Low-Interest Personal Loans For Bad Credit

We monitor dozens of personal loans lenders, and these are the lowest interest rates that we could find

Everybody needs some financial help at one time or another. A personal loan is a great option, whether you need to borrow a little money for an emergency or more money for home improvement projects.

Banks and other lenders offer personal loans that can be used to consolidate debt, pay off medical bills, plan for milestones, or even help with moving expenses.

We’ve done all the legwork to find the best bank or lender for personal loans.

Low Interest Personal Loans

The best personal loans at low-interest rates

  • Largest Projects: LightStream
  • Home Improvement Best: Wells Fargo
  • Best Membership Perks: SOFI
  • Credit Card Consolidation at its Best: Payment
  • Best Credit for Fair Credit: Best Egg

FAQs

What does the interest rate impact on a personal loan?

The cost of borrowing is determined by the interest you pay on the prices loan. This is one way banks make money from personal loans. Higher interest rates mean higher costs. 

Let’s assume you borrowed $10,000 for three years. You’ll pay $789.52 interest if you get a 5% APR. The interest cost for a 7% APR is $1,115.75. As you can see, a change in the interest rate will result in additional costs of $300.

What is considered a low-interest rate?

There are a variety of APR rates, so the interest rate you pay will depend on your situation. What is considered low or high depends on market rates and other factors. A personal loan with a low rate of interest falls within the range of 3%-6%.

What determines the interest rate on a personal loan?

The economy, cost of funds borrowed (from customer deposits or other sources at market rates), and competition among lenders are all factors that affect personal loan interest rates. 

Once you have established a baseline, the rate you receive is determined based on your credit profile and credit score. A lower credit score will result in a higher interest rate. This is because the lender considers you a greater risk.

How to get a low-interest rate on a personal loan

There are some things you can do in order to lower the rate of a personal loan:

  • Increase your credit score. Work on credit scoring to qualify for a lower interest rate.
  • You can qualify for lower interest rates if you have a lower debt-to-income ratio.
  • Apply with a co-applicant. Some personal loans offered by banks let you apply with a co-applicant. You might be able to get someone with better credit to apply with you. This could lead to lower interest rates.
  • Search to compare loan rates from different lenders to find the best APR.
  • Sign up for autopay to receive discounts on personal bank loans. This is a great way to lower your interest rate.

How to Choose the Lowest Interest Rate Personal Loans

To determine the lowest interest rate, we compared the 30-plus lenders in our database. We also took into account other factors such as loan amount and credit score to determine who a loan would be suitable for. 

We recognize that each borrower has different financial needs and priorities. This is why we have included a wide range of lenders in our list. Every recommendation may not be right for everyone. Make sure to consider all options before you apply.

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Author: Jay Batson

My Name is Jay has and I have a passion for financial writing. I am the chief writer on this blog. I do my best to verify all the information but if there is anything amiss please let me know and I will do my best to correct it.

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