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If you need access to cash, taking out a personal loan with a low interest rate can help you keep your overall repayment costs as low as possible.
Keep in mind that you’ll generally need good to excellent credit to qualify for the lowest rates available.
Here’s what you should know about low-interest personal loans and where to find them:
- What is an interest rate?
- How to qualify for low-interest personal loans
- Best low-interest personal loans
- How to qualify for a low-interest rate with poor credit
- How to increase your credit score
- Is a personal loan right for me?
What is an interest rate?
The interest rate on a loan is essentially the fee — expressed as a percentage — that lenders charge in return for allowing you to borrow money. The lower your interest rate, the less you’ll pay on a loan over time.
Average personal loan interest rates can range from 4.99% up to 36%, depending on the lender as well as on your credit.
You can estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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Checking rates won’t affect your credit score.
What’s a good interest rate for a personal loan?
There is no set interest rate for a personal loan. Instead, you should expect a number of factors to affect your rate. Borrowers with higher credit scores, especially in the 720-850 range, will qualify for the best rates. But borrowers with lower credit may be able to apply with a creditworthy cosigner to get a lower rate. Not all lenders allow cosigners, but some do. Another factor is your debt-to-income (DTI) ratio – what you owe in monthly debt payments compared to your gross (pretax) monthly income. While your DTI ratio doesn’t impact your credit score, having a low ratio can help you get a better interest rate when applying for personal loans.
How credit card interest rates compare to personal loan rates
Personal loan interest rates tend to be lower compared to what you’d get with a credit card. As of February 2023, the overall average rate for personal loans was 11.48% — lower than the average credit card interest rate of 20.92%, according to the Federal Reserve.
This means that if you need to borrow money, you’ll likely pay less in interest with a personal loan than you would with a credit card.
If you need to make a large purchase, it might be a better idea to rely on a personal loan instead as you’ll likely get a lower interest rate.[/basic-box]
How to qualify for low-interest personal loans
You’ll typically need good to excellent credit to qualify for a low-interest personal loan. A FICO score of 670 or higher is considered a good credit score.
| Credit score ranges | Credit rating |
|---|---|
| Below 579 | Poor |
| 580-669 | Fair |
| 670-739 | Good |
| 800 and up | Excellent |
How to compare personal loan lenders
To have the best chance of finding an optimal rate, it’s important to take the time to shop around and consider as many personal loan lenders as possible.
In addition to interest rates, here are some other important factors to keep in mind as you weigh your options:
- Loan amounts: You can generally borrow $600 up to $100,000 (or more) with a personal loan, depending on the lender. Be sure to borrow only what you need to keep your future repayment costs manageable.
- Repayment terms: Personal loan repayment terms typically range from one to seven years, depending on the lender. While choosing a longer term could get you a lower monthly payment, it’s usually best to choose the shortest term you can afford to keep your interest costs as low as possible. Additionally, many lenders offer better rates to borrowers who opt for shorter terms.
- Fees: Some lenders charge fees on personal loans (such as origination or late fees), which can increase your overall loan costs. Note that if you take out a personal loan with one of Credible’s partner lenders, you won’t have to worry about prepayment penalties.
- Discounts: In some cases, you might be able to take advantage of rate discounts, which can help you save money on your loan. For example, many lenders offer rate discounts to borrowers who sign up for automatic payments — typically 0.25%. And other lenders provide discounts to existing account holders who also take out a personal loan with them.
- Time to fund: If you’re approved, you can typically expect to get your personal loan funds within one week — though some lenders will fund loans as soon as the same or next business day after approval. Keep in mind that online lenders tend to offer faster funding compared to banks and credit unions.
If you’re ready to apply for a personal loan, remember to consider as many lenders as you can to find the right loan for your needs.
Best low-interest personal loans
It’s important to compare multiple lenders so you can find the best loan for your needs. Through Credible, you can compare the best rates and get prequalified with our partner lenders without affecting your credit score.
| Lender | Fixed rates | Loan amounts | Check rates |
|---|---|---|---|
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 29.99% APR | $7,500 to $50,000 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 9.95% - 35.99% APR | $2,000 to $35,000** | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 11.79% - 20.84% APR | $10,000 to $50,000 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.99% - 35.99% APR | $2,000 to $50,000 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 24.99% APR | $2,500 - $40,000 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 11.52% - 24.81% APR | $5,000 to $40,000 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 9.57% - 35.99% APR | $1,000 to $40,000 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 35.99% APR | $2,000 to $36,500 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 25.49% APR with autopay | $5,000 to $100,000 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 18.0% - 35.99% APR | $1,500 to $20,000 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.49% - 17.99% APR | $600 to $50,000 (depending on loan term) | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 14.3% - 35.99% APR | $3,500 to $40,000 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.99% - 25.81% APR10 | $5,000 to $100,000 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 11.69% - 35.99% APR7 | $1,000 to $20,000 | |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.49% - 35.99% APR | $1,000 to $50,000 | |
|
|||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.2% - 35.99% APR4 | $1,000 to $50,0005 | |
|
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How to qualify for a low-interest rate with poor credit
While you’ll need good to excellent credit to get approved by most personal loan lenders, others specialize in working with borrowers who have poor or fair credit — so if you have bad credit, you might still be able to qualify for a personal loan.
However, the trade-off is that your interest rate on one of these loans will likely be higher compared to the rates offered to borrowers with good credit. Lenders view borrowers with bad credit as a riskier investment, so they charge higher rates to compensate for the possibility that you might default on the loan.
Even if you don’t need a cosigner to qualify, having one could get you a lower interest rate than you’d get on your own. Just keep in mind that because your cosigner is equally responsible for the loan, they’ll be on the hook if you don’t make your payments.
Check out: Bad Credit Loans
How to increase your credit score
If you’d like to increase your credit score to qualify for better rates in the future, here are a few potential strategies to consider:
Check your credit
When you apply for a personal loan, the lender will review your credit to determine if you qualify and what your rate will be — so it’s a good idea to check your credit beforehand to see where you stand.
You can use a site like AnnualCreditReport.com to review your credit reports for free. If you find any errors, dispute them with the appropriate credit bureau — Experian, TransUnion, or Equifax — to potentially boost your score.
Pay all your bills on time
Your payment history is one of the biggest components of your credit score. Just one late payment could severely damage your score, especially if you’re more than 30 days late. Additionally, negative information like late payments can stay on your credit report for up to seven years.
If you want to improve your credit, it’s critical to pay all of your bills on time.
Pay down credit card balances
Credit utilization is another major factor of your credit score — this is the amount you owe on revolving credit lines (like credit cards and lines of credit) compared to your credit limits.
- Add up your credit card limits.
- Add up your credit card balances.
- Divide your total balance by your total credit limit.
- Multiply this number by 100 to get your percentage.
In general, it’s a good idea to keep your utilization below 30% to prevent damage to your credit score. If you have balances on your credit cards, consider paying them down as much as possible to reduce your credit utilization and improve your score.
Avoid new loans when possible
Applying for several loans with multiple hard credit inquiries in a short period of time can also have a negative impact on your credit score. Additionally, hard credit pulls can stay on your report for up to two years. Because of this, it’s a good idea to apply for loans only when you need them.
However, it’s still a good idea to shop around and compare your rates from multiple lenders before actually applying for a loan. Many lenders allow you to see your personalized rates with just a soft credit pull that won’t hurt your credit — for example, you can see your prequalified rates from Credible’s partner lenders with no impact on your credit score.
Learn more: What Credit Score Do I Need to Take Out a Personal Loan?
Is a personal loan right for me?
A personal loan can be used for almost any type of personal expense, such as consolidating debt, covering wedding costs, or paying for medical procedures.
Ultimately, whether a personal loan is right for you will depend on your individual financial circumstances. And remember that by taking advantage of a low-interest personal loan, you can keep your repayment costs as low as possible.
Credible makes it easy to compare your personal loan options. You can see your prequalified rates from multiple lenders in two minutes — without affecting your credit.
Ready to find your personal loan?
Credible makes it easy to find the right loan for you.
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Checking rates won’t affect your credit
Taylor Medine has contributed to the reporting of this article.
