Best low-interest personal loans

Our top pick: Fiona Personal Loans

• Min. Credit Score Required: Good to excellent credit
• Min. Loan Amount: $1,000
• Max. Loan Amount: $100,000
• APR: 3.84% to 35.99%
• Requirements: Good to excellent credit, American citizen or permanent resident, 21+ years old

Our top pick: Fiona Personal Loans

Get loan offers from multiple lenders at once without affecting your credit score.

• Min. Credit Score Required: Good to excellent credit
• Min. Loan Amount: $1,000
• Max. Loan Amount: $100,000
• APR: 3.84% to 35.99%
• Requirements: Good to excellent credit, American citizen or permanent resident, 21+ years old

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Best low-interest personal loans

Alliant

• Best for borrowers looking for a low rate with fair credit.

• Look elsewhere if you don’t want to join a credit union.

Alliant has one of the lowest maximum rates available — it’s hard to beat 10.49%. And unlike most lenders, it accepts borrowers with fair credit. You’ll also have access to a variety of other banking services through the credit union without needing to meet specific criteria. Overall, it’s one of the better deals out there if your credit or debt-to-income ratio doesn’t meet other lenders’ requirements.

Fiona Financial

• Best for comparing lenders with rates as low as 3.84%.

• Look elsewhere if you don’t want your information shared with marketing partners.

Fiona Financial is a connection service, not a direct lender. But some of the lenders in its network have surprisingly low starting APRs of 3.84% — provided you have excellent credit. Through its service, you can compare personalized offers from its partner lenders without affecting your credit. But you might face marketing emails and phone calls from its partners — even after you take out a loan.

Earnest

• Best for borrowers who have a tendency to pay late — it doesn’t charge any late fees.

• Look elsewhere if you were hoping to apply with a cosigner.

While you still need good credit to qualify for a loan from Earnest, this online lender uses a unique underwriting system to look at all aspects of your career, education and finances when you apply.

Earnest’s rates start low, but the low maximum APR is what makes it really competitive — it’s also much lower than the standard maximum rate of 36%. If you went to graduate school and have established a solid career path, you might find that Earnest offers lower rates than other lenders provide.

LightStream

• Best for getting a rate that beats out the competition.

• Look elsewhere if you don’t have good to excellent credit.

LightStream offers some of the lowest rates out there. And if you get a better offer from another lender, LightStream might offer a rate 0.01% lower, thanks to its Rate Beat program — as long as the other lender’s APR meets specific terms and conditions. Its maximum APR caps at close to half of what you’d find with most other lenders.

PenFed

• Best for current, honorably discharged and retired military members.

• Look elsewhere if you’re in a rush — it can take up to two weeks to get your funds.

PenFed doesn’t technically have the lowest rates out there, but for military members and civilians who qualify for membership, it’s still competitive. That’s because you only need fair credit to qualify. However, there are a few downsides: Turnaround time may take multiple weeks, and the maximum loan amount is relatively low. However, a max rate below 18% can be worth the extra wait if you don’t have excellent credit.

SoFi

• Best for borrowers with good credit who want free career and financial mentoring.

• Look elsewhere if you need less than $5,000.

SoFi welcomes younger borrowers with good to excellent credit — and it won’t nickel and dime you for it. While its minimum loan amount starts high, you could be eligible for up to $100,000 and a loan term up to seven years. You may also be able to take advantage of its many programs, like career coaching and special rate discounts.

Wells Fargo

• Best for borrowing at a low rate for a long loan term.

• Look elsewhere if you want to avoid steep late fees.

Wells Fargo may have a hefty late fee and a higher maximum APR, but it also has one of the lowest minimum APRs on this list. And with a wide range of loan amounts, it’s a good option if you have the credit to qualify. You may also be able to borrow a secured loan or line of credit, giving you much more flexibility than many other banks.

What’s considered a low interest rate on a personal loan?

A low-interest personal loan is a loan that has an interest rate below 12%. It works like any other personal loan: you borrow money and then pay it back with interest and fees. But because of their low interest rates, they tend to cost much less than the average personal loan.

To qualify for a low-interest loan from most lenders, you typically need to have a credit score above 720 and a strong financial history. Doesn’t sound like you? You still have low-interest options. Those without excellent credit might want to look at loans secured with collateral or borrow from credit unions or peer-to-peer lenders, which tend to offer lower rates than other direct lenders.

No matter what your situation, you’re likely to find a low-interest personal loan that fits your needs.

What’s the best rate on a personal loan?

You might think you can get that 2.99% interest rate by simply having a good credit score, but the truth is that very few people can qualify for a lender’s absolute lowest rate. Lenders only offer these low rates to the most ideal candidates: people 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.

In reality, the average interest rate for people with excellent credit is actually around 9%.

How do I compare low-interest offers?

Interest is important, but it’s not the only thing that makes a loan competitive. Compare these other features when deciding between two low-interest offers:

• Loan security. If you can’t provide any collateral, your options are limited to low-interest unsecured personal loans. By providing some kind of security, you may be able to get a lower APR.
• Loan amount. Different lenders offer low-interest unsecured personal loans for amounts from $500 to $50,000. The maximum you can borrow depends on your creditworthiness, your existing financial situation and your ability to make repayments.
• Loan fees. Some online loans come with origination fees — typically between 1% to 5% of your loan amount — which is factored into your APR. There are other fees you might want to look out for that don’t get included in your rate, such as prepayment penalties, late fees or nonsufficient funds fees. You could also consider a no-fee personal loan if you have very good credit.
• Loan term. Getting a loan term that matches your needs may be easier than you think. You can normally find low-interest personal loans with terms from two to seven years.
• Processing time. Certain lenders can give you access to funds on the day you apply or by the next business day. For others, you may have to wait for as long as 7 to 10 business days.

How do lenders determine interest rate?

The interest rate you’re given by a lender is determined by your financial history and your current financial 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. A high credit score is the first thing many lenders look at and is often considered one of the most important parts of your application.
• Credit report. Your credit report lists all the accounts you’ve had in the past, the accounts you currently have open and the recent pulls to check your credit score. This details your financial situation for your lender, giving it a better idea of how you handle your finances.
• Debt-to-income ratio. Lenders rely more on your debt-to-income ratio (DTI) than your income itself. This is because your DTI 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 when setting your interest rate. Your work history, level of education and even how many times you’ve changed your phone number over the past few years could affect your interest rate.

5 tips to get a low interest rate on a personal loan

Watch our 2-minute video or read the tips below to learn how to save money on your next personal loan.

• Shop around

  Personal loans from banks and credit unions tend to have low interest rates, but don’t stop your search there. You can find plenty of personal loan options with low interest rates from online and peer-to-peer lenders — without having to visit a branch. See which institution has the lowest starting rates to find the option that best fits your needs.

• Know your credit score and report

  Although most personal loans only require a score of 680 or above, to get the lowest interest rates, you’ll need to have excellent credit. It also pays to know the accounts listed on your credit report. If you’re close to excellent credit, fixing any errors and knowing where your credit could be improved will help you qualify for a lower interest rate down the road.

• Pay down your debt

  In addition to your credit, lenders also want to see a low debt-to-income ratio (DTI). When you have a low DTI ratio, lenders know you’re responsible with your money and have enough to cover your payments, which could lead to a low interest rate on your next loan.

• Apply for preapproval

  Full applications will ding your credit, resulting in a lowered credit score. And a lowered credit score means you may not be able to get the lowest rates. Circumvent this by checking the lender’s eligibility requirements ahead of time and applying for preapproval. This allows you to see a potential interest rate before you complete the application, which means you can compare multiple offers without impacting your credit.

• Only apply for the amount you need

  Lenders calculate interest based on the amount you borrow. By only applying for the amount of money you need, you’ll be able to keep your rate reasonable.

• Sign up for autopay and take advantage of perks

  Many lenders offer a 0.25% interest rate discount to borrowers who sign up for autopay — also referred to as auto debit or automatic payments. It’s an easy way to lower your interest rate and can also make repayment much easier, since you don’t have to log in and manually make a repayment each month.

  Some lenders also offer loyalty discounts to current customers on top of the autopay discount. For example, SoFi takes an additional 0.125% off of interest for repeat borrowers and Citizens Bank offers a discount of 0.25% to anyone with a qualifying account at the bank.

Compare more personal loan options

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Name	Product	APR	Min. Credit Score	Max. Loan Amount
Even Financial Personal Loans		3.84% to 35.99%	550	$100,000	Get connected to competitive loan offers instantly from top online consumer lenders.	Check my rate View details		loading Fetching your data...
LendingClub Personal Loan		6.95% to 35.89%	640	$40,000	A peer-to-peer lender offering fair rates based on your credit score.	Check my rate View details		loading Fetching your data...
Monevo Personal Loans		3.99% to 35.99%	450	$100,000	Quickly compare multiple online lenders with competitive rates depending on your credit.	Check my rate View details		loading Fetching your data...

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Where can I find a low-interest personal loan?

In your search for low-interest personal loans you’ll come across these options:

• Peer-to-peer lenders. Peer-to-peer lenders connect investors with borrowers. If you have a good or excellent credit score, you may be able to get competitive interest rates.
• Credit unions. Credit unions don’t have any shareholders so they transfer their profits to their members through competitive interest rates and little to no fees. But not all credit unions offer membership to the public at large.
• Secured loan providers. Some lenders allow you to secure your personal loan with collateral. In return, you may be able to score a lower interest rate.
• Banks. If you have excellent credit, you might be able to qualify for a low-interest bank loan. Some banks like Wells Fargo might offer a customer discount if you already have an account.
• Online lenders. There are multiple personal loans out there offered by lenders that work completely online. These tend to accept borrowers with a range of credit scores, but you may be able to get a low rate if you have a good or excellent credit score.

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How to get a low-interest loan

If you find a personal loan you’re eligible for, you can either apply online, in-person or over the phone. Many online lenders have prequalification options, which gives you an estimate of what type of interest rates you might be eligible for without a hard credit check.

After you submit your application, an underwriter (or underwriting software) reviews your file and pulls a hard credit check, which will cause a temporary dip in your credit score. At this point, you might be asked to submit additional documentation like bank statements, tax forms or pay stubs.

If you’re approved for an online personal loan, the money is transferred into your bank account electronically. You then have to make repayments on a monthly basis until your loan is paid off.

Bottom line

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. But the hard work will be worth it when you can compare loans for excellent credit.

Frequently asked questions

• What's considered a good interest rate on a personal loan?

  It really depends on your credit score. The average interest rate for borrowers with good to excellent credit is around 9% to 11%.

• Can I get a low-interest loan with bad credit?

  Probably not. Most bad credit borrowers can only qualify for interest rates around 25% and up — if at all. If you have bad credit, you might want to consider getting a credit builder loan from a credit union, which typically come with rates around 18%. These tend to be short-term and in small amounts and are designed to improve your credit score before you apply for other types of financing.

• How quickly can I apply for a low-interest personal loan online?

  If you have all the required information ready, the process should take around 5 to 10 minutes.

• What information do I have to provide to apply for a low-interest personal loan?

  You’ll have to provide personal information such as your full name, date of birth and contact details. Identification details can come from your driver’s license, passport, Social Security card or state ID. Lenders also require your employment and income related details.

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