Last week, rates on personal loans declined. Qualified borrowers can still pick up a worthwhile interest rate, providing the opportunity to finance a project, purchase or unexpected bills.
From September 16 to September 21, the average fixed rate on a three-year personal loan was 15.01% for borrowers with a credit score of 720 or higher who prequalified on Credible.com’s personal loan marketplace. The rate was 15.23% the previous week, according to Credible.com. The average rate on a five-year personal loan fell 0.32% last week to 21.63% from 21.95%.
Keep in mind that the rate you’ll receive depends on several factors, including your creditworthiness and the loans available through your chosen lender. The most creditworthy borrowers may be able to receive rates significantly lower than average.
These rates are accurate as of September 23, 2024.
Compare Personal Loan Rates
You can get started with the comparison process by prequalifying for a loan. Consider looking for lenders who offer prequalification online, which can make the process much more convenient. Prequalifying can provide you with a more precise picture of the rate you’ll receive from a particular lender, since they’ll prescreen you by performing a soft credit check (which doesn’t impact your credit score).
After you prequalify, the lender can provide you with a snapshot of your loan options. This snapshot generally includes loan rates, terms and limits. To find the best loan for your situation, consider prequalifying at multiple lenders and comparing the terms.
However, prequalification doesn’t guarantee approval. Once you find an offer you like, you will still need to submit a formal application and provide additional documentation to the lender. When you apply, a lender will typically run a hard credit check, which will ding your credit score between one and five points.
Where Can You Get a Personal Loan?
You can find a personal loan either online or in-person, depending on the institution. With varying lenders offering personal loans, you can find one that works best for you. Lenders offering personal loans include:
- Banks: Best for in-person banking and opening a personal loan with your current bank
- Online lenders: Best for flexible qualification requirements and an online-only banking experience
- Credit unions: Best for those who meet a nearby credit union’s eligibility requirements or current members
How To Receive More Favorable Interest Rates
Your credit is a big factor in the rates you receive. According to Rod Griffin, senior director of consumer education and advocacy at Experian, “checking your credit report and scores three to six months before you apply for a personal loan” is a good idea. This gives you enough time to make any necessary fixes.
A credit score of 720 or better will typically get you the best terms. If you’re not quite in that credit score range, consider taking action to improve your credit score. Pay down existing debt to lower your credit utilization ratio, remove errors from your credit report and pay your bills early or on time.
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