Save Thousands on Your Personal Loan with Low Rates

Lenders determine your interest rate based on your creditworthiness, how you plan to use the loan funds and the length of the loan. To get the best offers on a personal loan, borrowers should have a good credit score, a long history of on-time payments, steady income and a low debt-to-income ratio.

Keep in mind that a lender’s lowest advertised rate often goes to borrowers with excellent credit scores. If your score could use some work, you can expect to pay more money in interest over the life of your loan. In fact, a 2024 LendingTree study found that raising your credit score from “fair” to “very good” could save you more than $22,000.

Here’s a look at the average rates LendingTree users received from our network of lenders, broken down by credit score.

Source: LendingTree user data on closed personal loans for the fourth quarter of 2023.

Personal loans are a flexible form of credit that can be used to pay for almost any purpose. Keep in mind, your rates and terms may depend on how you plan to use the money.

• Debt consolidation: If you’re struggling to manage your debt, unable to make on-time, consistent payments or just want to group various accounts, a debt consolidation loan may be right for you.
• Credit card refinancing: By paying off your credit card with a lower-rate personal loan, you could save hundreds or even thousands of dollars in repayment.
• Home improvement loan: Homeowners have a wide variety of expenses. A personal loan could give you the funding you need in the short term without harming your finances in the long term.
• Large purchase loan: Personal loans can be used for a variety of expected and unexpected expenses, from wedding planning, moving costs, car repairs, medical bills and other bigger purchases.

The best place to get a personal loan will depend on your borrowing needs. Typically, there are three types of financial institutions that offer personal loans.

  Banks

Before launching into your search for a loan, consider checking with your current bank first. Some banks, like Wells Fargo Bank, require you to be a current customer in order to access personal loan products.

The personal loan application process may take a bit longer to complete compared to online lenders, but you may access perks like no-fee loans. Banks may also require that you visit a local branch in person in order to close on your loan.

  Credit unions

To get a loan from a credit union, you’ll typically need to become a member of the credit union first. This may require a small fee or deposit. Check membership requirements before applying for a credit union personal loan, as some credit unions only cater to certain groups, such as people with military ties.

Credit unions also tend to offer smaller loan amounts than banks and online lenders. Navy Federal Credit Union, for instance, offers loans as small as $250. Another benefit to credit unions is that the APR is capped at 18%, which is particularly good news if you’re having trouble finding lower rates elsewhere.

  Online lenders

Personal loans online offer flexibility to consumers who don’t want to become a credit union member or bank customer. Because everything is done online and you don’t have to worry about creating a membership or banking account, online lenders may take less time to approve and fund your personal loan.

Each lender will have a different application process for getting a personal loan as well as varied eligibility requirements. However, many lenders follow a similar approach when it comes to applying for a personal loan.

1. Check your credit score

Before you start shopping around for personal loan lenders, it’s important to check your credit score to understand how creditworthy you are in the eyes of lenders.

Your credit score can give you an idea of the terms and interest rates you may qualify for. If you have a low score, you may want to work on improving your credit score before applying for a loan.

To help assess how much debt you can afford, you can use a personal loan calculator to estimate your minimum monthly payments and determine how much interest you’ll pay over the life of the loan.

2. Shop around for lenders

Comparing lenders’ interest rates, fees, terms and loan amounts can save you money in the long run.

Many lenders allow consumers to prequalify for a loan — meaning you can check to see whether you’re eligible for a loan and what your potential rates and terms could be without any impact to your credit score.

 Note: Not every lender offers prequalification and requires a hard credit pull to determine your loan eligibility. When evaluating lenders, you may consider looking for lenders that allow prequalification. (Remember, though, that prequalified offers are not a guarantee that you’ll be approved or receive the exact rates presented.)

3. Verify your information

Once you select a lender, you’ll need to verify the information you provided in your loan application. Typically, lenders want to verify your identity, employment and income, so you may need to provide a government-issued form of identification, plus W-2s or pay stubs.

During this part of the process, you’ll likely need to submit to a hard credit pull before the lender offers you final approval. This can cause your credit score to temporarily drop by a handful of points.

4. Close on your loan

Once your lender officially approves you for a loan, you’ll need to sign a personal loan agreement. The lender will either deposit the funds into your bank account or send you a check. The amount of time it takes to receive funds will depend on both your lender and bank.

How we chose our picks for the best personal loan lenders

We reviewed more than 25 lenders that offer personal loans to determine the overall best 12 lenders. To make our list, lenders must offer competitive annual percentage rates (APRs). From there, we prioritize lenders based on the following factors:

• Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
• Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
• Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

LendingTree reviews and fact-checks our top lender picks on a monthly basis.