Rates have also been relatively consistent in recent years, so it’s unlikely that there will be substantial change in rates in 2022. Here’s a snapshot of the average rates for a 24-month personal loan over the last 5 years:
- % in the 3rd quarter of 2019
- % in the 3rd quarter of 2018
- 9.76% in the 3rd quarter of 2017
- 9.64% in the 3rd quarter of 2016
- 9.80% in the 3rd quarter of 2015
When you’re applying for a personal loan, you won’t necessarily get a loan at the average rate. Your loan’s rate will depend upon https://fasterloansllc.com/installment-loans-wy/ how well-qualified of a borrower lenders think you are. A number of different factors will go into determining your rate, including:
- Which lender you borrow from
- The amount you borrow and the length of your loan term
- Your income
- Your credit score
If you have ample income, good credit, and you’re borrowing a reasonable sum, you can expect to get a loan at a competitive rate.
Those with lower credit scores, less income, and more existing debt will likely be offered loans only at higher rates. Applying with a cosigner, however, could help these borrowers to qualify for a more competitive loan.
What is a good interest rate on a personal loan?
A good interest rate will differ for a borrower with good credit versus a borrower with poor credit. In general, however, any personal loan rate below the averages listed above would be considered a fairly good one.
What bank has the best personal loan rates?
The best personal loan rate for each individual borrower will vary depending on many factors, including outstanding debt, credit score, and prior relationships with financial institutions.
To find the best interest rates, consumers should shop around and obtain quotes from at least three lenders. It is important that borrowers compare not just rates but also fees, whether the interest rate is fixed or variable, and repayment timelines when choosing the most affordable loan for their situation.
What’s the best place to get a personal loan?
There are pros and cons to each option, and the best source of financing will vary by buyer. This guide to the best places to get a personal loan can help you to explore different options for obtaining the funding you need.
Where can I get a personal loan with low interest?
It is possible for well-qualified borrowers to get a low interest personal loan from many different sources. However, borrowers with a lower credit score may have fewer options for financing and may not qualify for loans with lenders offering the most competitive rates.
Any borrower should shop around both online and with local lenders to compare rates and see which financing provider offers the lowest cost loan for someone with their particular financial history.
The bottom line: Personal loans are likely to become more popular
As mentioned above, personal loans are the fastest growing category of debt in the United States and that trend is likely to continue into 2020.
In fact, personal loans could become even more widely available going forward as the Federal Reserve Consumer Financial Protection Bureau, and several other financial agencies issued a joint statement encouraging lenders to consider alternative data — besides just credit scores – in making decisions on loan approval.
But while personal loans are a common and often affordable source of financing, borrowers should always do their due diligence and ensure they compare offers to find a loan with terms that are favorable for their situation. And, as always, borrowers should avoid taking on more debt than is necessary and should borrow for essential expenses only in order to keep interest costs down.
Fortunately, even as the number of consumers taking out personal loans has rapidly increased, default rates have remained very low. Because many of the new personal loan borrowers are super prime consumers with very high credit scores, rather than subprime borrowers, it is likely that seriously delinquent accounts will remain rare.