Last week, rates on personal loans moved lower. This means if you’re in the market for a personal loan, whether to finance a project or major purchase, you can grab a worthwhile interest rate, so long as you’re a qualified borrower.
For borrowers with a credit score of 720 or higher who prequalified on Credible.com’s personal loan marketplace, the average interest rate on a three-year personal loan was 15.22% from September 30 to October 5. According to Credible.com, that’s a 0.72% drop from the previous week. The average rate on a five-year personal loan fell 0.20% last week to 22.06% from 22.26%.
The most qualified borrowers generally receive the best rates. In fact, well-qualified borrowers may receive a rate that’s significantly lower than average. The rate you receive depends on a number of factors, including your creditworthiness and the loans available through your chosen lender.
These rates are accurate as of October 7, 2024.
Related: Best Personal Loans
Getting the Best Rates
Two quick ways to help you receive more favorable rates include paying down existing debt to help lower your DTI and improving your credit score. The interest rate your receive on a personal loan is based on a number of factors. This includes your overall creditworthiness, credit score, income and debt-to-income (DTI) ratio.
While qualification requirements differ across lenders, a minimum credit score of 720 will typically yield you the best terms. If your score falls below this marker, and you’re on a quest for the lowest rate possible, you can take action to improve your score. Try strategies like lowering your credit utilization ratio, removing errors from your credit report and paying your bills early or on time.
Where Can You Get a Personal Loan?
You can find a personal loan either online or in-person, depending on the institution. With varying lenders offering personal loans, you can find one that works best for you. Lenders offering personal loans include:
- Banks: Best for in-person banking and opening a personal loan with your current bank
- Online lenders: Best for flexible qualification requirements and an online-only banking experience
- Credit unions: Best for those who meet a nearby credit union’s eligibility requirements or current members
More From Advisor
- Today’s Personal Loan Rates: October 1, 2024—Rates Move Up
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- Today’s Personal Loan Rates: September 24, 2024—Rates Drop
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