Best Personal Loan Rates of May 2024 - NerdWallet (2024)

• What is a good personal loan rate?

• How lenders set personal loan rates

• Personal loan rates by credit score

• Personal loan rates by lender type

• How APR affects monthly payments

• How to get the best personal loan rate

• How to compare personal loan offers

• What to know about personal loans

• Frequently asked questions about personal loan rates

• Bad-credit personal loan rates

  Lender	APR range
  Upstart	7.80% - 35.99%
  Upgrade	8.49% - 35.99%
  Avant	9.95% - 35.99%
  LendingPoint	7.99% - 35.99%
  Universal Credit	11.69% - 35.99%

  » MORE: Best loans for bad credit

• Good- and excellent-credit personal loan rates

  Lender	APR range
  PNC	7.49% - 30.49%
  PenFed	7.99% - 17.99%
  Citibank	10.49% - 19.49%
  LightStream	6.99% - 25.49%
  SoFi	8.99% - 29.99%
  Discover	7.99% - 24.99%
  Happy Money	11.72% - 17.99%

  » MORE: Best loans for good credit

• Debt consolidation loan rates

  Lender	APR range
  Discover	7.99% - 24.99%
  Happy Money	11.72% - 17.99%
  LightStream	6.99% - 25.49%
  SoFi	8.99% - 29.99%
  PNC	7.49% - 30.49%

  » MORE: Best loans for debt consolidation

• Home improvement loan rates

  Lender	APR range
  SoFi	8.99% - 29.99%
  Discover	7.99% - 24.99%
  LightStream	6.99% - 25.49%
  Wells Fargo	7.49% - 23.74%
  Rocket Loans	9.12% - 29.99%

  » MORE: Best loans for home improvement

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» MORE: See this month’s average personal loan rates

» MORE: Learn more about personal loan requirements

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» MORE: What credit score do you need for a personal loan?

» MORE: Best bank loans

» MORE: Credit union personal loans

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1. Boost your credit. Check your credit report for errors or accounts that may be weighing on your score and address them before applying. For example, a past-due account could be a reason a lender charges a high rate or denies your application.

2. Lower your debt-to-income ratio. Pay down existing debt to lower your DTI and show lenders that you have ample income for new loan payments. Make sure to include all sources of income on an application.

3. Ask for the minimum you need. Requesting a large loan could cause a lender to charge a higher interest rate. The additional debt increases your DTI and lenders may find it riskier than if you requested a smaller loan.

4. Shorten your repayment term. Lenders often charge lower APRs on shorter-term loans because a shorter term means there’s less time for your financial situation to change during repayment. Choose the shortest loan term you can while still keeping monthly payments affordable.

5. Get rate discounts. Many online lenders offer rate discounts for setting up automatic payments and some banks offer rate discounts to existing customers who hold certain bank accounts.

6. Find a no-fee lender. Origination fees are the most common personal loan fees, and they can drive up your APR, but not all lenders charge them. Compare fees and look for a lender with low or no fees.

7. Add a co-signer or co-borrower. Borrowers with blemished credit can add a co-signer or co-borrower with better credit and higher income to get a lower rate. Both co-signers and co-borrowers are responsible for repaying the debt if the primary borrower misses payments.

8. Add collateral. You may qualify for a personal loan or get a lower rate by pledging collateral like a vehicle or savings account. With a secured loan, the lender can take the collateral if you default.

9. Pre-qualify and compare offers. Many lenders offer pre-qualification, which lets you preview the potential loan amount, rate and repayment term without affecting your credit score. Pre-qualify with multiple lenders to compare offers and select the best rate.

» Get started: Pre-qualify on NerdWallet

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You can use a personal loan for almost anything. Here are a few common reasons to get a personal loan:

• Debt consolidation.

• Credit card refinancing.

• Home improvement projects.

• Emergency expenses.

• Medical bill payments.

• Weddings.

• Vacations.

» MORE: Personal loan pros and cons

1. Check your credit and budget. Lenders consider factors such as your credit score, credit history, income and existing debts on a personal loan application. If you have a low score or high DTI, it may be worth your time to build your credit and pay down debt before applying for the best chance at a low rate.

2. Pre-qualify with multiple lenders. Pre-qualifying triggers a soft credit pull, so you can do it multiple times without affecting your score. A lender usually only does a hard credit pull once you submit a formal application.

3. Compare loan offers. Compare features on pre-qualified loan offers like APR, repayment terms and monthly payment amounts to determine which best fits your needs.

4. Complete a formal application. When you’re ready to apply, gather documents such as your Social Security number, government-issued ID, payroll stubs and tax returns to speed up the process. Lenders typically approve or decline applications within a couple of days and fund approved loans within a week, though some move faster. If your application is denied, the lender must tell you why.

» MORE: How to get a personal loan

» MORE: How to manage personal loan payments

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• What’s the difference between a personal loan APR and interest rate?

  APR and interest rate are so similar they’re often used interchangeably, but on personal loans there’s an important distinction. A personal loan APR includes the interest rate plus any origination fee. According to the Truth in Lending Act, all lenders must disclose a loan’s APR before you sign an agreement.

• Can you refinance a personal loan to get a lower rate?

  If you currently have a personal loan with a high rate, you may be able to lock in a lower rate by refinancing a personal loan, especially if you’ve improved your credit or lowered your debt since you first borrowed. Lenders have different refinancing policies: Some allow borrowers to refinance a personal loan you have with them, but others may require you to refinance with a different lender.

  If you refinance, be mindful of the new loan’s term. Even with a lower rate, a longer repayment term could raise the total interest costs.

• What are some alternatives to personal loans?

  Other ways to borrow money include:

  • 0% APR credit cards

  • Personal line of credit

  • Home equity loan or HELOC

  • 401(k) loan

  • Family loan

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NerdWallet’s review process evaluates and rates personal loan products from more than 35 technology companies and financial institutions. We collect over 50 data points from each lender and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.