Low-Interest Personal Loans

Personal loans make it easy to afford emergency expenses, home renovations, and debt consolidation when you don’t have the money—or don’t want to spend the money—in your savings account. But personal loans aren’t free: Every loan has an interest rate, just like a mortgage, car loan, or credit card, and you may also need to pay an origination fee to start the loan.

The lower the interest rate and fees, the less you’ll spend over the life of the loan. But you’ll need a strong credit score, a low debt-to-income ratio, and the right loan terms to qualify for the best low-interest personal loans. Below, we’ll walk you through where to find low-interest personal loans—and how to improve your chances of qualifying.

Where to find the lowest personal loan rates

Lender	Rates (APR)
Credible1	7.49% – 35.99%
LightStream	7.49% – 25.49%
SoFi	8.99% – 29.99% fixed rate APR with all discounts applied

Your best bet for finding a low personal loan rate is using a lending platform such as Credible. These online loan marketplaces make it easy to compare multiple lenders in one place and see which one offers the best mix of low rates and fees.

You’ll input basic information, such as your credit score, income, and desired loan amount, and the platforms will find the best personal loans you’re prequalified for. This doesn’t mean you’re approved for the loans, but it indicates you’re likely to get the personal loan offers displayed, as long as the info you’ve entered is accurate.

While we feel that these lending platforms are the most convenient way to find the best low-interest personal loans, we have identified two specific lenders that offer low starting annual percentage rates (APRs) worth your consideration:

• LightStream, which offers loans with rates as low as 7.49%
• SoFi, which offers loans with fixed rate APRs as low as 8.99% with all discounts applied

Bear in mind: Just because a lender advertises a low starting APR doesn’t mean you’ll get approved at that rate. Several factors, especially your credit score, affect the annual percentage rate (APR) you’re offered.

Credible – Best marketplace

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LendEDU rating: 5.0 out of 5

• Direct comparison of different loan options
• Fast online application process
• Free credit score access

Credible is a premier online marketplace for personal loans. It offers unparalleled service that simplifies the comparison of loan options from various lenders. This platform excels in providing users with a streamlined application process that can be completed online, saving time and effort. 

One of our favorite features is Credible’s free access to credit scores, which enables borrowers to better understand their financial standing at no additional cost. Credible’s commitment to transparency and user empowerment makes it an ideal choice for individuals looking to explore and compare loan options.

LightStream – Best for excellent credit

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LendEDU rating: 4.8 out of 5

• Competitive rates for those with FICO credit scores of 740 and better
• Rate Beat program to outdo competitor rates
• No fees or prepayment penalties

LightStream is our go-to lender for individuals with excellent credit. It offers some of the most competitive rates in the market. Its distinctive Rate Beat program demonstrates a strong commitment to providing value, promising to beat competitor rates under certain conditions. 

Borrowers will appreciate the absence of fees and prepayment penalties, underscoring LightStream’s borrower-friendly policies. This lender’s focus on rewarding high creditworthiness with low rates and flexible terms makes it an outstanding choice for those who have managed their credit well.

SoFi – Best for good credit

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LendEDU rating: 5.0 out of 5

• Competitive rates for borrowers with FICO credit scores at and above 670
• Membership benefits include giveaways, SoFi travel, and financial advice

SoFi is our top choice for borrowers with good credit, offering competitive interest rates that reward financial responsibility.

A wealth of membership benefits, such as travel benefits offering premium access to hotels, flights, and rental cars and financial advice, places SoFi in a league of its own. These features not only support borrowers financially but also contribute to opportunities for personal growth, making SoFi a comprehensive financial partner for those who qualify.

How do lenders calculate low APR on personal loans?

Lenders use proprietary algorithms to calculate each loan applicant’s APR. That said, most lenders use the same common data points to determine the interest rate and fees for all types of personal loans. These data points include:

• Your credit score: A strong credit score indicates to lenders that you are responsible with the money you borrow and more likely to pay it back. This poses less of a risk to lenders, so they’re able to offer lower interest rates.
• Your income: Having a higher income indicates that you’re more likely to make your monthly loan payments.
• Your debts: High income is only half the battle. If you make a high salary but also owe a significant amount—think credit card debt, student loan debt, mortgage, and car loans—your debt-to-income ratio (DTI) may not be ideal. To get the lowest rates, you’ll want little debt and a sizable income.
• Your bank account transactions: Lenders may also examine your bank transactions to determine how responsible you are with spending.
• The amount you want to borrow: When you borrow a small amount, it poses less risk to the lender. Thus, small personal loans could result in a lower interest rate.
• The repayment term you’ve requested: A shorter repayment term is more attractive to a lender because it means the lender will get its money back (plus interest) faster. This could yield a lower interest rate—but be warned, that will mean higher monthly payments.

In general, the stronger your credit score and the lower your debt-to-income ratio, the more likely you are to qualify for a lower interest rate and origination fee. Some lenders may offer personal loans with no origination fees at all, but these may only be available to excellent-credit borrowers.

Certain lenders may use alternative methods to determine your interest rate. For example, lenders such as Avant and Upstart consider factors outside your credit history, including your job history and education.

How does a low APR affect the cost of your personal loan?

The APR on a personal loan is expressed as a percentage and represents the interest rate plus any fees, including the origination fee. This percentage represents the total cost of the loan: The higher the APR, the more expensive the personal loan.

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Tip

Always compare loan APRs, not interest rates. A loan with a slightly lower interest rate but a higher origination fee may have a higher APR—and will be more expensive over the life of the loan.

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Let’s look at an example to see how APR affects how much you’ll spend on a personal loan:

	Loan 1	Loan 2
Amount borrowed	$20,000	$20,000
Loan term	3 years	3 years
Interest rate	10%	12%
Origination fee	8%	2%
Interest paid	$3,232.37	$3,914.30
Origination fee cost	$1,600	$400
APR	15.829%	13.410%
Total cost of loan	$4,832.37	$4,314.30

As you can see, although Loan 1 has a lower interest rate than Loan 2, the higher origination fee results in a higher APR and a more expensive loan over three years.

How to qualify for the lowest interest rate on a personal loan

Hoping to score a low interest rate on a personal loan? Here’s how to find the best options:

Shop around

The best way to get a low personal loan interest rate is to explore multiple options. You can get prequalified at multiple lenders without a hard inquiry on your credit report, which means there’s no impact on your credit score.

Using online lending platforms such as Credible and Lending Tree makes it easy to see offers from multiple lenders in one place.

Work on your credit score

If you don’t need the money immediately, take a few months to work on your credit score. Reduce your spending with credit cards, pay down debts, and always make on-time payments for bills that get reported to the credit bureaus.

You can also review your credit report to ensure there are no errors. If you discover errors, work with the credit bureaus to fix those; they’re likely bringing your score down.

Monitor your credit score. When you’ve made a significant improvement, apply for a personal loan.

Lower your debt-to-income ratio

Paying down your debts improves your credit score and lowers your DTI. Lenders will more confidently lend to you—at lower rates—if you have less debt.

Another way to improve your debt-to-income ratio is to increase your income. Ask for a raise, take a new job somewhere else, or start a side hustle to increase your monthly take-home pay.

Set up automatic payments

Many lenders offer a slight APR discount (often between 0.25% and 0.50%) if you enroll in automatic payments. Read the fine print; some lenders’ advertised APRs already have that discount applied.

If you set up autopay, make sure your checking account is always funded with enough money to cover the payment. Missing a loan payment because your account doesn’t have enough on autopay day can result in fees and a ding to your credit score.

Keep the loan small and short

Only borrow what you need—the smaller the loan amount, the more likely the lender is to offer a lower APR.

Shorter repayment periods generally yield lower interest rates. However, you should avoid choosing too short a repayment term if it means the monthly payments will be unmanageable on your budget.

FAQ

Is there a 0% personal loan?

Some lenders may advertise 0% interest personal loans, but these are typically introductory offers and may come with hidden fees or high interest rates beyond the promotional period. It’s important to read the terms and conditions of any loan agreement before signing to avoid unpleasant surprises.

What loan has the lowest interest rate?

It can vary, but secured loans, such as home equity loans, car loans, or student loans, often offer the lowest interest rates because they’re backed by collateral, reducing the lender’s risk. In terms of personal loans, the lenders featured below tend to offer among the lowest rates we’ve found.

Recap of lenders offering low-interest personal loans

Lender		Rates (APR)
Credible		7.49% – 35.99%
LightStream		7.49% – 25.49%
SoFi		8.99% – 29.49%