Borrowers with good credit seeking personal loans have been prequalified for rates that were lower compared to the previous seven days fixed-rate loans during the past seven days.
For borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender between Nov. 29 and Dec. 6:
Rates on 3 year fixed-rate loans averaged 11.34% a year ago, down from 11.61% the seven days before and up from 11.28% a year ago.
Rates on 5 year fixed-rate loans averaged 14.05%, down from 15.04% the previous seven days and 14.75% a year ago.
Personal loans have become a popular way to pay off credit card debt and other loans. They can be used to cover unexpected expenses like medical bills, take care of a major purchase or fund home improvement projects.
Personal loan interest rates fell for both 5 year and 3 year fixed terms. Rates for a 5 year term plunged by nearly a full percentage point, and are significantly lower than they were last year. 3 year rates fell by 0.27%. Borrowers can get huge savings with a 5 year fixed-rate personal loan, either a 3 year or a 5 year fixed-rate loan right now.
It depends on several factors, including what rate you can qualify for a personal loan, to make sure it's right for you. This can help you get the best personal loan possible by comparing multiple lenders and their rates.
It's always a good idea to compare and contrast sites like Credible to see how much you qualify for and choose the best option for you.
Here are the latest trends in personal loan interest rates from the Credible marketplace, updated monthly.
The chart above shows average prequalified rates for borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender.
In October, the 3 year personal loan rates averaged 11.32%, down from 11.33% in October.
The rate on 5 year personal loans was 14.25%, up from 13.85% in October.
The rates on personal loans can vary based on credit score and loan term. If you want to compare and contrast the different personal loan rates you may qualify for, you can use an online tool like Credible to compare options from different private lenders. In November, the average prequalified rate selected by borrowers was
8.92% of borrowers with a credit score of 780 or above will choose a 3 year loan.
For borrowers with credit scores below 600, 29.04% will choose a 5 year loan.
All Credible marketplace lenders offer fixed-rate loans at competitive rates. It is a good idea to get personal loan rates from multiple lenders so you can compare your options because lenders use different methods to evaluate borrowers.
The interest rate can vary based on factors such as your credit score, which type of personal loan you are seeking and the loan repayment term.
As shown in the chart above, a good credit score can mean a lower interest rate, and rates tend to be higher on loans with fixed interest rates and longer repayment terms.
How can I get a lower interest rate?
There are many factors that influence the interest rate a lender might give you on a personal loan. You can make some steps to increase your chances of getting a lower interest rate. People with higher credit scores qualify for lower interest rates. How can I improve my credit score over time?
Payment history is the most important factor in your credit score. Pay all bills on time for the amount due.
You should look at your credit report to make sure there are no errors on it. If you find errors, you can dispute them with the credit bureau.
Lower your credit utilization ratio. Credit card debt can be improved by paying down credit card debt.
Only open credit accounts that you need to apply for. Too many hard inquiries on your credit report in a short amount of time could lower your credit score.
Personal loan repayment terms can vary from one to several years. Since the lender's money is at risk for a shorter period of time, shorter terms usually come with lower interest rates.
If your financial situation allows, applying for a shorter term could help you score a lower interest rate. The shorter term doesn't just benefit the lender - by choosing a shorter repayment term, you'll pay less interest over the life of the loan.
If you have student loans, you may be familiar with the concept of a cosigner. If your credit isn't good enough to qualify for the best personal loan interest rates, finding a cosigner with good credit could help you get a lower interest rate.
If you default on the loan, your cosigner will be on the hook to repay it. It is possible that if you sign for a loan, it will affect your credit score.
Before applying for a personal loan, it is a good idea to look around and compare offers from several different lenders to get the lowest rates. Online lenders can be quicker to disburse your loan than a brick-and- mortar establishment because they usually offer the most competitive rates.
But don't worry, comparing rates and terms doesn't have to be a time-consuming process.
Credible makes it easy to use. Just enter how much you want to borrow and you'll be able to compare multiple lenders to choose the one that makes the most sense for you.
Credible is a multi-lender marketplace that allows consumers to find financial products that are the best fit for their unique circumstances. Credit bureaus and lenders have the ability to compare and contrast loan options without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivalled customer experience, as evidenced by over 4,500 positive Trustpilot reviews and a TrustScore of 4.7 5.