Best personal loan rates for October 2021

As of

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money.

The Bankrate guide to choosing the best personal loan

Why trust Bankrate?

At Bankrate, our mission is to empower you to make smarter financial decisions. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure the content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.

When shopping for a personal loan, compare APRs across multiple lenders to make sure you’re getting a competitive rate. Also look for lenders that keep fees to a minimum and offer repayment terms that fit your needs. Loan details presented here are current as of the publication date. Check the lenders’ websites for more current information. The personal loan lenders listed here are selected based on factors such as APR, loan amounts, fees and credit requirements.

Summary: Personal loans in 2021

Best personal loan rates in October 2021

Lender Current APR Range Loan Term Loan Amount Best for
SoFi
4.99%–19.63% (with autopay)
2 to 7 years
$5,000–$100,000
Overall personal loan
LightStream
2.49%–19.99% (with autopay)
2 to 12 years
$5,000–$100,000
Generous repayment terms
Avant
9.95%–35.99%
2 to 5 years
$2,000–$35,000
People with bad credit
Marcus by Goldman Sachs
6.99%–19.99% (with autopay)
3 to 6 years
$3,500–$40,000
Debt consolidation
Best Egg
5.99%–29.99%
3 to 5 years
$2,000–$50,000
Low APRs
Upgrade
5.94%–35.97% (with autopay)
2 to 7 years
$1,000–$50,000
Fast funding
Payoff
5.99%–24.99%
2 to 5 years
$5,000–$40,000
Paying credit card debt
Upstart
4.37%–35.99%
3 or 5 years
$1,000–$50,000
Little credit history
LendingClub
7.04%–35.89%
3 or 5 years
$1,000–$40,000
Using a co-borrower
PenFed
Starting at 5.99%
1 to 5 years
$600–$50,000
Small loan amounts
TD Bank
6.99%–21.99%
3 to 5 years
$2,000–$50,000
Few fees
PNC Bank
Starting at 5.99% (with autopay)
6 months to 5 years
$1,000–$35,000
In-person banking

Details: Best personal loan rates in 2021

  • SoFi: Best overall personal loan
  • LightStream: Best personal loan for generous repayment terms
  • Avant: Best personal loan for people with bad credit
  • Marcus by Goldman Sachs: Best personal loan for debt consolidation
  • Best Egg: Best personal loan for low APRs
  • Upgrade: Best personal loan for fast funding
  • Payoff: Best personal loan for paying credit card debt
  • Upstart: Best personal loan for little credit history
  • LendingClub: Best personal loan for using a co-borrower
  • PenFed: Best personal loan for credit union members
  • TD Bank: Best personal loan for few fees
  • PNC Bank: Best personal loan for in-person banking

What is a personal loan?

Personal loans are short-term loans that consumers can receive from banks, credit unions or private lenders like online marketplace lenders and peer-to-peer lenders. The loan funds can be used for just about any purpose, such as paying off other debt, financing a home renovation or paying for family needs, like a wedding or adoption. A personal loan is repaid in monthly installments, similar to a car loan or home mortgage, with loan terms ranging from 24 months to 60 months or even longer. Personal loans are typically unsecured, meaning they are not backed by collateral such as a car, house or other assets.

If you need cash fast, these loans are a good choice because the approval and funding process is often faster than that of a home equity line of credit, which lets you borrow funds as you need them rather than in a lump sum.

What are current personal loan interest rates?

Personal loan interest rates currently range from about 3 percent to 36 percent, depending on your credit score. As of September 8, 2021, the average personal loan interest rate is 10.46 percent.

The better your credit score, the more likely you are to qualify for a personal loan with the lowest interest rate available. Compare personal loan offers to see what you are eligible for before applying for a personal loan.

Average personal loan interest rates by credit rating

Average personal loan interest rates range from 10.3 percent to 12.5 percent for “excellent” credit scores of 720 to 850, 13.5 percent to 15.5 percent for "good" credit scores of 690 to 719, 17.8 percent to 19.9 percent for "average" credit scores of 630 to 689 and 28.5 percent to 32.0 percent for “poor” credit scores of 300 to 629.

Credit Band Credit Score Range Average Personal Loan Interest Rate
Excellent Credit 720–850 10.3%–12.5%
Good Credit 690–719 13.5%–15.5%
Average Credit 630–689 17.8%–19.9%
Bad Credit 300–629 28.5%–32.0%

Excellent-credit loans

Excellent-credit loans are loans that are geared toward borrowers with excellent credit, typically with credit scores between 720 and 850. Having such a high credit score can come with many benefits, including average APRs as low as 10.3 percent — though some lenders go even lower. If your credit score falls into this range, look for excellent-credit lenders with low advertised rates and few fees.

Good-credit loans

Good-credit loans offer competitive interest rates and generally low fees. You're considered to have good credit if you have a credit score between 690 and 719, and with such a high score, you may qualify for average APRs as low as 13.5 percent. However, if you have good credit and are interested in a personal loan, shop around; you may be able to qualify for an even lower interest rate.

Fair-credit loans

If you have a fair or average credit score, it can be hard to find a personal loan that offers reasonable rates and fees. If your credit score falls between 630 and 689, your credit score is average. While this is considered a less-than-stellar score, you still may be able to qualify for a personal loan with an average APR as low as 17.8 percent. This list of the best personal loans for fair credit features lenders that cater to people with scores in the mid-600s.

Bad-credit loans

You can get approved for a loan even with bad credit, although you won't qualify for the best APRs. If your credit score is between 300 and 629, the best interest rate available could be around 28.5 percent. However, a bad-credit loan, even one with a rate close to 30 percent, is a better financial option than a payday loan; to see what rates are available, compare offers from a few bad-credit lenders.

How does the coronavirus affect personal loans?

The impact of COVID-19 has left millions of Americans without a reliable source of income, and many may be searching for personal loans to cover emergency expenses. In response to unprecedented market conditions, some banks have announced new loan offerings and lower interest rates, though many have also tightened their eligibility requirements.

For existing borrowers, some lenders have extended their loan relief programs into 2021, waiving fees or letting customers temporarily defer payments. Long-term unemployment will mean some borrowers continue to rely on these programs, says Greg McBride, Bankrate’s chief financial analyst. He encourages those who are having trouble making payments on their personal loans to contact their lenders rather than ignoring the problem.

Who gets a stimulus check?

The American Rescue Plan Act brought a third stimulus check in March 2021, when the IRS started sending eligible Americans payments of up to $1,400. Between July and December, eligible families will also receive half of their child tax credit as monthly payments. The other half will be paid out in 2022, and those who don’t want monthly payments can instead get a lump sum next year. Families could receive a total of $3,600 for children aged 5 and under, $3,000 for children between the ages of 6 and 17 and $500 for 18-year-olds and full-time college students who are 19 to 24.

What are coronavirus hardship loans?

Coronavirus hardship loans are short-term personal loans designed by lenders specifically to help people affected by the coronavirus pandemic. These loans are typically less than $5,000 and may have to be repaid within three years or less. Coronavirus hardship loans are popular among credit unions, in particular; if you need short-term relief, ask your local credit union about its offerings.

Pros and cons of personal loans

Pros:

  • One lump sum, usually with a fixed interest rate, which helps keep monthly payments on track.
  • Get money quickly, sometimes within as little as a day, depending on the lender you choose.
  • Many are unsecured loans, which means your home or car isn’t used to borrow money.
  • Interest rates are much lower than those of payday loans, which charge upward of 400 percent.
  • Unlike highly risky payday loans, personal loans give you a reasonable amount of time to repay the loan.

Cons:

  • APRs are generally higher than those of some secured loans.
  • If you have a low credit score, you might not qualify.
  • Some lenders charge fees, like origination, late and prepayment fees. The lower your credit score, the more likely you are to have a lender that charges more fees.
  • Some lenders don’t allow co-signers, which means you can only use your credit score and history to qualify.
  • You’re adding another bill to your monthly payments, which might stretch or even break your budget.

How to choose the best personal loan lender for you

It's always best to get quotes from a few lenders before applying for a personal loan. When comparing lenders, keep an eye on the following factors.

  1. Approval requirements. Every lender has its own threshold for approving potential borrowers, considering things like your income, credit score and debt-to-income ratio. If you have below-average credit, look for lenders that utilize other approval criteria; some will take into account things like your area of study or job history.
  2. Interest rates. The lowest advertised rate is never guaranteed, so compare your actual quotes. When comparing interest rates, also make sure to incorporate any fees or penalties; origination fees or application fees can significantly add to the overall cost of your loan.
  3. Loan amounts. If you need a loan for something small, like a minor car repair, you'll look at different lenders than you would if you need to pay for tens of thousands of dollars in medical bills.
  4. Repayment options. A good personal loan lender usually offers multiple repayment terms so you can choose the one that makes the most sense for your situation. If you're borrowing a lot of money, you may want to look for a lender with long repayment terms to decrease your monthly payment. If you have a smaller loan, a shorter repayment term will cut back on the amount of interest you pay overall.
  5. Unique features. Keep an eye out for lenders with any unique perks (or restrictions). Be sure to check that any lender you're considering will allow you to use your loan for the purpose you're intending. Some, like Payoff, restrict their personal loans to specific uses, like debt consolidation.
  6. Customer service. It's also wise to investigate a company's customer service options, particularly if you prefer in-person service to online. If you need more information, you can always look up reviews about the company or check out its Better Business Bureau profile.

Types of personal loans and their uses

With the exception of loans from a few niche lenders, like Payoff, most personal loans can be used for any purpose. The most common types of personal loans are:

  • Debt consolidation: If you have multiple lines of credit card debt, for instance, you can pay them off with a personal loan and repay the loan over time, often with a better interest rate.
  • Emergency expenses: Unexpected expenses like a car repair or hospital bill can throw off your monthly budget, and a small personal loan can alleviate the immediate cost.
  • Home renovations: A personal loan is a great way to pay for a large home renovation project and boost the equity in your home.
  • Major purchase or event. Personal loans are often used to cover major expenses, such as a wedding or vacation.

To learn more, read our article on the top nine reasons to apply for a personal loan.

Frequently asked questions about personal loans

What is APR?

APR stands for annual percentage rate. It refers to the extra amount borrowers pay on top of their loan amount, or principal. APR is different from your interest rate; it equals your interest rate plus any loan fees.

What's the difference between a secured loan and an unsecured loan?

Secured loans are backed by a piece of the borrower’s property as collateral, typically a vehicle or house. Because the borrower stands to lose personal property if they default, secured loans tend to have lower interest rates.

Unsecured loans are not backed by collateral, but instead by the borrower’s creditworthiness. Because the lender takes on more of a risk with an unsecured loan, interest rates tend to be higher. Lenders also require that borrowers seeking unsecured loans have higher-than-average credit scores. Learn more about the key differences between secured and unsecured loans.

What's a repayment term?

A repayment term refers to the length of time borrowers have to repay their loans. A personal loan's repayment term is typically between one and 10 years, depending on the lender.

How does my credit score affect my offer?

Because personal loans are often unsecured, they may come with higher APRs than other types of loans. With unsecured loans, lenders tend to pay extra attention to a borrower's credit score.

The lower a borrower's credit score is, the more they'll have to pay in interest. Lower credit scores can lead to APRs in the double digits. Loan rates differ by lender, but opting for a secured loan can often help lower the loan's APR, even for someone with bad credit. In some cases, secured loans can offer APRs up to 6 percent less than unsecured loans.

Will a personal loan hurt my credit score?

A personal loan can temporarily hurt your credit score since lenders will do a hard credit check when you apply. However, you should be able to recover and even improve your credit score if you make on-time payments for the duration of your loan. If you miss payments or make consistently late payments, be prepared to see a more significant dip in your score.

What’s the difference between fixed and variable interest?

Depending on the loan and the lender, you may have a choice between a fixed-rate loan (which stays the same over the life of the loan) and a variable rate (which can rise or fall depending on changes in the market).

The interest on a variable-rate loan often starts low but may increase over time. The terms of the loan agreement will specify how often the lender is allowed to raise the interest rate, and some loans cap the maximum rate at a certain percentage. By contrast, the payments and interest charges on a fixed-rate loan will remain the same.

Base your decision on whether you prefer the stability of a fixed rate or the possibility of saving on interest with a variable rate.

Is a personal loan worth it?

A personal loan could be a good option for you if you need a large sum of money upfront and the stability of a predictable monthly payment. Personal loans typically have better APRs than credit cards or lines of credit, and most personal loans maintain that fixed rate over the life of the loan.

However, before committing to a personal loan, weigh the APR you're offered to make sure that a monthly loan payment fits into your budget. Some loans have repayment periods as long as 10 years, and some companies charge a fee if you choose to pay your loan off early. It's also important to take out only as much as you need for your project or expense; borrowing extra will increase your monthly payments and the total amount you'll pay in interest.

If you're unsure if you can afford a loan, try using a personal loan calculator to see how much you'll pay in interest on top of the cost of your loan,

What is a good interest rate on a personal loan?

A "good" interest rate on a personal loan depends on your credit score. In general, you should look for a rate below the average APR — 10.3 percent to 12.5 percent for excellent credit, 13.5 percent to 15.5 percent for good credit, 17.8 percent to 19.9 percent for average credit and 28.5 percent to 32 percent for bad credit.

The rate you are quoted depends on many factors, including your credit score, credit history and annual income. Many lenders offer prequalification, a step that allows you to see if you're eligible for a loan without a hard pull on your credit score. Checking your rate with a few companies can help you determine which will offer you the best APR.

What are the requirements for a personal loan?

While every lender's requirements will vary, you may be granted a personal loan based on three factors: your credit score, your income and your payment history. While all of these elements are important to overall financial health, lenders typically focus more heavily on your credit score. The lower your credit score, the less likely you are to get approved for the loan and the higher your interest rates if you are approved. It's important to assess your credit and financial history to determine if a personal loan is the right fit for you.

When you're applying for a personal loan, the lender may also require you to show documentation, such as proof of your identity, employer, income and address.

What is better: Personal loans or low-interest credit cards?

When it comes to debt consolidation, both personal loans and credit cards could be useful in paying off high-interest debt. With a personal loan, you'll be able to borrow a specific amount from the bank and then pay it back in monthly installments. With a credit card, you'll be able to complete a balance transfer, a method in which you transfer your existing debt to a new credit card.

Both options have drawbacks and benefits. With a personal loan, you're given the security of knowing the total loan costs, and you'll pay a fixed monthly amount, making it easier to budget and keep track of your expenses. The downside is that in some instances, a personal loan could have more up-front fees and a higher starting APR.

With a balance-transfer credit card, many card issuers will offer a 0 percent APR introductory period, which gives you the opportunity to pay down debt without accruing interest for a certain number of months. However, if you still have debt remaining after the introductory period, the APR could be higher than that of a personal loan, which may put you at risk of accumulating even more debt. Before choosing a method, compare the rates and fees of each option and evaluate how much flexibility you're looking for when consolidating debt.

How much can you borrow with a personal loan?

The amount you can borrow with a personal loan depends on the lender and your credit score. Many lenders offer loans between $5,000 and $50,000, but some may offer loans as low as $500 or as high as $100,000.

Can I pay my loan off early?

There are some situations where you may want to pay your personal loan off early; if you get a raise or receive a cash gift, putting those funds toward your personal loan can help you save on interest and eliminate the loan from your monthly expenses. Many lenders will even let you pay your loan off early without charging a prepayment penalty.

If you'd like to make extra payments on your loan, let your lender know that you'd like the extra payment to go toward the principal — otherwise, the lender may apply the funds toward your next payment.

Keep in mind that paying your loan off early may not be worth it if you have other higher-interest debt on your plate, like credit card debt, or if you don't have emergency savings built up. In those cases, it may be better to put extra funds toward those projects instead.

What happens if I can't pay back my loan?

If financial hardship means that you can't pay back your loan, your loan will eventually fall into default. With some lenders, default could happen as soon as you miss a payment, while with others it could happen after a few months of missed payments.

With a defaulted loan, you'll likely rack up late fees and see a dip in your credit score. If you miss enough payments, your loan may also be sent to collections. To minimize the impact of a defaulted loan, contact your lender as soon as you know that you won't be able to make a payment; your lender may be willing to work with you on an adjusted payment plan.

Additional personal loan resources