Personal Loans With The Lowest Interest! Where To Find & How To Get These Personal Loans
There are a lot of lenders out there offering personal loans. Trust us; we track them. If you are looking for a personal loan that charges low interest, I am going to tell you where you can go, what you can do, and what brands are best. At the end of the video, I will tell you how you can get the very best deal that you can get in your current situation.
We’ve spend years in the lending industry. We track dozens of lenders. We want to use that experience to give you the information you need to make the financial decisions that are best for you.
What is the APR of a low interest personal loan?
I think it is important to talk about what “low interest” means. There is “low interest” and then there is “low interest.” Lending is extremely individual. If you have spectactual credit, a low interest loan will mean something very different than if you have fair credit. In fact, here is a rough idea of the average interest rate for unsecured personal loans based on credit score.
Credit Score | Average Interest Rate |
Excellent | 11% |
Good | 15% |
Fair | 27% |
Poor | Over 65% |
Of course, this is an average which means that a “low” interest rate would be below these numbers. If you have a credit score in the Good range, you can expect a personal loan around 15%, which means if you can get one at 13%, you are doing pretty well. The poor range is the wild card, frankly. A lot of the loans offered to people with poor credit can be much, much higher than 65%. Bad credit loans are a whole other thing and I am not going to tackle it right now. That’s a different video. In this video, I am going to focus loans for people with Fair to Excellent credit.
Where you can go to get a low interest personal loan?
There are three kinds of companies that offer low interest personal loans: credit unions, banks, and finance companies.
Not all credit unions offer personal loans. The ones that do are most likely to charge low interest. The ones we monitor generally offer loans with minimum APRs of 8% and maximum APRs in the low 20s. Credit unions are not-for-profit organizations that are owned by their members. They charge lower rates for their services because their charter demands that they reinvest earnings into improving services for its members. Of course, you need to be a member to use their services. They also often prioritize long-standing relationships. They might also be rather restrictive in who they lend to.
Banks can also offer loans, but not all of them do. For the ones that do offer personal loans, they often reserve their lowest rates and their highest loan amounts to existing customers. Banks tend to be rather restrictive about who they lend to, so you are probably going to need Good to Excellent credit to be approved.
The primary purpose of many finance companies is to offer personal loans to consumers. Generally, finance companies will have higher interest rates because they have higher costs in customer acquisition and underwriting. This does not mean that their interest rates are always higher, though. They will try and be competitive to attract the best customers. But, they will also offer loans to people that banks and credit unions will not.
What can you do to get a lower interest rate on a personal loan?
Several things play a role in the interest rate a lender will offer you. Your credit history is the biggest factor. Your credit score stands as a proxy for that history, but it will also include things like your debt-to-income ratio, payment history, recent hard inquiries, and utilization. If you need a loan right now, there’s not much you can do to change your credit history. Depending on how “thick” your credit file is, making meaningful changes will take at least several months. But there are some things you can do right now.
Add a cosigner
If you are struggling to get approved for the loan–or the interest rate–you want, you can consider adding a cosigner to your application. A cosigner is someone who agrees to pay off the loan if you fail to. They are really only going to help you if they have a stronger credit profile than you do. If you can get the loan you need without a cosigner, don’t include one. There’s no reason to entangle a loved one in the process if you don’t need them. Not all lenders will accept a cosigner, though. If you want to use one, you should make sure they will take one before you begin the application process.
Look for discounts
Credit unions and banks will often offer discounts to people who are customers. They tie their most lucrative discounts to people who have savings or checking accounts. These institutions get the benefit of your deposits and the opportunity to sell you other financial services products.
Companies will also offer discounts if you sign up for autopay. Autopay lowers the chance that you will be late on a payment or default on your loan. That saves them from losing money and they will sometimes share that savings with you in the form of a discount.
Some finance companies will offer lower interest rates to returning customers who have been in good standing. If you have used a company before, you should check to see if they would offer you a lower rate than other companies because you have proven yourself to them.
Provide collateral
In an ideal world, you will be able to meet your needs with an unsecured loan. I like unsecured loans because running into additional financial trouble won’t create a domino effect on your finances. However, if you can’t get the loan you need, one solution is to offer collateral to guarantee the loan. Providing collateral can get you a lower interest rate, a higher loan amount, or both. Of course, the risk of putting up collateral is that you could lose it if you end up having trouble repaying the loan. The most common type of collateral is the title to your motor vehicle. Some institutions will allow you to secure the loan with a savings account or certificate of deposit. You can also secure a loan with your home with a home equity line of credit or a home equity loan.
Keep in mind that not all lenders have secured loan options.
Choose a shorter repayment period
If you can handle a higher monthly payment, you can often lower your interest rate by choosing a shorter term. Lenders consider longer loan terms to be riskier because there is more time for something to go wrong. You might be able to shave several percentage points off the interest rate of a loan by accepting a term that is a couple years shorter.
What lenders offer the lowest interest rates on personal loans?
The first list of lenders that I am going to show you have maximum APRs that are below 22%. That means that if they approve you, the APR they offer you will not exceed 22%.
Lender | Min APR | Max APR | State coverage |
M&T Bank | 8.49% | 14.60% | 13 |
Truist | 8.87% | 17.82% | 16 |
PenFed | 8.99% | 17.99% | 50 |
Happy Money | 11.72% | 17.99% | 48 |
Navy Federal CU | 8.99% | 18% | 50 |
Citibank | 10.49% | 20.49% | 50 |
Axos | 11.79% | 20.84% | 50 |
Fifth Third Bank | 8.74% | 21.74% | 11 |
If you look down that column titled “state coverage,” you will see that many of these lenders do not operate in all 50 states. M&T Bank has a great low maximum number. But its availability is limited. They are found in 13 states along the Eastern seaboard. Truist offers loans in 16 states; 15 in the Eastern time zone and Texas. PenFed is a credit union that issues loans in all 50 states. There are no restrictions on becoming a member. Happy Money connects borrowers with credit unions across the country. Navy Federal Credit Union restricts its personal loans to members. And to become a member, you must be connected directly or by family to a branch of the US military. Both Citibank and Axos issue loans nationally. Fifth Third Bank operates in 11 states in the southeast and midwest.
This next list of lenders all have minimum APRs under 10%, so they have the capacity to offer low rates. But, as you can see, they also have maximum APRs that are over 23%. Many of them go all the way up to 36%. That means that these lenders won’t guarantee you a low rate even if they approve you. Compared to the last list, this list includes a lot more finance companies. Their wider range of APRs shows that they are much more focused on being able to lend to a broader range of customers.
Lender | Min APR | Max APR |
Achieve | 8.99% | 35.99% |
Avant | 9.95% | 35.99% |
Discover | 7.99% | 24.99% |
Key Bank | 8.99% | 22.24% |
LendingClub | 8.98% | 35.99% |
LendingPoint | 7.99% | 35.99% |
LightStream | 9.39% | 25.99% |
Prosper | 8.99% | 35.99% |
Reach Financial | 9.95% | 35.99% |
Rocket Loans | 9.12% | 29.99% |
Santander Bank | 7.99% | 24.99% |
SoFi | 8.99% | 29.49% |
TD Bank | 9.99% | 23.99% |
Upgrade | 8.49% | 35.99% |
Upstart | 7.80% | 35.99% |
US Bank | 8.74% | 24.99% |
Wells Fargo | 7.49% | 23.24% |
How to ensure you’re getting the best deal
Every single one of these lenders has a different algorithm for deciding who to approve, for how much, and at what rate. Your credit score is a decent proxy for the quality of your credit history, but lenders look at a lot more than just your credit score. So, how can you be sure who will be the lender that will give you the best deal? The key is to shop around. You have to make sure you are getting the best deal you can get in your situation. If you can, we recommend that you get 2-3 approvals before you decide which loan to take. Of course, applying to several lenders can take a fair bit of time.
That’s why we’ve tried to make shopping around easy. At The Yukon Project, you can go to our lending marketplace page. You can apply to any one of our featured lenders. Behind the scenes, we will check your rate with up to 40 other lenders. Our partners use a soft credit check, so applying won’t hurt your credit score. We will show you all of your approved offers, so you can pick the best loan for you.
If there are any lenders we don’t have on this list that you think should be, leave a comment below. If you have any experience with any of these lenders, consider sharing your story so others can learn from you. If you found this information helpful, please like this video and subscribe to our channel. It really helps us out and we appreciate it. Thanks for watching.
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