July 3, 2022

Best Low Interest Personal Loans | U.S. News

A personal loan can help you pay for debt consolidation, home improvement or other expenses, but you’ll need to pay it back – with interest. Shopping around for a competitive rate, even on a low-interest personal loan, can reduce the interest you pay. Find out where to shop for low-interest personal loans and what to ask before you agree to a new loan. Here’s what you’ll learn:

  • Why is a low-interest personal loan important?
  • What is a good interest rate on a personal loan?
  • Can you get a low-interest loan?

What Are the Best Low-Interest Personal Loans?

LightStream

2.49% to 19.99% APR
$100,000 Max. Loan Amount
660 Min. Credit Score

Best Egg

4.99% to 29.99% APR
$50,000 Max. Loan Amount
640 Min. Credit Score

Payoff

5.99% to 24.99% APR
$40,000 Max. Loan Amount
640 Min. Credit Score

SoFi

5.99% to 18.28% APR
$100,000 Max. Loan Amount
680 Min. Credit Score

Peerform

5.99% to 29.99% APR
$25,000 Max. Loan Amount
600 Min. Credit Score

U.S. Bank

6.49% to 16.99% APR
$25,000 Max. Loan Amount
680 Min. Credit Score

Axos Bank

6.49% to 29.99% APR
$35,000 Max. Loan Amount
720 Min. Credit Score

Discover

6.99% to 24.99% APR
$35,000 Max. Loan Amount
660 Min. Credit Score

Rocket Loans

7.16% to 29.99% APR
$45,000 Max. Loan Amount
Not disclosed Min. Credit Score

Prosper

7.95% to 35.99% APR
$40,000 Max. Loan Amount
640 Min. Credit Score

Upgrade

7.99% to 35.97% APR
$50,000 Max. Loan Amount
Not disclosed Min. Credit Score

FreedomPlus

7.99% to 29.99% APR
$40,000 Max. Loan Amount
620 Min. Credit Score

Upstart

8.69% to 35.99% APR
$50,000 Max. Loan Amount
620 Min. Credit Score

Avant

9.95% to 35.95% APR
$35,000 Max. Loan Amount
550 Min. Credit Score

LendingClub

10.68% to 35.89% APR
$40,000 Max. Loan Amount
600 Min. Credit Score

Lender

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2.49% to 19.99% APR
$100,000 Max. Loan Amount
660 Min. Credit Score

Lender

Learn More
4.99% to 29.99% APR
$50,000 Max. Loan Amount
640 Min. Credit Score

Lender

Learn More
5.99% to 24.99% APR
$40,000 Max. Loan Amount
640 Min. Credit Score

Lender

Learn More
5.99% to 18.28% APR
$100,000 Max. Loan Amount
680 Min. Credit Score

Lender

Learn More
5.99% to 29.99% APR
$25,000 Max. Loan Amount
600 Min. Credit Score

Lender

Learn More
6.49% to 16.99% APR
$25,000 Max. Loan Amount
680 Min. Credit Score

Lender

Learn More
6.49% to 29.99% APR
$35,000 Max. Loan Amount
720 Min. Credit Score

Lender

Learn More
6.99% to 24.99% APR
$35,000 Max. Loan Amount
660 Min. Credit Score

Lender

Learn More
7.16% to 29.99% APR
$45,000 Max. Loan Amount
Not disclosed Min. Credit Score

Lender

Learn More
7.95% to 35.99% APR
$40,000 Max. Loan Amount
640 Min. Credit Score

Lender

Learn More
7.99% to 35.97% APR
$50,000 Max. Loan Amount
Not disclosed Min. Credit Score

Lender

Learn More
7.99% to 29.99% APR
$40,000 Max. Loan Amount
620 Min. Credit Score

Lender

Learn More
8.69% to 35.99% APR
$50,000 Max. Loan Amount
620 Min. Credit Score

Lender

Learn More
9.95% to 35.95% APR
$35,000 Max. Loan Amount
550 Min. Credit Score

Lender

Learn More
10.68% to 35.89% APR
$40,000 Max. Loan Amount
600 Min. Credit Score

Lender

Learn More

APR

Max. Loan Amount

Min. Credit Score

2.49% to 19.99% $100,000 660

4.99% to 29.99% $50,000 640

5.99% to 24.99% $40,000 640

5.99% to 18.28% $100,000 680

5.99% to 29.99% $25,000 600

6.49% to 17.99% $20,000 Not disclosed

6.49% to 16.99% $25,000 680

6.49% to 29.99% $35,000 720

6.99% to 19.99% $40,000 660

6.99% to 24.99% $35,000 660

7.16% to 29.99% $45,000 Not disclosed

7.95% to 35.99% $40,000 640

7.99% to 35.97% $50,000 Not disclosed

7.99% to 29.99% $40,000 620

8.69% to 35.99% $50,000 620

9.95% to 35.95% $35,000 550

9.99% to 35.99% $25,000 600

10.68% to 35.89% $40,000 600

Best for low interest

LightStream is the national online consumer lending division of SunTrust Bank, which in 2019 became Truist after merging with BB&T. The key feature of LightStream’s online personal loans is that they can be up to $100,000 and used for nearly any reason, outside of refinancing existing LightStream loans. Personal loans are available to borrowers with good to excellent credit in all 50 states.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $5,000 to $100,000
  • Repayment terms: 24 to 144 months
  • Better Business Bureau rating: A+

Best Features

  • A variety of loan uses are available.

  • Loans of up to $100,000 are available.

See full profile

Best for bad credit

Best Egg is a national online lender offering personal loans starting at $2,000 for a variety of purposes. Loans can be funded in as little as one business day.

Before You Apply

  • Minimum FICO credit score: 640
  • Loan amounts: $2,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Loan funding typically takes one to three business days upon approval.

  • The minimum loan amount is $2,000 in most states.

  • Borrowers incur no prepayment penalty.

See full profile

Best for debt consolidation

Payoff offers personal loans designed to consolidate credit card and other high-interest debt. It operates in most states and provides loans of up to $40,000.

Payoff is not a bank; instead, it works with lending partners that originate loans. The company, which considers itself a financial wellness firm, is based in California.

In 2017, Payoff launched a sister company called Happy Money, which takes a psychological approach to money matters. Today, Payoff is a service under the Happy Money umbrella.

Before You Apply

  • Minimum FICO credit score: 640
  • Loan amounts: $5,000 to $40,000
  • Repayment terms: 24 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Borrowers don’t face prepayment or late fees.

  • Borrowers can get preapproved with no hard credit check.

  • Some borrowers with fair credit may be eligible.

See full profile

Best for loans of up to $100,000 with no fees

SoFi, short for Social Finance, offers personal loans of up to $100,000 to borrowers with very good to excellent credit. The lender operates nationwide, but does not offer personal loans in Mississippi, and is known for offering loans with no fees. In addition to personal loans, SoFi offers student loans, student loan refinancing, home loans and small business financing.

Before You Apply

  • Minimum FICO credit score: 680
  • Loan amounts: $5,000 to $100,000
  • Repayment terms: 24 to 84 months
  • Better Business Bureau rating: A

Best Features

  • SoFi offers no-fee loans, including no late fees.

  • Loans of up to $100,000 are available.

  • Co-borrowers are accepted.

See full profile

Best for peer-to-peer loans of up to $25,000

Peerform is a marketplace lending platform that connects borrowers nationwide with investors. Borrowers with a credit score of 600 or higher may qualify for loans of up to $25,000.

Before You Apply

  • Minimum FICO credit score: 600
  • Loan amounts: $4,000 to $25,000
  • Repayment terms: undisclosed
  • Better Business Bureau rating: A

Best Features

  • Some borrowers with fair credit may qualify.

  • Borrowers can complete the entire loan process online.

See full profile

Best for low minimum loan amounts

PenFed Credit Union serves members of the Armed Forces, Department of Defense, Department of Homeland Security, military associations, eligible veterans and retirees, and their families. However, military association is not required to apply for a loan or become a credit union member. The credit union offers personal loans for eligible members and eligible co-borrowers in all 50 states.

Before You Apply

  • Minimum FICO credit score: undisclosed
  • Loan amounts: $500 to $20,000
  • Repayment terms: up to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Terms of up to 60 months.

  • There are no origination fees.

  • Borrowers can get access to funds as early as the day after approval.

See full profile

Best for short-term loans

U.S. Bank offers both short- and long-term personal loans with fixed interest rates.

Before You Apply

  • Minimum FICO credit score: 680
  • Loan amounts: $1,000 to $25,000
  • Repayment terms: three to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Loan funds are paid out relatively quickly.

  • U.S. Bank doesn’t charge an origination fee.

See full profile

Best for flexible loan terms

Axos Bank launched in 2000 and is owned by San Diego-based Axos Financial. You won’t find any brick-and-mortar branches, but the bank has offices throughout the country. Aside from personal loans, Axos Bank offers CDs, plus checking, savings, money market and retirement accounts.

Before You Apply

  • Minimum FICO credit score: 720
  • Loan amounts: $5,000 to $35,000
  • Repayment terms: 12 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • The loan application process is completely digital because Axos Bank is online only.

  • Flexible loan terms are one to five years.

  • You can borrow between $5,000 and $35,000.

See full profile

Best for no origination fee

Marcus is the consumer bank and lending arm of investment bank Goldman Sachs. Established in 2016, the lender offers personal loans of up to $40,000.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $3,500 to $40,000
  • Repayment terms: 36 to 72 months
  • Better Business Bureau rating: A+

Best Features

  • Marcus does not charge any fees on its personal loans.

  • Borrowers can adjust their payment due date.

See full profile

Best for low costs

Discover is a digital bank and payment services company known for its credit cards. But Discover also offers other products including fixed-rate personal loans of up to $35,000 to borrowers in all 50 states and Washington, D.C. The lender boasts no fees as long as you pay on time.

Before You Apply

  • Minimum FICO credit score: 660
  • Loan amounts: $2,500 to $35,000
  • Repayment terms: 36 to 84 months
  • Better Business Bureau rating: A+

Best Features

  • Discover has no fees other than a late fee.

  • Customizable loan terms from 36 to 84 months.

  • Borrowers get free access to their FICO credit score.

See full profile

What Is the Best Interest Rate on a Personal Loan?

The average personal loan rate is 9.34%. Last week’s average rate was 9.93%.*

*Rate as of May. 21, 2021

Personal Loan Finder

Why Is a Low-Interest Personal Loan Important?

The lower your personal loan interest rate, the less you’ll pay to borrow money. That affects your monthly payment and could mean you’ll need less time to pay off your loan. Here are a couple of scenarios that show the effects of interest rates on the cost of a personal loan:

Let’s say you received an offer for a $5,000 personal loan with a 9.3% annual percentage rate and a four-year repayment term. With this loan, you’d pay $1,006.66 in interest alone.

Now assume that you were approved for a $5,000 personal loan with a four-year term and a 6.75% APR. By comparison, your total interest charges on this loan would be $719.30, resulting in interest savings of $287.36.

Your personal loan interest rate makes more of a difference if you’re taking out a larger or longer-term loan. The average personal loan balance is $16,259, according to a 2019 personal loan study from the credit bureau Experian.

If you took out a $16,259 personal loan with the same 9.3% APR but a six-year term, interest charges would increase to a sizable $5,017.28. If you can shop around for a loan and get the same term length at 6.2% APR, you would spend $3,252.73 and save close to $1,800.

What Is a Good Interest Rate on a Personal Loan?

There are two pieces of good news: Low-interest personal loans are available, and the average interest rate for all personal loans is about 12%. That’s particularly helpful if you need to pay off high-interest credit card debt.

You’ll pay down debt faster on a personal loan than on credit cards with higher interest rates, says David Bakke, personal finance expert at Dollar Sanity, a financial education website.

Getting a good personal loan rate, though, depends on your credit profile. This often includes your credit history and score, your income and your debt.

All lenders have their own criteria to set applicants’ personal loan interest rates and terms.

Which Factors Affect Your Personal Loan Rate?

Here are a few key areas that lenders look at to determine personal loan approvals and interest rates:

Your credit score is one of the major factors lenders consider for personal loan eligibility, says Lauren Anastasio, certified financial planner at SoFi, a personal finance company. “Lenders don’t always disclose whether they have a minimum credit score for applicants, but often they prefer to see a good or excellent credit history,” she says.

Meeting the minimum credit score doesn’t mean you’ll qualify for the lowest loan rates advertised. A FICO credit score in the mid-700s or higher is considered very good to exceptional and generally earns you a competitive interest rate. Borrowers with fair or bad credit shouldn’t expect low interest rates on personal loans.

A co-signer, ideally one with strong credit, is held liable for repaying your loan if you can’t. Lenders may approve a loan at a lower interest rate when you have a co-signer.

“If you don’t have a stellar credit score or don’t make very much, adding a co-borrower to your loan might increase your chances of approval,” Anastasio says. “They might also help you get a better interest rate and repayment terms.”

Lenders will evaluate your income to ensure that you earn enough to repay the loan. Your debt-to-income ratio is the percentage of your monthly income you put toward debt. It helps lenders gauge whether you can manage a personal loan payment without financial hardship.

“And, in a nutshell, the maximum debt-to-income ratio you want if you’re looking for a personal loan is right around 35%,” Bakke says. “Anything higher than that and the lender will be thinking twice about whether or not to extend the loan.”

Additionally, some lenders may have a minimum annual income requirement.

Whether your personal loan is secured or unsecured can influence your interest rate. With a secured loan, you’re providing collateral that the lender can claim if you default on your loan.

“Secured loans, backed by assets owned by the borrower, like a car or house, are less risky to the lender and therefore often come with much lower interest rates, reducing the cost of borrowing over the life of the loan,” Anastasio says.

Before jumping on a secured personal loan, factor in the risk of losing your collateral, such as your home, if you can’t make the monthly payments.

Some lenders offer a small APR percentage point reduction for existing customers or for signing up for automatic payment options. Some lenders list interest rates that include autopay discounts.

Can You Get a Low-Interest Loan?

Take these steps to find the lowest rates on personal loans.

Lenders may advertise an APR range, but you won’t find out your rate until a lender checks your credit. Prequalification can tell you whether you could be approved for a low-interest personal loan and it only uses a soft credit inquiry, which doesn’t affect your credit score.

“Many lenders allow potential borrowers to see if they prequalify for a loan before applying,” Anastasio says. “This process shows how much the loan would potentially be approved for, what your repayment terms and your interest rate could possibly be.”

Not all lenders offer prequalification options, but online lenders generally do. You’ll submit basic information, such as how much you want to borrow and your income, and the lender will perform a soft credit check. This option gives you great insight into whether you might meet borrower criteria and what terms you could get without committing to the loan or hurting your credit with a hard credit check.

Plus, the process can be quick. Some lenders let you check rates and prequalification online, which can take just minutes.

2. Check With Your Bank or Credit Union

When you’re rate shopping, getting a quote from a financial institution you have a relationship with could pay off. “Your bank or credit union would be a great place to start,” Bakke says. “However, rates and fees do vary, so it’s recommended that you get quotes from at least three lenders.”

Your bank or credit union might be able to offer a more competitive rate or origination fee than rivals because it has a window into your finances that the others don’t. If you have deposit accounts, for example, the bank may consider your wages, spending patterns and savings.

3. Be a More Attractive Borrower and Try Again

If you can’t get approved for a competitive interest rate on a personal loan, you might want to wait. Take time to focus on raising your credit score and reapply.

Check your credit reports for errors that you can dispute, pay down debt, make on-time monthly payments, and take other steps to improve your credit before you apply for a personal loan.

Which Bank Is Best for Low-Interest Personal Loans?

Carefully review personal loan options before you commit to a loan. Read full reviews to find the best personal loan lenders with the lowest rates. Loan terms vary, but a personal loan review can tell you about what you can expect from a lender. In addition to interest rate, learn about each lender’s:

  • Loan amount range
  • Minimum credit score requirement
  • Minimum income requirement
  • Loan terms, or time to pay off the loan
  • Customer service ratings, such as from the Better Business Bureau

View More Best Low-Interest Personal Loans

Best for digital customer care

Rocket Loans offers personal loans to qualified borrowers in all U.S. states except Iowa, West Virginia and Nevada. These loans are designed for people with fair to excellent credit who need to borrow up to $45,000 for debt consolidation, home improvements, medical expenses and business or other expenses.

Before You Apply

  • Minimum FICO credit score: undisclosed
  • Loan amounts: $2,000 to $45,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Same-day loan funding is available in some cases.

  • No prepayment penalties apply.

  • An online application process is available.

See full profile

Best for post-sales support

Prosper is a peer-to-peer lending marketplace that allows borrowers to apply online for fixed-rate, fixed-term loans. Prosper matches borrowers with partner investors including Sequoia Capital, Francisco Partners, Institutional Venture Partners and Credit Suisse Fund. Since its founding in 2005, Prosper has expedited more than $18 billion in loans. Prosper lends to borrowers with fair to excellent credit with a minimum 640 FICO score.

Lender Highlights

  • Minimum FICO credit score: 640
  • Loan amounts: $2,000 to $40,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Prosper offers preapproval with a soft credit check.

  • Small-dollar loans of $2,000 or more are available.

  • Joint personal loans are available.

See full profile

Best for loan amounts of up to $50,000

Upgrade is an online lender that offers personal loans and lines of credits nationwide. Borrowers can qualify for up to $50,000 in financing.

Lender Highlights

  • Minimum FICO credit score: Not disclosed
  • Loan amounts: $1,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Loans and lines of credit are available up to $50,000.

  • Borrowers can complete the entire loan process online.

See full profile

Best for below-average credit

FreedomPlus is an online lender offering personal loans ranging from $7,500 to $40,000. Loans are available to qualified borrowers with a minimum FICO credit score of 620.

Before You Apply

  • Minimum FICO credit score: 620
  • Loan amounts: $7,500 to $40,000
  • Repayment terms: 24 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Borrowers with fair credit may qualify for a loan.

  • Loans of up to $40,000 are available.

  • Same-day approval is available, with loans funded in as little as 48 hours.

See full profile

Best for borrowers with no credit or poor credit

Upstart is an online marketplace lender that connects borrowers and investors to originate personal loans. It offers loans of up to $50,000 to borrowers with fair to excellent credit nationwide, with the exception of Iowa and West Virginia residents. Since it was established in 2012, more than $7 billion in loans have been originated. Many loan decisions made through the platform are automated and use artificial intelligence.

Before You Apply

  • Minimum FICO credit score: 620
  • Loan amounts: $1,000 to $50,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: A+

Best Features

  • Upstart may accept applicants with fair credit or even those with no credit history, using artificial intelligence to quantify risk.

  • Upstart loans as low as $1,000 are available in most states.

  • The lender’s credit dashboard allows borrowers to see the impact of loan repayments and to modify payment dates.

See full profile

Best for risky borrowers

Since 2012, Avant has provided access to personal loans to more than 800,000 borrowers nationwide. Borrowers may qualify with fair to excellent credit and can borrow from $2,000 to $35,000.

Before You Apply

  • Minimum FICO credit score: 550
  • Loan amounts: $2,000 to $35,000
  • Repayment terms: 24 to 60 months
  • Better Business Bureau rating: A

Best Features

  • Loans as low as $2,000 are available.

  • Funding can happen as early as the next business day after approval.

See full profile

Best for FICO scores between 580 and 669

LendingPoint, which specializes in loans for borrowers with fair credit, has offered online personal loans since 2014. The lender, operating in 49 states and the District of Columbia, provides loans as large as $25,000.

Before You Apply

  • Minimum FICO credit score: 600
  • Loan amounts: $2,000 to $25,000
  • Repayment terms: 24 to 48 months
  • Better Business Bureau rating: A+

Best Features

  • Loan funds are available as soon as one day after approval.

  • Borrowers with fair credit may qualify.

See full profile

Best for fair credit

LendingClub is an online marketplace that connects borrowers and investors through its network of lending partners. LendingClub initially launched on Facebook and has evolved into an extensive peer-to-peer lender. Borrowers in all U.S. states except Iowa and U.S. territories who have fair to excellent credit can get $1,000 to $40,000 loans with LendingClub.

Before You Apply

  • Minimum FICO credit score: 600
  • Loan amounts: $1,000 to $40,000
  • Repayment terms: 36 to 60 months
  • Better Business Bureau rating: not rated

Best Features

  • Loans of $1,000 or more are available.

  • Joint applications are accepted.

  • Borrowers can qualify with fair to excellent credit.

See full profile

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