Your Guide to Getting the Best Personal Loan Rates

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Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.

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Need a more flexible stream of cash for home improvements, car repairs, or life’s other emergencies?

When it comes to borrowing money for larger expenses, a personal loan can be a great choice. That’s because personal loan rates are (typically) lower than traditional credit options.

However, It’s important to make sure you’re getting the best personal loan interest rates possible. Lower personal loan rates mean less cash out of your pocket each month thanks to less interest.

Here’s how you should begin your search for the best personal loan rates.

What are today’s personal loan rates?

Personal loan interest rates tend to be lower than other options like credit cards, personal lines of credit, or even student loans.

This makes unsecured personal loans viable options for financing new and necessary purchases, as well as refinancing past debts that have higher interest rates.

What’s more, personal loan rates have actually steadily decreased over the past five years.

Personal loan rates today are approximately 1.4 percentage points lower than they were in 2011, according to rates data from the National Credit Union Association (NCUA) compiled from March 2011 through September 2016.

personal-loan-rates-over-time

And here are personal loan rate averages for a 36-month unsecured fixed rate loan, according to NCUA data released in September 2016:

  • Banks: 10.12%
  • Credit unions: 9.22%

What’s more, the downward trend of personal loan interest rates is good news for borrowers. Today, personal loans are the most affordable they’ve been in years.

Personal loan rates by credit score

Yet, at the end of the day, the costs of your personal loan will depend on your ability to meet a lender’s credit requirements.

The main determinant of the personal loan rates you’re offered will be your creditworthiness. The lender usually determines this based on your credit score and history, as well as personal income and other financial information.

The better your credit score and the higher your income, the greater your chances of getting the best personal loan rates.

Here are typical unsecured personal loan rates by credit score:

  • Excellent (720 or more): around 4.00% to 11.00%
  • Good (680 to 719): around 4.00% to 15.00%
  • Average (630 to 679): around 10.00% to 20.00%
  • Poor (630 and below): around 25.00% to 30.00% or higher

In addition to a higher credit score, a higher income can also help you qualify for competitive personal loan rates.

Where can I find the best personal loan rates?

No matter your credit score, shopping around and comparing lenders’ advertised rates can help you save. Certain types of personal loan providers offer better rates and loan terms than others.

Here are the starting personal loan rates for different types of lenders:

  • Banks: 6.49% APR
  • Credit unions: 5.99% APR
  • Online lenders: 3.99% APR
  • Peer-to-peer lenders: 5.32% APR

Note that these are starting APRs, which usually require excellent credit to qualify for.

When comparing personal loan interest rates, check out our online marketplace to compare and contrast what various lenders have to offer. Lenders listed include:

  • SoFi
  • Payoff
  • Earnest

Banks

The first place many people look for personal loans is through their bank.

Since you already have an established relationship with this bank, chances are they may be more willing to approve your personal loan and offer competitive rates.

Additionally, banks usually offer a wide range of financial products. So they might have more loan terms and options available for you.

Credit unions

Credit unions provide some of the most competitive personal loan rates around.

As not-for-profit financial institutions, credit unions are more focused on offering favorable products to members than making money. That’s why a credit union’s personal loan rate offer is usually lower than one offered by a bank.

In fact, over the past few years, credit unions’ average personal loan rates have been approximately 1.24 percentage points less than those offered by banks. That’s according to the compiled rates data from the NCUA from March 2011 through September 2016.

Online lenders

Online personal loan providers can also be a great option to find the best personal loan rates.

These institutions usually have less overhead than their brick-and-mortar counterparts thanks to operating solely online. And, will often have some of the most competitive interest rates around.

Additionally, some online lenders have credit requirements that are less strict, allowing them to service borrowers with less-than-perfect credit.

Peer-to-peer lenders

Another option similar to online lenders is peer-to-peer (P2P) lenders.

Like online personal loans, P2P loans are also available to a wider range of borrowers than more traditional options.

P2P marketplaces allow individuals to loan money directly to borrowers. Peer-to-peer personal loans often have lower interest rates. However, be on the lookout for potentially higher origination fees.

How to lower your personal loan interest rate

Choosing the right lender and maintaining positive credit are central to getting the best personal loan rates.

But once you find a lender and are ready to borrow, there are additional steps you can take to lower your personal loan rate.

Look for loan rate discounts

Financiers will often offer a personal loan rate discount to lenders who enroll in automatic payments or meet other requirements.

A typical interest rate discount for automatic withdrawals is 0.25%. However, some lenders might offer more.

Wells Fargo, for instance, offers a personal loan rate discount of 0.50% for borrowers with a qualifying Wells Fargo consumer checking account and enrollment in automatic payments.

Opt for a shorter loan term

When setting the terms of your personal loan, you might notice that lenders offer lower rates on loans with shorter terms.

With a shorter loan, the lender will get its money back faster and take on less risk. And this lower risk for the lender can mean lower interest for you too.

So if you can afford higher monthly payments, consider signing up for a shorter loan length, It may be a smart way to lower your personal loan interest rate and save money on interest as well.

Consider secured personal loans

Some of the best personal loan rates can be found on secured loans.

A secured loan is guaranteed by assets owned by the borrower. This can either be property such as a car, or cash like with a certificate-secured loan.

Credit unions, such as America First, often offer these secured loans with low interest rates.

Additionally, borrowers with bad credit can more easily get approved for secured personal loans. This can make them a smart option for consumers looking to improve their credit.

Do your homework

Ultimately, you are your best advocate in your search for the lowest personal loan rates.

Make sure you have a rate in mind when you begin your search, then see if lenders can match it. Don’t hesitate to compare products before submitting a full application.

And don’t forget, once an application is turned in, hard credit inquiry will follow.

Also, if a lender knows you’re shopping around, chances are they will try to lower their rate to get you to choose them. Remember, even when it comes to personal loans, knowledge is power.

Interested in a personal loan?

LendingTree allows you to compare rates from multiple lenders by filling out one easy form. Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

RATES (APR)loan amount
5.99% – 20.01%1 $5,000 to $100,000
6.14% – 35.99% $1,000 to $50,000
6.98% – 35.89%* $1,000 to $50,000
99.00% – 199.00%2 $500 to $4,000
5.99% – 24.99%3 $5,000 to $35,000
5.99% – 29.99%4 $7,500 to $40,000
compare rates on Lendingtree now
NMLS #1136: Terms & Conditions Apply
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Fixed rates from 5.99% APR to 20.01% APR (with AutoPay). Variable rates from 6.49% APR to 14.70% APR (with AutoPay). SoFi rate ranges are current as of November 15, 2019 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.49% APR assumes current 1-month LIBOR rate of 1.81% plus 4.93% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.
    See Consumer Licenses.
  3. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  4. If you lose your job through no fault of your own, you may apply for Unemployment Protection. SoFi will suspend your monthly SoFi loan payments and provide job placement assistance during your forbearance period. Interest will continue to accrue and will be added to your principal balance at the end of each forbearance period, to the extent permitted by applicable law. Benefits are offered in three month increments, and capped at 12 months, in aggregate, over the life of the loan. To be eligible for this assistance you must provide proof that you have applied for and are eligible for unemployment compensation, and you must actively work with our Career Advisory Group to look for new employment. If the loan is co-signed the unemployment protection applies where both the borrower and cosigner lose their job and meet conditions.
  5. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
2 Includes AutoPay discount. Important Disclosures for Opploans.

Opploans Disclosures

Direct 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.

  1. To qualify, a borrower must (i) be a U.S. citizen or permanent resident; (ii) reside in a state where OppLoans operates; (iii) have direct deposit; (iv) meet income requirements; (v) be 18 years of age (19 in Alabama); and, (vi) meet verification standards.
  2. NV Residents: The use of high-interest loans services should be used for short-term financial needs only and not as a long-term financial solution. Customers with credit difficulties should seek credit counseling before entering into any loan transaction.

  3. OppLoans performs no credit checks through the three major credit bureaus Experian, Equifax, or TransUnion. Applicants’ credit scores are provided by Clarity Services, Inc., a credit reporting agency.

  4. Based on customer service ratings on Google and Facebook. Testimonials reflect the individual’s opinion and may not be illustrative of all individual experiences with OppLoans. Check loan reviews.

  5.  

    Rates and terms vary by state.

3 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.
4 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 5.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 5.99% APR loan, a borrower will need excellent credit on a loan for an amount less than $12,000.00, and with a term equal to 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could help you also qualify for the lowest rate available.
* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% 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. Personal loans issued by WebBank, Member FDIC.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

Published in Credit & Debt, Loans

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