Best personal loan rates of October 2024

The average personal loan interest rate was 11.92% for a two-year loan in May 2024, according to Federal Reserve data. But interest rates range from around 7% to 36%, and vary based on the repayment term, the lender, and your credit profile. The best personal loan rates are generally the lowest ones available for your credit score and the loan term you need.

Average interest rates by credit score

According to Credible data, these are the average prequalified interest rates potential borrowers received based on their credit score bracket. 

Knowing your credit score ahead of applying for a personal loan can give you an idea of what to expect rate-wise, and could provide motivation to improve your credit score before you apply. 

Current personal loan rates: October 2024

Lenders with the best personal loan rates

Whatever your credit score is, some lenders may offer you lower rates than others. This could be due to the lender’s range of annual percentage rates (APRs), its experience with different types of borrowers, or other factors.

When comparing rates, it’s wise to consider the APR. This expresses the yearly cost of borrowing as a percentage of the loan amount, and includes the interest rate and any upfront fees (like an origination fee). Of the two dozen lenders we reviewed, the lenders below stand out for offering the lowest rates to the most qualified borrowers.

Methodology

We evaluated two dozen lenders based primarily on the lowest APR each lender makes available to its most qualified applicants. We also considered other factors, including customer experience, maximum loan amount, funding time, loan terms, fees, discounts, minimum credit score and income requirements, whether secured loans are available, and whether cosigners are accepted. Our team of experts gathered information from each lender's website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.

Read our full lender rating methodology for more information.

Where are interest rates headed?

Personal loan interest rates have been on an upward trajectory since 2022. Is there an end in sight? According to the Fed's July meeting, the answer may be yes. But to know where interest rates are headed, it helps to understand how rates are set.

Generally speaking, there are two main drivers of personal loan interest rates: the overall interest rate environment, as indicated by the federal funds rate, and the demand for personal loans. The effective federal funds rate has been steady at 5.33% since July 2023. Though the Fed anticipated making three rate cuts of 25 basis points each this year, stubborn inflation instead led to a wait-and-see approach.

Still, the past few months of CPI data support a cooling trend, and the Fed has announced it expects to deliver at least one rate cut by year's end. This is widely expected to happen at its September meeting, where the main debate will likely be over how much of a cut is needed after an unexpectedly weak July jobs report.

But even if the Fed makes rate cuts, there's no guarantee personal loan interest rates will drop dramatically. This is because demand for personal loans is on the rise, and lending standards have tightened. In other words, more people want to get a personal loan, but many banks have made qualification requirements more stringent. An example of this would be increasing credit score minimums.

Considering this, improving your credit score is probably a better way to secure a low interest rate than waiting for rates to drop.

How to get the best personal loan rates

You can start by looking at lenders' advertised personal loan rates for excellent credit borrowers to get a rough idea of what they may charge. This page is a good place to start. But ultimately, the lowest-rate lender for you will depend on your financial situation. That's why it's important to prequalify with several lenders that meet your needs and compare their estimated rates.

How to compare personal loans

To find the best rates, take the following steps:

1. Compare eligibility requirements: To find loans you’ll likely qualify for, research and compare lender minimum income and credit score requirements. If you have bad credit or a low income, you’ll have access to fewer loan options — likely with higher costs — and may need a cosigner or co-borrower to get approved. You might also secure the loan with collateral to gain approval or a better rate (not all lenders offer secured personal loans).
2. Compare terms and borrowing limits: Eliminate lenders that don’t offer the amount or term you need. To check if the lender’s maximum term will work for you, use an online calculator to find the monthly payment and ensure it fits into your budget. You should also exclude lenders that restrict you from using the loan for your intended purpose.
3. Identify important loan features: You may decide that you want to apply with a co-signer. It might also be important for you to manage your loan payments on a mobile app or choose a lender that offers unemployment protection. Consider your must-have features when comparing personal loans.
4. Research lender reputation: Rule out lenders with poor customer satisfaction by checking customer reviews on third-party websites, and search for red flags like regulatory action against the company with the Better Business Bureau.
5. Prequalify with a handful of lenders: Many lenders offer a prequalification process that allows you to see potential rates, amounts, and terms without hurting your credit. Unlike pre-approval for a mortgage, prequalifying for a personal loan only requires a soft credit check, so you won’t risk your credit health by checking your rate. Go through the online process with several lenders so you can compare between them, but be aware that your final rate might differ slightly.
6. Consider discounts and perks: Lenders may offer similar rates. To break the tie, consider available discounts or perks. For example, Wells Fargo offers a rate discount up to 0.50 percentage points for checking account holders, and SoFi offers membership benefits like no-cost financial advice.

How to get a personal loan

1. Choose a lender: Based on your research and review of prequalification quotes, pick the lowest-rate loan offer that meets your needs.
2. Gather your documents: You’ll need an identification document, such as a driver’s license, along with financial documents, like tax returns, bank statements, and pay stubs.
3. Formally apply: Submitting a formal application for a loan will trigger a hard credit check, which may cause a small dip in your credit score. Most people see a FICO score decrease of fewer than 5 points after a hard inquiry.
4. Submit any additional documents: Your loan may be instantly approved, or you may have to submit additional documents. For example, the lender may ask for utility bills to prove your address or a copy of your Social Security card to confirm your identity.
5. Sign and accept the loan offer: Make sure you’re satisfied with the final rate offer and review the loan agreement carefully before signing.
6. Receive payment: Most lenders will deposit the funds directly into your bank account. But if you use the loan to consolidate debt, you may be able to request that the lender pay your creditors directly (and could net a rate discount for doing so).

Learn more: How to get a personal loan

How to get a good interest rate with bad credit

While the best personal loan rates are generally reserved for borrowers with excellent credit, there are a few ways to lower your interest rate, even if you have bad credit.

• Choose an online lender that uses alternative underwriting data: Some online lenders evaluate more than just your credit score, and these lenders may be more likely to approve your loan application and offer a favorable interest rate. For example, Upstart offers an AI lending platform that allows partner lenders to approve more borrowers, often at lower APRs.
• Apply with a cosigner or co-borrower: If you have a friend or family member with good credit, they may be able to help you get a lower rate by cosigning your loan application. Cosigners are responsible for the full loan balance in the event the borrower fails to make payments. That provides the lender with additional assurance that the loan will be repaid, allowing it to offer a lower rate. Co-borrowers provide the same assurance but also have access to the loan funds. Not all lenders offer loans with cosigners.
• Secure the loan with collateral: Secured loans provide the lender with recourse in the event of nonpayment because it can take possession of the asset used to secure the loan. This is known as collateral. Many lenders offer lower rates on secured loans, but they're not an option with every lender.
• Improve your credit: To increase your credit score, make your payments on time and reduce your debt balances. Paying off credit card debt and lowering your debt-to-income ratio (DTI), or the amount of debt you have relative to your earnings, can help. This can take time, but there are tools that may help you improve your credit score immediately. For example, Experian Boost gives you credit for your on-time utility and rent payments. You may see an immediate score increase if you've been responsible with those payments.

Lenders that offer loans for bad credit

Best personal loan interest rates FAQ

What credit score do I need to get a personal loan?

While most lenders look for a credit score in the mid-600s, some lenders are more accepting of poor-credit borrowers than others. For example, Upstart only requires a minimum credit score of 300 if you apply on its website, but your approval will depend on other factors as well.

Can I get a personal loan with poor credit?

While it’s possible to get approved for a personal loan with bad credit, you may have to pay a higher interest rate. For example, the average three-year fixed rate for borrowers with credit scores below 600 is 32.25%, according to prequalification data from the Credible loan marketplace.

How many personal loans can I have at once?

While there’s no industry-wide limit on the number of outstanding personal loans a borrower can have at once, individual lenders may have their own rules, which may vary by state. If you already have a lot of outstanding debt relative to your income, you may find it challenging to get approved for an additional personal loan.

What alternatives are there for personal loans?

A few low-interest alternatives to personal loans include borrowing money from friends or family, requesting a cash advance from your employer, running a crowdfunding campaign, borrowing from your 401(k), taking out a home equity loan or home equity line of credit, and using a cash advance app.

Related articles:

• What is a personal loan?
• Where can I get a personal loan?
• Best personal loans
• Best online loans
• No-credit-check loans