Rates on personal loans fell last week. A qualified borrower can still get a good interest rate to finance a project or purchase, as well as unexpected bills.
The average interest rate for a three year personal loan with credit scores of 720 and higher was 11.47% between October 11 and October 15. Credible.com says that this is a drop of 0.14% from the previous week. Last week’s average personal loan rate fell by 0.37% to 13.86%, from 14.23%.
Rates for the most qualified borrowers are generally the highest. Well-qualified borrowers might receive rates that are significantly lower than the average. Rates are dependent on many factors including creditworthiness and availability of loans through your lender.
Get the best rates
Paying down existing debt and improving credit scores are two quick ways to get more favorable rates. Personal loan interest rates depend on many factors such as your creditworthiness, credit score and income.
Although qualification requirements vary between lenders, a minimum credit score (720) will usually yield the best terms. If your credit score is below this level and you are trying to get the best rate, there are ways you can improve it. You can try strategies such as lowering your credit utilization, correcting errors in your credit report, and paying your bills on time.
How to calculate your personal loan payments
It’s crucial to determine if the loan fits within your budget. This includes estimating how much you will pay each month and how much interest you’ll be paying over the term of the loan. A personal loan calculator is one of the best ways to do this. The information you need is your loan term, amount and interest rate.
Let’s take, for example, a personal loan of $5,000 with an 11.47% fixed rate, a term length of 36 months, and a loan amount of $5,000. The Payday Champion personal loans calculator estimates that your monthly payment would amount to $165, and you’d pay approximately $933 in interest over its life. You would owe $5.933 total, which includes principal and interest.
Average personal loan interest rates based on credit score
Experian’s rates below represent average individual loan interest rates based on VantageScore risk levels. These rates can be used as a guideline, but lenders will ultimately decide the interest rate.
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.