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Best low-interest personal loans for October 2023

Sep 26, 2023

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PERSONAL LOANS

Best for generous repayment terms

4.7

Bankrate Score
Est. APR
7.99- 25.49%
* with AutoPay
Loan amount
$5k- $100K
Term: 2-7 yrs*
Min credit score
695
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

Best for little or no credit history

4.7

Bankrate Score
Est. APR
4.60- 35.99%
Loan amount
$1k- $50K
Term: 3-5 yrs
Min credit score
Not disclosed
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

Best for quick approval

4.6

Bankrate Score
Est. APR
7.99- 29.99%
Loan amount
$5k- $50K
Term: 2-5 yrs
Min credit score
620
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

Best for fast funding

4.7

Bankrate Score
Est. APR
8.49- 35.99%
with AutoPay
Loan amount
$1k- $50K
Term: 2-7 yrs
Min credit score
600
See offersArrow Right

Check rate with Bankrate

PERSONAL LOANS

Best for small loan amounts

4.8

Bankrate Score
Est. APR
7.74- 17.99%
Loan amount
$600- $50K
Term: 1-5 yrs
Min credit score
700
Read our reviewArrow Right

on Bankrate

PERSONAL LOANS

Best for unemployment protection

4.7

Bankrate Score
Est. APR
8.99- 25.81%
with AutoPay
Loan amount
$5k- $100K
Term: 2-7 yrs
Min credit score
680
Read our reviewArrow Right

on Bankrate

PERSONAL LOANS

Best for few fees

4.9

Bankrate Score
Est. APR
8.99- 23.99%
Loan amount
$2k- $50K
Term: 3-5 yrs
Min credit score
700
Read our reviewArrow Right

on Bankrate

PERSONAL LOANS

Best for no prepayment penalty

4.4

Bankrate Score
Est. APR
6.99- 35.99%
Loan amount
$2k- $50K
Term: 2-5 yrs
Min credit score
640
Read our reviewArrow Right

On Bankrate

PERSONAL LOANS

Best for good credit and fast funding

4.8

Bankrate Score
Est. APR
7.99- 24.99%
Loan amount
$2.5k- $35K
Term: 3-7 yrs
Min credit score
Not disclosed
Read our reviewArrow Right

On Bankrate

We helped over 421K people get prequalified loan offers last year. Let's find yours now.

How to get a low interest personal loan in 3 easy steps

1. Answer a few questions

Take a few minutes to answer questions about yourself and the loan that you need, and we can match you with potential lenders. This service is free and will not affect your credit score. 

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Make sure you have good credit, look into a co-signer or find a lender that works with bad credit borrowers.
compare offers
2. Compare your offers

Get prequalified and compare loan product offers based on important factors like APR, loan amount and minimum monthly payments. 

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Take your time and check with multiple lenders to ensure you get the best deal possible.
apply for loans
3. Lock in your rate

Choose a lender and visit its website to complete the application process. If you’re approved, you could get funding within a few weeks.

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Make sure you have financial documents regarding existing loans, income verification, etc.

How to choose the best lender

It is important to compare a variety of lenders before deciding on one, especially if getting the lowest possible interest rate is a priority. When comparing lenders, pay attention to the following.

  1. Approval requirements: Each lender has its own approval requirements. Generally, lenders evaluate your creditworthiness by looking at your credit score, debt-to-income ratio, credit history and income.
  2. Interest rates: The lowest rate a company advertises is never guaranteed and depends on the terms of your loan as well as your credit health. Also make sure to incorporate any fees the lender charges into the interest rate, which can significantly impact the overall cost of your loan.
  3. Loan amounts: You should always make sure that the lenders you’re considering offer loans in the amount you need. If you need a small loan, you’ll be looking at different lenders than borrowers who need large sums of money. 
  4. Repayment options: Some lenders offer a wide range of repayment options while others only let borrowers choose between two to three terms.
  5. Unique features: Lenders often offer perks like rate discounts, introductory offers and access to free financial tools. Keep an eye out for any unique features a lender offers.
  6. Customer service: Always look into a company’s customer service options before applying. Many lenders offer over the phone customer service and some even have live chat features on their websites.

 

Compare low-interest personal loans in October 2023

LENDER BEST FOR APR RANGE LOAN TERM LOAN AMOUNTS MIN CREDIT SCORE
LightStream Generous repayment terms 7.99%-25.49% with Autopay 2-7 years $5,000-$100,000 695
SoFi Unemployment protection 8.99%-25.81% with Autopay 2-7 years $5,000-$100,000 680
Achieve Quick approval 7.99%-29.99% 2-5 years $5,000-$50,000 620
PenFed Small loan amounts 7.74%-17.99% Up to 5 years $600-$50,000 700
Upstart Little or no credit history 4.60%-35.99% 3-5 years $1,000-$50,000 No requirement
Prosper No prepayment penalty 6.99%-35.99% 2-5 years $2,000-$50,000 640
Upgrade Fast funding 8.49%-35.99% with Autopay 2-7 years $1,000-$50,000 600
TD Bank Few fees 8.99%-23.99% 3-5 years $2,000-$50,000 700
Discover Good credit and fast funding 7.99%-24.99% 3-7 years $2,500-$40,000 660

A closer look at our top low-interest personal loans

Here's a deep-dive into each lender, why its the best in each category and specifically who would benefit most from borrowing from the lender. 

LightStream: Best for generous repayment terms

Overview: LightStream offers personal loans of up to $100,000, with competitive interest rates and no fees. The company also offers a unique rate-beat program in which it will better any competing offer by 0.1 percent. This alone makes it a low-cost option for those with excellent credit.

SoFi: Best for unemployment protection

Overview: SoFi’s personal loans feature a generous cap of up to $100,000 and no mandatory fees. Borrowers can check their rate without hurting their credit and get access to exclusive member perks, including discounts and career coaching.

Achieve: Best for quick approval

Overview: Achieve offers loans with a low APR and borrowers can choose among four repayment terms. Besides its competitive rates, Achieve offers three rate discounts: one for applying with a qualified co-borrower, another for showing proof of retirement assets and an autopay discount. This alone makes its loans lower cost than most in the market.

PenFed: Best for small loan amounts

Overview: PenFed is a credit union best known for its refinance products, however, the lender’s personal loans are also quite competitive. Borrowers can apply for loans of up to $50,000, with repayment terms of up to five years. Besides that, the APR on PenFed loans is capped at 17.99 percent — much lower than the industry average.

Upstart: Best for little or no credit history

Overview: Upstart is a peer-to-peer lender that offers personal loans of $1,000 to $50,000. Because Upstart loans are funded by investors, the approval process works differently compared to other lenders. Instead of just focusing on your credit score and income, Upstart considers other factors, such as your educational background and career, to approve you for the loan.

Prosper: Best for no prepayment penalty

Overview: Prosper’s low interest loans have a starting APR as low as 6.99 percent and you can borrow any amount from $2,000 to $50,000. The company is the first peer-to-peer lender to appear in the personal loan space in 2005 and has funded over $23 billion in loans since then.

Upgrade: Best for fast funding

Overview: Upgrade caters to borrowers who have fair credit or better, with a minimum score requirement of at least 600. The company’s loans range from $1,000 to $50,000 and offer flexible repayment terms of up to seven years. 

TD Bank: Best for few fees

Overview: With over 1,100 branches, TD Bank is one of the few lenders in our list that offers both in-person and online customer support. The lender’s loans can be repaid in as little as a year — or as long as five — with borrowing amounts of up to $50,000.

Discover: Best for good credit and fast funding

Overview: Discover's loans can be used for a variety of purposes, including debt consolidation and midsize home improvement projects. Personal loan interest rates start at 6.99 percent which is much lower than the industry average. 

How we choose our best lenders

To select the best personal loans, Bankrate’s team of experts evaluated over 30 lenders. Each lender was ranked using a meticulous 20-point system, focusing on four main categories:

  • Checkmark
    Affordability
    The interest rates, penalties and fees are measured in this section of the score. Lower rates and fees and fewer potential penalties result in a higher score. We also give bonus points to lenders offering rate discounts, grace periods and that allow borrowers to change their due date. 
  • Checkmark
    Availability
    Minimum loan amounts, number of repayment terms, eligibility requirements, ability to apply using a co-borrower or co-signer and loan turnaround time are considered in this category.
  • Checkmark
    Customer experience
    This category covers customer service hours, if online applications are available, online account access and mobile apps.
  • Checkmark
    Transparency
    For this factor, we consider how well information is presented to the borrower on the lender’s website. This includes listing credit requirements, rates and fees, in addition to offering prequalification.
Clock Wait
47
years in business
Credit Card Search
30+
lenders reviewed
Loan
20
loan features weighed
Rates
665
data points collected
 

What is a low-interest-rate personal loan?

Low-interest-rate personal loans typically have an annual percentage rate (APR) below 12 percent. Depending on who the money is borrowed from, the proceeds can be used for consolidating credit card debt, home improvement projects, financing a major purchase, a wedding or even a vacation.

Loan terms vary by lender, but there’s always a predetermined payment period, often ranging from one to seven years. These are installment loans, and the money is repaid via monthly payments.

Before applying for a loan, it’s a good idea to calculate your debt-to-income ratio, or DTI ratio, which is your total monthly debt payments divided by your total gross monthly income. Lenders view applicants who have low DTI ratios as more reliable borrowers.

Average personal loan interest rates

The average personal loan currently has an interest rate above 11 percent. That said, your rate will be based on several factors, including the lender you choose, your credit score and borrowing history.

Average personal loan rates by credit score

CREDIT RATING / SCORE RANGE AVERAGE PERSONAL LOAN INTEREST RATE
Excellent (720-850) 10.73%-12.50%
Good (690-719) 13.50%-15.50%
Average (630-689) 17.80%-19.90%
Bad (300-629) 28.50%-32.00%
Source: Bankrate

How to qualify for low-interest personal loans

There’s a variety of ways to improve your chances of scoring the best low-interest loan.

  1. Know your credit score: Many lenders have minimum credit score requirements in the mid-600s, but most give their best rates to borrowers with credit scores of at least 700. If you don't need the cash immediately, work on improving your credit score before applying for a personal loan.
  2. Pay down debt: When determining your eligibility for a loan, most lenders look at your debt-to-income ratio, or DTI ratio — your monthly debt payments relative to your monthly gross income. By reducing the amount of debt you owe, you decrease your DTI ratio and make yourself eligible for more loans and lower APRs.
  3. 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 situation.
  4. Look for discounts: Many lenders offer rate discounts when you enroll in their autopay programs. Some lenders also offer discounts if you’re an existing customer or open checking or savings accounts with them.
  5. Only apply for the amount you need: Aim to apply for the lowest amount you think you'll need to cover your expenses. Choosing a low loan amount will reduce your monthly payments and the total amount you'll pay in interest over the life of the loan.
  6. Consider credit unions: Because they are nonprofit organizations, credit unions typically offer lower-cost loans than standard banks or lenders.
  7. Apply for prequalification: Prequalification, offered by many lenders, is a way to check whether you qualify for a personal loan before you formally apply. This is a valuable tool if you're just shopping around, and it saves you from a hard pull on your credit.

Pros and cons of low-interest personal loans

Pros

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    You can use the funds to cover almost any expense.

  • Checkmark

    Most lenders provide funding within the same week of approval.

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    They tend to have lower interest rates than other credit products, such as credit cards.

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    You’ll have a fixed repayment term and interest rate, so your monthly payment won’t change.

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    On-time payments could boost your credit score.

Cons

  • Some lenders charge origination fees as high as 10 percent.

  • You could end up with a hefty interest rate if your credit isn’t in good shape.

  • Failing to make payments could damage your credit for up to seven years.

Where to get low-interest loans

You can get a personal loan with a low interest rate from a variety of lenders. These include banks, credit unions and peer-to-peer lenders. But, regardless of the lender you choose, you’ll need a strong credit profile, a stable source of income and a low DTI ratio to secure the lowest rate.

Besides that, make sure to compare offers from different lenders before deciding on one, as this will allow you to get the best offer available for your financial situation.

Why it's important to compare low-interest loans

Comparing loan rates and lenders can be a daunting task, but it's necessary if you want to find the lowest interest rate possible. Because lenders use their own algorithms to determine interest rates, the same financial profile could get you a much lower rate at one lender than another. Here are some other factors to be aware of when comparing loan rates and lenders:

  • Loan term: The number of years that you will repay the loan. Most commonly, personal loan terms are one to seven years.
  • Interest rate: Interest rates vary by lender and are determined primarily by your credit score, income and overall financial health.
  • Origination fee: The origination fee is charged by a lender to process a new application. It can range from 0 percent to 10 percent, depending on the loan amount, your credit score and the length of the loan.
  • Other fees: Some fees may be included in the APR calculation, but you should also be aware of others that are not, such as late fees and prepayment penalties.

Use our loan comparison calculator to compare loan rates and calculate costs, without impacting your credit.

Alternatives to low-interest personal loans

In addition to personal loans, there are a few other options you can explore to get the funds you need, without paying a lot in interest. These are a few of them.
 

Cash-out refinance

A cash-out refinance essentially replaces your mortgage with a bigger one, with different terms and interest rates. With this loan, you get to keep the difference between your old mortgage and your new one. 
On the downside, your mortgage payment will be higher, the loan can take up to 60 days to be completed and it requires a decent amount of paperwork. That said, a cash-out refi could be a good option if you need a considerable amount of money for home renovations or a big investment as APRs can be as low as 5 percent.
 

0% interest credit card

Some credit cards offer 0 percent introductory offers in which you get to make purchases, without accruing interest for a set number of months. To qualify for these, you’ll typically need excellent credit and a stable source of income. This option is better suited for those who only need to borrow a small amount (usually no more than $3,000).
 

Buy now, pay later (BPNL)

BPNLs are a type of installment loan that allows you to split your purchase into a series of interest-free payments (between four and six, depending on the company). Although these services are often offered through online retailers, some stores are beginning to accept them as a form of payment. BPNLs are better suited for big purchases, such as furniture and equipment.

Frequently asked questions about low-interest personal loans