Best Personal Loan Rates of February 2025 (original) (raw)

To find the lender who meets your needs, one big thing you will want to take into account is each loan’s annual percentage rate (APR), which includes all fees and costs, to understand the total annual cost of borrowing money. We at the MarketWatch Guides team have reviewed the current personal loan APRs of the best lenders to help you narrow your choices.

Compare the Personal Loan Rates of the Best Lenders

The Best Personal Loan Rates

Personal loan interest rates vary from one lender to another. Check out our list of some lenders offering competitive rates and favorable bank loan terms. But remember, your credit score and other financial credentials can impact your personalized rate.

*APR accurate as of November 15, 2024

Personal Loan Rates Comparison

Advertisement

The listings that appear are from companies from which this website may receive compensation, which may impact how, where and in what order products appear. Not all companies, products or offers were reviewed in connection with this listing.

*APR accurate as of November 15, 2024

How to Obtain the Lowest Rates

If you want the lowest rates a lender offers, you should focus on improving your credit score. Your credit score is based on five factors: payment history (35%), total amount owed (30%), length of credit history (15%), credit mix (10%) and new credit added (10%). Paying down your total debt by making on-time payments each month is a surefire way to improve your score over time.

You also have to consider the type of loan you’re applying for. Sandra Cho, founder and president of Pointwealth Capital Management, explained that while criteria vary from lender to lender, the type and length of the loan will be factors in your rate. A fixed installment loan like a personal loan will typically provide better interest rates than a variable credit card loan — according to the Federal Reserve, the average personal loan APR was 12.49% as of February while the average credit card APR was 21.59%. And the shorter your repayment term, the better rate you’ll likely get.

Average Personal Loan Interest Rates By Credit Score

Our table lays out the average personal loan interest rates based on data we obtained from Credible. Your unique rate will be determined by the lender, and your credit score is only one of the factors taken into consideration for loan approval.

Credit Score 3-Year Fixed 5-Year Fixed
>780 13.42% 16.57%
720 to 779 16.17% 20.70%
680 to 719 22.26% 24.26%
640 to 679 26.88% 29.41%
600 to 639 28.02% 31.59%
<599 27.88% 32.07%

How to Read a Rate Range

A lender normally lists their interest rates as a range of annual percentage rates (APRs), or the range of what your total interest, fees and costs are in a year. This makes it easier for you to compare the real cost of a loan between lenders. Lenders have had to disclose their APR since 1968, when the federal Truth in Lending Act passed to protect consumers.

When you look at a rate range, keep in mind that you will qualify for a rate based not only on your credit score, but also on the total amount you want to borrow and your repayment term. A larger loan and repayment term usually means a higher interest rate, according to the Consumer Financial Protection Bureau.

When Might You Consider a Personal Loan?

People take out personal loans for a variety of reasons:

In a 2023 MarketWatch Guide team’s Personal Loans Survey, more than one in five respondents used a personal loan to consolidate high-interest debt. If you have several high credit card bills or other high-interest loans you want to consolidate into one lower monthly payment, compare your new total with a lower-interest personal loan.

If you took out a 50,000loan,like10.750,000 loan, like 10.7% of our survey respondents did, and qualified for the average interest rate (as of this writing) of 11.5%, you would have a monthly payment of 50,000loan,like10.7964.56 with a 72-month term.

It is important to have a clear reason for taking out a personal loan, along with a plan for paying it back. You’ll also need to consider the interest rate and origination fees, said Kyle Enright, president of Achieve Lending in San Mateo, Calif.

“Most personal loans will have terms of 24 to 60 months, with strict payment schedules. This helps make sure you actually pay off the debt, versus keep making minimum payments like you could on a credit card,” he said.

In our survey, 20.1% of people took out a personal loan for a home renovation or remodel. While a home equity loan (fixed rate mortgage loan) or home equity line of credit (HELOC, variable line of credit that uses your house as collateral) often makes more sense for home renovations, a personal loan involves less paperwork and you can get your funds much faster.

9.1% of people in our survey took out a personal loan to pay for medical expenses. If you need a loan to cover dental work, surgery or a hospital stay, a personal loan can offer lower rates than a credit card. Our average loan amount for survey respondents with good credit (670-739) was roughly 17,000,whichwouldbeamonthlyrepaymentof17,000, which would be a monthly repayment of 17,000,whichwouldbeamonthlyrepaymentof581.02 with a 36-month repayment term and 14% APR.

Key Considerations Besides Rates When Choosing a Lender

Even though a low rate is important when you’re looking at lenders, it’s not everything. “When making decisions about selecting a lender for a personal loan, consumers should consider everything from application process times to discounts for autopay,” said Josh Miller, head of consumer acquisition, marketing, and product development at KeyBank. He also recommended you consider lenders who are transparent about rates and fees, lenders who provide multiple loan offers and lenders with an online application process.

Make sure you’re also comparing:

Online processes: Technology has changed the financial services field, but make sure your lender has kept up. Does your lender allow you to apply completely online? Can you e-sign your loan? Can you make payments on an app on your phone?

Reputation: Check out online reviews of the lenders you’re considering. “As with all financial products, consumers should perform their due diligence before getting involved with a lender. Look for consumer reviews on TrustPilot, Google and the Better Business Bureau,” said Amy Maliga, financial educator at the nonprofit Take Charge America. One loud, bad review does not mean that you should avoid the lender, but if there are multiple negative reviews across platforms, consider steering clear.
Customer support: Customer support among lenders can vary widely, and if you have questions in the middle of your loan application process, you’ll want to have a knowledgeable customer service department to turn to. Decide if you’re okay with chat or phone support, or if you’d prefer a brick-and-mortar branch.

The Bottom Line: Personal Loan Rates

Exploring personal loan rates before choosing a lender can help you determine which choice is right for you. A lower APR may save you thousands of dollars over time. Also, researching lenders can help you learn the pros and cons of each beyond interest rates. Consider factors like loan terms, borrowing limits and fees when making your decision.

When choosing a lender, consider exploring various options, such as banks, credit unions, and private lenders available through online marketplaces and peer-to-peer platforms. Regardless of which lender you select, make sure your monthly payments are affordable. Consider any borrowing decisions in the context of your larger financial goals and plans.

Recap of Our Picks for the Best Personal Loan Rates

Frequently Asked Questions About Personal Loan Rates

According to the Federal Reserve, the average personal loan interest rate was 12.49% as of November 2023. If you are offered a loan with a rate below this average, it may be a good option. However, your personal rate can vary based on your financial credentials, so it is essential to compare rates from multiple lenders to ensure you get the best rate for your situation.

Currently, LightStream offers the lowest starting APR on our list at 6.94%, but that does not mean you will qualify for the lowest rate. The rate you’re offered will be based on your credit score, debt-to-income ratio and credit history. Other lenders on our list with low starting APRs are Wells Fargo, who both offer a 7.49% APR, Upstart 7.80% APR, and Discover with a 7.99% starting APR.

Disadvantages of a personal loan include committing to interest payments and ongoing monthly payments. In some cases, personal loans may also be costlier than credit cards offering 0% APRs on purchases and balance transfers, since these cards allow you to pay no interest for 12 to 18 months, while personal loan rates typically charge a minimum of 6% interest.

If you’re looking for a streamlined personal loan process, consider our best online lenders. You can get approved by many online lenders within just a few minutes of you filling out your application, and many can get you funding the same business day. Technology has made the approval process a lot faster.

Methodology

Our team researched 37 of the most prominent lenders in the U.S., analyzing disclosures, websites and sample loan agreements. To determine the best personal loans, we ranked the top lenders over five categories: affordability, loan features, customer experience, company reputation and accessibility.

For further insight into consumer banking trends, MarketWatch Guides surveyed 1,000 American personal loan consumers using Pollfish. The results were post-stratified to reflect a nationally representative sample based on age, gender, marital status and household income. Pollfish uses an organic random device engagement method for sampling. To learn more, read our full personal loans methodology.

Top-rated institutions provide the most competitive APYs, which include interest and upfront fees.

The best scores go to lenders that offer the widest range of terms and loan amounts, lenient credit requirements, fast funding and the ability to pre-qualify.

High scores are given to lenders with excellent reputations based on BBB and Trustpilot ratings, legal standing and number of years in business.

Lenders that receive high marks in this category offer online applications, have various customer support options and allow a co-borrower.

High marks go to lenders in this category that are available in all 50 states and don’t require membership or another account to apply.

30% Affordability

25% Loan Features

20% Company Reputation

15% Customer Experience

10% Accessibility

Affordability

Top-rated institutions provide the most competitive APYs, which include interest and upfront fees.

Loan Features

The best scores go to lenders that offer the widest range of terms and loan amounts, lenient credit requirements, fast funding and the ability to pre-qualify.

Company Reputation

High scores are given to lenders with excellent reputations based on BBB and Trustpilot ratings, legal standing and number of years in business.

Customer Experience

Lenders that receive high marks in this category offer online applications, have various customer support options and allow a co-borrower.

Accessibility

High marks go to lenders in this category that are available in all 50 states and don’t require membership or another account to apply.

Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.