Each lender decides what rate they are willing to offer. Credit unions, banks, and online lenders will all have varying underwriting policies, risk assessments and requirements. They will consider the total loan amount, loan term, your credit score and history and current economic conditions. Your rate is also dependent on the type of interest rate you’re receiving, like fixed versus variable rate.
At this time, 10% is a good interest rate for a personal loan for a borrower with good credit. Anything below the national average personal loan interest rate, set by the Federal Reserve, is considered a good personal interest rate. Borrowers with poor credit scores will likely be offered a higher interest rate.
Upstart currently offers the lowest minimum interest rates on personal loans. They even offer loans to borrowers with bad credit as an opportunity to start improving their credit scores. However, this lender’s maximum interest rate is higher than competitors’. Your rate will depend on your financial profile. Compare several lenders to be sure that you’ve received the best rate for your circ*mstances.
While you can pay off your personal loan early, some lenders may charge you a prepayment penalty. When you are comparing lenders, it’s important to ask about their specific policies and terms. Many lenders allow early pay-off without any associated fees.
