Best Low-Interest Personal Loans for September 2024

A low-interest personal loan can give you access to cash you need for emergency expenses, home projects, big purchases, or even debt consolidation, while limiting your out-of-pocket costs for that money. The best personal loans offer lower interest rates, limited fees, and a wide range of loan and repayment terms.

Here’s a look at some of the best low-interest personal loans we’ve found and what each lender offers to borrowers.

Our recommendations for the best low-interest personal loans

Best low-interest personal loan rates compared

Tips for selecting the best low-interest rate personal loan

Not sure which personal loan lender is right for you? Here are some considerations to help you choose.

Know what you need

Each lender has its own loan limits, which will determine how much (or how little) you’re allowed to borrow. Some lenders also limit how those funds can be utilized, such as only offering debt consolidation loans.

It’s important to know how much money you need, depending on your purpose for borrowing those funds, before you start shopping around. That way, you can rest assured that the lender you choose offers the right loan for you.

Shop around for the lowest rates

Rather than choosing the first lender that approves you, consider shopping around a bit first to find the best rates. You can either get pre-approved through multiple lenders (usually without impacting your credit), or you can apply through a lender platform and get multiple offers at once. Then, choose the loan offer with the lowest rates and fees.

Consider your budget

Your new personal loan will have a repayment term that, along with the loan’s interest rate, will determine how much you pay monthly. Be sure to consider your household budget before you choose a loan amount and repayment term, to ensure that you’re able to meet that new obligation until the debt is repaid.

Limit your fees

The less you pay in fees to a lender, the more of your own money you keep in your pocket. Origination fees, application fees, early repayment penalties, late fees, and interest charges can all add up, so try to find a lender that either doesn’t require these or charges the lowest possible amount.

How to qualify for a low-interest personal loan

Ready to borrow? Here’s how to qualify for a low-interest personal loan and snag the best possible terms.

Get your credit in order

As you might expect, the lowest interest rates on personal loans are reserved for the most creditworthy borrowers. With all other factors the same, a borrower with a 750 credit score will usually be offered a more enticing rate than one with a 650 score.

Additionally, many of the best lenders have minimum credit score thresholds for borrowers. If you want to qualify for one of these loans, make sure your credit score is healthy and that you don’t have any late payments, delinquent accounts, or a too-high debt-to-income ratio (DTI).

Consider adding a co-borrower

Some lenders allow for joint loans, which are loans issued to two co-borrowers who take equal responsibility for the debt. As a result, the incomes and credit histories of both borrowers are taken into account, and the lender generally takes on less risk.

By adding a creditworthy co-borrower to your new loan, you may find that you’re offered even lower interest rates than applying alone. If you are struggling to find a low-interest loan or even qualify on your own, consider adding someone else who’s willing to share the loan.

Adjust your terms

In many cases, you’ll be offered a lower interest rate when you take out a smaller personal loan or choose a shorter repayment period. Some lenders may provide an online loan estimate tool where you can adjust your loan terms to see what rates are offered. If your goal is to get the lowest interest rate possible, you might want to see which loan term combination is best.

Alternatives to low-interest loans

Of course, personal loans aren’t the right answer for everyone. If you aren’t sure whether you should take out a personal loan or aren’t able to qualify for a low-interest loan, here are some alternatives to consider.

Credit cards

A credit card is an easy option when you need to make an unexpected payment, cover a large purchase, or even consolidate other balances. If you have a credit card in your pocket with an available credit limit, this gives you access to a line of credit anytime you need it. Some credit cards even offer cash advances, if you need access to liquid funds.

Interest rates are generally higher than with personal loans, so keep this in mind when using plastic. Some credit cards also have 0% APR offers on new purchases or balance transfers, which can be used to consolidate debt or make big purchases without paying any interest charges; just be sure to pay off the entire balance before the promotional period ends.

Tap into home equity

If you own a home and have equity in the property, you may be able to tap into that value for big purchases or projects. With a home equity line of credit (HELOC) or home equity loan, you can either get a lump sum installment loan or revolving line of credit that is secured by your property’s value.

Since these loans are secured, interest rates may be lower than with credit cards or even personal loans. Funding generally takes longer as it may require a home appraisal, but if you don’t need funds immediately, this can be a viable option.

Low-interest personal loans: Key considerations

Here are some things to know and keep in mind about low-interest personal loans.

How to get a low-interest personal loan with bad credit

While the best rates and terms are reserved for borrowers with good credit or better, there are bad credit personal loans if you have a lower score or limited credit history. You may not be able to borrow from every lender, and you should expect that your interest rates may be higher than if you had better credit, but funding may still be available.

Can you get a low-interest loan with good credit but with no job?

Many lenders have annual income requirements in order to qualify for low-interest personal loans. This income can usually come from a W-2 or 1099 employment, investments, or other sources. If you don’t have a job or source of steady income, you could find it difficult to get approved and might need to turn to a secured personal loan instead.

How to consolidate credit card debt with a low-interest personal loan

You can use a personal loan to consolidate existing debt, such as credit card balances, in order to lower interest rates, adjust monthly payment requirements, or both. A low-interest personal loan may have an interest rate that is a fraction of the rate you’re paying on a revolving credit card account, so refinancing and consolidating one or more of these balances can save you hundreds if not thousands of dollars on repayment.

You can use the disbursed loan funds to pay off credit cards, then direct that monthly payment toward your new loan. Some lenders even offer to disburse your loan funds directly to the creditors, simplifying the entire process for you.

TIME Stamp: Low-interest personal loans let you access funds quickly while saving on interest rates

A low-interest personal loan provides you with funding for big projects, large purchases, unexpected expenses, or even debt consolidation, while limiting the amount of interest you’ll pay for the debt. These loans are generally reserved for borrowers with good credit and can give you access to funds as quickly as the same day.

Frequently asked questions (FAQs)

Is it possible to get a 0% personal loan?

While you can get a personal loan with a low interest rate, there are no 0% personal loans available to consumers. If you want to avoid interest charges altogether, your best option is a 0% APR purchase or balance transfer offer on a credit card. These offers are promotional, so you’ll need to pay off the balance before the promotion ends to avoid that deferred interest.

What is a good interest rate on a personal loan?

According to the Federal Reserve, the average interest rate on a 24-month personal loan in November 2023 was 12.35%, so a good interest rate on a personal loan could mean anything below that. Many of the lenders mentioned here have rates below 10%, which can save you even more money.

What affects my personal loan rate?

Your personal loan interest rate is determined by factors like your requested loan amount, repayment term, and location. It’s also impacted by your credit history and rating, income, debt-to-income ratio (DTI), credit utilization, and, in some cases, your purpose for the loan.