This article was reviewed by Doug Noll, a member of the Finder Editorial Review Board and award-winning lawyer, mediator and author with over 40 years of experience in the legal field.
Personal loan rates usually range from 4% to 36%. But the rate you can qualify for depends on your personal finances, especially your credit score, income and debts. The lowest rate on our list clocks in at just 1.99% — significantly below average.
We spent hundreds of hours reviewing over 120 personal loan providers before selecting these lenders. Our list includes options for different credit types and a best overall pick. We also paid special attention to the maximum interest rate — only a few applicants can qualify for the lowest rate available.
11 best low-interest personal loans of October 2021
What sets it apart
4.99% – 19.63%
Borrowers with excellent credit
Member perks can help get you on the path to financial freedom — and help you qualify for lower rates down the line.
This online lender offers some of the lowest interest rates out there and charges absolutely no fees — not even late fees. It’s also one of the few providers that offers variable rates, which allow you to take advantage of the low fed rate on shorter loan terms. Aside from rates, this lender offers perks like free financial planning and career coaching. But it can take as long as 30 days to get your funds — and it doesn’t disburse money to creditors for debt consolidation.
Not available in: Mississippi, Vermont
Fixed and variable rates available
Membership benefits to boost career
High minimum loan amount of $5,000
High minimum loan amount of $5,000
Doesn’t send funds to creditors for debt consolidation
Fixed rates from 4.99% APR to 19.63% APR (with AutoPay). SoFi rate ranges are current as of August 11, 2021 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
Marcus By Goldmans Sachs is the online lending arm of Goldman Sachs Bank. While it doesn’t have the lowest starting APRs out there, its low maximum rate makes it a good option for borrowers with excellent credit. Service members can also qualify for rates as low as 4%. But its range of loan amounts is limited compared to other similar providers. And while it doesn’t charge a late fee, you’ll pay extra interest if you miss a payment.
Marcus By Goldman Sachs® Offer Terms and Conditions
Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. The availability of a loan offer and the terms of your actual offer will vary due to a number of factors, including your loan purpose and our evaluation of your creditworthiness. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans). Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions. Receive an APR reduction when you enroll in AutoPay. This reduction will not be applied if AutoPay is not in effect. When enrolled, a larger portion of your monthly payment will be applied to your principal loan amount and less interest will accrue on your loan, which may result in a smaller final payment. See loan agreement for details.
While we picked Upstart as the best overall pick for fair credit because of its more-forgiving credit score cutoff. But Upgrade offers a better deal if you’re looking at rates. This lender emphasizes your monthly cashflow over your credit scores, making it a good choice if your credit report isn’t spotless. But its origination fees can run as high as 8% — most lenders stop at 5%.
Not available in: Colorado, Iowa, Maryland, Vermont, West Virginia
Accepts coapplicants for a lower interest rate
Hardship program that allows you to defer two payments
Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by WebBank, Member FDIC.
OneMain’s interest rates start higher than some of its competitors stop. But for bad credit borrowers, it’s not a bad deal. This lender is one of the few personal loan providers that doesn’t have a minimum credit score. And it allows you to secure your loan with collateral for a lower interest rate. But it’s still expensive. If it’s not an emergency, consider taking steps to improve your credit to help you get a lower rate.
Not available in: Alaska, Arkansas, California, Connecticut, Massachusetts, Michigan, Rhode Island, Vermont
* OneMain Disclosures:
Example Loan: A $6,000 loan with a 24.99% APR that is repayable in 60 monthly installments would have monthly payments of $176.07.
Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Maximum annual percentage rate (APR) is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. Depending on the state where you open your loan, the origination fee may be either a flat amount or a percentage of your loan amount. Flat fee amounts vary by state, ranging from $25 to $400. Percentage-based fees vary by state ranging from 1% to 10% of your loan amount subject to certain state limits on the fee amount. Active duty military, their spouse or dependents covered under the Military Lending Act may not pledge any vehicle as collateral for a loan. OneMain loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z, such as college, university or vocational expenses; for any business or commercial purpose; to purchase securities; or for gambling or illegal purposes.
Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. Ohio: $2,000. Virginia: $2,600.
Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: Iowa: $8,500. Maine: $7,000. Mississippi: $7,500. North Carolina: $7,500. New York: $20,000. West Virginia: $14,000. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.
Stilt specializes in personal loans for nonresidents and recent immigrants. But anyone with strong personal finances but no credit history can benefit from this lender. Instead of looking at your credit score, it considers factors like your income, spending habits, education and career. But it’s only available in a handful of states and its loan terms are short compared to other lenders. This can lead to high monthly payments.
Only available in: Arizona, California, Florida, Georgia, Illinois, Michigan, New Jersey, New York, Pennsylvania, Texas, Utah, Washington, Wisconsin
Doesn't consider credit history
Low rates even compared to excellent-credit lenders
We may not be able to tell you the exact rate, but if you check its website, you’ll see why LightStream tops our list. Aside from having one of the lowest range of interest rates, its Rate Beat program may beat some competitor offers. It also has a generous 0.5% autopay discount and offers a $100 satisfaction guarantee. But you could struggle to qualify if you don’t have good credit. You also can’t check your rate without affecting your credit.
Monevo is an online marketplace that can help you find a personal loan if you don’t know where to start. You can compare personalized offers from its partners by filling out a quick online form. Its partners offer some of the lowest interest rates out there and it has options for all credit scores. But by using its service, you’re agreeing to share your information with its partner lenders. Many people complain about getting high volume of phone calls and emails from lenders after using similar services.
Available in all states
Partners offer some of the lowest rates available
No minimum credit score
Wide range of repayment terms
Marketing calls and emails from partners
Can only compare offers from partners
Some lenders can take a long time to fund your loan
This online lender will send your loan directly to your creditors, making it easy to pay off high-interest debts. It also doesn’t charge origination fees and can disburse your loan as soon as the next business day. But the maximum loan amount is low compared to other options on this list. And it charges a relatively high late fee of $39 as soon as you miss a payment. Most lenders have a 15-day grace period.
Available in all states
Sends funds directly to creditors
No origination fee
Late fee of $39 with no grace period
Sends at least 70% of consolidation loan to creditors
If you only have credit card debt, Payoff could be a better choice — especially if you have good or excellent credit. While it charges some borrowers an origination fee of up to 5%, you can save on late and annual fees. This lender only offers loans for credit card debt consolidation and claims that borrowers boosted their credit scores by as much as 40 points by paying off $5,000 in credit card debt. It also allows you to change your monthly due date once a year, which can be useful if you switch jobs.
Not available in: Massachusetts, Mississippi, Nebraska, Nevada, Ohio, West Virginia
When it comes to big national banks, Wells Fargo offers some of the lowest interest rates that are available to new and current customers. There’s also no origination fee and you can receive an APR discount as high as 0.5% if you sign up for autopay with a Wells Fargo account. But consider applying with your bank before you choose Wells Fargo. Most offer relationship discounts and it can take significantly less time to receive your funds if you already have an account.
PenFed Credit Union has some of the lowest maximum interest rates out there — and it accepts some borrowers with fair credit. You can also borrow as little as $600 through this lender. But its maximum loan amount also runs low compared to other providers on this list. Like other banks and credit unions, you have to be eligible for membership to get approved. And it can take a couple of weeks to receive your funds — which it disburses by check.
The lowest rates lenders offer on personal loans hover around 4%. But very few people can qualify for the absolute lowest rate. The average rate is over 9%according to the Federal reserve — and that’s if you borrow from a bank. Online lenders typically offer higher rates.
So who gets the best rates? Generally these go to applicants with near-perfect credit, who borrow over a certain amount, have a six-figure income and almost no debt. In other words, the kind of person that probably doesn’t need a loan.
What’s a low interest rate on a personal loan?
For most borrowers, a low interest rate is below 12%. But it depends on your lender and personal finances. The better your credit, the more likely you are to qualify for rates in the single digits.
Who has the lowest APR on a personal loan?
You can find the lowest APRs with the following lenders.
LightStream has the lowest starting APR, and rates vary by amount and loan term
SoFi comes in second with a starting APR at 4.99%
Wells Fargo sits at 5.74% for customers who qualify, including the relationship discount
Upgrade starts at 5.94%, including an autopay discount
Payoff and PenFed tie for fifth at 5.99%
How to get a low interest rate
There are several steps you can take to find the lowest interest rate on a loan.
Consider a secured loan. Backing your loan with collateral offsets the risk for the lender and can help you qualify for a lower rate.
Look into relationship discounts. Your bank might offer rate discounts as high as 0.5% to current checking account customers — and can get you funds faster.
Sign up for autopay. Some lenders offer a 0.25% rate discount if you sign up to have payments automatically debited from your account.
Shop around. Don’t just go with the first lender you find. Comparing lenders can sometimes lead you to an even better deal.
Check your rate. Prequalify or reach out to your top picks to make sure you’re applying for the loan with lowest rate available to you.
Take advantage of low-rate guarantees. Some lenders like LightStream will offer you a lower rate than the competition, as long as the offer meets certain requirements.
Where can I get a low-interest personal loan?
The following types of lenders might offer low interest rates, though you might not be able to qualify with all unless you have good credit.
Banks. Banks tend to offer some of the lowest rates out there, but you generally need a credit score of at least 670 to qualify — and some might only offer loans to current customers.
Credit unions. Credit unions often offer low rates to a wide range of credit types compared to other lenders, since they’re owned by their customers. And federal credit unions legally can’t charge rates over 18%.
Online lenders. These lenders have higher rates on average, but typically put less weight on credit score than a bank or credit union.
Connection services. A connection service can help you quickly prequalify with multiple lenders to help you quickly find the lowest rate you qualify for with its partner lenders.
How lenders determine interest rates
The interest rate you’re given by a lender is determined by your financial history and current situation. Lenders want to know how well you can pay back your loan and if you’re likely to default.
Credit score. Your credit score is an overall picture of your ability to pay back the money you borrow.
Credit report. Your credit report lists all the accounts you’ve had in the past, the accounts you currently have open and any hard credit inquiries.
Debt-to-income ratio. Lenders rely more on your debt-to-income (DTI) ratio than your income itself, since it shows the exact amount you have to spend on your loan and the money you owe to other creditors.
Nonconventional factors. Lenders may also consider less conventional factors, like your work history, level of education and even how many times you’ve changed your phone number over the past few years.
What’s the difference between my interest rate and APR?
APR includes the interest and fees you’d pay over one year. It gives you a more accurate idea of how much your loan will going to cost. Many personal loans don’t come with application or origination fees, so in those cases the APR and interest rate are the same. Otherwise, a loan’s APR will be higher than its interest rate.
How to apply for a low-interest personal loan
Follow these steps to get started on your personal loan application.
Compare lenders. Start your search by comparing lenders that you qualify for, paying close attention to interest and fees.
Prequalify. After you’ve narrowed down your choices, fill out an online form or reach out over the phone to learn which rates you might be eligible for through that particular lender.
Gather basic documents. Having your most recent bank statements, tax returns and pay stubs on hand before you start means you won’t have to scramble to find information later.
Fill out the application. Many lenders allow you to apply online or over the phone. Banks and credit unions also allow you to apply in person in most cases — and sometimes require it. If you meet the basic requirements, your lender will likely ask you to submit documents to verify your identity and income.
Review your offer. If you’re approved, the lender should send you an offer with your final rates and terms — it might. be different from your prequalification offer.
Submit a counter offer, if possible. If you received a lower offer from another lender, now is the time to take advantage of a best rate guarantee if it’s available by following the lender’s instructions.
Sign your contract. Typically you can sign your contract online using an e-signature. Otherwise, you might have to sign in person.
What to know before you apply
Look into these factors before you start comparing lenders.
Credit score. Check your credit score online to get an estimate of the number your lender will see, and your credit score range. This can help you understand the types of rates you’re eligible for. If your score is below 670, consider taking steps to improve your credit first.
DTI. Use a calculator to get an estimate of what your DTI is. If it’s over 43%, you might have trouble qualifying. Try focusing on paying down debt before you apply for a loan.
Monthly cash flow. Lenders look at how much money you have available each month to cover loan repayments after you’ve paid your bills. You should have enough in there to cover monthly repayments on the loan amount and term you’re considering with room for emergency costs.
Exact loan amount. Go in knowing how much you need to borrow so you can rule out lenders who don’t offer financing in that range. If you’re not sure how much you’ll need, consider more flexible financing options like a credit card or line of credit instead.
Low-interest credit cards vs. personal loans
Low-interest credit cards and personal loans are useful in different situations. Personal loans are ideal for a one-time expense that you need a few years to repay. But if you could easily pay off the debt in a year, a new credit card might be the better way to go.
That’s because cards typically come with 0% APR introductory periods that usually last around 12 months. You’ll save on interest if you can pay off your debt in that time. But low-interest credit card rates are typically higher than personal loans when the interest kicks in.
Getting a personal loan with a low interest rate can be a years-long task. After all, you’ll need to have both an excellent credit score and a solid financial history.
Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 1,000 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
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