At Credible Operations, Inc. (NMLS No. 1681276, hereafter referred to as “Credible”), our goal is to give you the tools and confidence you need to improve your financial situation. While we promote products from partner financial institutions from whom we receive compensation for our services, all opinions are our own.
Weekly updates on the latest trends in personal loan interest rates from the Credible marketplace. (iStock)
Borrowers with good credit who sought a personal loan in the past seven days were preconditioned for higher interest rates on three-year and five-year loans compared to fixed-rate loans in the previous seven days.
For borrowers with a credit score of 720 or higher who used the Credible marketplace to select a lender between May 16 and May 22:
- The average interest rate on a three-year fixed rate loan was 15.53%, up from 15.17% seven days ago and 14.48% a year ago.
- The average interest rate on a five-year fixed rate loan was 20.23%, up from 19.21% last week and 17.71% a year ago.
Personal loans have become a popular way to consolidate debt and pay off credit card debt and other loans. It can also be used to cover unexpected emergency expenses, such as medical bills, or to make large purchases. Funding home improvement projects.
Average interest rate for personal loans
Average personal loan interest rates have increased for three-year and five-year loans over the past seven days. Three-year loan interest rates rose by 0.36 percentage points, while five-year loan interest rates rose by 1.02 percentage points. Interest rates for both periods remain higher than the same period last year, increasing by 1.05 percentage points for the three-year period and 2.52 percentage points for the five-year period.
Still, borrowers can take advantage of interest savings on three-year or five-year personal loans. That’s because both loan terms offer lower interest rates on average than more expensive borrowing options like credit cards.
But whether a personal loan is right for you depends on a variety of factors, including the interest rate you can get, which is primarily based on your credit score. By comparing interest rates from multiple lenders, you can ensure you get the best personal loan for your needs.
Before applying for a personal loan, consider using a personal loan marketplace like Credible. comparison shop.
Personal loan weekly interest rate trends
Below are the latest developments in personal loan rates from the Credible Marketplace. Updated weekly.
The chart above shows the average pre-qualification interest rate for borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender.
For February 2024:
- Three-year personal loan interest rates averaged 21.68%, down from 22.16% in January.
- Five-year personal loan interest rates averaged 24.88%, down from 25.26% in January.
Personal loan interest rates vary widely depending on your credit score and the length of the loan, and if you’re curious to know what kind of personal loan interest rate you could qualify for, you can use an online tool like Credible to compare options from different private lenders.
All Credible marketplace lenders offer fixed-rate loans at competitive rates. Because lenders use different methods to evaluate borrowers, we encourage you to request personal loan rates from multiple lenders so you can compare your options.
Current personal loan interest rates by credit score
Here are the average pre-approved interest rates selected by borrowers in February:
- 12.78% for 3-year loans for borrowers with a credit score of 780 or higher
- 30.11% for borrowers with credit scores below 600 who choose a five-year loan.
Interest rates can vary depending on factors such as your credit score, the type of personal loan you’re seeking, and the loan repayment period.
As shown in the chart above, higher credit scores mean lower interest rates, and loans with fixed interest rates and longer repayment terms tend to have higher interest rates.
How to get a lower interest rate
Many factors influence the interest rate offered by a personal loan lender. However, there are some steps you can take to increase your chances of getting a lower interest rate. Here are some tactics to try.
Increase your credit score
Generally, people with higher credit scores qualify for lower interest rates. Helpful steps improve credit score Over time they include:
- Pay your bills on time: Payment history is the most important factor in your credit score, so pay all your bills on time.
- Check your credit report: Look at your credit report and make sure there are no errors. If you find any mistakes, dispute them with the credit bureaus.
- Lower your credit utilization ratio: Paying off your credit card debt can help improve this important credit score factor.
- Do not open new credit accounts. Only apply for and open credit accounts you truly need. Too many hard queries on your credit report in a short period of time can lower your credit score.
Choose a short loan term
Repayment terms for personal loans can vary from one year to several years. Generally, the shorter the repayment term, the lower the interest rate because the lender’s funds are at risk for a shorter period of time.
If your financial situation allows, applying for a shorter term could help you get a lower interest rate. Keep in mind that a shorter term doesn’t just benefit the lender; choosing a shorter repayment term reduces the interest you pay over the life of the loan.
Obtaining a guarantor
If you have student loans, you may be familiar with the concept of a cosigner. If your credit score isn’t good enough to qualify for the best personal loan rates, you may be able to secure a lower rate by finding a cosigner with good credit.
Remember, if you default on your loan repayments, the cosigner will be responsible for the repayments. Also, cosigning a loan can affect the cosigner’s credit score.
Compare interest rates from different lenders
Before applying for a personal loan, we recommend researching and comparing offers from several different lenders to get the lowest interest rate. Online lenders usually offer the most competitive rates and may be able to disburse your loan faster than brick-and-mortar lenders.
But don’t worry, comparing rates and terms doesn’t have to be a time-consuming process.
Credible makes it easy. Simply enter the amount you want to borrow and compare multiple lenders to choose the one that is most suitable for you.
About Credible
Credible is a multi-lender marketplace that helps consumers find the best financial product for their situation. Credible integrates with leading lenders and credit bureaus, allowing consumers to quickly compare accurate and personalized loan options without putting their personal information at risk or impacting their credit scores. . Credible Marketplace offers an unparalleled customer experience as reflected in: Over 6,500 positive Trustpilot reviews TrustScore: 4.7/5
