Best low-interest personal loans for December 2021

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The Bankrate guide to personal loans with low interest

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The loan details presented in the table below are current as of the publication date. Check the lenders’ websites for more current information. The lenders listed were selected based on factors such as credit requirements, APR, loan amounts and fees.

Summary: low-interest personal loans in 2021

Best low-interest personal loans in December 2021

Best for
APR range
Loan term
Loan amounts
Generous repayment terms
2.49%–19.99% (with autopay)
2 to 12 years
$5,000 – $100,000
Paying credit card debt
5.99% – 24.99%
2 to 5 years
$5,000 – $40,000
Best Egg
Low APRs
5.99% – 35.99%
3 to 5 years
$2,000 – $50,000
Unemployment protection
5.99% – 19.63% (with autopay)
2 to 7 years
$5,000 – $100,000
Quick approval
7.99% – 29.99%
2 to 5 years
$7,500 – $50,000
Small loan amounts
Starting at 5.99%
1 to 5 years
$600 – $35,000
Little or no credit history
4.37% – 35.99%
3 or 5 years
$1,000 – $50,000
Using a co-borrower
7.04% – 35.89%
3 or 5 years
$1,000 – $40,000
No prepayment penalty
7.95% – 35.99%
3 or 5 years
$2,000 – $40,000
Fast funding
5.94% – 35.97% (with autopay)
2 to 7 years
$1,000 – $50,000
Marcus by Goldman Sachs
Debt consolidation
6.99% – 19.99% (with autopay)
3 to 6 years
$3,500 – $40,000
TD Bank
Few fees
6.99% – 21.99%
3 to 5 years
$2,000 – $50,000

Average personal loan interest rates

According to the most recent data from the Federal Reserve, the average interest rate on a two-year personal loan is 9.46 percent. However, rates vary significantly from lender to lender. Depending on your credit score and borrowing history, interest rates for personal loans can be as high as 36 percent.

Average personal loan rates by credit score

Credit Rating / Score Range Average personal loan interest rate
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%

Details: 12 best personal loans with low interest rates

LightStream - Best for generous repayment terms

Overview: LightStream is the online consumer lending division of Truist (formerly SunTrust Bank). Its personal loans are aimed at applicants with a strong credit history. While personal loans can typically be used for most any purpose, LightStream advertises unique uses such as adoptions, IVF financing and horse ownership.The APRs on LightStream loans range from 2.49 percent to 19.99 percent. Loan amounts start at $5,000 and go as high as $100,000. Terms vary from two to 12 years.

Why LightStream is the best for generous repayment terms: While most of the lenders profiled on this page offer terms of up to five years, Lightstream offers terms of up to seven years for most of it loans and up to 12 years for loans for home improvement or the installation of a swimming pool or a solar energy system.

Perks: LightStream loans offer competitive, fixed rates for those with a solid credit background. In addition, the entire application process is 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 prior to receiving loan funds. Rates for customers who decline autopay are 0.5 percentage points higher.

Impact on borrowers looking for low interest rates: If you're looking for the lowest possible monthly payment, LightStream could be a good option. It not only offers some of the lowest interest rates in the business, but also has some of the longest repayment terms.

Payoff - Best for paying credit card debt

Overview: Payoff loans can only be used to consolidate or pay off credit card debt. APRs range from 5.93 percent to 19.99 percent. Loans are available from $5,000 to $40,000, and terms are two to five years.

Why Payoff is the best for paying credit card debt: Credit cards often come with double-digit APRs, which is why Payoff’s low rates could make it attractive for people looking to consolidate credit card debt.

Perks: There are no late fees, application fees or early payment fees. There are also no returned check fees or annual fees.

What to watch out for: Payoff charges an origination fee of up to 5 percent, which includes closing costs and maintenance fees. It is the only fee associated with a Payoff loan.

Impact on borrowers looking for low interest rates: If you have good credit, Payoff can likely provide you a much lower interest rate than you're getting on your credit cards.

Best Egg - Best for low APRs

Overview: Best Egg promises a seamless and hassle-free application and approval process. Loan amounts range from $2,000 to $50,000. Loan terms vary from three to five years.

Why Best Egg is the best for low APRs: APRs on Best Egg loans start at 5.99 percent, and at 35.99 percent, its maximum APR is lower than that of several lenders on this page.

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.

Impact on borrowers looking for low interest rates: Best Egg's interest rates are competitive, which could make the overall cost of your loan low.

SoFi - Best for unemployment protection

Overview: Because SoFi does business entirely online, it’s able to minimize expenses and aims to pass those savings on to customers. SoFi APRs start at 5.99 percent and increase to as much as 19.63 percent. Loan amounts range from $5,000 to $100,000, and loan terms vary from two to seven years.

Why SoFi is the best for unemployment protection: If you lose your job, SoFi’s Unemployment Protection Program lets you put your loans into forbearance for three months at a time, up to 12 months total. Interest will still accrue, but you won’t have to make payments during that period.

Perks: SoFi doesn't charge late fees or prepayment penalties. Its loans also come with exclusive member benefits, such as access to career coaches and personal financial advisors. In the event that you lose your job, SoFi can even assist you with finding a new one.

What to watch out for: SoFi’s entire loan process is online, so you must be comfortable with an entirely online experience.

Impact on borrowers looking for low interest rates: The lowest advertised APR from a company is not always the number you'll want to look for; if you have below-average credit, you'll also want to look at rate caps. SoFi's APRs cap at 19.63 percent, which is low compared to competitors. Because of this, SoFi could be the cheapest option if you don't have the best credit.

FreedomPlus - Best for quick approval

Overview: FreedomPlus loans are available for consolidating debt, making large purchases, making home improvements and more. FreedomPlus APRs start at 7.99 percent and go up to 29.99 percent. Loan amounts range from $7,500 to $50,000, while terms vary from two to five years.

Why FreedomPlus is the best for quick approval: The FreedomPlus loan process can be very quick, with same-day approval and funds in your account in as little as 48 hours.

Perks: FreedomPlus allows you to have a co-borrower, which could get you a lower rate than you’d qualify for on your own.

What to watch out for: Personal loans from FreedomPlus include an origination fee of 1.99 percent to 4.99 percent, with 4.99 percent being the most common.

Impact on borrowers looking for low interest rates: FreedomPlus may not have the lowest interest rates around, but the company's fast funding means it's a competitive option if you need a low-interest loan quickly.

PenFed - Best for small loan amounts

Overview: Personal loans are available from PenFed to cover expenses such as home renovations, debt consolidation and medical and dental bills. PenFed’s APRs start at 5.99 percent, and terms are one to five years. Borrowers can qualify for loan amounts of $600 to $35,000.

Why PenFed is the best for small loan amounts: Since PenFed’s low-interest personal loans start at just $600, you can borrow only what you need for smaller expenses such as vehicle repairs.

Perks: Though PenFed does charge late fees on its personal loans, there are no origination fees or early payoff penalties.

What to watch out for: In order to receive a PenFed loan, you’ll need to join this credit union.

Impact on borrowers looking for low interest rates: One of PenFed's main draws is that it is a credit union. Credit unions typically offer more personalized service, which could help offset PenFed's slightly higher rates.

Upstart - Best for little or no credit history

Overview: Upstart aims to offer fast, fair personal loans. APRs for Upstart loans range from 4.37 percent to 35.99 percent, and loan amounts range from $1,000 to as much as $50,000. You can choose a loan term of either three or five years.

Why Upstart is the best for little or no credit history: 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.

Perks: Upstart can provide your rate in just five minutes. There are no prepayment penalties, and funds are available in as little as one business 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.

Impact on borrowers looking for low interest rates: The lowest interest rates are typically offered to those with excellent credit, but Upstart looks at more than just your credit score, giving you a better shot at qualifying for a low rate.

LendingClub - Best for using a co-borrower

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 consolidating debt, making home improvements and refinancing an automobile purchase. Loans are available for $1,000 to $40,000. The APRs on LendingClub loans range from 7.04 percent to 35.89 percent, and you can choose a loan term of three or five years.

Why LendingClub is the best for using a co-borrower: LendingClub allows joint applications, which could improve your chances of being approved for a low-interest personal loan.

Perks: LendingClub’s online loan application takes just a few minutes, and funds are available 48-hours from loan approval to funding. There are no prepayment penalties.

What to watch out for: You’ll pay origination fees of 3 percent to 6 percent with LendingClub, and the loans require a minimum credit score of 600. If you have bad credit or are trying to rebuild your credit, LendingClub may not be for you.

Impact on borrowers looking for low interest rates: If you can't qualify for the lowest rates on your own, adding a co-borrower with good credit will help your overall credit picture and could net you lower rates.

Prosper - Best for no prepayment penalty

Overview: Prosper is a peer-to-peer lender with loans available to those with fair to excellent credit. APRs on Prosper loans start at 7.95 percent and go as high as 35.99 percent. Loans are available for $2,000 to $40,000, and repayment terms are three or five years.

Why Prosper is the best for no prepayment penalty: Because Prosper doesn’t have prepayment penalties, you could pay your loan back early and save on interest costs.

Perks: Prosper offers a simple online application process, and money is available as soon as one day after applicants complete all requirements.

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 when you submit your application, you will have to reapply.

Impact on borrowers looking for low interest rates: If you don't need to borrow much money and you're confident that you can pay your funds back quickly, Prosper is worth considering. Its interest rates are higher than those of many of its competitors, but its fees are relatively low.

Upgrade - Best for fast funding

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 5.94 percent to 35.97 percent. Loan amounts range from $1,000 to $50,000, and terms are two to seven years.

Why Upgrade is the best for fast funding: Upgrade offers a quick application process and provides loan decisions within a few minutes. Additionally, money is available within as little as one day of completing the verification process.

Perks: There’s no prepayment penalty. Also, if you use one of its personal loans for debt consolidation, Upgrade gives you the option of having the loan funds sent right to your creditor.

What to watch out for: All Upgrade personal loans come with an origination fee of 2.9 percent to 8 percent. The fee is deducted from your loan funds.

Impact on borrowers looking for low interest rates: Borrowers with fair credit may find Upgrade a better alternative to payday lenders, which offer fast loans without a credit check. Upgrade also offers incredibly fast funding.

Marcus by Goldman Sachs - Best for debt consolidation

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 19.99 percent, and loans are available for $3,500 to $40,000. Repayment terms are three to six years.

Why Marcus by Goldman Sachs is the best for debt consolidation: With a low rate cap and repayment terms that stretch to six years, Marcus could be an affordable way to pay off existing credit card or loan debt.

Perks: There are no sign-up or prepayment fees with Marcus. If you make payments on time for a year, the company will let you skip a month, during which interest won’t accrue.

What to watch out for: Marcus doesn't accept joint applications, so if you need a co-signer to qualify, this may not be a good option for you.

Impact on borrowers looking for low interest rates: Marcus specializes in low-interest debt consolidation loans, and its terms are relatively flexible for borrowers looking for low rates.

TD Bank - best for few fees

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 offers unsecured loans with options from $2,000 to $50,000, with terms of three to five years and APRs ranging from 6.99 percent to 21.99 percent.

Why TD Bank is the best for low fees: Borrowers looking for low interest rates can also save on fees with TD Bank — it doesn't charge origination, application, prepayment or non-sufficient funds (NSF) fees.  It does, however, charge a late fee of 5 percent of the payment due or $10, whichever is less.

Perks: Personal loan funds from TD Bank can be available in as little as one business day.

What to watch out for: TD Bank is a full-service bank, which means its loans may be best-suited for those who plan to do all their banking here.

Impact on borrowers looking for low interest rates: Borrowers with less-than-stellar credit may spend less on interest with TD Bank — while some lenders’ highest interest rates are near 36 percent, TD Bank charges no more than 21.99 percent.

What you need to know about low-interest loans

What is a low-interest-rate personal loan?

Low-interest-rate personal loans typically have an annual percentage rate (APR) below 12 percent. 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, the proceeds can be used for consolidating credit card debt, making a major purchase or even taking a vacation.

Loan terms vary by lender, but there’s always a predetermined payment period, often ranging from three to five 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.

How do lenders determine interest rates?

Every lender uses its own algorithm to determine the interest rate you'll receive. Three of the most important factors lenders evaluate are credit score, debt-to-income ratio and annual income. The lower your DTI and the higher your income and credit score, the more likely you are to qualify for low rates and large loan amounts.

Outside of these factors, some lenders also take into account things like your area of study, length of time with your most recent employer, job history and education. This is why it's so important to shop around and compare rates with multiple lenders.

What is considered a low interest rate?

Those with the highest credit scores, 720 to 850, may be offered rates between 10.3 percent and 12.5 percent.

How does the coronavirus affect low-interest personal loans?

In response to the impacts of COVID-19, some banks and online lenders have introduced new loan offerings to help Americans experiencing financial distress. In particular, some institutions are offering coronavirus hardship loans to help those who have lost their income or job as a result of the pandemic. These loans often include low- or no-interest periods, as well as  deferment options and flexible repayment plans. And if you need help paying for an existing personal loan, many lenders are also providing loan relief programs and reduced fees.

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 three to five 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 1 percent to 8 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.

Check out our loan comparison calculator to compare loan rates and calculate costs.

No-interest loans: What to know

No-interest loans include financing from auto dealerships and retailers. “No interest” doesn’t necessarily mean you won’t pay anything to borrow money. Here are some costs that may come with a no-interest loan:

  • Origination fee
  • Prepayment penalties
  • Late payment fees
  • Interest charged as a penalty for late payments

The interest rate isn’t all that determines how much a loan could cost you. As you compare lenders, take note of origination fees, which are typically taken out of the loan amount, as well as charges such as late fees. A balance transfer credit card with a 0 percent introductory APR could be a less costly option than a no-interest loan — as long as you pay the card off before the intro period ends.

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. 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.
  2. 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.
  3. Consider credit unions. Because they are nonprofit organizations, credit unions typically offer lower-cost loans than standard banks or lenders.
  4. Apply for preapproval: Preapproval, offered by some 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.
  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. 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.
  7. 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.

Additional personal loan rate resources: