Personal loan interest rates are down for 3 and 5 year fixed rate loans

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to below as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote products from our partner lenders, all opinions are our own.

66958300-Credible content only

The latest trends in interest rates for personal loans from credible markets, updated weekly. (iStock)

Borrowers with good credit to look for personal loan during the past seven days prequalified for lower rates for both 3- and 5-year fixed-rate loans compared to the previous seven days.

For borrowers with a credit score of 720 or higher who use the credible market to choose a lender between Nov 3 and Nov 9:

  • Rates on fixed-rate loans for 3 years averaged 12.36%, down from 13.52% seven days ago and up from 10.88% a year ago.
  • The average 5-year fixed-rate loan rate is 15.93%, down from 16.54% seven days ago and up from 14.19% a year ago.

Personal loans have become a popular way to Consolidate and pay off credit card debt and other loans. It can also be used to cover unexpected expenses like medical billstake care of a major purchase or fund home improvement projects.

Personal loan interest rates have dropped significantly over the last seven days for 3 and 5 year fixed rate loans. Rates for 5-year loans fell by 0.61 percentage points, while 3-year loans saw a big drop of 1.16 percentage points. Despite the current decrease, interest rates for both loan terms are higher than last year. Still, borrowers can take advantage of interest savings with a 3- or 5-year personal loan now. Both term loans offer lower interest rates than higher loan options such as credit cards.

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

It is always a good idea to comparison shop on sites like credible understand how much you are suitable and choose the best option for you.

Here are the latest trends in personal loan interest rates from Credible marketplace, updated monthly.

Personal loan weekly rate trends

Nov-10-personal-loans.jpg

The chart above shows the average pre-qualification rates for borrowers with a credit score of 720 or higher who use the Credible marketplace to select lenders.

For the month of October 2022:

  • 3-year personal loan rates averaged 12.37%, up from 11.65% in September.
  • The average 5-year personal loan rate was 15.84%, up from 15.60% in September.

Personal loan rates vary greatly by credit score and loan term. If you are curious about the type of personal loan you may qualify for, you can use online tools like Credible to compare options from different private lenders. Checking your rates will not affect your credit score.

All trusted market lenders offer fixed rate loans at competitive rates. Because lenders use different methods to evaluate borrowers, it is a good idea to ask for personal loan rates from several lenders so you can compare your options.

Current personal loan rates by credit score

Personal-loan-bar-chart.jpg

In October, the average prequalified rate selected by borrowers is:

  • 9.90% for borrowers with a credit score of 780 or higher choose a 3-year loan
  • 29.90% for borrowers with a credit score below 600 choose a 5-year loan

Depending on factors such as your credit score, the type of personal loan you are looking for and the loan repayment term, the interest rate may vary.

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

How to get a lower interest rate

Many factors affect the interest rates that lenders can offer for personal loans. But you can take a few steps to increase your chances of getting a lower interest rate. Here are some tactics to try.

Improve credit score

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

  • Pay bills on time. Payment history is the most important factor in your credit score. Pay all your bills on time for the amount due.
  • Check your credit report. Look at your credit report to make sure there are no errors on it. If you find errors, dispute them with the credit bureau.
  • Lower your credit utilization ratio. Paying off credit card debt can improve this important credit score factor.
  • Do not open a new credit account. Just apply and open the credit account you need. Too many hard inquiries on your credit report in a short amount of time can lower your credit score.

Choose a shorter loan term

Personal loan payment terms can vary from one to several years. In general, shorter terms include lower interest rates, since 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 score a lower interest rate. Remember that a shorter term doesn’t just benefit the lender – by choosing a shorter repayment term, you’ll pay less interest over the life of the loan.

Get a cosigner

You may be familiar with the concept of a cosigner if you have student loans. If your credit isn’t good enough to qualify for the best personal loan interest rates, find a cosigner with good credit can help you secure lower interest rates.

Just remember, if you borrow a loan, your cosigner will be ready to pay it back. And cosigning for a loan 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 price. Online lenders typically offer the most competitive rates — and can pay off your loan faster than brick-and-mortar establishments.

But don’t worry, comparing rates and terms doesn’t have to be a time-consuming process.

Credibility makes it easy. Simply enter how much you want to borrow and you will be able to compare several lenders to choose the one that makes the most sense for you.

About credible

Credible is a multi-lender marketplace that empowers consumers to find the financial products that best fit their unique circumstances. Credible integration with major lenders and credit bureaus allows consumers to quickly compare accurate and personalized loan options – without putting their personal information at risk or affecting their credit score. Credible Marketplace provides an unparalleled customer experience, as seen by more 4,500 positive Trustpilot reviews and TrustScore 4.7/5.

Leave a Reply

Your email address will not be published. Required fields are marked *