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Last week, personal loan rates increased. Still, if you’re in the market for a personal loan to finance a project, vehicle purchase, unexpected bills or to improve your cash flow, it’s possible to pick up a decent rate.
From June 17 to June 22, the average fixed rate on a three-year personal loan was 15.69% for borrowers with a credit score of 720 or higher who prequalified on Credible.com’s personal loan marketplace. The rate was 15.48% the previous week, according to Credible.com. The average rate on a five-year personal loan rose 0.90% last week to 19.66% from 18.76%.
However, the actual rate you receive depends on your creditworthiness and what’s available through your preferred lender. Well-qualified borrowers may be able to find rates significantly lower than the average.
These rates are accurate as of June 24, 2024.
Related: Best Personal Loans
Getting the Best Rates
Your credit is a big factor in the rates you receive. According to Rod Griffin, senior director of consumer education and advocacy at Experian, “checking your credit report and scores three to six months before you apply for a personal loan” is a good idea. This gives you enough time to make any necessary fixes.
A credit score of 720 or better will typically get you the best terms. If you’re not quite in that credit score range, consider taking action to improve your credit score. Pay down existing debt to lower your credit utilization ratio, remove errors from your credit report and pay your bills early or on time.
How to Calculate Your Personal Loan Payments
You can estimate your monthly payment and how much you’ll pay in interest once you know your personal loan interest rate, term and amount.
Let’s say you get a three-year, $5,000 personal loan at a fixed rate of 15.69%. You’d pay about $175 monthly and around $1,301 in interest over the life of the loan, according to the Forbes Advisor personal loan calculator. You’d pay $6,301 in total over those three years, which includes both principal and interest.