To get a low-interest loan, you’ll likely need excellent credit and a high income. However, you can still find loans with low interest rates if you shop around. You’ll also want to consider the loan amount each lender offers and other repayment terms; a low interest rate is not the only factor in determining the best personal loan for your needs.

our mission is to empower you to make smarter financial decisions. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure the content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.

Loan details presented here are current as of the publish date. Check the lenders’ websites for more current information. The lenders listed here are selected based on factors such as credit requirements, APR, loan amounts, fees and more.

Best low-interest personal loans in January 2021

Generous repayment terms
3.49%–19.99% (with autopay)
2 to 12 years
$5,000 – $100,000
Paying credit card debt
5.99% – 24.99%
2 to 5 years
$5,000 – $40,000
Best Egg
Low APRs
5.99% – 29.99%
3 to 5 years
$2,000 – $35,000
Unemployment protection
5.99% – 18.83% (with autopay)
2 to 7 years
$5,000 – $100,000
Quick approval
7.99% – 29.99%
2 to 5 years
$7,500 – $40,000
Credit union members
6.49% – 17.99%
1 to 5 years
$600 – $20,000
Little or no credit history
8.69% – 35.99%
3 or 5 years
$1,000 – $50,000
Using a co-borrower
10.68% – 35.89%
3 or 5 years
$1,000 – $40,000
No prepayment penalty
7.95% – 35.99%
3 or 5 years
$2,000 – $40,000
Fast funding
7.99% – 35.97% (with autopay)
3 or 5 years
$1,000 – $35,000
Marcus by Goldman Sachs
Debt consolidation
6.99% – 19.99%
3 to 6 years
$3,500 – $40,000
TD Bank
Secured loan options
5.67% – 21.99%
1 to 5 years
$2,000 – $50,000

Average personal loan interest rates

The average interest rate on a two-year personal loan is 9.5 percent, according to the Federal Reserve. However, rates vary significantly from lender to lender. Depending on your credit score and borrowing history, interest rates can be as high as 36 percent.

Average personal loan rates by credit score

Excellent (720 – 850) 10.3% – 12.5%
Good (690 to 719) 13.5% – 15.5%
Average (630 to 689) 17.8% – 19.9%
Bad (300 to 629) 28.5% – 32.0%

Rates as of 08/05/2020

Details: 12 best personal loans with low interest rates

LightStream – Best for generous repayment terms

Overview: LightStream is the online consumer lending division of SunTrust Bank. Its personal loans are aimed at applicants with a strong credit history. While personal loans can typically be used for most any purpose, LightStream advertises unique uses, such as adoptions, IVF financing and horse loans.

The APRs on LightStream loans range from 3.49 percent to 19.99 percent. Loan amounts start at about $5,000 and go as high as $100,000. Terms vary from two to 12 years.

Perks: LightStream loans offer competitive, fixed rates for those with a solid credit background. In addition, the entire application process is nearly paperless. Customers can apply from a computer or mobile device and sign loan agreements via these devices. In addition, funds can be made available on the same day you apply.

What to watch out for: All rates quoted are for those who sign up for autopay prior to receiving loan funds. Rates for customers who decline autopay are 0.5 percentage points higher.

Impact to borrowers looking for low interest rates: If you’re looking for the lowest possible monthly payment, LightStream could be a good option. Not only does it offer some of the lowest interest rates in the business, but it also has some of the longest repayment terms.

Payoff – Best for paying credit card debt

Overview: Payoff loans are focused solely on consolidating or paying off credit card debt. The loans are not available for any other purposes.

APRs range from 5.99 percent to 24.99 percent. Loans are available from $5,000 to $40,000, and terms are two to five years.

Perks: There are no late fees, application fees or early payment fees.

What to watch out for: Payoff charges an origination fee of up to 5 percent, which includes closing costs and maintenance fees.

Impact to borrowers looking for low interest rates: Credit cards often come with double-digit APRs, which is why Payoff is so attractive for people looking to consolidate credit card debt. If you have good credit, Payoff can likely provide you a much lower interest rate than you’re getting on your credit cards.

Best Egg – Best for low APRs

Overview: Best Egg promises a seamless and hassle-free application and approval process.

APRs on Best Egg loans start at 5.99 percent. Loan amounts range from $2,000 to $35,000, though some qualified borrowers may be eligible for as much as $50,000. Loan terms vary from three to five years.

Perks: There are no prepayment penalties on Best Egg loans, and qualified borrowers can receive funds in as little as one day.

What to watch out for: Best Egg, which matches investors with borrowers, charges an origination fee for loans. These fees range from 0.99 percent to 6.99 percent.

Impact to borrowers looking for low interest rates: Best Egg’s interest rates are competitive, and its origination fees can also be relatively low — meaning you may not have to add much to the overall cost of your loan.

SoFi – Best for unemployment protection

Overview: Because SoFi does business entirely online, it’s able to minimize expenses and aims to pass those savings on to customers. The loan application considers more than just credit scores and debt-to-income ratio, also factoring in variables like career, education and estimated cash flow.

SoFi APRs start at 5.99 percent and increase to as much as 18.83 percent. Loan amounts range from $5,000 to $100,000, and loan terms vary from two to seven years.

Perks: SoFi doesn’t charge late fees or prepayment penalties. SoFi loans also come with exclusive member benefits, such as access to career coaches and financial advisers. Additionally, SoFi offers unemployment protection in the event that you lose your job, and it can even assist you with finding a new job.

What to watch out for: With SoFi, the entire loan process is online, so you must be comfortable with an entirely online experience.

Impact to borrowers looking for low interest rates: The lowest advertised APR from a company is not always the number you’ll want to look for; if you have below-average credit, you’ll also want to look at rate caps. SoFi’s APRs cap at 18.83 percent, which is low compared to competitors. Because of this, SoFi could be the cheapest option if you don’t have the best credit.

FreedomPlus – Best for quick approval

Overview: FreedomPlus loans are available for consolidating debt, making large purchases, making home improvements and more.

FreedomPlus APRs start at 7.99 percent and go up to 29.99 percent. Loan amounts range from $7,500 to $40,000, while terms vary from two to five years.

Perks: The FreedomPlus loan process can be very quick, with same-day approval and funds in your account in as little as 48 hours.

What to watch out for: Personal loans from FreedomPlus include an origination fee of anywhere from 1.99 to 4.99 percent, with 4.99 percent being the most common.

Impact to borrowers looking for low interest rates: FreedomPlus may not have the lowest interest rates around, but the company’s fast funding means it’s a competitive option if you need a low-interest loan quickly.

PenFed – Best for credit union members

Overview: Personal loans are available from PenFed to cover home renovations, debt consolidation, travel and even auto repairs. Though PenFed primarily serves the military community and immediate family members, loans are also available to those who open a PenFed savings account with at least $5.

PenFed’s APRs start at 6.49 percent, and terms are one to five years. Borrowers can qualify for loan amounts of $600 to $20,000.

Perks: Though PenFed does charge late fees on its personal loans, there are no origination fees or application fees.

What to watch out for: In order to receive a PenFed loan, you’ll need to join this credit union, which requires an additional application. In addition, PenFed loans are limited to a maximum of $20,000.

Impact to borrowers looking for low interest rates: One of PenFed’s main draws is that it is a credit union. Credit unions typically offer more personalized service, which could help offset PenFed’s slightly higher rates.

Upstart – Best for little or no credit history

Overview: Upstart aims to offer fast, fair personal loans. While many loan applications are based on credit score and years of credit, Upstart applications also factor in an individual’s education, job history and area of study.

APRs for Upstart loans range from 8.69 percent to 35.99 percent. Loan amounts range from $1,000 to as much as $50,000. You can choose a loan term of either three or five years.

Perks: Upstart can provide your rate in just five minutes. There are no prepayment penalties, and funds are available in as little as one day.

What to watch out for: Upstart charges a one-time origination fee, which can be as much as 8 percent of your loan amount.

Impact to borrowers looking for low interest rates: The lowest interest rates are typically offered to those with excellent credit, but Upstart looks at more than just your credit score — giving you a better shot at qualifying for a low rate.

LendingClub – Best for using a co-borrower

Overview: LendingClub is a peer-to-peer lending platform that serves as a broker for matching investors with borrowers. Its personal loans are available to cover a variety of purposes, such as debt consolidation, home improvements and refinancing an automobile purchase.

Loans are available for $1,000 to $40,000. The APRs on LendingClub loans range from 10.68 percent to 35.89 percent, and you can choose a loan term of three or five years.

Perks: LendingClub’s online loan application takes just a few minutes, and funds are available in as little as four days. There are no prepayment penalties.

What to watch out for: You’ll pay origination fees with LendingClub, and the loans require a good to excellent credit score. If you have bad credit or are trying to rebuild your credit, LendingClub may not be for you.

Impact to borrowers looking for low interest rates: If you can’t qualify for the lowest rates on your own, LendingClub is fairly unique in offering joint applications. Adding a co-borrower with good credit will help your overall credit picture and could net you lower rates.

Prosper – Best for no prepayment penalty

Overview: Prosper is a peer-to-peer lender with loans available to those with fair to excellent credit.

APRs on Prosper loans start at 7.95 percent and go as high as 35.99 percent. Loans are available for $2,000 to as much as $40,000, and repayment terms are three or five years.

Perks: Prosper offers a simple online application process, and money is available within a few days of approval. There are no prepayment penalties on Prosper loans.

What to watch out for: Because Prosper is a peer-to-peer lender, borrowers must wait for investors to fund their loans. If your loan doesn’t receive at least 70 percent funding within 14 days of submitting your application, you will have to reapply.

Impact to borrowers looking for low interest rates: If you don’t need to borrow much money and you’re confident that you can pay back your funds quickly, Prosper is worth considering. Its interest rates are higher than those of many of its competitors, but relatively low fees and no prepayment penalties mean that you could pay back your loan early and save on interest costs.

Upgrade – Best for fast funding

Overview: Upgrade offers personal loans for those with fair credit or better. The funds can be used for debt consolidation, credit card refinancing, home improvements or major purchases.

APRs available from Upgrade range from 7.99 percent to 35.97 percent. Loan amounts range from $1,000 to $35,000, and terms are three or five years.

Perks: Upgrade offers a quick one-page application process and provides loan decisions within a few minutes. Additionally, money is made available within as little as one day of completing the verification process.

What to watch out for: All Upgrade personal loans come with an origination fee of 2.9 percent to 8 percent. The fee is deducted from your loan funds.

Impact to borrowers looking for low interest rates: Borrowers with fair credit may find Upgrade a better alternative to payday lenders, which offer fast loans without a credit check. Upgrade also offers incredibly fast funding, and its credit threshold is relatively low, with a 620 minimum credit score. You likely won’t find the lowest interest rates with that score, but interest rates will still be lower than those of payday loans.

Marcus by Goldman Sachs – Best for debt consolidation

Overview: Marcus by Goldman Sachs loans are available to those with good to excellent credit and can be used to fund major purchases or pay off credit card debt.

APRs range from 6.99 percent to 19.99 percent, and loans are available for $3,500 to $40,000. Repayment terms are three to six years.

Perks: There are no sign-up or origination fees with Marcus. The company also offers rewards for a year of on-time payments.

What to watch out for: Marcus does not accept joint applications, so if you need a co-signer to qualify, this may not be a good option for you.

Impact to borrowers looking for low interest rates: Marcus specializes in low-interest debt consolidation loans, and its terms are relatively flexible for borrowers looking for low rates. With a low rate cap and repayment terms that stretch to six years, it could be an affordable way to pay off existing credit card or loan debt.

TD Bank – best for secured loan options

Overview: TD Bank offers personal loans to those with good credit and those trying to establish credit. Funds can be used for debt consolidation, vacations, renovations and more.

TD Bank offers two types of loans: unsecured and secured. Its secured loan gives you $5,000 to $50,000 with terms of one to five years and a starting APR of 5.67 percent. Its unsecured loan has broader loan amounts, with options from $2,000 to $50,000, but its terms are three to five years and its APRs range from 6.99 percent to 21.99 percent.

Perks: Personal loan funds from TD Bank will be made available in as little as 48 hours. Its secured loan could also be a good option if you’re having trouble qualifying for loans based on your credit score.

What to watch out for: TD Bank is a full-service bank, which means its loans may be best-suited for those who plan to do all their banking here. Its secured loan, in particular, must use a TD Bank savings, money market or CD account as collateral.

Impact to borrowers looking for low interest rates: Borrowers willing to put down collateral will find low rates with TD Bank’s secured loan. This is a great option for people who are having trouble finding low rates elsewhere due to a poor credit score, as lenders are more willing to lend to poor-credit borrowers if the loans are secured by collateral.

What you need to know about low-interest loans

What is a low-interest-rate personal loan?

Personal loans are generally short-term loans provided by banks, peer-to-peer lending platforms and credit unions. Depending on who the money is borrowed from, it can be used for consolidating credit card debt, making a major purchase or even taking a vacation. Low-interest loans typically have an interest rate below 12 percent.

Loan terms vary by lender, but there’s always a predetermined payment period, often ranging from two to five years. These are installment loans, and the money is repaid via monthly payments.

How do lenders determine interest rates?

Every lender uses its own algorithm to determine the interest rate you’ll receive. Three of the most important factors lenders evaluate are credit score, debt-to-income ratio and annual income. The lower your credit score and DTI and the higher your income, the more likely you are to qualify for low rates and large loan amounts.

Outside of these factors, some lenders also take into account things like your area of study, job history and education. This is why it’s so important to shop around and compare rates with multiple lenders.

What is considered a low interest rate?

A low interest rate is typically any interest rate that’s below the average for your credit band. For excellent credit, the average is 10.3 percent to 12.5 percent; for good credit, it’s 13.5 percent to 15.5 percent; for average credit, it’s 17.8 percent to 19.9 percent; and for bad credit, it’s 28.5 percent to 32 percent. However, the lowest-interest loans can have rates as low as 3.49 percent.

How does the coronavirus affect low-interest personal loans?

In response to the impacts of COVID-19, some banks and online lenders have introduced new loan offerings in order to help Americans experiencing financial hardship. And if you need help paying for an existing personal loan, many lenders are also providing loan relief programs and reduced fees.

Why it’s important to compare low-interest loans

Comparing loan rates and lenders can be a daunting task, but it’s necessary if you want to find the lowest interest rate possible. Because lenders use their own algorithms to determine interest rates, the same financial profile could get you a much lower rate at one lender than another. Here are some other factors to be aware of when comparing loan rates and lenders:

  • Loan term: The number of years that you will repay the loan. Most commonly, the loan terms are 15 years to 30 years.
  • Interest rate: Interest rates vary by lender and are determined primarily by your credit score, income and overall financial health.
  • Origination fee: This is an upfront fee charged by a lender to process a new application. They can range from 1 percent to 8 percent, depending on the loan amount, your credit score and the length of the loan.
  • Other fees: Some fees may be included in the APR calculation, but you should also be aware of things like late fees and prepayment penalties.

Check out our loan comparison calculator to compare loan rates and calculate costs.

How to qualify for low-interest personal loans

There’s a variety of ways to improve your chances of scoring the best low-interest loan.

  1. Research all of your options. Shop around and check rate offers from multiple lenders to ensure that you are getting the best deal for your personal situation.
  2. Look for ways to get discounts. Many lenders offer a rate discount when you enroll in their autopay programs. Some lenders also offer discounts if you’re an existing customer or hold a checking or savings account with them.
  3. Consider credit unions. Because they are nonprofit organizations, credit unions typically offer lower-cost loans than standard banks or lenders.
  4. Apply for preapproval: Preapproval, offered by some lenders, is a way to check whether or not you qualify for a personal loan before you formally apply. This is a valuable tool if you’re just shopping around, and it also saves you from a hard pull on your credit.
  5. Only apply for the amount you need: When calculating your desired loan amount, aim to apply for the lowest amount you think you’ll need to cover your expenses. Choosing a low loan amount will reduce the total amount you’ll pay in interest over the life of the loan.
  6. Pay down debt: When determining your eligibility for a loan, most lenders look at your debt-to-income ratio, or DTI — the amount of debt you hold relative to your income. By reducing the amount of debt you owe, you decrease your DTI and make yourself eligible for more loans and lower APRs.
  7. Know your credit score: Many lenders have minimum credit score requirements in the mid-600s, but most give their best rates to borrowers with a credit score of at least 700. If you don’t need the cash immediately, work on improving your credit score before applying for a personal loan.

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