The lowest personal loan rates and what you’ll need to qualify

Methodology

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For the fairest personal loan rates comparison, our editorial and research teams combined efforts: Our editors designed a rubric to judge lenders across five categories: rates, loan details, eligibility, repayment and customer experience. And our data and research experts independently collected data points and analyzed them to produce our five-star ratings.

• Number of companies reviewed: 32
• Number of data points analyzed: 800
• Number of features we considered: 25
• Number of primary data sources used: 30

Our complete methodology explains in greater detail how we determined which lenders offer the best personal loan rates.

Show summary

• SoFi

  : Best personal loan rates

• PenFed Credit Union

  : Best for borrowing small amounts

• U.S. Bank

  : Best for current U.S. Bank customers

• Upgrade

  : Best for noncitizen borrowers

• Navy Federal Credit Union

  : Best for military families

• Wells Fargo

  : Best for borrowing large amounts

• Discover Bank

  : Best for hardship relief options

• LightStream

  : Best for repayment term choices

• Rocket Loans

  : Best for customer service

• Prosper

  : Best for borrowers with fair credit

We receive compensation from our partners for Featured Offer placements, which impacts how and where their offer is displayed.

Featured Offer

SoFi

APRs

8.99% to 25.03%*

Loan amount

$5,000 to $100,000

Minimum credit score

680

Compare Rates

On Credible's Website

SoFi

Best personal loan rates

APRs

8.99% to 29.49%*

Loan amount

$5,000 to $100,000

Minimum credit score

680

5/5

The CNN Underscored Money editorial team scores financial services products objectively. We weigh several factors consumers should consider when creating our methodologies.

Compare Rates

On Credible’s Website

PenFed Credit Union

Best for borrowing small amounts

APRs

7.99% to 17.99%*

Loan amount

$600 to $50,000

Minimum credit score

Undisclosed

4.6/5

Compare Rates

On Fiona’s Website

U.S. Bank

Best for current U.S. Bank customers

APRs

8.74% to 24.99%*

Loan amount

$1,000 to $50,000 for U.S. Bank customers; $1,000 to $25,000 for non-customers

Minimum credit score

660

4.5/5

Compare Rates

On Credible’s Website

Upgrade

Best for noncitizen borrowers

APRs

8.49% to 35.99%*

Loan amount

$1,000 to $50,000

Minimum credit score

580

4.5/5

Compare Rates

On Fiona’s Website

Navy Federal Credit Union

Best for military families

APRs

8.99% to 18.00%*

Loan amount

$250 to $50,000

Minimum credit score

Undisclosed

4.3/5

The CNN Underscored Money editorial team scores financial services products objectively. We weigh several factors consumers should consider when creating our methodologies.

Compare Rates

On Credible’s Website

Wells Fargo

Best for borrowing large amounts

APRs

7.49% to 23.24%*

Loan amount

$3,000 to $100,000

Minimum credit score

Undisclosed

4.2/5

Compare Rates

On Credible’s Website

Discover Bank

Best for hardship relief options

APRs

7.99% to 24.99%*

Loan amount

$2,500 to $40,000

Minimum credit score

660

4.2/5

The CNN Underscored Money editorial team scores financial services products objectively. We weigh several factors consumers should consider when creating our methodologies.

Compare Rates

On Credible’s Website

LightStream

Best for repayment term choices

APRs

7.49% to 25.49%*

Loan amount

$5,000 to $100,000

Minimum credit score

Undisclosed

4.1/5

Compare Rates

On Fiona’s Website

Rocket Loans

Best for customer service

APRs

9.12% to 29.99%*

Loan amount

$2,000 to $45,000

Minimum credit score

640

4.1/5

Compare Rates

On Credible’s Website

Prosper

Best for borrowers with fair credit

APRs

8.99% to 35.99%*

Loan amount

$2,000 to $50,000

Minimum credit score

560

4.1/5

Compare Rates

On Fiona’s Website

How to get the best personal rates

• Improve your credit. Your credit scores play a huge role in the personal loan interest rates you can get. Take steps like reducing your credit utilization, making on-time payments on your bills and disputing errors on your credit reports that may affect your credit scores.
• Lower your debt-to-income (DTI) ratio. Your DTI compares your monthly debt obligations with your income. Lenders prefer a DTI ratio below 36%.
• Stabilize your income. Lenders also look at your employment history and income when you apply for a personal loan. A steady source of verifiable income may help you qualify for better personal loan rates.
• Shop around. Every lender is different, so compare offers from multiple institutions to find the best rate. Some lenders let you pre-qualify for a personal loan online, which won’t impact your credit scores, unlike an official application.
• Apply with a cosigner. If you have poor or fair credit, applying with a creditworthy cosigner could help you access better personal loan interest rates. But if you default on the loan, it will affect the cosigner’s credit too.
• Consider a secured personal loan. While most personal loans are unsecured, borrowers with bad credit may get better rates with a secured personal loan, which requires collateral. Keep in mind, though, that the lender can seize your collateral if you don’t pay back your loan.

How to compare personal loans

• Pre-qualify with multiple lenders. Many let you pre-qualify for personal loans online. This lets you check your eligibility and potential rates and terms without harming your credit scores.
• Compare interest rates and fees. Look for a loan with a low rate and few fees. Good-credit borrowers, for instance, may be able to avoid having to pay an origination fee.
• Look over repayment terms. You may find loan terms between 1 and 7 years or longer, depending on the lender. Make sure the repayment options and monthly payments will work for your budget.
• Consider loan amounts. Each lender sets its own minimum and maximum loan amount, so look for one that offers the amount you need. And keep in mind that an origination fee (if applicable) is usually removed from the loan amount before it reaches your account.
• Review qualification requirements. Some lenders have stricter credit and income requirements than others. Look for one that would be a good fit for your financial profile, perhaps including a lender that allows cosigners.
• Check out customer service options and reviews. Strong customer support can make or break your borrowing experience. Find out whether you can contact the lender via email, phone or web chat, and read customer reviews to see what other borrowers have to say about the lender.

Personal loans are one of the most flexible forms of financing, as they can be used for almost any (legal) expense, including consolidating high-interest debt or funding home repairs. You may find more competitive rates on a personal loan than you would on a credit card, depending on your credit, as well as repayment terms from one to seven years or longer.

Many personal loans are unsecured, so you don’t have to worry about pledging collateral. That said, some lenders offer secured personal loans, which can have more lenient credit requirements than unsecured loans. Paying back your personal loan on time each month can help increase your credit scores over time.

There can be some downsides to personal loans, however. It can be tough to qualify for a personal loan if you have low credit scores (or a thin credit history) or a low income — many lenders require scores in the mid-600s. Even if you can qualify with bad credit, you may get stuck with an interest rate as high as 36%. Some lenders also charge origination fees as high as 12% of your loan amount, which would add to your costs of borrowing. Finally, if you can’t afford the monthly payments on your personal loan, you could end up damaging your credit scores.

Current personal loan rates

The post-Covid-19 pandemic economy saw some of the steepest interest rate increases in decades, causing personal loan rates to also rise. According to the Federal Reserve, the average rate on a two-year personal loan in November 2023 was 12.35%.

By January 2024, most lenders offered rates starting around 7.00% or 8.00% with a maximum rate around 36.00%, though credit unions’ rate ceilings were 18.00% (as determined by the National Credit Union Administration). According to the National Consumer Law Center, 36% is generally seen as the dividing line between an affordable loan and an unaffordable loan.

Here’s more current proprietary data for average personal loan rates:

What’s a good rate on a personal loan?

Personal loan interest rates range from around 7.00% or 8.00% to 36.00%, so a good rate would be one on the lower end of that range. You might also consider a good rate to be one that’s below the current average, which was 12.35% for two-year personal loans in November 2023.

Also, remember that a good rate on a personal loan depends on your credit scores. Here are average rates by credit band:

Ultimately, though, a good rate on a personal loan is one that’s affordable for your budget. Use a personal loan calculator (like Calculator.net’s) to estimate your monthly payments and long-term interest costs and confirm that the loan terms work for you.

How lenders determine personal loan rates

Lenders determine their personal loan rate range using risk-based pricing. They offer lower rates to borrowers they deem to be less risky, while they assign higher rates to borrowers who appear to be riskier candidates for a loan.

Specifically, lenders gauge risk and assign rates based on the following factors:

• Credit scores: Borrowers with good or excellent credit tend to get the best rates.
• Credit history: Lenders also review your credit history to see if you have any delinquencies or a history of late payments. Negative marks on your credit report could lead to higher rates (or to not getting approved for a loan).
• Income: Having a steady, verifiable source of income could also make you seem less risky to a lender, so you could get a better rate.
• Debt-to-income ratio: A low DTI of 35% or less could also reduce risk for the lender, resulting in a better rate.
• Presence of cosigner or collateral: Although not all lenders offer joint, cosigned or secured personal loans, those that do might offer better interest rates on them.

Your rate may also increase or decrease depending on your loan amount and repayment terms.

What’s the difference between interest rate and APR? APR is a more inclusive measure than interest rate, since it accounts for interest and loan fees. If your loan has no additional fees, your APR and interest rate may be equal.

Are rates lower for secured personal loans? Rates may be lower on secured personal loans, since secured loans are less risky for lenders. If you don’t pay back your loan, the lender can seize your collateral as a form of repayment.

How personal loan rates affect your monthly payment

The interest rate you get on a personal loan will impact your monthly payments and long-term costs.

Example: You take out a $15,000 personal loan with a five-year repayment term. With an interest rate of 8.00%, your monthly payment would be $304, and total interest charges (over five years) would be $3,249. For comparison, if your interest rate were, say, 12%, your monthly payments would be $334, and you’d pay $5,020 in interest overall.

Using a personal loan calculator can help you crunch the numbers and compare personal loan rates and terms.

How to apply for a personal loan

The steps to apply for a personal loan may vary by lender, but here’s the general process you’ll need to follow:

1. Check your credit. Since your credit plays a big role in loan approval and rates, it’s worth checking your scores before you start applying. You can use a free credit monitoring service, check with your credit card issuer or purchase your scores from a website like myFICO.com. You can also review a free copy of your credit reports from AnnualCreditReport.com to review your various accounts.
2. Pre-qualify with several lenders. There are lots of lenders that provide personal loans, including banks, credit unions and online lenders. Many let you check your offers online through pre-qualification, which only takes minutes and won’t harm your credit (thanks to a “soft” credit check). This process will help you perform a personal loan rate comparison and find your best offer.
3. Submit an official application. Once you’ve selected a loan offer and lender, you’ll fill out a more formal application with your personal and financial details. You’ll also likely need to provide verifying documentation, such as identification and pay stubs, as well as consent to a “hard” credit inquiry that can temporarily drop your credit scores.
4. Receive your loan. If the lender approves your loan, it will send the proceeds in a lump sum to your designated bank account (although some lenders offer direct payment to your creditors in the case of debt consolidation personal loans). Then, you’ll start paying your loan back on the agreed-upon terms.

How to improve your chances of getting approved

• Boost your credit scores. If you don’t need the loan right away, take steps to improve your credit before you apply, such as paying down or consolidating debts and reducing your credit utilization.
• Dispute errors on your credit reports. If you find an inaccuracy on your reports that may affect your scores (for example, a collections account that’s older than seven years), dispute it to have it removed before you apply for your loan. (Note: While it’s very worthwhile to dispute genuine errors on your reports, there are no guarantees that a dispute will result in a favorable outcome for you).
• Research lenders. Every lender sets its own eligibility criteria, so look for a lender that would be a good match for your financial profile.
• Read over your application before submitting it. Make sure you don’t have any errors or typos that could delay your loan processing, and double-check that you’ve provided all the required documentation.
• Don’t borrow more than you need (or can afford). The criteria for a large-amount loan can be more stringent than the criteria for a small one. You also don’t want to set yourself up for failure in repayment.
• Apply with a co-borrower, cosigner or collateral. As mentioned, taking out a personal loan with a creditworthy co-applicant or backing it with collateral could make it easier to get approved if you have less-than-stellar credit.

Alternatives to a personal loan

Before borrowing a personal loan, consider whether any alternative sources of financing might be a better fit for your situation. Some other options include:

• Home equity loan or line of credit: Homeowners may be able to tap into their equity with a home equity loan or home equity line of credit (HELOC). These “second mortgages” can offer large loan amounts at competitive rates, but they use your home as collateral. If you can’t pay back your loan or HELOC, you could lose your home to foreclosure.
• Credit card: Paying with a credit card is another option, particularly if you can qualify for a card with a 0% APR introductory period. If you have the cash flow to pay off your balance before the 0% APR period ends, you essentially get an interest-free loan. Be careful of using credit cards otherwise, though, because they come with high interest rates.
• Buy now, pay later: If you’re looking to finance a major purchase, check if the retailer offers a buy now, pay later (BNPL) option. Some BNPL providers don’t charge any interest if you pay off the amount over six weeks or so. Longer terms may also be available, but they typically come with interest and fees.
• Cash advance: If you need a small amount to cover a cash flow gap, consider requesting a cash advance from a financial app or your bank. Some loan apps offer free cash advances if you pay them back on your next paycheck. Ask about fees before proceeding.
• Savings: If you can cover costs with your own savings — or by budgeting first, then saving up over time — this would be a better option than taking out debt, which will cost you more in the long run due to interest and potential fees.

Methodology

After our editorial team established a rubric to evaluate 32 leading personal loan lenders, our data research team scored these lenders across the following five categories to elicit a five-star rating. The 10 lenders listed above received the highest scores across each of the 25 loan features under consideration.

Rates (30%)

Given that you’re seeking the best and lowest personal loan rates, we weighted this category highest. Lenders that offer pre-qualification, or the ability to check rates via a soft credit check, were rewarded. The category also accounted for each lender’s lowest and highest APRs offered, plus whether it featured a rate discount for enrolling in automatic payments.

Loan details (25%)

This category comprises four criteria. Lenders that scored best don’t charge origination fees, disburse loans in one business day or less and have low minimum and high maximum borrowing amounts.

Eligibility (10%)

Here, we’re basically asking, “How easy is it to get a loan from this lender?” Banks, credit unions and online lenders fared better if they lend nationwide; allow co-applicants and noncitizen borrowers; and set accessible minimum requirements for credit score and annual income.

Repayment (25%)

Securing the best personal loan rate might seem all-important, but it’s not the end of the road — it’s actually the beginning of repayment. With that in mind, we scored lenders on their repayment term options, hardship relief programs, credit reporting practices and late payment fees.

Customer experience (10%)

Repayment can be easier if you get some help along the way, and the most helpful and well-rated lenders earned the highest marks in this category. We considered eight factors, including the availability and accessibility of lenders’ customer support teams, and judged their performance using metrics from independent organizations like the Better Business Bureau and the CFPB.

What didn’t make the cut

Twenty-two popular lenders didn’t make our list of the best personal loan rates. Here are a few examples of big-name financial institutions that came up short.

• OneMain Financial, Happy Money, and Universal Credit offer starting rates above 10% APR.
• BHG Money and Axos Bank have high minimum loan amounts.
• Avant, Citi and LendingPoint have low maximum loan amounts.
• MoneyKey and RISE charge triple-digit maximum APRs.
• Truist Bank, Zable and Achieve aren’t available in all states.

Frequently asked questions (FAQs)

Can I get a personal loan with bad credit?

It may be possible to get a personal loan with bad credit. Each lender sets its own borrowing criteria, and some are willing to work with poor-credit borrowers. You might also increase your chances of approval if you apply with a creditworthy co-applicant (co-borrower or cosigner) or secure your loan with collateral, such as cash or assets.

Are there penalties for repaying a loan early?

Many personal loan lenders don’t charge penalties for paying off your loan early. However, check with the individual lender to see if it charges prepayment penalties.

What happens if I miss a payment on my personal loan?

Most lenders impose a late fee if you don’t submit your monthly payment by the due date. If your payment is more than 30 days late, the lender may report the missed payment to the credit bureaus — since payment history is the most important factor impacting your credit scores, the delinquency can cause your scores to drop. If you’re having trouble making your loan payments, contact your lender as soon as possible to see if temporary hardship options are available.

Are there tax implications related to personal loan interest?

Personal loans are generally not taxable or tax deductible. However, the interest you pay on a personal loan may be tax deductible if you use the loan for higher education or business expenses. That said, most lenders prohibit the use of personal loans for higher education or business purposes, so you’ll have to check with the individual lender to see if either is an acceptable use for the loan.