If you’re drowning in high-interest credit card debt or don’t have the cash to fund a major purchase, low-interest personal loans can be a lifesaver. But with hundreds of lenders offering personal loans, it can be hard to know where to go to find your best rates.
The good news is we’ve done the research for you. Here is our list of four of the best low-interest personal loans currently on the market and what you need to do to qualify for them.
4 best low-interest personal loans available today
1. LendingTree – Compare Rates from Multiple Lenders
If you are looking to get your best interest rate on your personal loan, it is critical that you compare offers from multiple lenders. LendingTree, the parent company of Student Loan Hero, allows for consumers to easily compare personal loan offers from up to 5 lenders with a single online form, giving you the peace of mind that you are getting your best loan available. With dozens of lenders that participate in their personal loan comparison tool, you will be able to potentially see offers from the lenders listed below, as well as others.
2. SoFi
SoFi is known mostly for its student loan refinancing, but it also offers the lowest interest rate for personal loans of the lenders we reviewed. Depending on your credit, you can qualify for a fixed 5.99% to 19.16% APR.
SoFi doesn’t require a minimum credit score to get approved, but you must earn at least $50,000 in annual income. Here are some other facts to know:
- You can borrow between $5,000 and $100,000.
- Repayment periods include three, five, and seven years.
- There are no restrictions on how you use the funds.
- There are no origination fees or prepayment penalties. You also can qualify for late-fee forgiveness after three consecutive on-time payments.
- SoFi offers loan prequalification with a soft credit check.
3. Upstart
If your credit isn’t stellar, you still might qualify for an Upstart personal loan — but with a high interest rate. With excellent credit, the lender’s rates are competitive; APRs range from 8.27% to 35.99%.
Upstart’s FICO score and income requirements are low at 620 and $12,000, respectively. However, its other terms aren’t as favorable as Earnest’s and SoFi’s:
- You can borrow between $1,000 and $50,000.
- Repayment terms include three and five years.
- There are no restrictions on how you use the funds.
- Origination fees range between 1 percent and 8 percent of the loan balance. You’ll also pay a late-payment fee of 5 percent of the amount due or $15, whichever is greater. There are no prepayment penalties.
- Upstart offers loan prequalification with a soft credit check.
4. LendingClub
LendingClub’s APRs range from 10.68% to 35.89%. So, if you have excellent credit, interest rates are favorable. If you don’t, getting a personal loan might not be worth it.
The lender has no income requirements and requires just a 600 credit score to qualify. Here are other terms to know:
- You can borrow between $1,000 and $40,000.
- Repayment terms include three and five years.
- There are no restrictions on how you use the funds.
- Origination fees range from 1 percent to 6 percent. The late-payment fee is $15 or 5 percent of the amount due, whichever is greater.
- LendingClub offers loan prequalification with a soft credit check.
How to qualify for low-interest personal loans
Personal loan interest rates are generally a reflection of how the lender views you as a credit risk — or how likely you are to default on the loan. Lenders look at a few factors to determine your rate.
1. Credit score
Your credit score is a road map of your experience with credit. Payment history, amount owed, and length of credit history are major factors in determining that three-digit number.
A low credit score can signify that you’re less reliable as a borrower, so you might get a higher interest rate to make up for the risk. A high credit score, on the other hand, shows you’re a responsible borrower and should qualify you for a lower interest rate.
2. Debt-to-income ratio
Even lenders that don’t have a minimum income requirement use your income to help determine your interest rate.
The main reason is they want to know your debt-to-income ratio (DTI). The ratio is calculated by dividing your monthly debt payments by your monthly gross income.
The lower your DTI, the more flexibility you have to make your monthly payments. This makes you look less risky and usually results in a lower interest rate. Use our DTI calculator to find out what yours is before you apply.
3. Loan term
The shorter the repayment period, the sooner the lender can lend that money to someone else. So, lenders typically offer lower interest rates on personal loans with short repayment periods. This incentivizes the borrower to repay the loan quickly.
Shorter repayment periods come with higher monthly payments, though, so make sure you can afford them.
Compare personal loans to get your best rate
To see your lowest interest rate on a personal loan, compare several lenders to see what rates they offer. All the lenders listed here allow you to prequalify without a hard inquiry on your credit report.
Here’s what happens when you go through the prequalification process:
- The lender will do a soft inquiry on your credit report.
- You’ll get an estimated interest rate based on the information it finds.
- When you apply, you’ll get a final rate based on your full financial profile.
Going through this process will help you get your best possible rate for your situation. Plus, thanks to a lower interest rate, you’re more likely to save money on your personal loan in the long run.
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If you need to take out a personal loan and don’t know where to start, check out LendingTree’s personal loan shopping tool. Dozens of lenders work with LendingTree to offer personal loans. When you enter your information into the tool, you can get several offers at once, without affecting your credit score. Depending on your credit, you could qualify for a loan with an interest rate below 6%.
Interested in a personal loan?
LendingTree allows you to compare rates from multiple lenders by filling out one easy form. How Student Loan Hero Gets PaidHow Student Loan Hero Gets Paid
Student Loan Hero is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). Student Loan Hero does not include all lenders, savings products, or loan options available in the marketplace.
Student Loan Hero Advertiser Disclosure
Student Loan Hero is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.
How Student Loan Hero Gets Paid
Student Loan Hero is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). Student Loan Hero does not include all lenders, savings products, or loan options available in the marketplace.
Student Loan Hero Advertiser Disclosure
Student Loan Hero is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.
Lender | RATES (APR) | loan amount | |
---|---|---|---|
5.99% – 19.16%1 | $5,000 to $100,000 | ||
8.27% – 35.99% | $1,000 to $50,000 | ||
6.94% – 35.97%* | $1,000 to $35,000 | ||
99.00% – 199.00%2 | $500 to $4,000 | ||
5.99% – 24.99%3 | $5,000 to $40,000 | ||
7.99% – 29.99%4 | $7,500 to $40,000 | ||
compare rates on Lendingtree now | |||
1 Includes AutoPay discount. Important Disclosures for SoFi. SoFi Disclosures
Opploans DisclosuresDirect Deposit required for payroll. Opploans currently operates in these states: . *Approval may take longer if additional verification documents are requested. Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications processed and approved before 7:30 p.m. ET Monday-Friday are typically funded the next business day.
Payoff Disclosures
FreedomPlus Disclosures
Upgrade Bank DisclosuresPersonal loans made through Upgrade feature APRs of 6.94%-35.97%. All personal loans have a 2.9% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Accept your loan offer and your funds will be sent to your bank or designated account within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes the transaction. From the time of approval, funds should be available within four (4) business days. Funds sent directly to pay off your creditors may take up to 2 weeks to clear, depending on the creditor. Personal loans issued by Upgrade’s lending partners. Information on Upgrade’s lending partners can be found at https://www.upgrade.com/lending-partners/. |