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After raising interest rates 11 times since March 2022 (reaching 5.5% in July 2023), the Fed has kept them on hold since. The forecast for 2024 is that rates are likely to be cut, possibly as many as three separate times. This is good news for consumers, as interest rate reductions tend to follow cuts in the Fed rate. Still, if you’re planning to borrow money for auto loans, student loans, mortgages, or personal loans this year, it’s smart to compare lenders to identify the best personal loan rates available.
Those rate hikes make it more costly to borrow money, be it for auto loans, student loans, mortgages, or personal loans. As such it’s important to compare lenders to identify the best personal loan rates available.
Brand name | APR | Loan amount | Term |
---|---|---|---|
LendingPoint | 7.99% to 35.99% | $2,000 - $36,500 | 24 to 72 months |
Upgrade | 8.49% to 35.99% | $1,000 to $50,000 | 24 to 84 months |
Upstart | 7.8% to 35.99% | $1,000 to $50,000 | 36 or 60 months |
Discover | 7.99% to 24.99% | $2,500 to $40,000 | 36 to 84 months |
Best Egg | 8.99% to 35.99% | $2,000 to $50,000 | 36 to 60 months |
Happy Money | 11.72% to 17.99% | $5,000 to $40,000 | 24 to 60 months |
Avant | 9.95% to 35.99% | $2,000 to $35,000 | 12 to 60 months |
PenFed | 7.99% to 17.99% | Up to $50,000 | Up to 60 months |
LightStream | 6.99% to 25.99% | $5,000 to $100,000 | 24 to 240 months |
LendingClub | 8.98% to 35.99% | $1,000 to $40,000 | 24 to 60 months |
Personal loans, like auto loans or even student loans, can be sourced from several financial institutions or companies.
Online lenders tend to (but don’t necessarily) offer attractive interest rates, and may include companies like LendingClub or Avant. Then there are traditional banks which may offer personal loans, the list of which would include most big banks that you’re likely familiar with along with companies like Discover, which are usually associated with credit cards.
Finally, you can also check with credit unions for personal loan offerings. Credit unions tend to be smaller and more regionally-focused, but there are likely at least one or two in your immediate area no matter where you live in the U.S.
Here is some additional information about the financial institutions offering personal loans which we picked.
LendingPoint is an Atlanta-based online lending company, which offers personal loans in every U.S. state with the exceptions of Nevada and West Virginia. Note that there can be high origination fees when using LendingPoint, and that the maximum applicable interest rates can be pretty high.
Our take: Prospective borrowers should be aware of the high interest rate (if their credit score isn’t great), and the aforementioned origination fees, which can be as high as 8%. That can be a potential downside to using LendingPoint, but for those with better credit, lower-range APRs can be a plus.
Upgrade’s personal loans are available to residents of every state except Iowa, Vermont, and West Virginia. There are origination fees to take into account as well, which range from 1.85% to 8.99%. There’s a credit score minimum of 600, and as with other lenders discussed, origination fees can be as high as 12%.
Our take: The fees and high potential APR should be red flags for some borrowers considering Upgrade. However, if you have bad credit, it may be one of several loans for bad credit options available to you. So, if your credit’s rough, it may be worth a look, despite the relatively high fees.
Upstart is unique in that it utilizes artificial intelligence to power its lending marketplace, which also helps it lower costs. It also allows it to move faster, and approve borrowers at a quicker rate than other financial institutions. There’s a credit score minimum of 600, and as with other financial institutions discussed, origination fees can top 8%.
Our take: A relatively low credit score can fetch loan offers using Upstart, and the platform’s artificial intelligence-driven backend may increase the speed at which a potential borrower is qualified. But again: Make note of the high potential origination fees.
You’re likely familiar with Discover from its numerous credit card offerings. Now you know it offers personal loans, too. Given that it’s a large, recognized, and relatively stable company, some potential borrowers may be inclined to explore its offerings. There are no origination or up-front fees, and funds can be accessed quickly, which is another plus.
Our take: The fact that Discover doesn’t charge any up-front or origination fees can’t be overlooked, and it also offers a 30-day window during which borrowers can pay the money back or otherwise change their minds to have their loans canceled with no financial penalty.
Best Egg is another financial institution headquartered in Delaware that dates back to 2014. It tends to offer loans with relatively high interest rates, but the terms aren’t easily accessed via the company’s website. Potential borrowers do need a minimum credit score of 550 to 600 to qualify.
RELATED: Best Egg Personal Loans Review
Our take: Best Egg has been around for a while, and has a fairly good reputation in the industry. That said, there are origination fees to take into account, and you’ll need to engage in the application process before loan terms become clear. All things considered, if your credit is fair to good, Best Egg may be worth checking out.
Happy Money’s APR range bottoms out at more than 11%, which is considerably higher than many other financial institutions. The minimum-required credit score is a bit higher, too, at 640. The company made a name for itself by targeting borrowers looking to pay off or consolidate high-interest credit card debt and has doled out more than $5.2 billion in loans so far.
Our take: If paying off credit card debt is your primary aim in taking out a personal loan, Happy Money can be a good option, especially if its relatively high minimum interest rate charges and origination fees are offset by paying off high-interest credit cards.
Avant is a Chicago-based financial institution, which was founded in 2012. Borrowers can live in most states, with the exception of Hawaii, Iowa, New York, Vermont, West Virginia, and Maine. There’s a minimum credit score of 580 needed to qualify. Fees are also something to consider, as there’s an upfront administration fee of 4.75%, and late payment fees.
Our take: Avant is another perfectly viable option if you don’t have very good credit. But the fees and interest rates are something that shouldn’t be ignored. Also, something to keep in mind: Avant did end up settling with the Federal Trade Commission (FTC) in 2019 for $3.85 million for allegedly charging fees and interest that customers didn’t owe.
One thing that stands out about Penfed is that it offers low rates on relatively small loan amounts. Applicable APR starts at 7.99%, among the lowest of the financial institutions analyzed, and borrowers can take out less than $1,000, all the way up to $50,000. PenFed is also a credit union, and one with a long history: it was founded all the way back in 1935.
Our take: Given the friendly interest rates and the ability to borrow fairly small amounts, Penfed may be a good option for many potential borrowers. There are origination fees, however, and borrowers will need to join the credit union in order to take a loan out.
LightStream is a part of a much larger financial operation, having been developed as the consumer lending arm of Truist, which was the company that formed after SunTrust Bank and BB&T merged several years ago. LightStream’s interest rates are attractive, too, but there is a minimum score of 660 needed to qualify.
Our take: LightStream is a part of a fairly large financial institution, and has good interest rates for the current environment. If you have a good credit score, this may be a financial institution that’s worthy of your time. Another positive: There are no origination fees.
Lending Club charges origination fees between 2% and 6%, and its applicable APR range tends to be on the high side among the financial institutions analyzed. The company’s loans are available to residents of all 50 states and D.C., however, and you can even submit a joint application.
Our take: Though loans are available nationwide and Lending Club will allow borrowers to apply with a co-signer or co-borrower, the fees associated with their loans may make it pricier than other financial institutions. It’s not a bad option, but the costs are something potential customers should keep in mind. Lending Club charges origination fees between 3% and 8%.
Lenders expend a lot of resources to determine loan rates, but it often boils down to a few main factors: Your credit score, your credit history, prevailing economic conditions and how those affect rates set by the Federal Reserve. Borrowers can’t do anything about the Fed or the economy, but they can do their best to shape up their credit histories and scores. Your credit score may be the biggest determining factor, too, when lenders are determining what interest rate to charge you.
Generally, you can make some assumptions given your credit score range, and determine an estimated APR, too. The chart below is a rough estimate, but given where current interest rate averages are, this may be helpful in providing some guidance:
Credit score range | Average APR |
---|---|
720 to 850 | 10.73% to 12.50% |
690 to 719 | 13.50% to 15.50% |
630 to 689 | 17.80% to 19.90% |
300 to 629 | 28.50% to 32.00% |
Source: Bankrate
With myriad options out there for personal loans, here are some tips to make it easier to compare and contrast what’s available:
Securing a personal loan may require some effort, depending on your specific financial situation. While there probably is a lender out there willing to work with you, here are a few tips for getting the best loan at the best rate possible.
There are a slew of options out there for finding a personal loan. You can look at what online lenders, banks, and even credit unions have to offer, and you’ll probably need to do some homework to figure out which offer is most favorable to you, your goals, and your specific financial situation.
That goes beyond just looking at interest rates. There are fees to consider, qualifying credit score, pre-qualifications and the list goes on. As always, remember that if something seems too good to be true — such as a personal loan offer for $1 million with no interest for 15 years, or something crazy like that — it probably is.
Securing a personal loan offer and choosing the right lender isn’t an exact science, and the decision will ultimately be up to you. Just remember to do your research, consider all the costs, and think about how additional debt may impact your long-term financial health. If you need to, you can always reach out to a financial professional for help.
The easiest and most precise way to calculate the payment for personal loans is to use an online calculator. If you want to try and do it the old-fashioned way, you can get an estimate if you know your overall balance, interest rate, and loan term. Divide your total loan balance by the term (in months), then factor in the interest rate by the loan term (in months), and multiply it by the remaining balance.
Ultimately, your interest rate for a personal loan or any other loan will depend on your credit score and credit history. However, as of July 2023, the best interest rate you’re likely to get on a personal loan, assuming you have very good or exceptional credit, is going to be in the 4.6% to 11.25% range.
Personal loans can be used for just about anything, from consolidating debt, to throwing an expensive birthday bash. Many people take out personal loans to make home improvements, fund an investment, or start a business. There really aren’t strict rules, but whether or not you’ll receive a personal loan will, in the end, be in the hands of a lender.
*APRs are current as of May 1, 2024. Rates fluctuate, so be sure to check with your lender about the most recent rate.
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