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- Free loan connection service
- Personalized rates in minutes
- Secure online application
Our top pick: Credible Personal Loans
- Min. Credit Score Required: Good to excellent credit
- Min. Loan Amount: $1,000
- Max. Loan Amount: $100,000
- APR: 5.34% to 35.99%
- Requirements: Have good to excellent credit, ages 18+ and be a US citizen or permanent resident.
What is a low-interest 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.
Top three providers for low-interest personal loans
| Provider | APR Range | Loan Amounts | |
|---|---|---|---|
Monevo
|
3.99% to 35.99%
|
$500 to $100,000
| |
LightStream
|
Competitive
|
$5,000 to $100,000
| |
LendingClub
|
6.95% to 35.89%
|
$1,000 to $40,000
|
Monevo
Monevo is an award-winning online connection service that can help you quickly compare lenders at once. Its partners offer a wide range of loan amounts, terms and rates. It also has some of the lowest interest rates out there. Like with Even Financial, you don’t need perfect credit to apply but you also likely won’t be able to get the lowest rates unless your personal finances are impeccable.
Prosper
Prosper is a peer-to-peer lender that offers investor-funded personal loans. Its interest rates are competitive, though it also charges an origination fee between 2.41% and 5%. The interest rate you’re quoted is almost entirely based on your credit score, so you’ll need perfect credit to get the lowest rate. It isn’t available to borrowers in Iowa, North Dakota or West Virginia.
Even Financial
Even Financial is an online connection service that works with a network of providers offering fixed-rate term loans. Using a connection service like Even Financial allows you to apply to prequalify with multiple providers and quickly find the one that offers the lowest rates. You don’t need a perfect credit score to apply, though you likely won’t qualify for the lowest rates unless you have excellent credit.
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.
- Nonconvential 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.
Who gets the lowest rates?
You might think that all you need to get that 2.99% interest rate is a reasonably good credit score, but the truth is that very few people can qualify for a lender’s absolute lowest rate. This is because lenders only offer these low rates to 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%.
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