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The latest trends in personal loan interest rates from Credible Market, updated weekly. (iStock)
Borrowers with good credit personal loans during the past seven days prequalified for rates that were lower and for loans with fixed interest for 3 and 5 years compared to the previous seven days.
For borrowers with a credit score of 720 or higher who used the Credible marketplace to select a lender between November 3 and November 9:
- Rates on three-year fixed-rate loans averaged 12.36%, down from 13.52% seven days ago and up from 10.88% a year ago.
- Rates on five-year fixed-rate loans averaged 15.93%, down from 16.54% seven days ago and up from 14.19% a year ago.
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 billstake care of a larger purchase or finance home improvement projects.
Interest rates on personal loans have fallen significantly in the last seven days and for loans with a fixed interest rate for 3 and 5 years. Rates on 5-year loans fell by 0.61 percentage points, while on 3-year loans, they recorded a larger drop of 1.16 percentage points. Despite today’s reductions, interest rates for both loan terms are higher than this time last year. However, borrowers can take advantage of interest savings with a 3 or 5 year personal loan right now. Both loan terms offer interest rates significantly lower than higher-cost borrowing options such as credit cards.
Whether a personal loan is right for you often depends on a number of factors, including the rate you can qualify for. Comparing multiple lenders and their rates can help you get the best possible personal loan for your needs.
It’s always a good idea to comparison shop on sites like Credible to understand how you qualify and choose the best option for you.
Here are the latest personal loan interest rate trends from Credible Market, updated monthly.
Weekly rate trends for personal loans
The chart above shows the average pre-qualified rates for borrowers with a credit score of 720 or higher who used the Credible marketplace to select a lender.
For the month of October 2022:
- Rates on three-year personal loans averaged 12.37%, compared to 11.65% in September.
- Rates on 5-year loans for individuals averaged 15.84%, compared to 15.60% in September.
Personal loan rates vary significantly depending on your credit score and loan term. If you’re curious about what personal loan rates you may qualify for, you can use an online tool like Credible to compare options from different private lenders. Checking your rates will not affect your credit score.
All credit market lenders offer fixed rate loans at competitive rates. Because lenders use different methods to evaluate borrowers, it’s a good idea to request personal loan rates from multiple lenders so you can compare your options.
Current personal loan rates by credit score
In October, the average pre-qualified rate chosen by borrowers was:
- 9.90% for borrowers with a credit score of 780 or higher who choose a 3-year loan
- 29.90% for borrowers with a credit score below 600 who choose a 5-year loan
Depending on factors such as your credit score, what type of personal loan you are looking for, and the loan repayment term, the interest rate can vary.
As shown in the table above, a good credit score can mean a lower interest rate, and rates are usually higher on fixed-rate loans with longer repayment terms.
How to get a lower interest rate
Many factors affect the interest rate a lender might offer you for a personal loan. But you can take some steps to increase your chances of getting 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 include:
- Pay your bills on time. Payment history is the most important factor in your credit score. Pay all your bills on time for debt.
- Check your credit report. Look at your credit report to make sure there are no errors on it. If you find errors, dispute them with the credit bureau.
- Reduce your credit utilization ratio. Paying off credit card debt can improve this important credit score factor.
- Avoid opening new credit accounts. Apply and open only the credit accounts you really need. Too many hard inquiries on your credit report in a short period of time can lower your credit score.
Choose a shorter loan term
Personal loan repayment terms it can vary from one to several years. Generally speaking, shorter terms come with lower interest rates, since the lender’s money is at risk for a shorter period of time.
If your financial situation allows, applying for a shorter term can help you achieve a lower interest rate. Keep in mind that a 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 cosigner
You may be familiar with the concept of a cosigner if you have student loans. If your credit isn’t good enough to qualify for the best personal loan interest rates, finding a cosigner with good credit can help you secure a lower interest rate.
Just remember, if you default on the loan, your cosigner will be willing to pay it off. And co-signing a loan can also affect their credit score.
Compare rates from different lenders
Before you apply for a personal loan, it’s a good idea to shop around and compare offers from several different lenders to get the lowest rates. Online lenders usually offer the most competitive rates – and can pay off your loan faster than brick-and-mortar institutions.
But don’t worry, comparing prices and terms doesn’t have to be a time-consuming process.
It makes it really easy. 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.
About Credible
Credible is a multi-lender marketplace that allows consumers to discover the financial products that best fit their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options – without compromising their personal information or impacting their credit score. Credible Market provides an unsurpassed user experience, which is reflected in the over 4,500 positive Trustpilot reviews and a trust rating of 4.7/5.
