What is a good interest rate on a personal loan?

Some of the best fixed rate personal loans are from LightStream by SunTrust Bank, which offers APRs ranging from 3.99% to 16.99%. A fixed rate means the APR the borrower receives at the beginning will never change over the life of the loan. The alternative to a fixed rate personal loan is a variable rate personal loan, where the APR is tied to an index rate. That is usually the prime rate, the rate at which banks lend to each other. However, most personal loans have a fixed rate; it’s rare for them to have a variable rate.… read full answer

WalletHub’s personal loan partners only offer fixed rate personal loans. Below, you can see their general APR ranges. Your individual rate could be anywhere within the range, depending on your credit, income, existing debt load and other factors. But it’s locked in from the moment you open the loan until the moment you pay it off.

Popular fixed rate personal loan options:

LightStream: 3.99% to 16.99% APR. Loans up to $100,000 for as long as 144 months.

Best Egg: 5.99% to 29.99% APR. Loans up to $50,000 for as long as 60 months.

Avant: 9.95% to 35.99% APR. Loans up to $35,000 for as long as 60 months.

LendingClub: 6.95% to 35.89% APR. Loans up to $40,000 for as long as 60 months.

Payoff: 5.99% to 24.99% APR. Loans up to $35,000 for as long as 60 months.

LendingPoint: 9.99% to 35.99% APR. Loans up to $25,000 for as long as 48 months.

Prosper: 6.95% to 35.99% APR. Loans up to $40,000 for as long as 60 months.

FreedomPlus: 5.99% - 29.99% APR. Loans up to $40,000 for as long as 60 months.

It’s pretty rare to find a personal loan without a fixed rate. If you’re wondering whether a certain lender has fixed or variable rates, just look for the words “fixed” or “variable” in the terms and conditions for the loan.

If you want to get a better idea of what rates you can expect on a personal loan, use WalletHub’s free pre-qualification tool. It will check with multiple lenders to see who is likely to approve you for a loan and what your potential interest rates could be.

It’s easy to compare personal loan rates, which is good because doing so is essential to finding the best loan offers. Personal loan rates can range all the way from 6% to 36%, and they sometimes reflect more than just interest charges. The rates advertised for personal loans are actually annual percentage rates (APRs). Technically, the difference is that APRs include both interest and fees. However, origination fees are the most common type of personal loan fee, and they’re not always factored into the APR. So it’s important to confirm you’re comparing apples to apples when comparing personal loan rates.… read full answer

The best way to compare personal loan rates is to use WalletHub’s personal loans search tool to quickly see what some of the most popular lenders offer. On the left side of the page, you can filter the results by your credit score, desired loan amount, desired loan length and location. You’ll also be able to see additional details about the loans, such as estimated fees and monthly payments.

Using the search tool will give you a general idea of what options you can pursue and what rates are available. The next step is to check for pre-qualification. WalletHub’s free pre-qualification tool will tell you which lenders are likely to approve you, plus an estimate of what your rates would be if you’re approved.

After you compare the personal loan rates you’re pre-qualified for, you’ll typically want to apply for the loan with the lowest estimated rate. However, interest rates aren’t the only factor you should consider. If you’ll have to pay a large origination fee, for example, a slightly lower rate might not be worth it (assuming that fee isn’t already factored into the APR). And if the lender doesn’t offer loans as large as the one you need, you’ll want to rule it out. While interest rates are probably the most important consideration when it comes to a personal loan, you shouldn’t base your decision on them alone.

You should get a personal loan if you really need to borrow the money and the loan has better terms than other borrowing methods available to you. For example, in certain situations, a credit card or home equity loan might be a better choice. In addition, you should only get a personal loan if you are confident that you can pay the loan off on schedule. Borrowers have defaulted on 3% - 4% of personal loans since 2016, down from 4.8% a decade prior, according to TransUnion. Defaulting on a loan results in significant credit-score damage.… read full answer

If you’re on the fence about whether you should get a personal loan, you can follow this simple checklist. You’ll need to check off all the items for a loan to be worthwhile.

When you should get a personal loan:

1. The expense is necessary. You can get a personal loan for almost any purpose. But it’s wiser to use a loan for important things like consolidating debt or making home improvements that will increase the value of your property.
2. Credit cards aren’t a better option. People with good or excellent credit will likely find better long-term interest rates on personal loans than on credit cards. But there are plenty of credit cards with introductory 0% rates for 12-18 months on purchases. So 0% APR credit cards may be the better choice for smaller expenses.
3. Home equity loans/lines of credit aren’t a better option. You can probably expect to get lower interest rates on a home equity loan or home equity line of credit than with a personal loan, and you may be able to borrow more than you could with a personal loan. But home equity loans and HELOCs use your house as collateral, whereas most personal loans require no collateral. Think over your options in detail before choosing.
4. You’re confident you can pay it off. Personal loans can last anywhere from 12 to 84 months, though 60 months is a more typical cap. You’ll make payments in equal monthly installments. Before agreeing to a personal loan, look at the monthly payment and put it in the context of all your other monthly expenses. You should be able to comfortably afford the loan payment, and not have to worry about being late.
5. You can qualify. To get an unsecured personal loan (a loan that doesn’t require collateral) you’ll need a credit score of at least 585. And you probably won’t be able to get a loan without an origination fee unless your score is at least 660.

There are many situations when you should get a personal loan instead of borrowing another way. But there are also plenty of cases where you should not get a personal loan or even borrow at all. For example, taking out a personal loan to go on vacation or to throw a wedding isn’t ideal. It’ll take months or years to pay off the debt from something that only lasted a day or week. In addition, you’ll want to avoid personal loans when you can get a better deal through other borrowing methods.

There are several other cases when you should not use a personal loan either. For example, it’s not a good idea to borrow money to make investments you’re not confident will pay off in the future. And your chances of getting an unsecured personal loan aren’t great when your credit score is below 585. Personal loans are also not ideal in emergencies when you need immediate cash, because the lenders usually take at least a few business days to approve you and deliver the money. You might consider using a credit card or borrowing from family in an emergency instead.

Bottom line: Make sure to compare all options thoroughly before you commit to one.