When you’re shopping around for a personal loan, it’s important to know what the average personal loan interest rates are. This will give you a good idea of what to expect when you’re comparing offers from different lenders.
In this blog post, we’ll explain what the average personal loan interest rates are and how they can vary depending on your credit score and other factors. We’ll also share some tips on how you can get the best rate possible when you’re taking out a personal
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Average Personal Loan Interest Rates
Understanding average personal loan interest rates can save you money on your next loan. We’ll explain how personal loan interest rates are determined and how you can get the best rate possible.
The average personal loan interest rate is 9.41% for fixed-rate loans and 4.21% for variable-rate loans as of 2018. The average personal loan interest rate will vary depending on the type of lender you borrow from and the type of loan you choose.
Federal rates for student and parent PLUS loans first disbursed on or after July 1, 2018 and before July 1, 2019 are 7.60% for fixed-rate loans and 8.05% for variable-rate loans. Private rates for student loans first disbursed on or after July 1, 2006 are capped at 8.25%.
The following table shows the average interest rates for personal loans in each state. Mouse over any state for more information, or click on a state to apply for a loan.
State Average Interest Rate
Private Lender Rates
Below are the average personal loan interest rates from some of the most popular private lenders in the United States. These rates are based on a $10,000 loan with a three-year repayment period and do not include any origination fees.
-Wells Fargo: 6.63% – 18.87%
-SoFi: 5.99% – 16.79%
-Citibank: 9.99% – 16.49%
-Discover: 6.99% – 24.99%
-Capital One: 9.95% – 35.99%
How to Get the Best Interest Rate on a Personal Loan
The average personal loan interest rate is 10.2 percent, according to the Federal Reserve. That means if you borrow $10,000, you can expect to pay back $11,020 over the course of a year if you make no other changes to your loan. But there are ways to get a lower interest rate on a personal loan, and it starts with having good credit.
When you’re looking for the best interest rate on a personal loan, the first place to start is with a few different lenders. Many online lenders offer personal loans, and they’re a great way to compare rates and terms from the comfort of your own home.
Once you have a few offers in hand, compare the Annual Percentage Rates (APRs) to see which one is lowest. The APR includes the interest rate plus any fees charged by the lender, and it’s expressed as a percentage of the loan amount.
You should also compare the loan terms, which can vary from two to seven years, to see which one gives you the most affordable monthly payments. Keep in mind that a longer loan term will usually result in a lower monthly payment but a higher total cost because you’ll be paying interest for a longer period of time.
Once you’ve found the best offer, it’s time to apply for the loan. The process is usually pretty straightforward, and you can usually complete it entirely online. The lender will pull your credit report and score to assess your creditworthiness, so it’s important to make sure your information is accurate before you apply.
If you have any questions during the process, don’t hesitate to reach out to customer service for help. Once you’re approved, you should receive your funds within a few days — or sometimes even sooner!
Consider a Secured Loan
If you have equity in your home or another asset, such as a car, you may be able to get a lower interest rate by borrowing against it. This is because the lender has your asset as collateral, so they’re less likely to lose money if you default on the loan. However, this also means that you could lose your home if you can’t repay the loan.
Improve Your Credit Score
If you have a low credit score, you might not be able to get the lowest interest rate on a personal loan. You can improve your credit score by paying all your bills on time, not using all of your credit card limit, and maintaining a good mix of different types of credit.
How to Use a Personal Loan
You can use a personal loan for just about anything – from consolidating debt to financing a major purchase. But, before you apply for a personal loan, it’s important to understand how personal loans work. In this section, we’ll cover everything you need to know about personal loans, from how to get the best personal loan interest rates to how you can use a personal loan to achieve your financial goals.
Debt consolidation is one popular use for personal loans. By consolidating your debt with a personal loan, you can get a lower interest rate and save money on monthly payments. To consolidate debt, you’ll need to apply for a personal loan and use the funds to pay off your existing debt. Once you’ve paid off your debt, you’ll be left with one monthly payment to make instead of several.
Before you consolidate your debt, it’s important to understand how personal loans work. Personal loans are typically unsecured, which means they’re not backed by collateral like a home or car. This makes them different from secured loans like mortgages and auto loans. Unsecured loans also tend to have higher interest rates than secured loans.
If you have good credit, you may be able to qualify for a low-interest unsecured personal loan and save money on interest charges. If you have bad credit, you may still be able to get a personal loan, but you may have to pay a higher interest rate.
Making improvements to your home can be a great way to add value to your property and make your living space more comfortable, but it can also be a expensive undertaking. If you’re planning on making any major improvements, a personal loan can be a great way to finance the project.
Personal loans are often used for home improvement projects because they offer a number of advantages:
-You can borrow the exact amount you need, so you don’t have to worry about overspending.
-Interest rates on personal loans are often lower than credit cards, so you’ll save money in the long run.
-Personal loans offer fixed interest rates, so your monthly payments will stay the same for the life of the loan.
-You’ll have a set timeline for repaying the loan, so you can easily budget for the project.
Before taking out a personal loan, be sure to compare offers from multiple lenders to get the best interest rate and terms. Once you’ve found the right loan, make sure you understand all of the terms and conditions before signing on the dotted line.
You can use personal loans for a variety of purposes, but they are most commonly used for major purchases. Major purchases could include buying a car, financing a wedding, or taking a much-needed vacation.
Before taking out a personal loan, it’s important to understand the difference between secured and unsecured loans. A secured loan is one that is backed by collateral, such as a car or home. If you default on the loan, the lender can seize the collateral to recoup their losses. An unsecured loan is not backed by collateral and therefore has a higher interest rate because it’s considered riskier by the lender.
Once you’ve decided on the type of loan you need, compare interest rates from multiple lenders to get the best deal. The interest rate on personal loans can vary widely, so it pays to shop around. When you’ve found the best interest rate, calculate your monthly payments and total costs to make sure you can afford the loan.
If you have good credit, you may be able to qualify for a 0% APR introductory offer on a credit card. This could help you avoid paying interest on your purchase altogether. However, make sure you can pay off the balance before the introductory period ends, or you’ll be stuck with a high interest rate on the remaining balance.