Looking for a personal loan? You’d be wise to shop around. Different lenders offer different interest rates, and those differences could add up to hundreds, even thousands of dollars in interest charges over the course of a loan.
The tricky thing is that shopping for loan rates is not a one-size-fits-all type of exercise. Lenders make rate adjustments based on your credit circumstances and have different ways of evaluating those circumstances. Indeed, the best place to get a personal loan might be different for you than for your neighbor.
To highlight how the best personal loans can differ according to your credit rating, and how those differences can affect interest rates, LendingTree has identified some of the lowest personal loan rates in each of four categories. The following are summaries on lenders that stood out in each category, followed by some tips on getting and using a personal loan.
How we came up with the ranking: Starting with lenders listed on MagnifyMoney.com, a LendingTree-owned company, we looked strictly at personal loans that offer the lowest APR available. For each category, we chose two to three lenders.
As the tables shown earlier in the article demonstrate, lenders have differing standards about what credit score is necessary in order to qualify for a personal loan. Also, credit score is just part of the picture that lenders look at when deciding whether or not you are likely to meet your loan obligations.
In addition to credit score, here are some other things lenders may look at in deciding whether you qualify:
The lending market is in a period of change. The emergence of peer-to-peer lenders, other nonbank lenders and online loan platforms has introduced some nontraditional underwriting methods into the market. Some examples:
Some of these nontraditional methods might work in favor of would-be borrowers who have limited or less-than-ideal credit histories. In particular, if you have run into a brick wall trying to get a loan from a traditional bank, you may want to look for a lender that uses a range of metrics beyond your credit score.