3-year personal loan interest rates edge down slightly

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The latest trends in interest rates for personal loans from the Credible market are updated weekly. (iStock)

Loans with good credit search personal loans during the past seven days previously qualified for rates that were lower for 3-year loans and higher for 5-year loans compared to the previous seven days.

For lenders with credit scores of 720 or higher who used the Credible Market to select a lender between July 4th and July 10th:

  • Rates on 3-year fixed-rate loans averaged 11.02%, down from 11.10% the seven days before and lower from 11.35% a year ago.
  • Rates on 5-year fixed-rate loans averaged 13.89%, up from 13.58% the previous seven days and up from 13.67% a year ago.

Personal loans have become a popular way to consolidate and pay off credit card debt and other loans. They can also be used to cover unexpected expenses such as medical billsmake a big purchase or finance home improvement projects.

Rates for 3-year personal loans fell by a slight 0.08%, and rates for 5-year loans increased by 0.31%. In addition to today’s declines, rates for 3-year terms are lower than they were a year ago. Borrowers can now benefit from interest savings with a 3-year personal loan. In addition, both loan terms offer interest rates significantly lower than higher-cost borrowing options such as credit cards.

Whether a personal loan is right for you often depends on several factors, including the rate at which you may qualify. By comparing various lenders and their rates, you can ensure that you get the best possible personal loan for your needs.

It’s always a good idea to comparison store on sites like Credible to understand how much you qualify for and choose the best option for you.

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

Personal loan weekly rates trends

The graph above shows average pre-qualified rates for borrowers with credit scores of 720 or higher who used the Credible market to select a lender.

For the month of June 2022:

  • Rates on 3-year personal loans averaged 11.1%, down from 11.12% in May.
  • Rates on 5-year personal loans averaged 13.13%, down from 13.27% in May.

Rates on personal loans differ significantly according to credit score and loan term. If you are curious about what kind of personal loan rates you can qualify for, you can use an online tool like Credible to compare options from different private lenders. Checking your rates will not affect your credit score.

All Credible Marketplace lenders offer fixed rate loans at competitive rates. Because lenders use different methods to evaluate lenders, it is a good idea to request personal loan rates from multiple lenders so that you can compare your options.

Current personal loan rates by credit score

In June, the average pre-qualified rate chosen by lenders was:

  • 8.26% for borrowers with credit scores of 780 or higher who choose a 3-year loan
  • 29.39% for lenders with credit scores below 600 who 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 differ.

As shown in the graph above, a good credit score can mean a lower interest rate, 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 influence the interest rate that a lender can offer you on a personal loan. But you can take a few steps to boost your chances of getting a lower interest rate. Here are some tactics to try.

Increase credit score

In general, people with higher credit scores qualify for lower interest rates. Steps that can help you improve your credit rating over time includes:

  • 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. Check 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 point factor.
  • Avoid opening new credit accounts. Only apply for and open credit accounts that you really need. Too many hard queries about your credit report in a short period of time can lower your credit score.

Choose a shorter loan term

Personal loan repayment terms can range from one to several years. In general, shorter terms come with lower interest rates, as the borrower’s money is at risk for a shorter period of time.

If your financial situation allows it, applying for a shorter term can help you achieve a lower interest rate. Keep in mind that the shorter term does not only benefit the borrower – by choosing a shorter repayment term, you 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 is not good enough to qualify for the best personal loan interest rates, to find a cosigner with good credit can help you ensure a lower interest rate.

Just remember, if you default on the loan, your co-signer will be on the hook to repay it. And co-signing for a loan can also affect their credit score.

Compare rates from different lenders

Before applying for a personal loan, it is a good idea to look around and compare offers from different lenders to get the lowest rates. Online lenders typically offer the most competitive rates – and may be quicker to pay off your loan than a brick-and-mortar business.

But do not worry, comparing rates and terms does not have to be a time consuming process.

Credible makes it easy. Just enter how much you want to borrow and you will be able to compare multiple lenders to choose the one that makes the most sense to you.

About credible

Credible is a multi-lender market that empowers consumers to discover financial products that best suit their unique circumstances. Credible’s integrations with leading lenders and credit bureaus enable consumers to quickly compare accurate, personalized loan options – without compromising their personal information or affecting their credit score. The credible market offers an unparalleled customer experience, as reflected by 4,500 Positive Trustpilot Reviews and a Trust Score of 4.7 / 5.

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