Personal Loans

Where to Get Low-Interest Personal Loans in 2021

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Your interest rate is one of the most important factors to consider when shopping for a personal loan because it influences your overall cost of borrowing. Personal loan interest rates can vary widely depending on many factors, including your credit score and debt-to-income (DTI) ratio, as well as the desired loan amount and loan length.

You’ll typically need excellent credit to qualify for a personal loan with a low interest rate. Read on to see where to get low-interest personal loans and how to increase your chances of qualifying for one.

8 low-interest personal loans

Debt consolidation, home improvement, wedding expenses: No matter why you’re borrowing a personal loan, it’s important that you shop around and find a personal loan that offers the lowest possible APR for your financial situation.

Your annual percentage rate (APR) reflects the annualized cost of borrowing a personal loan, so a loan with a lower APR will cost less over time. APR includes your interest rate as well as any fees, such as an origination fee.

Check out these lending platforms and banks that offer personal loans with low interest rates:

Where to get low-interest personal loans
Lending platform APR range* Loan length Loan amount
Best Egg 5.99% – 29.99% 36 or 60 months $2,000 – $50,000
LightStream 4.99% – 19.99% 24 to 144 months $5,000 – $100,000
PenFed Credit Union 5.99% – 17.99% Up to 60 months $500 – $35,000
Prosper 7.95% – 35.99% 36 or 60 months $2,000 – $40,000
SoFi 5.99% – 20.69% 24 to 84 months $5,000 – $100,000
Upgrade 6.94% – 35.97% 36 or 60 months $1,000 – $35,000
Upstart 7.86% – 35.99% 36 or 60 months $1,000 – $50,000
Wells Fargo Bank 5.74% – 24.24% 12 to 84 months $3,000 – $100,000
*APRs shown may include Autopay discount

What’s a low interest rate for a personal loan?

It’s difficult to say what a “good” APR is for all borrowers, since APRs vary based on a variety of factors, including credit score, income and the amount of debt in your name. However, some lenders offer APRs as low as 4.99% for the most creditworthy borrowers.

The average best offered APR for borrowers with excellent credit (760 and above) was 10.28% in December 2020, according to LendingTree data. However, borrowers with lower credit scores will see higher offered interest rates, and thus, higher APRs.

One of the best ways to find what range of APRs you can expect on a loan is to prequalify through several lenders. Most (but not all) lenders let you see if you’re eligible for a personal loan by providing your information and conducting a soft credit inquiry, which won’t impact your credit score. With prequalification, you can compare potential terms across multiple lenders without a hard credit inquiry.

How to qualify for a low-interest personal loan

The exact qualifications for a low-interest loan will vary by lender as they each use their own systems for approval and calculating rates and terms. Not all borrowers will qualify for a personal loan with the lowest available APRs.

Here are a few commonly considered factors:

  Credit score: As noted, your credit score is typically one of the main factors when lenders are considering loan applications. In general, the higher your score, the better your rate, so you’ll want to have excellent credit to get the lowest APRs.

  Debt-to-income (DTI) ratio: This is calculated by dividing your monthly debt payments by your gross monthly income. It’s used to gauge your ability to repay a potential loan. The lower the debt-to-income (DTI) ratio, the better chance you have of qualifying for a personal loan.

  Employment: To qualify for a personal loan, you’ll generally need to show proof of employment. This is used as a verification that you have some sort of income and can afford the monthly payments associated with a personal loan.

  Payment history: Lenders generally want to see that you haven’t missed payments or defaulted on any loans in the past. The timeline considered can vary by lender, but in general, those with a history of paying their bills on time are given better rates compared to those who’ve missed payments.

Keep in mind that if you opt for a credit union personal loan, however, the requirements will generally include membership. The way credit unions weigh these common factors will likely be different than a bank.

Applying for a personal loan with a low interest rate

  1. Check your credit score. If you want a low-interest personal loan, you’ll want to have a good or excellent credit score. You can check your credit score using the My LendingTree app for free.
  2. Research lenders that offer low interest rates. You can choose from the lenders and loan marketplaces in the table above, all of which have some of the lowest starting APRs on the market.
  3. Prequalify through multiple lenders. Most personal loan lenders let you check potential loan terms without affecting your credit score.
  4. Choose the loan offer with the lowest APR. The lower your APR, the less your loan will cost over time.
  5. Formally apply through the desired lender. Get your financial documents in order and prepare for a hard credit check. If approved, your personal loan funding should be disbursed to your bank account within a few days.

What else to consider when borrowing a personal loan

Your APR is an important factor when you look at the total cost of borrowing, but it isn’t the only thing to consider. Many of the other important aspects could reside in the fine print, so you’ll need to do your research to fully understand the costs.

Here’s what else you should factor into your decision:

Origination fees: These fees are typically taken out of the borrowing amount before the loan is funded and can be about 1% to 8% the total cost of the loan. Because this can reduce the amount you receive, it’s important to ask about potential origination fees.

Prepayment penalties: These can be applied for borrowers who choose to pay off the loan ahead of schedule. If you plan on doing so, you’ll want to look for a personal loan that doesn’t come with prepayment penalties, like one from Upstart or SoFi.

Late fees: These are common and would apply if you were to miss a payment due date. They can range widely, however, so be sure to note the exact amount (or percentage) from each lender before making your decision. You can search for no-fee personal loans to avoid late fees altogether.

Loan term: The length of your loan term has a major impact on your total costs. The longer the term, the lower your monthly payments but the higher overall interest charges you’d pay.

Loan amount: The amount you choose to take out will be the amount that’s charged interest, so it’s another factor to consider. In general, it’s best to only borrow what you need.

Cosigning: Some lenders allow borrowers to add a cosigner. A cosigner can be a way for someone with less-than-perfect credit to access a loan or better loan terms by leaning on another person’s strong credit.


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