Personal loan rates this week fall on 3 year loans

Personal loan rates this week fall on 3 year loans

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we promote products from our lender partners who pay us for our services, all opinions are our own.

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The latest trends in interest rates for personal loans from the Credible market, updated weekly. (iStock)

Borrowers with good credit search personal loan within the past seven days prequalified for rates that are lower for 3-year loans and higher for 5-year loans compared to fixed-rate loans for the past seven days.

For borrowers with credit scores of 720 or higher who used the Credible marketplace to choose a lender between January 25 and January 31:

  • Rates on 3-year fixed-rate loans averaged 15.24%, up from 15.33% seven days before and up from 12.10% last year.
  • Rates on 5-year fixed-rate loans averaged 22.87%, up from 21.94% in the past seven days and up from 15.27% a year ago.

Personal loans have become a popular way to consolidate debt and pay off credit card debt and other loans. It can also be used to cover unexpected and emergency expenses such as medical bills, taking care of a major purchase, or finance home improvement projects.

Average personal loan interest

Personal loan interest rates have decreased over the past seven days for 3-year loans, and 5-year personal loan rates have increased. While the 3-year loan rates decreased by 0.09 percentage points, rates of the 5-year loan jumped by 0.93 percentage points. The interest rates for both terms of the loan remained higher than last year, increasing by 3.14 percentage points for the 3-year loan, and 7.60 percentage points for the 5-year loan.

However, borrowers can take advantage of interest savings with a 3- or 5-year personal loan, as both loan terms offer lower interest rates than other loan options. more expensive like credit cards.

But whether a personal loan is right for you depends on a number of factors, including what rate you qualify for, which is largely based on your credit score. Comparing multiple lenders and their rates can help ensure you get the best personal loan for your needs.

Before applying for a personal loan, use a personal loan marketplace like Credible to comparison shop.

Weekly personal loan trends

Here are the latest trends in personal loan interests from the Credible market, updated weekly.

master version personal loan weekly rate trends 13

The chart above shows the average prequalified rates for borrowers with credit scores of 720 or higher who used the Credible marketplace to choose a lender.

For the month of December 2023:

  • Rates on 3-year personal loans averaged 22.79%, up from 22.52% in November.
  • Rates on 5-year personal loans averaged 25.17%, up from 25.00% in November.

Personal loan rates vary greatly by credit score and loan term. If you’re curious about what kind of personal loan rate you might qualify for, you can use an online tool like Credible to compare options from different private lenders.

All Credible lenders in the marketplace offer fixed-rate loans at competitive rates. Because lenders use different methods to evaluate borrowers, it’s a good idea to request personal loan quotes from several lenders so you can compare your options.

Current personal loan rates by credit score

evergreen average personal loan rates by credit score 2

In December, the average prequalified rate chosen by borrowers was:

  • 13.52% for borrowers with credit scores of 780 or higher who choose a 3-year loan
  • 31.77% for borrowers with credit scores 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 may vary.

As the chart above shows, a good credit score can mean a lower interest rate, and rates tend to be higher on loans with fixed interest rates and higher payment terms.

How to get a low interest rate

Many factors influence the interest rate that a lender can offer you on 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 credit score

Generally, people with higher credit scores qualify for lower interest rates. Steps to help you improve your credit score over time include:

  • Paying bills on time: Payment history is the most important factor in your credit score. Pay all your bills on time for the amount owed.
  • 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.
  • Lower your credit utilization ratio: Paying off credit card debt can improve this important credit-scoring factor.
  • Avoid opening new credit accounts: Just apply and open the credit accounts you 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 can vary from one to several years. In general, shorter terms come with lower interest rates, because 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 get a lower interest rate. Remember that a shorter term does not only benefit the lender – by choosing a shorter repayment term, you will pay less in interest over the life of the loan.

Get a cosigner

You may be familiar with the concept of a cosigner when it comes to student loans. If your credit isn’t good enough to qualify for the best personal loan interest, finding a cosigner with good credit can help you get a lower interest rate.

Just remember, if you default on the loan, your cosigner is on the hook for paying it. And cosigning for a loan can also affect their credit score.

Compare rates from different lenders

Before applying for a personal loan, it’s a good idea to shop around and compare offers from several different lenders to get the lowest price. Online lenders often offer the most competitive rates – and can disburse your loan faster than a brick-and-mortar establishment.

But don’t worry, comparing rates and terms doesn’t have to be a time-consuming process.

Credible makes it easy. Just enter how much you want to borrow and you can compare multiple lenders to choose the one that makes the most sense for you.

About Credible

Credibility is a multi-lender marketplace that empowers consumers to discover the financial products best suited for their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to easily compare accurate, personalized loan options – without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unparalleled customer experience, demonstrated by over 6,500 positive reviews on Trustpilot and a TrustScore of 4.7/5.

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