone who wants to establish credit in a low-risk way

Best Secured Credit Cards in 2026

1. Discover it Secured Credit Card — Best Overall

Discover it Secured offers something rare: cash back rewards on a secured card. It also automatically reviews your account after 7 months for a possible upgrade to an unsecured card.

Deposit: $200 minimum
Rewards: 2% at gas stations and restaurants (up to $1,000/quarter), 1% everywhere else
Annual fee: $0
Reports to all three bureaus
Cashback Match in year one
Graduation: Automatic review at 7 months

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

Find My Best Card

2. Capital One Platinum Secured Credit Card — Best for Low Deposit

Capital One may approve you for a $200 credit limit with a deposit as low as $49, $99, or $200 depending on your creditworthiness. This is the lowest possible deposit requirement among major secured cards.

Deposit: $49, $99, or $200 (credit limit starts at $200)
Annual fee: $0
Reports to all three bureaus
Credit limit increases possible after 6 months with responsible use
Graduation: Possible to unsecured after responsible use

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

Find My Best Card

3. OpenSky Secured Visa — Best for No Credit Check

OpenSky does not check your credit at all when you apply. This makes it accessible even if your credit is severely damaged or you have a recent bankruptcy.

Deposit: $200 minimum, up to $3,000
Annual fee: $35
No credit check required
Reports to all three bureaus
Graduation: Not automatic, but can apply for unsecured after 12 months of good payment history

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

Find My Best Card

4. Chime Credit Builder Secured Visa — Best for No Deposit Concerns

Chime Credit Builder is different from most secured cards. There is no minimum deposit — you move money from your Chime account into a Credit Builder account, and that amount becomes your spending limit. No interest charges, no annual fee.

Deposit: Flexible — whatever you move into the account
Annual fee: $0
No interest
Requires Chime checking account
Reports to Experian, TransUnion, Equifax

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

Find My Best Card

5. BankAmericard Secured Credit Card — Best for Higher Credit Limits

Bank of America allows a deposit of up to $4,900, which gives you more room to keep your credit utilization low — one of the key factors in your credit score.

Deposit: $200 minimum, up to $4,900
Annual fee: $0
Reports to all three bureaus
Graduation: Possible review after 12 months

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

Find My Best Card

Full Comparison Table

Card	Min. Deposit	Annual Fee	Credit Check	Rewards	Graduation Path
Discover it Secured	$200	$0	Yes	2%/1% cash back	Auto at 7 months
Capital One Platinum Secured	$49	$0	Yes	None	Review after 6 months
OpenSky Secured Visa	$200	$35	No	None	Apply after 12 months
Chime Credit Builder	Flexible	$0	No	None	N/A
BankAmericard Secured	$200	$0	Yes	None	Review after 12 months

How to Use a Secured Card to Build Credit Fast

Make small purchases each month. Use the card for a recurring bill or one small purchase to keep it active.
Always pay on time. Payment history is the biggest factor in your credit score — about 35%. Even one missed payment can set you back months.
Keep your balance low. Use less than 30% of your credit limit. So on a $200 limit, keep your balance under $60. Lower is better.
Pay in full each month. This avoids interest and keeps your utilization low.
Be patient. You should see meaningful score improvement within 6 to 12 months of responsible use.

How to Graduate to an Unsecured Card

Graduation means your card issuer converts your secured card to a regular unsecured card and returns your deposit. Here is how to make it happen:

Pay on time every month — zero missed or late payments
Keep balances low relative to your limit
Do not apply for too many other credit products at once
Use the card regularly so the issuer sees activity
Ask your issuer about their graduation criteria if they do not have an automatic process

For more tips on improving your score overall, read our guide on how to improve your credit score in 2026. You can also check our list of best apps to build credit for additional tools to speed up your progress.

Frequently Asked Questions

Do you get your deposit back from a secured credit card?

Yes, when you close the account in good standing or graduate to an unsecured card. The deposit is returned to you, typically within a few billing cycles.

How long does it take to build credit with a secured card?

Most people see meaningful credit score improvement within 6 to 12 months of responsible use. With consistent on-time payments and low utilization, your score can jump 50 to 100 points or more in that time.

What is a good deposit amount for a secured credit card?

Start with the minimum — often $200. A higher deposit gives you a higher limit, which makes it easier to keep utilization low. But you do not need to deposit more than you can afford to tie up temporarily.

Can a secured card hurt your credit?

Yes, if you misuse it. Late payments, high balances, and exceeding your limit will all hurt your score. Used responsibly, a secured card is purely positive for your credit.

What is the difference between a secured and prepaid card?

A secured credit card requires a deposit and reports to credit bureaus. A prepaid card is just a way to spend money you already have — it does not report to credit bureaus and does not build credit.

Rates as of May 2026. Rates and terms change often. Check each card issuer for the most current information.

May 6, 2026

Best Credit Cards for Gas and Groceries 2026

Gas and groceries eat up a large chunk of most household budgets. Using the right credit card on these purchases can put a meaningful amount of cash back in your pocket each year. This guide covers the best credit cards for gas and groceries in 2026.

Fixed-Category vs. Rotating-Category Cards

Before you pick a card, understand the difference:

Fixed-Category Cards

These earn a set bonus rate on specific categories all year long. For example, a card might always earn 3% on groceries and 2% on gas. No activation needed, no surprises.

Rotating-Category Cards

These earn a high rate (often 5%) on categories that change every quarter. Gas stations and grocery stores frequently appear in these rotations. You must activate the bonus each quarter to earn the higher rate.

Best Credit Cards for Gas and Groceries in 2026

1. Blue Cash Preferred from American Express — Best for Groceries

The top grocery earning card available. Earns 6% at U.S. supermarkets on the first $6,000 spent per year, then 1%. Also earns 3% at U.S. gas stations.

6% at U.S. supermarkets (up to $6K/year)
3% at U.S. gas stations and transit
1% on all other purchases
Annual fee: $95 (waived first year)
Welcome offer: $250 cash back after $3,000 spend in 6 months

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

Find My Best Card

2. Citi Custom Cash Card — Best for One Top Spending Category

The Citi Custom Cash automatically earns 5% on your top spending category each billing cycle (up to $500 per cycle). If groceries or gas is your biggest expense, this card rewards it automatically.

5% on your top eligible spending category each billing cycle (up to $500)
1% on all other purchases
Annual fee: $0
Eligible categories include grocery stores and gas stations

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

Find My Best Card

3. Blue Cash Everyday from American Express — Best No-Fee Grocery Card

For those who want grocery rewards without an annual fee, the Blue Cash Everyday earns 3% at U.S. supermarkets on up to $6,000 per year.

3% at U.S. supermarkets (up to $6K/year)
3% at U.S. online retail purchases (up to $6K/year)
2% at U.S. gas stations
1% on all other purchases
Annual fee: $0

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

Find My Best Card

4. Costco Anywhere Visa by Citi — Best for Costco Shoppers and Gas

If you shop at Costco or fill up at Costco gas stations, this card earns exceptional rates. It requires a Costco membership.

4% on eligible gas and EV charging (up to $7,000/year)
3% on restaurants and eligible travel
2% on all purchases at Costco and Costco.com
1% on all other purchases
Annual fee: $0 (Costco membership required: $65/year)

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

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5. Discover it Cash Back — Best Rotating Category Card for Gas and Groceries

Discover regularly features gas stations and grocery stores in its 5% rotating categories. The first-year Cashback Match makes it especially rewarding for new cardholders.

5% in rotating quarterly categories (up to $1,500 per quarter)
1% on all other purchases
Annual fee: $0
Cashback Match in year one

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

Find My Best Card

Comparison Table

Card	Grocery Rate	Gas Rate	Annual Fee
Blue Cash Preferred	6%	3%	$95
Citi Custom Cash	5% (top category, up to $500/cycle)	5% (if top category)	$0
Blue Cash Everyday	3%	2%	$0
Costco Anywhere Visa	2% at Costco	4% (up to $7K/year)	$0 (Costco membership req.)
Discover it Cash Back	5% (when category active)	5% (when category active)	$0

How Much Can You Earn?

Here is an annual earnings estimate for a household spending $500/month on groceries and $150/month on gas:

Card	Est. Annual Grocery Rewards	Est. Annual Gas Rewards	Net Annual Value (after fee)
Blue Cash Preferred	$360	$54	$319 net
Blue Cash Everyday	$180	$36	$216 net
Citi Custom Cash	Up to $300	Depends on rotation	Up to $300 net

For cards with no annual fee, see our guide to the best cash back credit cards for more options. And if your credit needs work first, check out the best options for credit cards for bad credit.

How to Pick the Right Card

High grocery spend ($400+/month): Blue Cash Preferred pays for itself quickly even with the $95 fee.
No annual fee preference: Blue Cash Everyday or Citi Custom Cash.
High gas spend: Costco Anywhere Visa or Citi Custom Cash if gas is your top category.
Want to maximize everything with effort: Discover it Cash Back or another rotating category card.

Frequently Asked Questions

What counts as a grocery store for credit card rewards?

Most issuers define grocery stores by merchant category code. Standalone supermarkets like Kroger, Safeway, and Publix qualify. Superstores like Walmart and Target, as well as warehouse clubs like Costco and Sam’s Club, typically do not count as grocery stores on most cards.

What counts as a gas station for credit card rewards?

Standalone gas stations and most major fuel brands qualify. Gas purchased at warehouse clubs or superstores may or may not qualify depending on the card issuer. Check your card’s terms to confirm.

Is the Blue Cash Preferred worth the $95 annual fee?

For most households spending $300 or more per month on groceries, yes. At $300/month in groceries, the 6% rate earns $216 in grocery rewards alone, more than covering the fee.

Can I use multiple cash back cards to maximize rewards?

Yes. A common strategy is to use a high grocery card for supermarkets, a high gas card for fuel, and a flat-rate card for everything else.

Do I need excellent credit to get a good gas and grocery card?

Most of the top cards require good to excellent credit, roughly 670 and above. Some cards offer lower bonus rates for fair credit applicants.

Rates as of May 2026. Rates and terms change often. Check each card issuer for the most current information.

May 6, 2026

Best Cash Back Credit Cards for Everyday Spending 2026

A cash back credit card is one of the easiest ways to earn rewards on purchases you already make. The best cards return 1.5% to 5% on everyday spending like groceries, gas, and dining. This guide breaks down the top options for 2026 so you can pick the card that earns the most for your spending habits.

Flat-Rate vs. Tiered Cash Back Cards

Before picking a card, it helps to understand the two main types:

Flat-Rate Cards

You earn the same percentage on every purchase. Simple and predictable. A 2% flat-rate card earns 2 cents for every dollar spent, no matter where you shop.

Best for: People who do not want to track categories or rotate cards.

Tiered Cash Back Cards

You earn higher cash back in specific categories (like 3% on groceries or 4% on dining) and a lower base rate on everything else.

Best for: People who spend heavily in specific categories and are willing to use the right card for each purchase.

Best Cash Back Credit Cards for 2026

1. Wells Fargo Active Cash Card — Best Flat-Rate Card

The Wells Fargo Active Cash earns an unlimited 2% cash back on all purchases. No categories to track, no caps, no expiration dates on rewards.

Rewards: 2% on everything
Annual fee: $0
Welcome offer: $200 cash back after spending $500 in the first 3 months
Intro APR: 0% for 15 months on purchases and balance transfers

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

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2. Citi Double Cash Card — Best for Maximizing Flat-Rate Rewards

The Citi Double Cash earns 2% on every purchase: 1% when you buy and 1% when you pay. It effectively rewards responsible payment habits.

Rewards: 2% total cash back on all purchases
Annual fee: $0
Balance transfer: Strong option for 0% intro periods
No welcome bonus (as of 2026)

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

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3. Chase Freedom Unlimited — Best for New Cardholders

Chase Freedom Unlimited earns 1.5% on all purchases plus bonus rates on travel, dining, and drugstores. It also comes with strong new cardholder bonuses and pairs well with other Chase cards.

Rewards: 5% on Chase travel, 3% on dining and drugstores, 1.5% on everything else
Annual fee: $0
Welcome offer: Earn $200 after spending $500 in first 3 months
0% intro APR: 15 months on purchases

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

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4. Blue Cash Preferred from American Express — Best for Groceries

For heavy grocery shoppers, no card beats the Blue Cash Preferred. It earns 6% at U.S. supermarkets on up to $6,000 per year, then 1%.

Rewards: 6% at U.S. supermarkets (up to $6K/year), 6% on select U.S. streaming, 3% at U.S. gas stations and transit, 1% on other purchases
Annual fee: $95 (waived first year)
Welcome offer: $250 cash back after $3,000 in purchases in first 6 months

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

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5. Discover it Cash Back — Best Rotating Categories Card

Discover it earns 5% cash back in rotating quarterly categories that typically include grocery stores, gas stations, restaurants, and Amazon. Discover matches all your cash back earned in the first year.

Rewards: 5% in rotating categories (up to $1,500 per quarter), 1% on all other purchases
Annual fee: $0
Welcome offer: Cashback Match in the first year (doubles your earnings)

Not sure which card fits your situation?

Answer a few questions and our free AI tool finds the best card for your credit score and spending habits in seconds.

Find My Best Card

Comparison Table

Card	Base Rate	Best Category Rate	Annual Fee
Wells Fargo Active Cash	2%	2% everywhere	$0
Citi Double Cash	2%	2% everywhere	$0
Chase Freedom Unlimited	1.5%	5% on Chase travel	$0
Blue Cash Preferred	1%	6% at U.S. supermarkets	$95
Discover it Cash Back	1%	5% rotating categories	$0

How to Choose the Right Cash Back Card

Use these questions to narrow down your choice:

Do you want simplicity? Pick a flat-rate card like the Wells Fargo Active Cash or Citi Double Cash.
Do you spend a lot on groceries? Blue Cash Preferred can earn significantly more if you max the $6,000 category limit.
Are you new to rewards? Chase Freedom Unlimited is a well-rounded starter card with broad category bonuses.
Do you want to maximize earnings with effort? Rotating category cards like Discover it reward those willing to activate categories each quarter.

Before applying for any credit card, make sure your credit is in good shape. See our guide on how to improve your credit score in 2026. If your score is lower, check our picks for best credit cards for fair credit first.

Tips to Maximize Cash Back Earnings

Always use the right card for the right category
Pay your balance in full every month to avoid interest charges that wipe out your rewards
Activate rotating categories before the quarter begins
Stack cash back with store loyalty programs and cashback portals
Set up automatic payments to avoid late fees

Frequently Asked Questions

What is the best flat-rate cash back credit card in 2026?

The Wells Fargo Active Cash and Citi Double Cash both earn a flat 2% on everything. The Active Cash adds a welcome bonus and intro 0% APR. The Double Cash rewards you for paying on time.

Is a cash back card worth it if I carry a balance?

Probably not. If you carry a balance, the interest charges will usually exceed the cash back you earn. Cash back cards work best for people who pay in full every month.

Do cash back rewards expire?

It depends on the card. Wells Fargo Active Cash and Citi Double Cash rewards do not expire as long as your account is open. Rotating category cards like Discover it also do not expire. Always check your specific card’s terms.

Can I get a cash back credit card with fair credit?

Yes, but your options are more limited. Cards for fair credit typically earn 1% to 1.5% cash back. As your score improves, you can upgrade to higher-earning cards.

What is the difference between cash back and points or miles?

Cash back is straightforward — you get a percentage of your spending back as cash or a statement credit. Points and miles can be worth more if redeemed strategically for travel, but they are more complex to manage.

Rates as of May 2026. Rates and terms change often. Check each card issuer for the most current information.

May 6, 2026

Discover Personal Loan Review 2026

Discover is best known for credit cards, but their personal loans are worth a close look. With no fees, competitive rates, and a unique 30-day money-back guarantee, Discover stands out in a crowded market. This review covers everything you need to know about Discover personal loans in 2026.

Discover Personal Loan: Quick Summary

Feature	Details
APR Range	7.99% – 24.99%
Loan Amounts	$2,500 – $40,000
Loan Terms	36 to 84 months
Origination Fee	None
Prepayment Penalty	None
Late Fee	$39
Min. Credit Score	~660 (not disclosed officially)
Funding Time	Next business day (after verification)
Available In	All 50 states
Co-borrower	Not available

Discover Personal Loan Rates and Terms

Discover offers fixed-rate personal loans with APRs ranging from 7.99% to 24.99%. Your actual rate depends on your credit score, income, and the loan term you choose.

Loan terms run from 36 to 84 months. Longer terms lower your monthly payment but increase the total interest you pay. Shorter terms save money overall but require higher monthly payments.

Monthly Payment Examples

Loan Amount	APR	Term	Monthly Payment	Total Cost
$10,000	9.99%	36 months	$323	$11,628
$10,000	9.99%	60 months	$212	$12,720
$20,000	13.99%	60 months	$465	$27,900

Key Features and Benefits

No Origination Fee

Discover charges no origination fee. This saves you money upfront and means the amount you borrow is the amount you receive.

30-Day Money Back Guarantee

This is unique to Discover. If you change your mind after getting your loan, you can return the full amount within 30 days and pay no interest. This gives you a genuine safety net if your situation changes.

Direct Creditor Payments

If you are using the loan to pay off debt, Discover can send the money directly to your creditors. This removes the temptation to spend the money elsewhere and simplifies the process.

Flexible Loan Amounts

Discover loans start at $2,500, which is lower than many competitors. The cap of $40,000 is sufficient for most personal finance needs.

No Prepayment Penalty

You can pay off your loan early without any extra charge. Paying extra each month reduces the total interest you pay.

Discover Personal Loan Drawbacks

No co-borrowers: You must apply alone. If you want to add a co-borrower to qualify for a better rate, Discover is not the right lender.
No secured option: Discover only offers unsecured loans. You cannot use collateral to lower your rate.
Late fee: There is a $39 late payment fee. Most other no-fee lenders also waive late fees (Marcus does not charge late fees, for example).
No credit score disclosed: Discover does not publish a minimum credit score. Based on approval patterns, you likely need 660 or higher.
Max loan of $40,000: If you need more, look at SoFi or LightStream, which go up to $100,000.

Who Is Discover Best For?

Borrowers with good to excellent credit (660+ score)
People who want the security of a 30-day money-back period
Those paying off multiple creditors who want direct payment handling
Anyone who wants no origination fee and no prepayment penalty

How to Apply for a Discover Personal Loan

Visit Discover’s website and click “Check Your Rate”
Enter basic personal and financial information — this uses a soft credit pull that will not affect your score
Review your pre-qualification offer
If you like the terms, complete the full application
Discover verifies your information (this may take a business day)
Funds are sent to your bank account as soon as the next business day

Discover vs. Competitors

Lender	APR Range	Max Loan	Late Fee	Co-borrower
Discover	7.99% – 24.99%	$40,000	$39	No
Marcus	6.99% – 24.99%	$40,000	None	No
SoFi	8.99% – 29.49%	$100,000	None	No
LightStream	7.49% – 25.49%	$100,000	None	No

If you are deciding between lenders, our best personal loans roundup covers all the top options. Also see personal loan vs. credit card for home improvement if you are still deciding which type of financing fits your project.

Our Verdict

Discover Personal Loan is a solid choice for borrowers with good credit who want no origination fees, no prepayment penalty, and the security of a 30-day return window. The rates are competitive, and the direct creditor payment feature makes debt consolidation easy. The main downsides are the $39 late fee and the lack of a co-borrower option.

If you need more than $40,000, SoFi or LightStream would be a better fit. If you want zero late fees, Marcus is worth a look.

Frequently Asked Questions

What credit score do you need for a Discover personal loan?

Discover does not publish an official minimum. Based on reported approval data, you likely need a credit score of around 660 or higher. The best rates go to borrowers with 720 and above.

How long does Discover take to approve a personal loan?

Pre-qualification is instant online. Full approval and funding typically happen within one business day after you submit your documents and Discover verifies your information.

Can I use a Discover personal loan to pay off credit cards?

Yes. Discover allows debt consolidation and can send payments directly to your creditors, which simplifies the process and removes the temptation to use the funds elsewhere.

Is Discover a good choice for debt consolidation?

Yes, especially because of the direct creditor payment option. Combined with no origination fee and competitive rates, Discover is a strong contender for debt consolidation.

Does Discover offer secured personal loans?

No. Discover only offers unsecured personal loans. You cannot use collateral such as a car or savings account to secure the loan or lower your rate.

Rates as of May 2026. Rates and terms change often. Check with each lender for the most current information.

May 6, 2026

Best Personal Loans with No Origination Fee 2026

An origination fee can add hundreds of dollars to the cost of a personal loan before you even make your first payment. The good news is that many top lenders charge zero fees. This guide covers the best no-origination-fee personal loans in 2026 and how to find the right one for your situation.

What Is an Origination Fee?

An origination fee is a one-time charge a lender collects for processing your loan. It is usually expressed as a percentage of the loan amount and deducted from your loan proceeds or added to your balance.

Example: You borrow $10,000 with a 5% origination fee. The lender deducts $500, so you receive only $9,500 — but you owe $10,000.

Some lenders charge no origination fee at all. These lenders make their money through the interest rate alone. Choosing a no-fee lender can save you a significant amount, especially on larger loans.

Best Personal Loans with No Origination Fee in 2026

1. Marcus by Goldman Sachs

Marcus is our top pick for no-fee personal loans. They charge no origination fee, no late fees, and no prepayment penalty. Their rates are competitive for borrowers with good credit.

APR: 6.99% – 24.99%
Loan amounts: $3,500 – $40,000
Terms: 36 to 72 months
Min. credit score: ~660

2. SoFi

SoFi charges no origination, prepayment, or late fees. They also offer unemployment protection — if you lose your job, SoFi may pause your payments while you look for work.

APR: 8.99% – 29.49%
Loan amounts: $5,000 – $100,000
Terms: 24 to 84 months
Min. credit score: 680

3. LightStream

LightStream has no fees of any kind and some of the lowest rates available for excellent credit borrowers. They even have a Rate Beat program — if a competitor offers you a lower rate, LightStream will beat it by 0.10 percentage points.

APR: 7.49% – 25.49%
Loan amounts: $5,000 – $100,000
Terms: 24 to 144 months
Min. credit score: ~660

4. Discover Personal Loans

Discover charges no origination fee and no prepayment penalty. They are available in all 50 states and offer a 30-day return guarantee — if you change your mind, you can return the funds within 30 days.

APR: 7.99% – 24.99%
Loan amounts: $2,500 – $40,000
Terms: 36 to 84 months
Min. credit score: ~660

5. PenFed Credit Union

PenFed charges no origination fee and offers rates that are competitive even compared to online lenders. Membership is required, but it is open to most people.

APR: 7.99% – 17.99%
Loan amounts: $600 – $50,000
Terms: 12 to 60 months
Min. credit score: 700 recommended

No-Fee Lenders: Full Comparison Table

Lender	APR Range	Loan Amount	Min. Credit Score	Late Fee	Prepayment Penalty
Marcus	6.99% – 24.99%	$3.5K – $40K	~660	None	None
SoFi	8.99% – 29.49%	$5K – $100K	680	None	None
LightStream	7.49% – 25.49%	$5K – $100K	~660	None	None
Discover	7.99% – 24.99%	$2.5K – $40K	~660	None	None
PenFed	7.99% – 17.99%	$600 – $50K	~700	None	None

How Much Does an Origination Fee Actually Cost?

Here is the real cost of a 3% origination fee compared to no fee:

Loan Amount	3% Origination Fee	5% Origination Fee	8% Origination Fee
$5,000	$150	$250	$400
$10,000	$300	$500	$800
$20,000	$600	$1,000	$1,600
$40,000	$1,200	$2,000	$3,200

Who Qualifies for No-Fee Personal Loans?

Lenders that charge no fees tend to serve borrowers with stronger credit profiles. Most require:

Credit score of 650 to 680 or higher
Stable income and employment history
Debt-to-income ratio below 35% to 40%
No recent bankruptcies or delinquencies

If your credit score is below 640, you may find it harder to qualify for a no-fee lender. You might still get a good deal from a lender that charges a small fee but offers a low APR. Always calculate the total cost — APR plus fees — rather than looking at rate alone.

See our full best personal loans of 2026 list for more options across all credit types.

If debt payoff is your goal, also check the best debt consolidation loans of 2026 which includes both fee and no-fee options.

How to Apply for a No-Fee Personal Loan

Check your credit score for free at Experian, Credit Karma, or your bank
Pre-qualify with 3 to 5 no-fee lenders using soft credit pulls
Compare APR, loan amount, term, and total repayment cost
Confirm there are no hidden fees in the fine print
Submit your formal application with the best offer
Review and sign the loan agreement
Receive funds, usually within 1 to 3 business days

Frequently Asked Questions

Are no-fee personal loans really free?

There are no origination fees, but you still pay interest. The total cost of a personal loan is the interest charged over the life of the loan. A no-fee lender with a lower rate will always be cheaper than a fee-charging lender with a higher rate.

Why do some lenders charge origination fees?

Origination fees help lenders cover the cost of processing your application. Lenders that skip this fee make their money through the interest rate alone. They usually require stronger credit to offset the risk.

Can I negotiate an origination fee?

In most cases, no. Origination fees are set policies, not negotiated line items. Your best option is to shop around for lenders that charge no fee at all.

Does a no-fee loan always have a lower total cost?

Not always. A no-fee lender might charge a higher APR than a fee-charging lender. Always compare total repayment cost — not just the fee or just the rate.

What is the best no-fee personal loan for bad credit?

Options are limited for bad credit borrowers. Most no-fee lenders require good credit. If your score is below 600, Avant (which charges a small fee) may be your most realistic option.

Rates as of May 2026. Rates and terms change often. Check with each lender for the most current information.

May 6, 2026

Best Personal Loans for Home Improvement 2026

A personal loan is one of the fastest ways to fund home improvements. You can get approved quickly, borrow without tapping your home equity, and repay in fixed monthly installments. This guide covers the best personal loans for home improvement projects in 2026.

Why Use a Personal Loan for Home Improvement?

A personal loan makes sense for home improvements when:

You do not have enough home equity for a HELOC or home equity loan
You need funds quickly (personal loans often fund within 1 to 3 business days)
You want a fixed payment and fixed payoff date
Your project is $5,000 to $50,000

Compared to credit cards, personal loans usually have lower interest rates and structured repayment. Compared to home equity loans, they do not put your home at risk.

Best Personal Loans for Home Improvement in 2026

1. SoFi — Best Overall for Good Credit

SoFi offers some of the best rates with zero fees. If your credit score is 680 or higher, SoFi is hard to beat for home improvement financing.

APR: 8.99% – 29.49%
Loan amounts: $5,000 – $100,000
Terms: 24 to 84 months
Origination fee: None
Funding time: 1 to 3 business days

Read our full SoFi personal loan review for more details.

2. LendingClub — Best for Fair Credit

LendingClub accepts borrowers with credit scores as low as 600. They charge an origination fee, but offer flexible repayment options and joint loan applications.

APR: 9.57% – 35.99%
Loan amounts: $1,000 – $40,000
Terms: 24 to 60 months
Origination fee: 3% – 8%
Funding time: 2 to 4 business days

See our LendingClub personal loan review for the full picture.

3. Marcus by Goldman Sachs — Best for No Fees

Marcus charges no fees at all — no origination, no late fees, no prepayment penalty. This makes them a top pick for borrowers who want predictable costs.

APR: 6.99% – 24.99%
Loan amounts: $3,500 – $40,000
Terms: 36 to 72 months
Origination fee: None
Funding time: 1 to 4 business days

Read the full Marcus personal loan review for details.

4. Avant — Best for Fair to Lower Credit

Avant works with borrowers with scores as low as 580. Rates are higher, but it is a solid option when other lenders say no.

APR: 9.95% – 35.99%
Loan amounts: $2,000 – $35,000
Terms: 24 to 60 months
Origination fee: Up to 4.75%
Funding time: Next business day

Our full Avant personal loan review covers everything you need to know.

5. LightStream — Best for Very Good to Excellent Credit

LightStream offers the lowest rates for strong borrowers and the highest loan amounts. Great for larger renovation projects like kitchen remodels or room additions.

APR: 7.49% – 25.49%
Loan amounts: $5,000 – $100,000
Terms: 24 to 144 months
Origination fee: None
Funding time: Same day possible

Comparison Table

Lender	APR Range	Loan Amounts	Min. Credit Score	Fees
SoFi	8.99% – 29.49%	$5K – $100K	680	None
LendingClub	9.57% – 35.99%	$1K – $40K	600	3–8% origination
Marcus	6.99% – 24.99%	$3.5K – $40K	660	None
Avant	9.95% – 35.99%	$2K – $35K	580	Up to 4.75%
LightStream	7.49% – 25.49%	$5K – $100K	660	None

Personal Loan vs. HELOC for Home Improvement

Feature	Personal Loan	HELOC
Collateral required	No	Yes (your home)
Approval speed	1–3 days	2–4 weeks
Rate type	Fixed	Variable
Typical rate	Higher	Lower
Risk	Credit impact if default	Home at risk if default

For more details on this comparison, see our full guide on personal loan vs. credit card for home improvement.

How to Apply for a Home Improvement Personal Loan

Get estimates from contractors so you know how much to borrow
Check your credit score and report for errors
Pre-qualify with 3 to 5 lenders using soft credit checks
Compare APRs, fees, and total repayment amounts
Submit a formal application with the best offer
Receive funds and start your project

Tips to Get the Best Rate

Check your credit report and dispute any errors before applying
Pay down credit card balances to lower your credit utilization
Add a co-borrower with strong credit if your score is borderline
Choose a shorter loan term to get a lower rate
Avoid applying for other credit in the months before you apply

Frequently Asked Questions

What credit score do I need for a home improvement loan?

Most lenders want a score of 600 or higher. The best rates are available for scores of 720 and above. Borrowers with scores below 600 should look at Avant or secured loan options.

How much can I borrow for a home improvement project?

Personal loans for home improvement go up to $100,000 with lenders like SoFi and LightStream. Most projects are funded in the $5,000 to $50,000 range.

How long does it take to get a home improvement loan?

Personal loans are among the fastest. Many lenders fund within 1 to 3 business days. LightStream offers same-day funding in some cases.

Can I use a personal loan for any home improvement?

Yes. Personal loans are unsecured and have no restrictions on how you use the funds. Kitchens, bathrooms, roofing, landscaping, HVAC — all are fair game.

Is interest on a home improvement personal loan tax-deductible?

No. Interest on unsecured personal loans is not tax-deductible. HELOC interest may be deductible if used to substantially improve the home — consult a tax professional for your situation.

Rates as of May 2026. Rates and terms change often. Check with each lender for the most current information.

May 6, 2026

Personal Loan Refinancing: How to Lower Your Interest Rate in 2026

If you have a high-interest personal loan, refinancing can save you money every month. This guide explains how personal loan refinancing works, when it makes sense, and how to find the best lenders in 2026.

What Is Personal Loan Refinancing?

Personal loan refinancing means taking out a new personal loan to pay off your current one. The goal is to get a lower interest rate, a lower monthly payment, or both.

The new loan has new terms: a different interest rate, loan amount, and repayment period. You use the new loan funds to pay off the old loan, then make payments on the new one.

When Does It Make Sense to Refinance?

Your Credit Score Improved

If your score was low when you got the original loan, you likely paid a high rate. After building better credit history, you may now qualify for a much lower rate. Even a few points of improvement can make a big difference.

You Can Get a Lower Rate

If overall interest rates have dropped or you simply find a lender offering a better rate, refinancing can reduce how much interest you pay over time.

You Need a Lower Monthly Payment

Extending the repayment term lowers your monthly payment. This can help if cash flow is tight. Just remember that a longer term means more interest paid overall.

You Want to Get Out of High-Interest Debt Faster

You can refinance into a shorter term to pay off your loan faster. Your monthly payment will be higher, but you pay less total interest.

Requirements to Refinance a Personal Loan

Lenders look at several factors:

Credit score: Most lenders want 600+. The best rates go to borrowers with 720 or higher.
Income: Stable income shows you can repay. Lenders verify this with pay stubs or tax returns.
Debt-to-income ratio (DTI): Most lenders prefer a DTI below 40%.
Loan purpose: Some lenders restrict what you can refinance into — always check the terms.
Existing account history: A track record of on-time payments on the original loan helps your case.

Best Lenders for Personal Loan Refinancing in 2026

SoFi

SoFi is a top choice for borrowers with good credit. They offer no fees, competitive rates, and flexible terms. Rates typically start around 8.99% APR. Check our SoFi personal loan review for full details.

LightStream

LightStream offers some of the lowest personal loan rates available, with rates starting around 7.49% APR for well-qualified borrowers. No fees, no prepayment penalties.

Marcus by Goldman Sachs

Marcus has no origination fees and competitive rates. They are a solid option for refinancing with good credit. Read the full Marcus personal loan review for details.

LendingClub

LendingClub works with a range of credit profiles. They charge an origination fee but can be a good option if other lenders turn you down. See our LendingClub review for current rates.

Avant

Avant is designed for borrowers with fair to good credit, typically 580 to 700. Rates are higher than SoFi or LightStream, but Avant accepts applicants others reject. See our Avant review for more.

Comparison Table: Personal Loan Refinancing Lenders

Lender	APR Range	Min Credit Score	Origination Fee	Loan Amounts
SoFi	8.99% – 29.49%	680	None	$5,000 – $100,000
LightStream	7.49% – 25.49%	660	None	$5,000 – $100,000
Marcus	6.99% – 24.99%	660	None	$3,500 – $40,000
LendingClub	9.57% – 35.99%	600	3% – 8%	$1,000 – $40,000
Avant	9.95% – 35.99%	580	Up to 4.75%	$2,000 – $35,000

How to Refinance a Personal Loan: Step by Step

Get your current loan details: Note your balance, current rate, remaining term, and payoff amount.
Check your credit score: Free options include Credit Karma, Experian, and your bank’s credit monitoring.
Pre-qualify with multiple lenders: Most lenders let you check rates with a soft credit pull that does not affect your score.
Compare offers: Look at APR (not just rate), fees, loan term, and total cost.
Apply formally: Submit your full application with the chosen lender.
Use the funds to pay off the old loan: Some lenders send the funds directly to your old lender. Others deposit into your account and you pay it off yourself.
Confirm payoff: Make sure the old loan is marked paid in full.

Things to Watch Out For

Prepayment penalties: Some loans charge a fee if you pay them off early. Check your current loan agreement before refinancing.
Origination fees: These can add up. A $1,000 fee on a $10,000 loan is 10% of the principal — factor this into your savings calculation.
Extending your term: A lower payment is nice, but more months means more interest. Do the math on total cost, not just monthly payment.

How Much Can Refinancing Save You?

Example:

Current loan: $15,000 at 22% APR, 36 months remaining
Monthly payment: $570
Total interest remaining: $5,520

After refinancing:

New loan: $15,000 at 11% APR, 36 months
Monthly payment: $491
Total interest: $2,676
Savings: $2,844 over 3 years

For a broader look at personal loan options, see our roundup of the best personal loans of 2026.

If you are carrying multiple high-interest debts, a debt consolidation loan could be a smarter move than refinancing a single loan.

Frequently Asked Questions

Can I refinance a personal loan with the same lender?

Sometimes yes, sometimes no. Some lenders allow it, especially if you have been a good customer. But you will usually find better rates by shopping around with new lenders.

Will refinancing a personal loan hurt my credit?

There will be a small temporary drop when the lender does a hard credit pull. But over time, if you make on-time payments and reduce your interest burden, your credit should improve.

Is there a limit to how many times I can refinance a personal loan?

There is no legal limit. But every refinance comes with costs and a credit inquiry. Refinancing too often usually does more harm than good.

What happens to my old loan when I refinance?

The new lender pays off your old loan in full. The old account is then marked as paid off and closed. This is generally good for your credit history.

Can I refinance if I have missed payments on my current loan?

You can try, but missed payments hurt your credit score, which makes it harder to qualify for a lower rate. You may want to get current on all payments and wait a few months before applying.

Rates as of May 2026. Rates and terms change often. Check with each lender for the most current information.

May 6, 2026