Our goal here at Credible Operations, Inc., number NMLS 1681276, referred to below as “credible”, is to provide you with the tools and security you need to improve your finances. As we promote the products of our partner borrowers, all opinions are ours.
The latest personal loan interest rate trends from the Credible market, updated weekly. (iStock)
Borrowers with good creditworthiness personal loans in the week of August 23, 2021, prequalified for both 3 and 5 year interest rates higher than the previous week’s fixed rate loans.
For borrowers with a credit score of 720 or higher who used the Credible Marketplace to select a lender during the week of August 23:
- Three-year fixed-rate interest rates averaged 11.44%, up from 11.34% the previous week and down from 12.05% a year ago. Over the past year, 3-year personal loan rates hit a low in the week of August 3, 2020, when they averaged 10.45%.
- The yield on 5-year fixed-rate loans averaged 13.89%, up from 13.76% the previous week and down from 15.60% a year ago. 5-year personal loan rates hit a low of 12.65% over the past 12 months in the week of May 3, 2021.
Personal loans have become a popular way to Consolidate and pay off credit card debt and other loans. They can also be used to cover unexpected expenses such as: medical expenses, make a big purchase or finance home improvement projects.
Although interest rates on personal loans increased, they remained relatively low in August and are significantly lower than in the same period last year. This can still be an excellent time for borrowers to get a lower interest rate when they use a personal loan to refinance other high-interest debts.
Whether a personal loan is right for you often depends on several factors, including the rate at which you can benefit. By comparing multiple lenders and their rates, you can ensure that you are getting the best possible personal loan for your needs.
It is always a good idea comparison shop on sites like Credible to understand how well you qualify and choose the best option for you.
Here are the latest trends in personal loan interest rates from the credible market, which is updated monthly.
Weekly interest rate trends for personal loans
The chart above shows the prequalified average rates for borrowers with a credit score of 720 or higher who have used the credible market to select a lender.
For the month of July 2021:
- 3-year personal loan rates averaged 11.35%, down from 12.15% in June and 11.43% a year ago.
- 5-year personal loan rates averaged 13.67%, up from 13.46% in June and down from 15.60% a year ago.
Personal loan rates vary significantly based on credit score and duration. If you are curious about what personal loan rates you could benefit from, you can use an online tool like Credible to compare the options of different private lenders. Checking your rates will not affect your credit score.
All Credible Marketplace lenders offer fixed rate loans at competitive rates. Since lenders use different methods to evaluate borrowers, it is a good idea to request personal loan rates from multiple lenders so that you can compare your options.
Current personal loan rates based on credit score
Depending on factors such as your credit score, the type of personal loan you are looking for, and the duration of the loan repayment, the interest rate can vary.
As shown in the graph above, a good credit score can mean lower interest rates, and rates tend to be higher for fixed-rate loans with longer repayment terms.
How do you get a lower interest rate?
There are many factors that affect the interest rate a lender can offer you on a personal loan. But you can take some steps to increase your chances of 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. Steps that can help you improve your credit score over time they include:
- Pay your bills on time. Payment history is the most important factor in your credit score. Pay all bills on time for the amount due.
- Check your credit report. Check your credit report to make sure there are no mistakes. If you find errors, dispute them with the credit department.
- Reduce your credit utilization rate. Paying off credit card debt can improve this important credit score factor.
- Avoid opening new credit accounts. Apply for and open only the credit accounts you really need. Too many difficult questions about your credit report in a short period of time can lower your credit score.
Choose a shorter loan term
Conditions for repayment of the personal loan it can vary from one to several years. In general, shorter maturities result in lower interest rates because the lender’s money is at risk for a shorter period of time.
If your financial situation allows, requesting a shorter deadline can help you get a lower interest rate. Keep in mind that the shorter term doesn’t just benefit the lender – by choosing a shorter repayment term, you pay less interest over the life of the loan.
Get a co-signer
You may be familiar with the concept of a co-signer if you have student loans. If your credit isn’t good enough to qualify for the best personal loan interest rates, find a co-signer having good credit can help you get a lower interest rate.
Just remember that if you don’t honor the loan, it will be your co-signer’s turn to repay it. And even signing up for a loan jointly can affect their credit score.
Compare the rates of different lenders
Before applying for a personal loan, it’s a good idea to shop around and compare offers from different lenders to get the lowest rates. Online lenders typically offer the most competitive rates and can pay off the loan faster than a physical branch.
But don’t worry, comparing rates and terms doesn’t have to be a time-consuming process.
Credible makes it easy. Just enter how much you want to borrow and you can get it compare multiple lenders to choose the one that makes the most sense for you.
Credible is a multi-lender marketplace that allows consumers to discover the financial products that best suit their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate and personalized loan options, without compromising their personal information or impacting their credit score. The credible marketplace offers an unparalleled customer experience, as evidenced by below 4,500 positive reviews on Trustpilot and a TrustScore of 4.7 / 5.
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