Bankrate's guide to low-interest rate personal loans
By Mia Taylor
As of Monday, April 06, 2020
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To get the lowest possible APR, you’ll likely need excellent credit and a high income. However, you can still find loans with competitive interest rates if you shop around. You’ll also want to consider the loan amount each lender offers and other repayment terms to make sure you’re getting a loan that meets your needs.
Loan details presented here are current as of the publish date. Check the lenders’ websites for more current information. The lenders listed here are selected based on factors such as credit requirements, APR, loan amounts, fees and more.
12 best low-interest-rate personal loans
The list below ranks various lenders by their lowest stated rates. Fees also vary widely and can have a large impact on the stated rate.
- LightStream - starting at 3.49%
- Payoff - starting at 5.99%
- Best Egg - starting at 5.99%
- SoFi - starting at 5.99%
- FreedomPlus - starting at 5.99%
- PenFed - starting at 6.49%
- Upstart - starting at 6.53%
- LendingClub - starting at 6.95%
- Prosper - starting at 6.95%
- Upgrade - starting at 6.98%
- Marcus by Goldman Sachs - starting at 6.99%
- TD Bank - starting at 6.99%
1. LightStream - starting at 3.49%
Lender overview: LightStream is the online consumer lending division of SunTrust Bank. Its personal loans are aimed at applicants with a strong credit history and are available for a range of purchases including areas many other personal loans do not cover such as adoptions, IVF financing and horse loans.
The APR on LightStream loans range from 3.49 percent to 16.79 percent. Loan amounts start at about $5,000 and go as high as $100,000. Terms vary from two to 12 years.
Perks: LightStream loans offer competitive, fixed rates for those with a solid credit background. In addition, the entire application process is nearly paperless. Customers can apply from a computer or mobile device, and sign loan agreements via these devices. In addition, funds can be made available on the same day you apply.
What to watch out for: All rates quoted are for those who sign up for autopay. Rates for customers who decline autopay are about 50 basis points higher.
2. Payoff - starting at 5.99%
Lender overview: Payoff loans are focused solely on consolidating or paying off credit card debt. The loans are not available for any other purposes.
APRs range from 5.99 percent to 24.99 percent. Loans are available from $5,000 to $35,000 and terms are two to five years.
Perks: There are no late fees, application fees or early payment fees.
What to watch out for: Payoff charges an origination fee of up to 5 percent, which includes closing costs and maintenance fees.
3. Best Egg - starting at 5.99%
Lender overview: Best Egg promises a seamless and hassle-free application and approval process.
APRs on Best Egg loans start at 5.99 percent. Loan amounts range from $2,000 to $35,000, though some qualified borrowers may be eligible for as much as $50,000. Loan terms vary from three to five years.
Perks: There are no prepayment penalties on Best Egg loans and qualified borrowers can receive funds in as little as one day.
What to watch out for: Best Egg, which matches investors with borrowers, charges an origination fee for loans. These fees range from 0.99 percent to 5.99 percent.
4. SoFi - starting at 5.99%
Lender overview: Because SoFi does business entirely online, it’s able to minimize expenses and aims to pass those savings on to customers. Loan application reviews consider more than just credit scores and debt-to-income ratio, also factoring in such variables as career, education and estimated cash flow.
SoFi APRs start at 5.99 percent and increase to as much as 18.82 percent. Loan amounts range from $5,000 to $100,000 and loan terms vary from two to seven years.
Perks: SoFi doesn't charge late fees or prepayment penalties. SoFi loans also come with exclusive member benefits such as access to career coaches and financial advisers. SoFi also offers unemployment protection in the event that you lose your job, and it can even assist you with finding a new job.
What to watch out for: With SoFi, the entire loan process is online, so you must be comfortable with an entirely online experience.
Lender overview: FreedomPlus loans are available for consolidating debt, making large purchases, home improvements and more.
FreedomPlus APRs start at 5.99 percent and go up to 29.99 percent. Loan amounts range from $7,500 to $40,000, while terms vary from two to five years.
Perks: The FreedomPlus loan process can be very quick with same-day approval and funds in your account in as little as 48 hours.
What to watch out for: Personal loans from FreedomPlus include an origination fee of anywhere from 0 to 4.99 percent.
6. PenFed - starting at 6.49%
Lender overview: Personal loans are available from PenFed to cover home renovations, debt consolidation, travel and even auto repairs. Though PenFed primarily serves the military community and immediate family members, loans are also available to those who are employed by the U.S. government or select employer groups.
PenFed’s APRs start at 6.49 percent, and terms are three to five years. Borrowers can qualify for loan amounts of $500 to $25,000.
Perks: There are no origination fees or hidden fees when getting a personal loan through PenFed.
What to watch out for: In order to receive a PenFed loan, you’ll need to join this credit union, which requires an additional application. In addition, PenFed loans are limited to a maximum of $25,000.
7. Upstart - starting at 6.53%
Lender overview: Upstart aims to offer fast, fair personal loans. While many loan applications are based on credit score and years of credit, Upstart applications also factor in an individual’s education, job history and area of study.
APRs for Upstart loans range from 6.53 percent to 35.99 percent. Loan amounts range from $1,000 to as much as $50,000. Loan terms vary from three to five years.
Perks: Upstart can provide your rate in just five minutes. There are no down payments required or prepayment penalties and funds are available in as little as one day.
What to watch out for: Upstart charges a one-time origination fee, which can be as much as 8 percent of your loan amount.
8. LendingClub - starting at 6.95%
Lender overview: LendingClub is a peer-to-peer lending platform that serves as a broker for matching investors with borrowers. Its personal loans are available to cover a variety of purposes such as debt consolidation, home improvements, and refinancing an automobile purchase.
Loans are available for $1,000 to $40,000. The APRs on LendingClub loans range from 6.95 percent to 35.89 percent, and loan terms vary from three to five years.
Perks: LendingClub’s online loan application takes just a few minutes, and funds are available in as little as four days. There are no prepayment penalties.
What to watch out for: You’ll pay origination fees with LendingClub, and the loans require a good to excellent credit score. If you have bad credit or are trying to rebuild your credit, LendingClub may not be for you.
9. Prosper - starting at 6.95%
Lender overview: Prosper is a peer-to-peer lender with loans available to those with fair to excellent credit.
APRs on Prosper loans start at 6.95 percent and go as high as 35.99 percent. Loans are available for $2,000 to as much as $40,000 and repayment terms are three or five years.
Perks: Prosper offers a simple online application process, and money is available within a few days after funding. There are no prepayment penalties on Prosper loans.
What to watch out for: Because Prosper is a peer-to-peer lender, borrowers must wait for investors to fund their loans. If your loan doesn't receive at least 70 percent funding within 14 days of submitting your application, you will have to re-apply.
10. Upgrade - starting at 6.98%
Lender overview: Upgrade offers personal loans for those with fair credit or better. The funds can be used for debt consolidation, credit card refinancing, home improvements or major purchases.
APRs available from Upgrade range from 6.98 percent to 35.89 percent. Loan amounts range from $1,000 to $50,000, and terms are three to five yeards.
Perks: Upgrade offers a quick one-page application process and provides loan decisions within a few minutes. Additionally, money is made available within as little as one day of completing the verification process.
What to watch out for: All Upgrade personal loans come with an origination fee of 1.5 percent to 6 percent. The fee is deducted from your loan funds.
Lender overview: Marcus by Goldman Sachs loans are available to those with good to excellent credit and can be used to fund major purchases or pay off credit card debt.
APRs range from 6.99 percent to 28.99 percent and loans are available for $3,500 to $40,000. Repayment terms are three to six years.
Perks: There are no sign-up or origination fees with Marcus. The company also offers rewards for a year of on-time payments.
What to watch out for: Marcus does not accept joint applications, so if you need a co-signer to qualify this may not be a good option for you.
12. TD Bank - starting at 6.99%
Lender overview: TD Bank offers personal loans to those with good credit and those trying to establish credit. Funds can be used for debt consolidation, vacations, renovations and more.
TD Bank loans are available for $2,000 to $50,000 with APRs ranging from 6.99 percent to 18.99 percent. Repayment terms are one to five years. TD Bank also offers secured personal loans for a lower rate, 5.67 percent, but keep in mind that you'll have to put down collateral for this type of loan.
Perks: Personal loan funds from TD Bank will be made available in as little as 48 hours. In addition, there are no origination or application fees.
What to watch out for: TD is a full-service bank, which means its loans may be best-suited for those who plan to do all their banking here. The rates advertised assume a 0.25 percent discount for automatic payment deduction from a personal TD Bank checking or savings account.
Best low-interest personal loans summary
3.49% – 16.79%
$5,000 – $100,000
5.99% – 24.99%
$5,000 – $35,000
5.99% – 29.99%
$2,000 – $50,000
5.99% – 18.82%
$5,000 – $100,000
5.99% – 29.99%
$7,500 – $40,000
As low as 6.49%
$500 – $25,000
6.53% – 35.99%
$1,000 – $50,000
6.95% – 35.89%
$1,000 – $40,000
6.95% – 35.99%
$2,000 – $40,000
6.98% – 35.89%
$1,000 – $50,000
|Marcus by Goldman Sachs
6.99% – 28.99%
$3,500 – 440,000
6.99% – 18.99%
$2,000 – $50,000/div>
What is a low-interest-rate personal loan?
Personal loans are generally short-term loans provided by banks, peer-to-peer lending platforms and credit unions. Depending on who the money is borrowed from, it can be used for consolidating credit card debt, making a major purchase or even taking a vacation. Low-interest loans typically have an interest rate below 12 percent.
Loan terms vary by lender, but there’s always a predetermined payment period, often ranging from two to five years. These are installment loans, and the money is repaid via monthly payments similar to a mortgage or automobile loan.
How to get a low-interest personal loan
The first step in acquiring a personal loan is to determine how much you'd like to borrow and how long you'd like to pay it off. Different lenders offer different loan amounts and repayment terms, so narrow down your list to the top lenders that meet your requirements.
From there, it's important to shop around with those lenders and compare offers. Your offer may be different from different lenders, since all lenders use their own formulas to calculate your APR based on things like your credit score and income. When comparing offers from different lenders, make sure to factor in things like origination fees, which will impact the total amount you'll owe on your loan.
Once you see an offer that meets your needs, you can finish your application. Many of the lenders we review here have quick turnaround times once you complete your application and verification — you may be able to access your funds in as little as a few days.
Average personal loan interest rate
The average interest rate on a two-year personal loan is 10.21 percent, according to the Federal Reserve. However, rates vary significantly from lender to lender. Depending on your credit score and borrowing history, interest rates can be as high as 36 percent.
Average personal loan rates by credit score
|Excellent (720 - 850)
||10.3% - 12.5%
|Good (690 to 719)
||13.5% - 15.5%
|Average (630 to 689)
||17.8% - 19.9%
|Bad (300 to 629)
||28.5% - 32.0%
Rates as of 03/18/2020
Tips for getting the lowest-interest-rate on a personal loan
There’s a variety of ways to improve your chances of scoring the best low-interest loan.
- Research all of your options. Shop around and check rate offers from multiple lenders to ensure that you are getting the best deal for your personal situation.
- Look for ways to get discounts. Many lenders offer a rate discount when you enroll in their autopay programs. Some lenders also offer discounts if you’re an existing customer or hold a checking or savings account with them as well.
- Consider credit unions. Because they are nonprofit organizations, credit unions typically offer lower-cost loans than standard banks or lenders.
- Apply for preapproval: Preapproval, offered by some lenders, is a way to check whether or not you qualify for a personal loan before you formally apply. This is a valuable tool if you're just shopping around, and it also saves you from a hard pull on your credit.
- Only apply for the amount you need: When calculating your desired loan amount, aim to apply for the lowest amount you think you'll need to cover your expenses. Choosing a low loan amount will reduce the total amount you'll pay in interest over the life of the loan.
- Pay down debt: When determining your eligibility for a loan, most lenders look at your debt-to-income ratio, or DTI — the amount of debt you hold relative to your income. By reducing the amount of debt you owe, you decrease your DTI and make yourself eligible for more loans and lower APRs.
- Know your credit score: Many lenders have minimum credit score requirements in the mid-600s, but most give their best rates to borrowers with a credit score of at least 700. If you don't need the cash immediately, work on improving your credit score before applying for a personal loan.