LendingTree Personal Loan Offers Report – January 2021
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For weekly updates, please see our index. Rate and loan amount offers varied widely among consumers, depending on factors including, but not limited to, credit score, income and current debt obligations.
Spreads between the highest and lowest offered APRs ranged from 1,046 basis points for highest-score borrowers and 914 basis points for the bottom end of the prime scores.
- The average spread for those with scores of 760 or higher was 1,046 basis points, amounting to a difference of 54%, or $3,590, on the average loan amount offered to this credit band for a three-year personal loan.
- Consumers with scores between 720 and 759 saw an average offer spread of 1,031 basis points, representing a 45%, or $2,934, difference in interest paid.
- For those with scores between 680 and 719, the average spread was 1,047 basis points, representing a 39%, or $2,469, difference in interest paid.
- Borrowers with scores between 640 and 679 had an average spread of 914 basis points, representing a 31%, or $1,684, difference in interest paid over the three years of the loan.
Excellent credit (760+ score): Best offered APRs to consumers with a credit score of 760+ averaged 9.82% in January.
- The average best APR offered to all borrowers with credit scores of 760 or above was 9.82%, a decrease of 53 basis points from the prior month and an decrease of 14 basis points from the same period one year ago.
- At $21,411, the average loan amount offered with the best APRs to all borrowers with a score of 760 was up 7% ($1,519) from last month, and up 7% ($1,384) from the same period one year ago.
- The top 10% of offers, presented to borrowers with the best profiles within this group, had offered APRs of 4.89% on average and loan amounts of $24,801. A borrower with this APR and loan amount would save $3,990 by consolidating debt with a 10% APR over a three-year term.
Good credit (680-719 score): Best offered APRs to consumers with a credit score between 680 and 719 averaged 18.77% in January.
- The average best APR for all borrowers with credit scores of 680-719 was 18.77%, a decrease of 90 basis points from last month and up 69 basis points from a year earlier.
- At $12,486, borrowers with scores of 680-719 saw the amounts offered with the best APRs increase by 5% ($676) in the last month and decrease by 11% ($1,352) from the same period last year.
- The top 10% of offers, presented to borrowers with the best profiles within the 680-719 credit score range, had an average best APR of 9.00%, offered with an average loan amount of $21,325. A borrower with this APR and loan amount would save $5,258 by consolidating debt from a 15% APR over a three-year term.
The most common reasons for seeking a personal loan are credit card refinancing and debt consolidation. These two categories comprise 53% of sampled loan inquiries in January.
About the report
The LendingTree Personal Loan Offers Report contains data from actual 36-month loan terms offered to borrowers with credit scores of at least 640 on LendingTree.com by third-party lenders. Our report averages the best offered APRs by credit score band and the best 10% of offered APRs within each credit score band, as well as the average loan amounts that accompanied those offers. Separately, we average the differences between the highest and lowest APRs offered to each consumer within each credit band and calculate the difference in interest paid that would represent the average loan amount offered within that credit band on a three-year term.
We organize results by credit score so that borrowers have added information about how their credit profiles can affect their loan prospects. We present the offers spread to demonstrate the variety in terms offered to the same consumers.
The personal loan market is a fundamental component of personal finance products available to consumers, and personal loans are often used to refinance existing debt. Knowledge about the terms available to similar borrowers can be a key to making decisions about managing personal finances. We believe this report is an important addition to standard industry surveys and reports on personal loan rates, as most quoted industry rates are either the minimum possible rate or the average rate, and few borrowers will experience either.