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The average rate on a personal loan is in the rate borrowers in the middle of the credit score spectrum can expect to pay. Borrowers with excellent credit typically can get the best low-interest personal loans, while borrowers with bad credit will be offered the highest personal loan rates. The average loan interest rate is the "sweet spot" between the two.
Generally speaking, a good loan interest rate is in the single digits. The lower the interest rate, the less you'll pay over the life of the loan.
$1,000 to $50,000 (borrowers in four states are subject to higher minimum loan amounts: Massachusetts: $7,000, Ohio: $6,000, New Mexico: $5,100, Georgia: $3,100)
Upstart could be the right lender if you have a strong work and education history, but you have a low credit score or limited credit history. The best personal loan for you depends on your credit score, which will determine what you qualify for and can lower your rate.
Details
Regular Annual Percentage Rate (APR)
4.60% to 35.99%
Loan Amount Range
$1,000 to $50,000 (borrowers in four states are subject to higher minimum loan amounts: Massachusetts: $7,000, Ohio: $6,000, New Mexico: $5,100, Georgia: $3,100)
Minimum Credit Score
300
Editor's Rating
3.25/5
3.25 out of
5 Stars
Pros & Cons
Pros
Small minimum loan amounts
No prepayment penalty
Quick loan fund disbursement
Cons
Only three and five year terms
Potential for high origination fees
Highlights
More Information
Loan amounts range from $1,000 to $50,000. However, borrowers in four states are subject to higher minimum loan amounts: Massachusetts: $7,000, Ohio: $6,000, New Mexico: $5,100, Georgia: $3,100
Loan term lengths are either 3 or 5 years
Can have origination fees up to 8%
Considers employment and education history when making loan approval decisions
Loans are made through one of several Upstart-powered bank partners
Wells Fargo Personal Loan are a good choice if you need a significant amount of cash, as you can borrow up to $100,000 with the lender. However, if you're not a current customer, you can't apply for a personal loan without visiting a branch.
Details
Regular Annual Percentage Rate (APR)
7.49% to 23.74% (with relationship discount)
Loan Amount Range
$3,000 to $100,000
Editor's Rating
3/5
3 out of
5 Stars
Pros & Cons
Pros
Large maximum loan amounts
Discounts for current customers
Established brick-and-mortar lender
No origination fee or prepayment penalty
Cons
Significant late fees
History of mismanaging customer information
No online applications for non-customers
Highlights
More Information
Loan amounts range from $3,000 to $100,000
Term lengths range from 1 to 7 years
Rate discounts to customers who have a checking account with the bank and who make their loan payments automatically through that account
Non-customers must apply by visiting a branch and talking with a banker
LightStream offers some of the lowest rates on personal loans out there, provided you have a great credit score. The lender also has loans of up to $100,000 and can supply you with funding on the same day you apply and are approved.
Details
Regular Annual Percentage Rate (APR)
7.99% to 25.49% (with AutoPay discount, rates vary by loan purpose)
Loan Amount Range
$5,000 to $100,000
Minimum Credit Score
660
Editor's Rating
4.75/5
4.75 out of
5 Stars
Pros & Cons
Pros
Competitive APR
Approval decisions should come shortly after applying
Loans can be funded the same day
Wide range of borrowing amounts and terms
No fees
Cons
Only available to people with good credit
No pre-approval option
Highlights
More Information
Loan amounts range from $5,000 to $100,000
Loan term lengths range from 2 to 12 years
Apply online and you'll receive a response shortly during business hours.
Best Personal Loan Interest Rates Frequently Asked Questions
What is the best interest rate for a personal loan?
The best rate on a personal loan is generally going to be in the single digits. You're unlikely to get rates in that range unless you have excellent credit.
Which lender offers the best personal loan rates?
The best low-interest personal loans are from lenders that offer minimum interest rates below 7%. These include American Express, Reach Financial, and Upstart.
How do I get the best personal loan rate?
Generally, the best personal loan rates are offered to borrowers with excellent credit scores, a history of reliable payments, and good incomes. To get the best rate, take steps to improve your financial situation.
What is a good personal loan rate?
A good personal loan rate is generally in the single digits, roughly around 6%. However, the best rate for you will vary depending on your credit history.
How are personal loan rates decided?
Personal loan rates are decided after your lender reviews your credit history and other aspects of your financial situation. Make sure you shop around with multiple lenders to get the best rate possible.
Why You Should Trust Us: Our Methodology
We rate all personal loan products in our reviews and guides on a 1-5 scale. The overall rating is a weighted average that takes into account seven different categories, some of which are judged more heavily than others. They are:
Interest rate (20% of rating)
Fees (20% of rating)
Term lengths and loan amounts (15% of rating)
Funding speed (15% of rating)
Borrower accessibility (15% of rating)
Customer support (7.5% of rating)
Ethics (7.5% of rating)
Each category's weighting is based on its importance to your borrowing experience. Personal loan interest rates and fees have the most direct impact on the overall cost of your loan, so we weigh those the most heavily. Customer support and ethics are still very important parts of the borrowing experience, but do not directly tie to a personal loan's terms, so they have less of an impact on the overall rating.
The interest rate on your personal loan depends on many financial factors, including your income and what other debt you have. Your credit score is probably going to be the most important component in getting the best personal loan rates. Here are a few tips to improve it:
Request and review a copy of your credit report. See if there are any mistakes on your report that could be damaging your score. If so, contact the credit bureau to talk about fixing the error so you can qualify for the lowest personal loan rates.
Keep credit card balances low. Maintaining a credit utilization rate — the percentage of your total credit you're using — of 30% or less will show lenders that you can manage your credit well.
Create a system for paying bills on time. Your payment history makes up a large percentage of your credit score, and lenders like to see steady and reliable payments in the past. Set up calendar reminders or automatic payments so you don't fall behind.
You should compare rates from the best personal loans to see which one offers you the best terms. The first lender to make you a loan offer isn't necessarily going to give you the best personal loan rate you can find.
Best Rates for Debt Consolidation
As of early June, the best personal loan rate for debt consolidation was as low as 5.99%, while the average overall personal loan rate was 18.24%. Consolidating debt is the most popular reason borrowers take out personal loans, as you can often get a lower rate than you would with a credit card.
Some lenders, including Payoff Loan™ and Reach Financial Personal Loan, are even designed to offer debt consolidation loans exclusively.
How To Decide if a Personal Loan Is Right for You
If you need a lump sum of money fast, a personal loan may be an excellent option for you. A personal loan can help you immediately cover an expense and spread the cost over a longer stretch of time. You may also be able to get a lower personal loan rate than you would pay on a credit card.
However, if you're already carrying a significant amount of debt, a personal loan may just add to your stress. The overall cost of whatever you're spending the money on, be it a home improvement or medical bills, will end up being more expensive in the long run because you'll have to pay interest on the money you take out. If you have the flexibility, saving up money for your expense is likely a better choice.
Keep in mind that if you fall behind on payments, the loan can damage your credit score, making a lender less likely to approve you and hindering your ability to get the best personal loan rates in the future.
Pros and Cons of Personal Loans
Pros
Cons
You'll get a lump sum of money to immediately cover your expense.
You can use a personal loan for a variety of purposes, including debt consolidation and home improvements.
You can boost your credit score with payments that are made on time and in full.
You often get your money the same day or the next day with many companies.
Generally, there aren't any penalties for paying off your loan early.
If your credit score isn't in the best shape, you might pay a high interest rate.
The overall cost of your purchase will be higher because you'll fork over interest in addition to your loan balance.
Ryan Wangman was a reporter at Personal Finance Insider reporting on personal loans, student loans, student loan refinancing, debt consolidation, auto loans, RV loans, and boat loans. He is also a Certified Educator in Personal Finance (CEPF).In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership. He graduated from Northwestern University and has previously written for The Boston Globe. Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services here >>
Elias Shaya is a junior compliance associate on the Personal Finance Insider team based in New York City.Personal Finance Insider is Insider's personal finance section that incorporates affiliate and commerce partnerships into the news, insights, and advice about money that readers already know and love. The compliance team's mission is to provide readers with stories that are fact-checked and current, so they can make informed financial decisions.The team also works to minimize risk for partners by making sure language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team. Elias is the point person for the loans sub-vertical and works with the editorial team to ensure that all rates and information for personal and student loans are up to date and accurate.He joined Insider in February 2022 as a fellow on the compliance team.Elias has a Bachelor of Science in International Business from the CUNY College of Staten Island. Prior to joining Insider, he volunteered at the New York Presbyterian Hospital, where he worked with the biomedical engineering department. In his spare time, Elias enjoys exploring new restaurants, traveling to visit his family in Lebanon, and spending time with friends.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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