Does investing in the stock market intimidate you? Do you wish someone could just make the entire process of investing easier?

Trust me, I’ve been there. I avoided the stock market entirely for a few years because I was so overwhelmed with the entire process.

Trying to learn financial terminology felt like I was trying to learn hieroglyphics. I just didn’t understand it. I knew I wanted to save money for retirement but I didn’t want to make a mistake and lose a bunch of money.

Sound familiar?

At that time, new platforms were just getting started known as robo-advisors. I wish I would’ve started with them earlier as they make it much easier for beginners to invest in the stock market.

Instead, I poured into financial podcasts, books, blogs, and anything else to understand how to get started investing. Now that I have the background, I can say that robo advisors will make it so much easier to get started.

Two of the most common and popular robo advisors are Betterment and Wealthfront. They both provide options for investors to make it simple and easy to invest.

Here’s everything you need to know in the betterment vs. wealthfront debate.

Betterment vs Wealthfront | The Robo-Advisor Matchup

Robo advising is a relatively new service that many people thought would fail in the initial stages. Before diving into the Betterment vs. Wealthfront debate, it’s important to learn about robo advising and how both of these great companies got started.

As I mentioned, investing is made unnecessarily hard in my opinion. It’s the reason so many people never start investing or have enough money in retirement. They are scared of the financial jargon, complexity, and losing money.

Ultimately, both companies were both created to help the everyday investor simplify the entire process.

What are Robo-Advisors?

Robo-advisors are online investing platforms that act as a financial advisor to help get you higher returns on your money. They are great options for beginner investors who just want someone to do it for them. Plus, since robo-advisors aren’t human (obviously), they keep costs lower and follow an algorithm to invest your money.

Two of the most popular advisors in this field are Wealthfront and Betterment in a growing industry. Both are great options but they have certain perks and benefits depending on your financial situation which I’ll cover.

Why Use Robo-Advising?

The main reasons to use services like Wealthfront and Betterment is because both are good for long-term, passive investors. My main goal with investing is to keep it simple, pay low fees, and minimize the amount of time I need to spend on them. If you’re busy with a family, career, and other adulting obligations, I’m sure you can agree.

Both of these companies will help you maximize your returns without making you have to understand the ins and outs of the stock market. Robo advising will help you get the most for your money with the least amount of effort.

The History of Wealthfront

Wealthfront is relatively new and was launched in 2011 by Andy Rachleff and Dan Carroll. Prior to beginning Wealthfront, Rachleff taught tech entrepreneurship courses at the Stanford Graduate School of Business. He also worked as the vice chairman at the University of Pennsylvania.

Both of his prior careers made him realize two things:

1. He constantly found himself being asked questions about investing from students and entrepreneurs. While he wanted to help, he couldn’t as most entrepreneurs and students had too low of balances.
2. He also realized the best-managed firms in the world were using outdated tools that weren’t matching technological updates with apps.

Like any good entrepreneur, he saw a problem in the marketplace and then created the solution with his company.

His partner, Dan Carroll was a former trader. One day, when helping his parents assess the damage from the 2008 stock market collapse he felt they misled with previous advice from their advisor.

So in 2008, the two founded “KaChing!” This company was created to mimic the portfolios of seasoned stock professionals using smaller amounts of money. In 2011, the company underwent some changes and officially became Wealthfront.

The History of Betterment

Betterment was founded in 2008 by Jon Stein and Eli Broverman. Most people associate Betterment as the actual first robo advising platform. While in college, Stein was studying economics and decided to apply his knowledge to his own financial portfolio.

It was then he realized that economics assumes that people are rational when investing, which he realized is rarely the case. Especially when it comes to managing money (I can 100% agree here). He then teamed up with Broverman, who was a securities attorney at the time, to create the first robo advising platform.

Betterment is different than Wealthfront as they focus on giving fiduciary advice. Their fiduciaries have no funds of their own and sole job is to help you manage your investments. This is one of several differences that I’ll cover in the Betterment vs. Wealthfront debate.

Comparing Betterment vs. Wealthfront

Now that you understand the history of these two great platforms, let’s compare the major differences so you can make the best choice for your investments.

Minimum Deposit

Betterment has no minimum deposit, whereas Wealthfront has a $500 minimum. In the world of investing, $500 is still a great option! In the past, Wealthfront used to be $5,000 but decreased to help more investors.

Either option is a good one here.

Annual Fees

Keeping fees low used to be difficult before robo advisors, especially if you used a financial advisor or mutual funds. But fees are so important to understand when it comes to investing in the stock market. Best-selling author and life Tony Robbins, breaks down why it’s so important to keep your fees low in his best-seller, Money: Master The Game.

“But what the majority of Americans don’t realize is that an increase in 1% in fees will cost you 10 years in retirement income!”

Keeping fees low is crucial to having more money in your future. Luckily, both Wealthfront and Betterment do a great job of keeping costs low for investors.

Below is a table to show the differences in annual fees for investing in both platforms using a tax-deferred (i.e. IRA) account.

Tax Efficient Investing

Both Wealthfront and Betterment offer great features to help minimize taxes as well. Of course, this assumes that you are using a taxable account. They do this with “tax loss harvesting.”

To simplify, tax loss harvesting is a rebalancing of your portfolio. They do this on a daily basis, not annually, which is what typically happens.

Another way they minimize your taxes is by only using index funds. Not only are these the lowest fees but they provide a natural tax advantage. Additionally, both platforms also use dividends to rebalance your portfolio. This means you’ll sell fewer positions which will result in fewer capital gains taxes as well.

For the more seasoned investor, Wealthfront wins in this category. If you have at least $100,000 invested in a taxable account, you are eligible for Passive Plus. This is a feature with advanced features that can add higher returns to your portfolio.

Portfolio

As I mentioned in the previous section, both platforms invest your money into low-cost index funds (ETFs). Betterment invests your money in a combination of 13 different ETFs. This includes six stock funds and seven bond funds.

The percentages of the ETF allocation are no longer fixed, either. Depending upon your allocation, Betterment adjusts the allocation of each individual ETF to meet your goals.

Betterment Portfolio Options

Stock Funds

Bond Funds

In addition to its main portfolio, Betterment also offers four additional options as well:

1. Goldman Sachs Smart Beta Portfolio — This portfolio is geared for higher returns but higher risk as well.
2. BlackRock Target Income Portfolio — This portfolio is the opposite of the Goldman Sachs portfolio. It was designed for investors who want low risk and all investments are put into bond funds only. No stock funds here!
3. Socially Responsible Investing Portfolio — This portfolio is a spinoff of the main Betterment portfolio and geared toward more socially responsible investing.
4. Flexible Portfolio — You can now opt to have control over your asset allocation within the main portfolio. While you will still get recommendations from Betterment, it’s nice to have the ability choose. This option requires the most work and is great if you’re a more hands-on, savvy investor.

Wealthfront Portfolio Options

Wealthfront is similar to Betterment but uses a total of eleven funds to build your portfolio. Here is an overview of the simplified but more diversified Wealthfront portfolio.

Stock Funds

Bond Funds

Alternative Investing Choices

One of the biggest advantages of Wealthfront is the “alternatives” category. With Betterment, you only have the option to choose stock and bond funds. But with Wealthfront you can also invest in a REIT (which is a real estate fund) and natural resources fund. This makes Wealthfront a more complete portfolio in my opinion.

Also, depending on if your account is taxable or tax-deferred the funds and asset allocation might change slightly. Ultimately, both offer great, low-cost index funds.

Retirement Planning

One of the best parts about robo-advisors is their ability to help you plan for retirement.

Both of these platforms sync with your external accounts to give retirement planning advice for financial life. Based on separate review sites, both platforms are very consistent in the retirement planning methodology.

Wealthfront

One benefit of Wealthfront is that they offer Path. This service helps you plan for big retirement goals like a home purchase, college tuition, and retiring. This is built into the service and doesn’t require any extra fees.

Betterment

Betterment has a few more options for retirement planning than Wealthfront but at a cost. It charges 0.40% per year for its Plus plan and 0.50% per year for its Premium plan. Premium is similar to the Plus offering, but instead of only one annual phone call, Premium offers unlimited communications with advisors.

If you’re younger or have a simpler portfolio, either platform will work great at helping you plan for retirement. If you’re older or have a more complex portfolio, I’d probably recommend Betterment. They have an edge on Wealthfront as they have human advisors. But, like using a typical financial advisor, it is more expensive.

Customer Support and Resources

One thing I love about both services is that they provide live customer support. This can help give you peace of mind when it comes to making sure you’re investing your money wisely.

Both companies also have helpful resource centers online which include in-depth blogs to help better understand your financial goals.

Betterment

Betterment wins in the battle for the best hours. Here are there customer support hours:

• Monday-Thursday: 9:00 a.m.—8:00 p.m. ET
• Friday: 9:00 a.m. – 6:00 p.m. ET
• Saturday and Sunday: 11:00 p.m. – 6:00 p.m. ET (support is provided via chat only)
• Email support available 24/7

Their blog has a ton of helpful articles, podcasts relating to money, and even offer personalized calculators to help you plan your retirement.

Wealthfront

Wealthfront has slightly less availability when it comes to customer service. Here are the customer support hours for Wealthfront:

• Monday through Friday: 11 a.m. – 8 p.m. ET
• Email support available 24/7

One of the biggest downsides of Wealthfront’s customer service is not having personal support on weekends. Betterment’s chat option is still better than no support and available on weekends.

Like Betterment, Wealthfront has a helpful resource library including a great section about careers. It discusses how certain career choices can significantly affect your long-term wealth.

Betterment allows all customers to chat with 12 financial advisers through its mobile app and receive responses within one business day. And if you enroll in the Premium account, you also get unlimited access to CFP professionals.

Wealthfront’s service lives purely online and in its app, with no human advisers to speak with.

Expertise

So who are the wizards behind these two magical software’s? Even though these platforms are robo advisors, there is a ton of behind the scenes work to create these helpful platforms.

Betterment

Betterment doesn’t hold back when it comes to making sure your money is in the right hands. They hire Certified Financial Planners (CFP), behavioral finance specialists, and macroeconomic researchers to design the software.

All members of the committee also hold undergraduate, master’s, and Ph.D. degrees. Their main areas of specialties are decision science, mathematics, operations research engineering, and computer science.

Wealthfront

Wealthfront is very similar in this category. Their research team members also include individuals with undergraduate, master’s, and PhD degrees in the same areas of expertise.

Plus, their Chief Investment Officer, Burt Malkiel, is a Senior Economist at Princeton University. He is commonly known as one of the first people who brought passive investing to the masses.

There isn’t a winner here but it’s great to know that both platforms use incredibly smart people to help grow your money.

Referral Program

Both services also have referral programs to gives you incentive to bring in family and friends. The more people you refer to these great services, the more you are rewarded!

Betterment is offering a special deal for new individual accounts. It will waive management fees based on the total amount you deposit within 45 days of opening an account, so you can get up to one year managed totally free!

With Betterment’s referral program, you will get 30 days managed free for every friend who funds and that friend also gets three months free. Additionally, when your first three friends fund, you also get an extra free year.

With Wealthfront’s referral program, you and your friend get $5,000 managed free when the friend funds an account, so in total you’ll get your first $15,000 managed free.

Summary of Betterment and Wealthfront

Betterment

Thanks to no minimum opening balance, simple investment setup, and a history of leading the market for robo-advising, Betterment is the best option for new investors looking to make money in the markets with virtually no personal involvement beyond funding your account and an initial risk profile.

Because tax loss harvesting is built in, any investor at Betterment can take advantage of opportunities formerly reserved for the wealthiest investors even with a small starting nest egg. Wealthfront does offer investors free management on portfolios below $10,000, which gives them a leg up over Betterment on that front; but no minimum to open made Betterment the winner.

Here are some of my favorite perks of Betterment:

• No minimum deposit
• Fractional shares, meaning you don’t have hardly any cash in your portfolio.
• Three additional portfolio strategies. This is great as it gives options to have more or less risk based on your current retirement plan.
• Flexible portfolios. This is a new feature that lets you become more hands-on (if you want)
• External account analysis. This feature allows Betterment to examine your entire financial picture including all external accounts. It also gives you estimate on how it would look if your entire portfolio was within Betterment.
• Financial advice packages. This new feature gives you tailored advice based on specific life events. This could include buying a home, paying for a child’s education and retirement options. This is great as it’s a service you typically get from a 1-on-1 relationship with a financial advisor.

Wealthfront

I think that Wealthfront is the best robo-advisor if your portfolio is over $500. Thanks to its direct indexing tax strategy, investors can get an edge over Betterment in the long-term.

Fees are nearly the same between the two companies for portfolios from $10,000 to $2 million. Over $2 million, Betterment is cheaper again

Remember, for any investor with more than $500 that you contribute to a new account, Wealthfront is free up to $10,000.

Here are some of the other amazing features with Wealthfront:

• REIT and Natural Resources ETF (unlike Betterment). This can let you take advantage of more than just stock and bond funds.
• 529 College Savings Plans. It’s never too early to start planning for your children’s future education costs!
• PATH. This feature helps you find the right path to align with your biggest life goals. They also now offer “college planning with path” as well.
• Portfolio line of credit. If you have over $100,000 you can take a line of credit out against the investment you have within Wealthfront.

Are There Other Robo-Advisors?

As you can tell, there are tons of perks when it comes to using Betterment and Wealthfront. So are there any other robo advising platforms out there?

Yes, the robo-advisor industry is continuing to see growth as people want to invest without the hassle of learning about the stock market. But in my opinion, Wealthfront and Betterment are the two best options available.

Just in case, here are the other most common robo advisors:

1. Personal Capital

As you know, Money Peach is a big fan of Personal Capital! They offer free personal finance management tools that are great for any investor and offers investment management for a fee.

They offer great free tools that I think everyone should take advantage of immediately. You can track your net worth, keep a budget, and all sorts of other features. If you have over $100,000 you can also use their robo advising services as well.

2. WiseBanyan

WiseBanyan offers no-fee robo-advising with no account minimum like Betterment. They have similar features like tax loss harvesting and others from Wealthfront and Betterment. If you are a brand-new investor with a small portfolio WiseBanyan is another good option.

3. Wealthsimple

Wealthsimple is another option with no minimum balance requirement, but they do have management fees for your account. They charge 0.4 percent to 0.5 percent in management fees, which makes them higher than others on this list of robo-advisors.

Tax loss harvesting is included with Wealthsimple Black but only if you have over $100,000 in your portfolio. Wealthsimple also offers socially responsible portfolio options.

4. Schwab Intelligent Portfolios

If you already have any accounts open with Charles Schwab, you may be interested in Schwab’s robo-advising product. One of the big perks is that they have no fees. The minimum account balance is $5,000 to get started with Schwab.

5. Acorns

Acorns is great for students and people who can only invest a small amount of money. You invest your spare change from monthly expenses. While it won’t be enough to retire on, it’s a good way to get started investing even if you don’t have much capital yet.

So Which Robo-Advisor Should You Choose?

Both Wealthfront and Betterment are great choices for your investment needs. They both offer diversified portfolios (with low-cost ETFs), automatic rebalancing and low fees.

Like I mentioned, one of the biggest downfalls of mutual funds is the high fees. Luckily, these robo advisors keep costs low and can help you save big for your retirement.

Betterment and Wealthfront both appeared to be risky when they first entered the market nearly a decade ago. But in the years since, robo-advising makes it easy for people to get started investing.

Honestly, you can’t go wrong with either if you’re just starting out. If you have been waiting to invest because you don’t know what stocks to pick, robo-advisors are perfect for you. Get started sooner rather than later to take advantage of compound interest and have more money for your retirement.

For one, most people probably don’t know. And even if they did know, they’re probably not likely to just come out and tell you. People get very sensitive about money and how it relates to success in the world.

Luckily, you don’t have to go asking friends, family, and coworkers what their net worth by age is since the information is already out there. Here’s everything you need to know about net worth, what the average worth by age is, and how you can increase your net worth.

What Is Net Worth?

So, why does your net worth really matter? According to Investopedia, your net worth is a huge indicator of your overall financial health.

Here’s the definition of net worth:

“Net worth is the amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure of how much an entity is worth. A consistent increase in net worth indicates good financial health; conversely, net worth may be depleted by annual operating losses or a substantial decrease in asset values relative to liabilities.”

That definition may be great if you’re studying to get a Masters in Finance, but can we please simplify that definition for people like you and I??

Net worth is everything you have minus everything you owe. If what you have (assets) adds up to a value of $500,000 and everything you owe (liabilities) totals up to $300,000 –  then your net worth is $500,000 – $300,000 = $200,000.

Net worth is such a good tool to evaluate your financial life because it includes both assets and liabilities. Instead of people asking, “What is your net worth” most people tend to ask “What do you make?”

Take into consideration that one person’s income may be $1,000,000 but they may only have a net worth of $100,000. On the contrary, another person can make $100,000 and have a net worth of $1,000,000. Net worth is always a better indicator of wealth than working income.

In fact, in the book Secrets of the Millionaire Mind, T. Harv Eker states: “Rich people focus on their net worth while poor people focus on their working income.”

Instead, net worth factors in assets and liabilities to give you one number that essentially determines your entire financial life, similar to a credit score. So, how do you figure out your net worth?

How To Calculate Your Net Worth?

Figuring out your net worth is very simple. You can do it manually or you can use a free app to do it all for you. Let’s start off with the free app and then walk through the manual process.

Personal Capital Net Worth App

It’s never been easier to track your net worth thanks to Personal Capital. This free tool makes it effortless to track your net worth. And the best part is that the app is 100% free!

All you do is add your bank accounts, credit cards, and any other loans to the app. Then, it will give you a complete financial picture including your net worth in real time. Plus, you can compare yourself to others average net worth in your income bracket and age range. I also love how the app allows you to track progress towards any financial goals you set.

Not to mention the app also lets you analyze your investment fees, track your spending, and even help with your retirement options. Seriously, Personal Capital does it all!

Manual Net Worth Tracking

Even though I’m a millennial blogger who loves technology, I still find myself doing this old-fashioned method as well. Before I knew about the wonders of Personal Capital, my first net worth tracking adventures began in 2016 with a blank excel sheet.

Hands down, I can say it’s one of the best financial habits I’ve ever started. Setting up a net worth tracker is easy. Here’s what to include for your assets and liabilities.

Assets

• Retirement accounts (Roth IRA, 401k, etc)
• Checking and savings accounts
• Brokerage accounts
• Additional accounts (This could include certificate of deposits, (CD’s), money market accounts, 529’s etc.)
• Items of substantial value (This could include things like jewelry, artwork, furniture, antiques, etc.)

Liabilities

• Auto Loans: Your car is both is an asset and a liability. If your car is valued at $20,000 and you have $15,000 left on the loan, add the $20,000 to assets & 15,000 to the liabilities column.
• Student Loan Debt: Make sure to include all student loan debt on your net worth tracker.
• Home Loan (Mortgage): This is the same as the car example. Your house is both an asset and a liability. If your house is valued at $250,000 and you own $150,000 left on your loan, then add $250,000 to assets and $150,000 to liabilities.
• Back taxes
• Credit card debt
• Liens or judgments against you
• Medical debt

How often should I track my net worth?

Tracking your net worth is a very personal thing. I know some people who look at it every day similar to weighing themselves on a scale. They figure the more top of mind, the more they can focus and manage it.

Personally, I check my net worth once every 30 days. There are constant fluctuations in the stock market so I stick with monthly tracking. If you use Personal Capital it makes it easy to look whenever is convenient as the app updates automatically.

Now that you know how to track your net worth, here’s what you need to know about your net worth by age.

Net Worth By Age

As I mentioned, Personal Capital does a great job with their free tool within the app. If you’re a manual tracker, here is how you can learn more about net worth by age.

I want to remind you that everyone started in a different spot. Some people had monster student loans, others started working earlier, and others might have made some good stock picks.

The point is to not compare yourself to others.

Please remember to use these figures as a guideline. At the end of the day, you should only compare your net worth to your previous net worth. Make sure you set clear goals and take the necessary steps to achieve them. Don’t compare yourself to others for no reason.

U.S. Census Net Worth Data Study

The U.S. Census came out with a report in 2013 (unfortunately this is the latest update of it) and released the figures of the average net worth by age bracket. Again, this figure is slightly outdated but it’s the only one that is verified by the U.S. government.

Please note, these figures below include home equity as well. Here’s is the average net worth by age breakdown:

Net Worth By 35

The average net worth for a 35-year old is $6,900. I’m surprised the data doesn’t start until 35 years old but it kind of makes sense. For most people, your 20’s are a time to graduate college, find a career, and start building a life. You might be starting a family and buying a house which requires a significant investment of your time and money.

So how do you compare at 35 or how did you compare? Higher? Lower?

Whatever the case, I’m sure your goal is to increase your net worth as you’re still young and can take advantage of compound interest. Not to mention, from 35-44 there a is big jump from $6,900 to $45,740 so you need to get going.

Here are three strategies to keep building wealth in your 30’s:

Create a Cash Flow Plan

The one book that changed my life forever was the Millionaire Next Door by Thomas Stanley. I believe this book should be required reading for everyone to graduate high school.

Once you read it, you will know how important it is to create a cash flow plan (AKA budget) to reach the seven-figure club. While you might start earning more money in your 30’s, it’s so important to keep with a budget so you don’t lose control of your finances.

Use the 50/30/20 budget rule to make it easy to save and reach your financial goals. This plan allocates 50% of your budget toward fixed expenses like rent, mortgage, utilities, etc. 30% goes to variable expenses like entertainment, groceries, etc and the last 20% is used to reach your financial goals. This could include paying off debt or contributing to a retirement fund.

Refinance Student Loan Debt

When’s the last time you checked the rate of your student loan debt? If your rate is higher than 3 or 4% check out college graduates are saving money. Even a small, 1-2% decrease in your rate you will save you tons of money over the life of the loan.

Start (or Keep) Investing For Your Future

Now is the time to get serious about investing for your future. If you want to become wealthy and surpass the average net worth when you’re older, one of the best ways to invest in a 401k and/or a Roth IRA. These tools make it easy to save money for your future and take advantage of compound interest.

Net Worth By 44

A decade later, at 44 years old, the average net worth is $45,740. Roughly a thousand dollars for every year you’ve been alive. This is a time in your life where it can feel easy to spread thin with your finances.

You probably have a mortgage, home repairs, auto loans, possibly student loan debt, and a family to provide for. And statistically, you probably have credit card debt as well. If this is the case, make it a top priority to pay off that debt as soon as possible.

Here are some strategies to help you increase your net worth so you’re ahead of the average by the time you are 54.

Pay Off Credit Card Debt Fast

Credit card debt is definitely considered “bad debt” as it means you probably went past your budget and are paying 12-20% interest rates each month. See if you can reduce some costs, start a side hustle or get a low interest or zero percent balance transfer offer to start paying off your credit cards.

Keep Saving For Your Future

At this point, you want to make sure that you are heavily contributing towards your retirement accounts. If you’re married, try to have both of you contributing as much as you can to keep using the power of compound interest.

Depending on your net worth and goals you might want to open a brokerage account if you are past your maximum IRA limits and want to save even more. It might be worth even checking with a fiduciary financial advisor to make sure you are on track for the future.

Invest In Your Children

If you have kids and want to help them with going to college, make sure you start saving for this as well. Look into opening an IRA for them or using a 529 college savings plan to help get them started.

Net Worth By 54

At age 54 the average net worth is just a little over $100,000. The six-figure club should be within reach if you’ve been consistent in the past decade with your budget and savings. At this point in your life, you’re probably earning more money than ever as you’ve run a business or got promoted to a high position within a company.

Look For Better Opportunities

Did you know that if you stay with the same company sometimes you’re missing out on a lot of money for a similar role with a competitor? Fast Company found that you should plan on switching jobs every three years for the rest of your life to maximize your income.

While every three years might be a bit drastic, make sure you are staying aware of new opportunities. Catch up with friends in the industry, constantly network, and see if there are other places you can earn more money.

Invest in Rental Properties

Rental properties are a great way to grow your passive income streams and net worth. Homeowning is one thing but rental properties are a way that lots of people earn more money with little time or effort.

Plus, you can find rental property management services to take care of the minute details like collecting rent and dealing with renter issues so you don’t have to worry about it. And if you love the house you can always live in it in the future as well.

Sell Your Services

At this point in life, you’ve got a ton of skills that people will pay to learn. If you want to provide paid mentoring services to help people this is a great way to earn more money and help others. Whether you’ve worked in management, helped scale a business or are an entrepreneur, there are plenty of younger people who want to learn the craft.

Net Worth By 64 (and Beyond)

At the age of the average net worth rises to a little over $164,000. This is a big jump in ten years but most likely it has to do with your investment accounts.

Don’t forget the power of compounding as you get older. Warren Buffett is 83 years old and worth around $70 billion at the time of this post. While it makes him one of the richest people on the planet, 99% of his net worth came after the age of 50!

At this point, you should have a pretty good clue about when you retire and what you will do with your time. The second part is equally as important as your retirement party. You should have a plan for how you will spend your day to make sure you are fulfilled when you don’t have to go work anymore. Likely, you’ve worked your whole life and it will be a huge transition so make sure you are prepared.

Here are some things you can consider now that you’re nearing or already retired.

Downsize Your House

Of course, this is 100% optional but if you have an empty nest you might have more house than you care to deal with. Plus, if you’re retired you don’t have to live anywhere specific. You could even have two houses or travel in an RV or by boat. Whatever you want!

Shift Your Asset Allocation

At this age you probably want to get out of most stocks or stock funds and have your investments in safer investments as you don’t have the time horizon you did in your 30’s or 40’s.

3 Biggest Takeaways From on Net Worth

1. Net Worth is MORE Important than Working Income

As important as your income is, your net worth is still more important. You and I have both seen the highest paid celebrities in our society go flat broke after making millions of dollars. Your income is a measure of right now whereas your net worth is a measure of right now AND your future.

2. Don’t Let Yourself Become the Average

A recent CNBC study shows that a 32-year-old millennial who plans on retiring at age 67 with a million dollars will actually be below the poverty line once you factor in inflation.

Therefore, the average net worth of $164,000 would feel like $344,000 in 30 years if adjusted for inflation at 2.5%.

As you can see, the average net worth will put you below the poverty line.

3. Owning a Home Plays a Huge Role

It really pays to own your home and build equity. While some people don’t want the responsibility that comes with being a homeowner, it is a huge factor in increasing your net worth. Take a look at the graph below to see the percentage of total home equity compared to the average net worth.

10 Easy Ways to Increase Your Net Worth

Now that you’ve seen all the different net worth by ages, here are some tricks to help you increase your net worth, regardless of your age. Whether you just graduated college and have a mountain of student loan debt, or you’re in your mid-40’s, these money tips will help you increase your net worth.

I want you to end up with more than enough money for retirement and not have to work at a job that you will probably hate. Start using these steps now and take action. I promise your future self will thank you tremendously!

1. Start a Side Business

It’s been said that the average millionaire has seven streams of income. How many do you have outside your paycheck? Diversifying your income streams is a great way to increase your net worth and protect yourself if you were to unexpectedly lose your job.

Check out this epic list of side hustles to start adding more money towards your net worth by paying off debt (liabilities) and increasing your savings (assets). It is not as difficult as it sounds to get started with a side hustle and very quickly generate even an extra $500 per month!

2. Invest in Real Estate

A large amount of the net worth in the table above is directly related to equity in a home. According to Kiplinger, homeowners are richer than renters. And it makes sense.

When you buy a home you have to pay the down payment which is usually 5-20% of the total home value. Then, as you pay the mortgage a portion of the payment goes to the principal which is basically paying yourself. And historically, homes increase anywhere from 2-5% in value each year.

All things considered, if you plan on staying somewhere for more than a year or two and have your finances in shape, look at becoming a first-time homeowner. Not only will it help you increase your net worth but also help with taxes as well.

You may also want to listen to Episode 92 of the Money Peach Podcast: How to Pay Off Mortgage in 2-5 Years on Your Current Income

3. Don’t Keep Up With The Joneses

So many people limit their ability to vastly increase their net worth because of pointless spending on new clothes, cars, and homes. Keeping up with the “Joneses” is a recipe for disaster.

4. Invest in Yourself

As the iconic John C Maxwell said, “Growth is the great separator between those who succeed and those who do not. WHen I see a person beginning to separate themselves from the pack, it’s almost always due to personal growth.”

The more you know, the more skills you have, and the more connections you acquire, the more valuable you are in the world. Invest in yourself by attending events, seminars, and reading books that will help you grow.

The more you grow and develop, the more you can give back and get rewarded for your efforts. The most wealthy and successful people in the world are constantly growing, developing, and learning new skills which almost directly correlate to increasing their net worth.

Do something today your future self will thank you for!

5. Pay Down Your Debt

Debt crushes your ability to grow your net worth. Make paying off debt a major priority, especially bad debt like credit cards.

If you have a credit card balance with $5,000 and an APR of 22% you’re spending $1,000 each year just in interest alone! Use a balance transfer to get your card to a 0% rate if possible or stop saving just to pay off high-cost debt. Often times, your investment contribution rates can’t offset the high prices of credit cards.

6. Start Saving…Now!

Compound interest is one of the keys to growing your net worth. The sooner you can invest and start applying compound interest to your savings, the higher the likelihood of drastically increasing your net worth.

7. Don’t Touch Your Retirement Accounts

While you can use a 401K loan for the right circumstances, you shouldn’t think of this as a backup emergency fund. If you take the money out of your retirement account it loses the power of compounding over time and missing out on any investment gains.

Try to keep your appropriately titled “retirement funds” for your retirement, not a spending spree.

8. Pay Yourself First

As the legendary investor Warren Buffett said, “Don’t save what is left after spending. Spend what is left after saving.” Paying yourself first is one of the easiest and most effective ways to drastically increase your net worth.

Think of this as one of the cornerstones to financial success. Paying yourself first ensures that you don’t give into temptation each time you get paid. Automation contributions and direct deposits make it easy to stay focused toward reaching your financial goals.

Plus 401k’s and IRA’s make it easy to pay yourself first with automatic contributions. Select the amount of money you want to save each paycheck and it will automatically get deducted. Even if you feel you can’t save, try to start with 2-4%. You can also increase in the future but even getting into the habit of saving create momentum to increasing your net worth.

9. Learn About Money

Have you ever noticed that once you start regularly tracking and learning about something you tend to understand it much quicker? For example, if you’re learning to play an instrument or learn a new program at work, you catch on after reading, learning, and experimenting. You get better with experience.

The same goes for investing. At the beginning of my investing journey it felt like I was reading hieroglyphics. I literally didn’t’ know what a stock was, how to open a Roth IRA or how to save for retirement. It was a completely different language.

But I knew that if I wanted to not work when I’m older I needed to learn this new financial language. I bought books, read blogs, watched TV shows, and just started investing. As I got more confident I began to pick individual stocks, learn about index funds, and even trade options.

And it all started with nothing. If you want to increase your net worth you have to become familiar with money. You need to make learning about money a major priority. It’s true, the more you learn, the more you earn.

10. Track It Regularly

Prior to 2015 I never tracked my net worth. Thankfully around that time I started my first personal finance blog after searching for ways to improve my finances. It was then I learned the power of tracking your net worth.

If you’re trying to change anything in your life it’s super important to track it on a consistent basis. Want to lose weight? Track your calories eaten and workouts completed. Want to grow your net worth? Track your spending, saving, and investment returns.

And now, thanks to Personal Capital, it’s never been easier to track your net worth! Once you input all of your account information it makes it super simple to log in and see how everything is doing. You Can view your savings, spending, investing returns, and pretty much anything else.

Learn more about Personal Capital here.

Final Thoughts

As you can tell, there are a lot of different factors when it comes to understanding your net worth. The biggest takeaway I hope you get from this piece is to just start being aware of your net worth. Whether you are -$30,000 or worth $1,000,000, monitoring your net worth makes you more likely to take action and change it.

Some of the best personal finance bloggers started out documenting their debt payoff journey by starting a blog and inspiring others to do the same. Once you become aware of anything and set a goal for what you want, you can achieve it.

Again, remember that these figures are slightly outdated but still a good benchmark if you’ve ever wondered what is a “good” net worth by age. Ultimately, make sure that you are only comparing your net worth vs. your previous net worth. Don’t waste time and energy comparing yourself to others.

Use that time and energy to earn more money, pay off debt, save more money, invest, and work hard toward achieving your financial goals. And make sure to sign up for Personal Capital to make it easy to monitor and track your net worth moving forward.

What do you think about these figures? Were you surprised by the average net worthy be each age?

Please let us know in the comments!

Life happens and sometimes you might need a personal loan to help cover your expenses and get you out of a money crunch quickly. Whether you have to cover medical bills, buy a new air conditioner for your house or consolidate credit card debt, a personal loan can help.

There have never been more options to help you find personal loans and get approved in minutes. Unlike the old days where you had to go to a credit union or bank, now there are tons of options online.

These online lenders have made the costs go down as there are no physical branches. You can elect to use a personal loan company or a peer-to-peer lending company where people will contribute towards your loan.

Even if you have a low credit score there are still tons of great options to help you get started. Plus, getting a personal loan can actually help improve your credit score as you can pay off credit cards instantly.

Our Favorite Personal Loan Companies (In Order)

1. Credible

Credible is one of the best places to start because Credible isn’t actually a lender. Instead, Credible is a marketplace that will do a side-by-side evaluation of the top personal loan lenders for you to see and compare for yourself.

Another bonus is Credible does not charge any fees to use their platform for comparison and your credit score is not affected in anyway when comparing which lender will fit your needs the best.

The one drawback to Credible is although they do have relationships with many of the top lenders, they don’t have relationships with all of them which means your options may be limited.

It’s best to take a look at Credible along with the other direct lenders we have listed below.

Credible is also a great resource for student loan refinancing. The average student saves $18,688 when they refinance their student loan with Credible!

Check out Credible here.

2. Prosper

Prosper is different from some of the other personal loan companies as they are a peer-to-peer marketplace. They operate only online and have secured over $12 billion in personal loans since their origination.

Prosper offers personal loans for healthcare financing, debt consolidation, and other reasons.

What to Know About Prosper

Prosper has a few downsides though. All loans are unsecured, the loan amounts only range from $2,000 up to $35,000 and fixed APR can go all the way up to nearly 36% interest. This is incredibly high!

Like Lending Tree, they will pull your credit and other factors using their algorithm to determine your borrower risk. Your interest rate is based on their internal tools. There isn’t a ton of information available about their proprietary software but it’s best to have a higher credit score and a low income to debt ratio.

Some of the benefits of using Prosper include 100% online process and can pre-qualify yourself on their site without affecting your credit score. Of course, if you do go through with a loan a hard credit pull is required.

Should You Use Prosper?

Personally, I think there are better options on this list for personal loans. The loan amounts are relatively small and interest rates can be very high for some individuals.

• Unsecured loan amounts range from $2,000 to $35,000
• No prepayment fees but there is a one-time origination fee to borrowers (all P2P platforms have origination fees unlike other online loan companies)
• Fixed APR from 6.95% to 35.99% which can be very expensive if you have a poor credit score
• Easy online application and free tool to see if you would be a good fit
• Better rates for creditworthy borrowers
• No joint loan applications

To learn more about Prosper click here.

3. SoFi

SoFi is a relatively new company that was first established in 2011, however they have grown substantially in their last seven years and are now one of the best choices for personal loans in the nation. I’ve used them for life insurance and known several friends to use them for personal loans.

They offer home mortgages, student loan refinancing, parent financing, and student loans under the SoFi name. They offer variable APR and fixed personal loans.

What to Know About SoFi

SoFi is a phenomenal option when it comes to finding a personal loan company. New borrowers can qualify for financing from $5,000 all the way up to $100,000. Their fixed rate APR starts at 6.2% and max out at 15.37%.

While the lowest variable APR rates are 5.9% and can go up to 14.69%. It’s tough to find a better deal in the personal loan industry!

Plus, SoFi has very flexible options as most online lenders only offer fixed-rate loans. SoFi also has something very few, if any of the competitors have with their unemployment protection. If you lose your job and your main source of income after you’ve taken out a loan, you are eligible to receive this protection. They will halt your payments until you find a new job and even helps you find new opportunities in the workplace!

When it comes to payment they have five different payment plans available. You can choose to pay back your unsecured loans within 3, 4, 5, 6, or 7 years. The longer plans have a lower APR while shorter plans come with a higher APR. Also, they offer autopay to ensure you never miss a payment.

If you want to get started it’s never been easier with their free application process.

Should You Use SoFi?

• They offer variable and fixed APRs personal loans
• The application process is completely free
• They offer no prepayment penalty
• Loan amounts up to $100,000 (highest amount on this list)
• Generous repayment term options: (5, 7, 10, 15, and 20 years)
• Five different payment plans (3, 4, 5, 6 or 7 years)

Get started with SoFi personal loans here.

4. Lightstream

Lightstream is another personal loan company to help you pay for unexpected expenses. The only thing you can’t use your Lightstream for is business loans and post-secondary education loans.

What to Know About Lightstream

Lightstream is part of SunTrust Bank which has been around for over 100 years and has a lot of different personal loan options. If you have a high credit score, then Lightstream is a great option to help you secure a low-interest loan.

Lightstream offers loan terms from 2-7 years with interest rates as low as 3%! Even on the higher end the rates only go up to around 14%. If you choose to sign up for autopay you can get an even slightly lower rate.

As far as loan amounts they also offer some of the highest available of all online loan companies. The loans start at $5,000 and range up to $100,000!

The best part? They have essentially no fees on any of their loans. You won’t’ have to pay an origination fee or service fee like a lot of the others on this list.

Should You Use Lightstream?

If you have good enough credit to qualify for Lightstream, they are one of the best personal loan companies available!

• Loans range from $5,000 up to $100,000 (which is tied with SoFi for highest loan amount of any companies on this list)
• Loan terms from 2-7 years (bigger loans and longer terms than most online loan companies)
• Some of the lowest APR available! These can range from 3-14% APR
• No prepayment penalties, no origination fees, and no service fees
• They offer a “Rate Beat Program” if you meet the specified criteria, something no other loan company on the list provided

If you want to take advantage of Lightstream great rates learn more here.  

5. Lending Club

Like Prosper, Lending Club is another P2P (peer-to-peer) personal loan lending platform. They are headquartered in San Francisco and connect borrowers and investors across the United States. Unfortunately, if you live in Iowa or West Virginia you are not allowed to apply.

Most of the loans from Lending Club are unsecured loans and can be used for almost any purpose.

What to Know About Lending Club

Lending Club will allow borrowers to receive a loan that ranges between $1,000 and $40,000. Also like Prosper, they have an internal risk assessment that will weigh information about the borrower to determine the APR.

Once you submit all your information you are given a score that ranges from A to G. A is the safest borrower and G is the riskiest borrower. If you are in an “A” your rates can be as low as 6% which is very competitive among personal loan companies and peer to peer lenders. Good luck if you are “G” according to the risk investment tool as interest rates can go as high as nearly 40%!

Investors in Lending Club can choose if they want to play it safe with someone who receives a top grade or take more risk (and reward) by choosing someone who is deemed less risky. Loan terms range as well but can extend up to 60 months. They do not charge prepayment penalties and also allows for joint applications if you are applying with someone else.

Should You Use Lending Club?

LendingClub is a great non-traditional choice for your personal loan if you have a high enough credit score. Otherwise, like Prosper, your interest rates can be nearly double of some of the highest credit card providers and probably not worth a personal loan.

• Loans that will range from $1,000 to $40,000
• Fixed rate loans only with rates that range from 5.99% to roughly 36%
• Origination fees differ according to your risk grade after submitting all the necessary paperwork (the riskier the higher your origination fee will be)
• Loan terms up to five years but they never have prepayment penalties if you want to pay off early
• Joint applications are allowed (not as common as you’d think for loan companies)

Learn more about Lending Club here.

6. Best Egg

Best Egg is a traditional personal loan company that has competitive interest rates to help you pay for debt consolidations, home improvements, credit card refinancing or just about anything else. The company is very reputable and has received an A+ rating with the BBB and loaned over $4 billion to borrowers.

What to Know About Best Egg

Best Egg makes the process to apply for a personal loan very simple. Within a few minutes, you can check your rate without having your credit score impacted and receive your money within one to two business days!

They don’t offer quite the flexibility of other lenders and only offer three or five-year repayment terms. But you can borrow between $2,000 and up to $50,000.

The interest rates can be low if you have a good credit score but up to 30% if you don’t have a high enough credit score. Plus, they have high origination fees for their loans. The origination fee can be between 1-6% of the total loan value, which can add up for a higher amount loan!

One of the main perks is that you can always pay off your loan early and can receive your money quickly. If you’re in a pinch and need money the next day this is a great personal loan option!

Should You Use Best Egg?

Best Egg has some perks like checking your rate quickly but a few big disadvantages. The biggest one being the origination fee which can be a ton of money depending on your total loan amount.

• Limited, fixed terms of 3 or 5 years are available
• Loan amounts can range up to $50,000 if you have high enough credit scores
• There are no prepayment penalties or hidden fees except an origination fee that can be as high as 6%
• APR can range from 5.99% – 29.99% depending on your credit score
• Can receive the loan quickly once the free application is completed

Learn more about Best Egg here.

7. Payoff

Payoff is a California based personal loan, peer-to-peer online lender. Their main focus is helping borrowers get out of credit card debt with a lower interest loan.

What to Know About Payoff

If you choose Payoff to secure your personal loan you can expect a fixed APR between 8 and 25%. The actual rates are lower at roughly 5.94% and 22.6%. The total amount you can borrow ranges from $5,000 for the smallest and up to $35,000.

Loan payment terms are between two and five years. Like other peer-to-peer lenders, you will an origination fee that is dependent on your loan term length. If you choose a 24-month loan you receive a 2% fee, a 36-month loan is 3%, 48 months is 4% and 60 months is 5%. The only bit of good news from the origination fee is that it is the only fee you pay.

They also offer no prepayment penalties and no other fees besides the one-time origination fee. Payoff will also help you if you find yourself unemployed or have other financial hardships. Plus, they don’t have any late fees on payments!

Lastly, they go above and beyond with services to help you like monthly credit monitoring, resume review, and even offer interview advice. That is great service for an online loan company!

Should You Use Payoff?

Payoff has some perks that other peer-to-peer lenders just can’t match. They will help you during financial hardship, don’t have late fees, and overall a ton of flexibility.

The last thing you should know about Payoff personal loans is that you need a credit score of at least 660. This is the highest amount needed compared to other peer-to-peer lenders.

• Loan amounts range from $5,000 to $35,000
• APR from 8.00% – 25.00%
• Loan purpose is limited only to debt consolidation (mainly to pay off credit cards)
• All origination fees vary according to length of loan term

Learn more about Payoff loans here.

8. Avant

Avant is another traditional personal loan provider that operates in the US but only in select states. Like Lending Tree and Prosper, they evaluate your trustworthiness based on their internal system. If you do choose Avant you don’t have to use the loan just for debt consolidation like other lenders.

What to Know About Payoff

Avant is pretty standard compared with other online loan companies. They only offer fixed APR rates that are a very high 9.95% even if you have excellent credit. If you have worse credit and aren’t deemed as trustworthy might have to pay up to 36% interest!

Should You Use Avant?

Avant is pretty standard when compared to other online loan companies and allows you to get a loan with a credit score as low as 580.

• Unsecured loans that will range from $2,000 to $35,000
• Loan terms will range from 2-5 years
• APR’s that will range from 9.95% to roughly 36%
• Loan terms up to 5 years and all loans never have prepayment penalties
• There is an origination fee of 4.75%, regardless of loan term length and amount

Learn more about Avant here.

9. Marcus Personal Loans (By Goldman Sachs)

Marcus Personal Loans is another great option for personal loans as they are a division of the famed Goldman Sachs. This division is even named after the co-founder, Marcus Goldman. This division of the company is relatively new and was originated in 2016.

What to Know About Marcus Personal Loans

If you choose Marcus Personal Loans you can receive loans from $3,500 all the way up to $40,000. Their APR rates range drastically on your credit score. The lowest fixed cost loan is 6.99% and the highest personal loan goes up to 24.99%. Marcus Personal Loans are limited with their term options, only offering terms between three and six years.

One of the biggest benefits of using Marcus Personal Loans is that they don’t charge you late fees if you miss a payment. Instead, you are only penalized  by paying interest for the number of days you missed. This is a huge benefit and can be crucial if you forget a payment!

Making this error on a credit card would hurt your score substantially and have outrageous late fees. Plus, the online application process is very simple.

You submit your free application and they do a soft credit check, not a hard check initially like other lenders. This ensures that you are qualified, don’t take the credit hit, and see what type of rate you qualify for.

Lastly, you can also customize your monthly loan amount and payments to make sure it works best for you! This is very rare in the personal loan industry.

Should You Use Marcus Personal Loans?

• They offer no prepayment penalty and other hidden fees
• Loan amounts up to $50,000
• Customizable repayment terms
• Several different payment plans between 3-6 years

To learn more about Marcus Personal Loans and get started click here.

10. Upgrade

Upgrade is a brand new personal loan company that was founded in 2017. While it is new, two of the creators helped co-found Lending Club. This a great option if your credit score isn’t perfect. Upgrade requires that your credit score is at least 620 and bases your eligibility beyond just your credit score.

What to Know About Upgrade

Unlike a lot of the competitors listed, Upgrade evaluates your trustworthiness on your amount of free cash flow each month. To be eligible for a personal loan you must have $1,000 after all of your bills are paid.

There isn’t much customization with Upgrade. You can choose from a 36 or 60-month term length. Plus, your interest payments can range greatly. On the low end, Upgrade is around 7% and the high end 36%!

One of the biggest positives to getting a loan through Upgrade is their payment reduction option. If you are suffering from a financial emergency they will temporarily or permanently change your monthly loan payments. Also, they offer a credit monitoring software that will show you how to improve your credit.

Should You Use Upgrade?

This is a great option if you don’t have a very high credit score and you have a high monthly income.

• Potentially very high-interest rates (up to 36%)
• They offer no prepayment penalty and other hidden fees
• Loan amounts up to $50,000
• Payment terms of 3 or 6 years (no customization)
• Free credit monitoring tool which can be useful to improve your score for any future loans

Learn more about Upgrade here.

11. Citizens Bank

Citizens Bank is a full-service bank that offers an array of financial products. They offer traditional things like mortgage, student loans, savings, checking and even personal loans. Unlike other personal loan lenders, they also have physical locations as they are the 13th biggest bank in the US.

What to Know About Citizens Bank

As they are a traditional bank they offer very traditional lending services. Their unsecured loans can range from $5,000 all the way up to $50,000. While $50,000 is a lot, it’s only half of some of the lenders on this list.

Some of the benefits of using Citizens Bank includes no application, origination, prepayment or distribution fees. Like other lenders, they offer autopay and a smartphone App to help you manage your loan better.

One of the biggest benefits of using Citizens Bank for personal loans is that you can have a cosigner help you secure the loan. Even if you have applied and been rejected you can apply with a cosigner. If you choose a qualified cosigner they will only use their credit score to help you get the loan.

Should You Use Citizens Bank?

Overall, Citizens Bank has a ton of benefits to help you with a personal loan. Two of the biggest perks are physical locations and the ability to have a cosigner.

• Loans amounts that range from $5,000 up to $50,000
• APR rates from 5.99% to 18.99% on personal loans (some of the best on this list)
• Terms vary from 36 to 84 months (some of the longest on this list)
• No account fees ever (including no prepayment penalties)
• Physical branch locations available throughout the United States
• Ability to use a cosigner even if you have been rejected (one of the only loan companies on this list)

Learn more about Citizens Bank Personal Loans here.

12. Lending Point

Lendingpoint is another decent option if you have a low credit score and low monthly income. They specialize in helping you get a loan if your credit score is over 600 and earn at least $20,000 per year.

To help them determine your trustworthiness they will also look at your outstanding debts, bankruptcies, employment status, and other factors.

What to Know About LendingPoint

LendingPoint will help if you’re in desperate need but the APR is so high it’s hard to recommend this as a great option. The lowest APR is around 17% interest rate and can range all the way to 35%.

The term lengths are relatively short as well and range between 2-4 years. One benefit is that Lendingpoint does offer an option for two scheduled monthly payments instead of one.

Should You Use LendingPoint?

If you live in one of the 28 states that LendingPoint operates from it’s an okay option but I recommend looking at other options from this list first.

• Loans ranging from $3,500 up to $20,000
• Very high APR rates that will range from 17-35%
• Terms vary from 36 to 84 months

To learn more about Lending Point click here.

13. Discover Personal Loans

Discover has a personal loan division that offers personal loans and a few options that aren’t available by other lenders.

What to Know About Discover Personal Loans

Discover offers personal loans with interest rates starting as low as 6.99% APR. They also have flexible term lengths that range from 3-7 years.

The best part? They offer “lenders remorse.” If you decide that you don’t want the loan anymore they will let you return the entire amount with no hidden fees within 30 days of the loan origination.

Should You Use Discover?

• No upfront fees and loans ranging up to $35,000
• APR rates that will range from 7-25%
• Terms vary from 36 to 84 months
• Get your money fast (usually 2-3 business days)

To get started with Discover Personal Loans learn more here.

14. FreedomPlus

Freedom Plus is a great loan company if you have a high credit score (over 720) and earn over $30,000 annually. To be eligible you also must have a debt to income ratio of under 40%.

What to Know About FreedomPlus

FreedomPlus has the highest minimum loan amount of $10,000. The interest rates are decent and range from 4.99% to 29.99%. The major downside to Freedom Plus is the origination fee which can be as high as 5% and is dependent on your location, not the total loan amount.

Should You Use Freedom Plus?

• Loans ranging from $10,000 and up to $35,000
• APR rates as low as 5%
• Terms vary from 24 to 60 months
• No prepayment penalties

To learn more about FreedomPlus click here.

15. Peerform

Peerform is a P2P (peer-to-peer) platform that is a good idea if you have an average credit. It is very comparable to Lending Tree and other P2P platforms.

What to Know About Peerform

As you don’t need as good of credit the loan amounts aren’t quite as high. The highest you can borrow is $25,000 and every loan has a three year term length with no exceptions.

Should You Use Peerform?

• Loans ranging up to $25,000
• APR rates as low as 6%
• Set terms for any loan amount of 3 years
• No prepayment penalties

To learn more about Peerform click here.

How a Personal Loan Saves You Thousands of Dollars

Let’s assume you have $15,000 in credit card debt at an average interest rate of 20%.

Now, let’s say you want to pay it all off in 2 years (or less) because debt sucks and you’re over it!

This means you would have to make $763 monthly payments for two years, which totals to $18,322 ($15,000 in principle payments and $3,322 in interest).

Now, let’s say you go through a site like Credible and find a personal loan with a 10% interest rate on a 2-year term.

Your new payment would lower from $763/month to $692/month ($71/month savings) and the total interest paid would lower from $3,222 to $1,612 (a $1,610 savings!)

Now, let’s assume you have a better credit score and you are approved for a 6.2% interest rate with SoFi bank.

The new savings is $97/month in payments and your overall interest savings in the two years it takes you to pay off the personal loan is a whopping $2,234!

Frequently Asked Questions About Personal Loans

What is a personal loan?

A personal loan is an unsecured loan where you don’t need to provide any collateral to secure the loan as you would for a down payment for a mortgage. You can use personal loans for a variety of reasons unless otherwise specified by the provider.

Fixed vs variable interest rate?

A fixed rate means the rate is fixed and will not change for the entire term of the loan. A variable rate on the other hand means just that – it’s a rate that can change.

I would always recommend you choose a fixed rate because it will allow you to easily budget for the same amount each month. The variable rate will always look better and almost always starts off with a lower interest rate than the fixed rate loan.

This is is because you are taking on more risk with the possibility of the rate going up. When the risk is transferred away from the lender and onto you, the benefit is the lower rate.

With that said, a variable rate may be a good idea if you KNOW you will pay the loan off BEFORE the change in rate will go in effect.

What is a personal loan used for?

Some of the most commons reasons to take out a personal loan include:

• Home improvements
• Refinancing high-interest credit card debt
• Starting a small business
• Refinancing high-interest student loan debt
• Medical expenses

Unless otherwise specified, you can use the loan however you choose best for your financial situation.

The biggest reason people use personal loans is to refinance high-interest debt and it can save you huge amounts of money! For example, if you have a lot of credit card debt that is at 15 or 20% interest and can get a personal loan for 5-8% you will be savings tons of money on interest!

Another great reason to access a personal loan is to help pay off your high-interest, student loan debt.

How to apply for a personal loan?

When it comes to applying for a personal loan you have two main options, credit unions and online lenders like the ones mentioned above.

Credit Unions

This might be more work when applying for a personal loan but it can help save you big on interest rates. Normally you would go in and speak with a loan officer at a credit union and go through the full process which is more time consuming than online.

If you have bad to average credit score this might not be the best option as credit unions tend to have the highest financial requirements.

Online Lenders

For online lenders and peer-to-peer options log onto their homepage with the links above and go through the signup process. Often times it’s much quicker than going to a credit union and they tend to have lower requirements. Depending on which institution you might even be able to access the cash the next day!

How can I improve my chances of being approved for a personal loan?

Before you apply for a personal loan I highly recommend that you try to increase your credit score as much as possible. Your credit score tends to be the biggest factor when it comes to securing the lowest interest rate.

After you’ve done what you can for your credit score I recommend trying to pay down any credit cards if possible. The lower your debt to income ratio, the better grade you will receive from peer-to-peer lending companies. Remember, these companies don’t just base your loan off of credit score but also other factors.

Are there any other good resources for personal loans?

Yes, there are other websites that aren’t directly personal loan companies but can help you find great loans.

• Personalloans.com – A search engine that helps you find cheap loans as low as $500 total loan amount!
• Evenfinancial.com – This tool makes it easy to compare a lot of the loan companies on this list in one place.

Summary of Best Personal Loan Companies

Before choosing a personal loan provider make sure you absolutely need the money.

I definitely don’t recommend taking a personal loan out for a fancy vacation, new clothes, a bigger TV, or anything like that. Make sure you have a plan for your personal loan which involves you saving money instead of paying more interest over time.

Bottom line: Only use a personal loan to improve your financial situation.

And while there are a ton of online personal loan platforms, keep in mind some of them can have pricey origination fees, high interest rates, and strict pay off terms. Make sure you read all the fine print before you hit submit.

With that said, if you do choose to get a personal loan, understand that your credit score will have a huge impact on your ability to get the lowest interest rate with the best loan terms.

Lastly, make sure you are 100% clear on the terms before you sign up for a personal loan. Shop around with some of the sites provided to ensure you get the lowest APR and payment terms that work best for you.

Have you ever used a personal loan service? What was your experience like?

Please let us know in the comments!