Our goal here at Credible Operations, Inc. NMLS 1681276, hereinafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. While we promote products from our creditor partners that compensate us for our services, all opinions are our own.

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Borrowers with good credit history personal loans have prequalified over the last seven days at rates that were higher for both 3- and 5-year loans compared to the previous seven days.

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For borrowers with a credit score of 720 or higher who used the Credible Market to select a lender between September 15 and September 21:

  • Rates on three-year fixed rate loans averaged 11.89%, compared to 11.74% seven days before and 10.70% a year ago.
  • Rates on 5-year fixed rate loans averaged 16.03% compared to 15.03% in the previous seven days and from 14.35% a year ago.

Consumer loans have become a popular way consolidate and pay off credit card debt and other loans. They can also be used to cover unexpected expenses such as medical billstake care of a major purchase or finance home improvement projects.

Interest rates on consumer loans have risen over the past seven days for both 3- and 5-year loans. Rates on three-year loans rose by just 0.15 percentage points, while 5-year loans rose by a full percentage point. In addition, interest rates for both loan terms are higher than they were this time last year. However, borrowers can take advantage of the interest savings with a 3- or 5-year personal loan right now. Both loan terms offer interest rates significantly lower than more expensive borrowing options such as credit cards.

Whether a personal loan is right for you often depends on a variety of factors, including what rate you can qualify for. Comparing several lenders and their rates can help you get the best personal loan for your needs.

It’s always a good idea to compare products on sites like Credible to see what you qualify for and choose the best one for you.

Here are the latest personal loan interest rate trends on the Credible marketplace, updated monthly.

Dynamics of weekly rates on consumer loans

The chart above shows the average upfront rates for borrowers with a credit score of 720 or higher who used the Credible market to select a lender.

For August 2022:

  • Rates on 3-year consumer loans averaged 15.03% compared to 11.04% in July.
  • Rates on 5-year consumer loans averaged 16.52% compared to 13.72% in July.

Interest rates on consumer loans vary significantly depending on the credit rating and the term of the loan. If you are wondering what personal loan rates you can qualify for, you can use an online tool like Credible compare options from different private lenders. Checking rates will not affect your credit score.

All Credible lenders in the market offer fixed rate loans at competitive rates. Because lenders use different methods to rate borrowers, it’s a good idea to ask for personal loan rates from multiple lenders so you can compare your options.

Current rates on consumer loans by credit rating

In August, the average prequalified rate selected by borrowers was:

  • 9.05% for borrowers with a credit score of 780 and above choosing a loan for 3 years.
  • 30.84% ​​for borrowers with a credit score below 600 choosing a 5-year loan

Depending on factors such as your credit score, the type of personal loan you are seeking, and the loan’s repayment period, the interest rate may vary.

As shown in the chart above, a good credit score can mean a lower interest rate, and rates tend to be higher on loans with fixed interest rates and longer maturities.

How to get a lower interest rate

Many factors affect the interest rate a lender can offer you on a personal loan. But there are some steps you can take to improve your chances of getting a lower interest rate. Here are a few tactics you can try.

Increase credit score

Generally, people with higher credit scores are eligible for lower interest rates. Steps that can help you improve your credit score over time include:

  • Pay bills on time. Payment history is the most important factor in your credit history. Pay all bills for the amount due on time.
  • Check your credit report. Look at your credit report to make sure there are no errors. If you find errors, dispute them with the credit bureau.
  • Reduce your credit utilization rate. Paying off your credit card debt can improve this important factor in your credit score.
  • Avoid opening new credit accounts. Apply and open only the credit accounts you really need. Too many complex inquiries on your credit report in a short amount of time can lower your credit score.

Choose a shorter loan term

Conditions for repayment of a personal loan may vary from one to several years. Generally, shorter terms are associated with lower interest rates as the lender’s money is at risk for a shorter period of time.

If your financial situation allows, applying for a shorter term can help you get a lower interest rate. Keep in mind that a shorter term is not only beneficial for the lender – by choosing a shorter repayment term, you will pay less interest over the life of the loan.

Get a guarantor

You may be familiar with the concept of a cosigner if you have student loans. If your credit is not good enough to qualify for the best personal loan interest rates, search for a guarantor having good credit can help you secure a lower interest rate.

Just remember, if you default on the loan, your guarantor will be on the hook to pay it off. And getting a loan together can also affect their credit score.

Compare rates from different lenders

Before applying for a personal loan, it’s a good idea to shop around and compare offers from several different lenders to get the lowest rates. Online lenders tend to offer the most competitive rates and can pay off a loan faster than a brick-and-mortar institution.

But don’t worry, comparing rates and conditions shouldn’t take long.

Reliable makes it easy. Just enter the amount you want to borrow and you can compare multiple lenders to choose the one that matters the most to you.

About trustworthy

Credible is a multi-lender marketplace that allows consumers to find financial products that are best suited to their unique circumstances. Credible’s integration with leading lenders and credit bureaus allows consumers to quickly compare accurate, personalized loan options without putting their personal information at risk or impacting their credit score. The Credible Marketplace delivers an unrivaled customer experience as evidenced by over 4500 positive Trustpilot reviews and a trust rating of 4.7/5.