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The Federal Reserve has been busy over the past year. During the Fed’s May meeting, which was held during the week of May 2, it decided to raise interest rates 25 basis points. That is the 10th-straight rate hike going back to last year. At its June meeting, held during the week of June 13, the Fed hit pause, declining to raise the prime rate further. At its July 25 meeting, though, it once again instituted a raise of 25 basis points, making the current federal funds rate 5.5%. The Fed’s next meeting is scheduled for Septemberh 19th and 20th.
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.
Top personal loan rates compared
|Brand name||APR||Loan amount||Term|
7.99% to 35.99%
$2,000 - $36,500
24 to 72 months
8.49% to 35.99%
$1,000 to $50,000
24 to 84 months
5.2% to 35.99%
$1,000 to $50,000
36 to 60 months
7.99% to 24.99%
$2,500 to $40,000
36 to 84 months
8.99% to 35.99%
$2,000 to $50,000
36 to 60 months
11.52% to 24.81%
$5,000 to $40,000
24 to 60 months
9.95% to 35.99%
$2,000 to $35,000
12 to 60 months
7.74% to 17.99%
Up to $50,000
Up to 60 months
7.99% to 25.49%
$5,000 to $100,000
24 to 144 months
9.57% 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.
See if you’re pre-qualified for a personal loan offer
Here is some additional information about the financial institutions offering personal loans which we picked.
Our recommendations for best personal loans providers
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.
Min. credit score
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.
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 7.74%, 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%.
How do lenders determine personal loan rates
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||Value||Estimated APR|
Tips for comparing personal loan rates
With myriad options out there for personal loans, here are some tips to make it easier to compare and contrast what’s available:
- Keep your aims in mind: You should always remember why you’re taking out a loan, and perhaps only look at lenders that cater to your specific aims. For example, if you’re trying to pay down or consolidate credit card debt, there are personal loan lenders that do that and only that. While those lenders still may not be the perfect match, it can help you when comparing many loan options.
- Watch out for fees: Fees, including origination or late payment fees, can add a significant amount to your overall loan burden. All things being equal, you should probably stick with lenders with the lowest fees in an effort to trim costs. Why borrow from a lender that’s going to add a 5% origination fee when you can borrow from one that won’t?
- Look at the details: There are more things to consider when choosing a lender besides interest rates and loan amounts. How do other customers rate their experience? Does the lender have an available support team that can help you? How long has the company been in business? These types of questions should help you winnow down your options and make it easier to compare lenders.
Tips to get the best personal loan rate
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.
- Review your credit: Take a look at your credit score, as well as your credit report before applying. You’ll want to know where you stand, and what potential lenders are going to see so that there are no surprises. As you likely know, the better your credit score and report the better rate you’re likely to get.
- Make adjustments: Remember to play around a bit with loan options, including the term and loan amount, to see if you can make the numbers work in your favor. This may and likely will change the interest rate you’re paying, but if you can find a term and loan amount that works better with your budget, and at a more favorable interest rate, it’s worth putting in the effort to see what your options are.
- Consider a co-signer: If it’s an option, you may want to consider adding a co-signer or co-borrower to your application. If your co-signer has a longer credit history and better credit score, it may help you secure your loan at a better rate. This isn’t a risk-free option, of course, and you’ll need to make absolutely sure your co-signer is a-okay with being included on your application.
Shop your options
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.
Frequently asked questions (FAQs)
How do I estimate my personal loan payment?
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.
What is a good interest rate on a personal loan?
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.
What can I use a personal loan for?
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 August 1st, 2023. Rates fluctuate, so be sure to check with your lender about the most recent rate.
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