Average Personal Loan Interest Rate

Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is a Personal Loan?
What Is an Interest Rate Vs an APR?
What Is the Average Personal Loan Interest Rate?
What Is a Good Interest Rate for a Personal Loan?
What Impacts Interest Rates for Personal Loans?
Credit Score
Debt-to-Income Ratio
Employment
Income
Loan Amount
Loan Length
Collateral
Benchmark Rates
Tips to Try to Reduce Your Interest Rate
Improve Your Credit Score
Check Credit Reports for Errors. Requesting a free credit report annually from each credit reporting agency will help you be sure the data used to calculate your credit scores is accurate and current. If you find any errors or signs of identity theft, you can take the appropriate steps to get them fixed.
Monitor Bank and Credit Card Statements. Keeping an eye on your bank and credit card statements can be a good way to monitor your spending, stay within your budget, and thwart identity theft.
Pay Bills on Time. Setting up automatic payments, at least for minimum amounts due, is a good way to make sure bills are paid on time.
Keep Old Accounts Open. Even if you pay off an old account, you may want to keep it open — length of credit history is a factor in calculating your credit score. Some creditors will close inactive accounts, so you may want to check for any minimum use requirements for accounts you don’t use on a regular basis.
Be Cautious with New Credit. Multiple credit applications in a short time period may negatively affect your credit score. Some lenders check an applicant’s credit using a soft credit pull, which won’t affect their credit score.
Consider a Cosigner
Refinance an Old Loan …
… Or Negotiate a Lower Rate
Look for a No-Fee Loan
Key Elements to Compare When Shopping Personal Loans
APR
Fees
Loan Length
Monthly Payment
Potential Discounts
Interest Rates for Personal Loan Alternatives
Credit Cards
Payday Loans
Overdrafting
Friends and Family Loans
The Takeaway
About the Author
Kim Franke-Folstad is an award-winning journalist with 30 years of experience writing and editing for newspapers, magazines and websites. Her work for SoFi covers a range of topics related to personal finance, including budgeting, saving, borrowing, and investing.
Share this article: