Need a personal loan? A low interest rate can help you save a lot of money over time.
Lenders normally offer low-interest personal loans to people with good and excellent credit rating. If you have poor or bad creditworthiness, your chances of getting a low interest personal loan remain slim unless you can provide some type of collateral. If you’re considering applying for a low-interest personal loan online or in-store, going through this guide will help you make an informed decision.
Prosper Personal Loans
You could borrow up to $35,000 for a variety of purposes, with rates starting from 5.99%.
- Recommended Credit Score: 640 or higher
- Minimum Loan Amount: $2,000
- Maximum Loan Amount: $35,000
- Loan Term: 3 or 5 years
- Turnaround Time: 1-3 business days
- Simple online application process
- No prepayment penalties
How do low interest personal loans work?
Individuals who have excellent credit history are ideal candidates for lenders that offer low interest personal loans. Depending on the lender you choose you can apply online or at a physical location. However, not all lenders operate across all American states.
Applying for these loans requires that you meet some eligibility criteria. Once you apply the lender reviews your application. If you apply for an online personal loan and the lender approves your application the money is transferred into your bank account electronically. You have to make repayments towards the loan per a predetermined repayment plan until you repay it completely.
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How to compare low interest personal loans
When comparing low interest personal loans, paying attention to these aspects is important:
- Interest. Low interest personal loans for excellent credit offer the most competitive annual percentage rates (APRs). If you’re borrowing a significant sum that you wish to repay over a prolonged period, this aspect can have a noticeable effect on the cost of the loan.
- Secured or unsecured. If you cannot provide any collateral, your options limit to low interest unsecured personal loans. By providing some kind of security you can 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 term. Getting a loan term that matches your requirement may be easier than you think. You can normally find low interest personal loans with terms from two to seven years.
- Processing time. If you need money in a hurry this aspect requires particular attention. 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 seven to 10 business days.
What types of low interest rates personal loans are available?
In your search for low interest personal loans you’ll come across these options:
- Peer-to-peer loans. Peer-to-peer lending is gaining popularity in the US. Lending platforms that offer peer-to-peer personal loans connect investors with borrowers. With good or excellent credit rating you can get competitive interest rates.
- Credit union loans. Credit unions don’t have any shareholders so they transfer their profits to their members through competitive interest rates and little to no fees. Not all credit unions offer membership to the public at large.
- Secured personal loans. Secured personal loans require that you provide some kind of collateral. In return, you’ll pay a lower APR.
What are the pros and cons of low interest personal loans?
- Savings. If you take a low interest personal loan that you wish to repay in a few years, you can end up saving a tidy sum in interest.
- Easy process. With widespread usage of the Internet, getting a personal loan has become considerably simpler. You can now apply using any Internet enabled device, and some lenders provide apps for mobile devices as well. Many lenders let you complete the identification process online.
- Repayment flexibility. You can find lenders that let you make payments as per your pay schedule, be it weekly, fortnightly or monthly. Some let you repay your loan early without charging any extra fees or penalties.
- Prepayment penalties. Find out if you may have to pay prepayment penalties because these can put a dent in your plans if you plan to repay your loan ahead of time.
- Scams. The online world is not devoid of unscrupulous characters. Before you apply for a low interest personal loan online find out if the lender you choose is legitimate by contacting the Federal Trade Commission and the Better Business Bureau.
- Bad credit is a problem. Finding low interest personal loans for bad credit is near impossible, unless you consider getting a secured loan.
Frequently asked questions
What eligibility criteria do I have to meet in order to get a low interest personal loan?
You’ll have to meet your state’s minimum age requirement. For most states that age is 18 years. You should also be an American citizen or a permanent resident of the US, and have a regular source of income.
How quickly can I apply for a low interest personal loan online?
If you have all the required information close at hand the process should take around five 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.