What is the personal loan interest rate?
Personal loan rates range from around 7% to 36%, with the average hovering around 12-15% for a 3-year loan. A good interest rate on a personal loan is one that is lower than the national average.
Personal loan rates range from around 7% to 36%, with the average hovering around 12-15% for a 3-year loan. A good interest rate on a personal loan is one that is lower than the national average.
An excellent credit score could get you one of the lowest personal loan interest rates on offer, between 6-9%. A borrower with a bad credit score could pay interest of 15-20% or even higher.
The interest rate on a $5,000 loan from a major lender is usually around 6.4% to 35.99%. It's difficult to pinpoint the exact interest rate that you'll get for a $5,000 loan since lenders take many factors into account when calculating your interest rate, such as your credit score and income.
| Loan Amount | Loan Term (Years) | Estimated Fixed Monthly Payment* |
|---|---|---|
| $10,000 | 5 | $207.54 |
| $15,000 | 3 | $463.09 |
| $15,000 | 5 | $313.13 |
| $20,000 | 3 | $617.45 |
Top 5 banks charge the lowest interest rates:
ICICI Bank: ICICI Bank charges anywhere between 10.65 to 16 percent per annum on loans. The loan processing charges of loan are up to 2.50 percent of loan amount plus applicable taxes. State Bank of India (SBI): SBI charges interest rate that starts from 11.15 percent.
A good personal loan interest rate depends on your credit score: 740 and above: Below 8% (look for loans for excellent credit) 670 to 739: Around 14% (look for loans for good credit) 580 to 669: Around 18% (look for loans for fair credit)
| Bank | Minimum interest rate on personal loan (%) |
|---|---|
| ICICI Bank | 10.65 |
| HDFC Bank | 10.5 |
| State Bank of India | 12.30 |
| Bank of Baroda | 13.15 |
| Company | Forbes Advisor Rating | Current APR range |
|---|---|---|
| Discover | 3.5 | 7.99% to 24.99% |
| Wells Fargo | 3.5 | 7.49% to 23.24% |
| PNC Bank | 3.0 | Rates vary by zip code |
| Citibank | 3.0 | 10.49% to 19.49% |
Some of the easiest loans to get approved for if you have bad credit include payday loans, no-credit-check loans, and pawnshop loans. Personal loans with essentially no approval requirements typically charge the highest interest rates and loan fees.
How much would a $6,000 loan cost per month?
The monthly payment on a $6,000 loan ranges from $82 to $603, depending on the APR and how long the loan lasts. For example, if you take out a $6,000 loan for one year with an APR of 36%, your monthly payment will be $603.
| Payoff period | APR | Monthly payment |
|---|---|---|
| 12 months | 15% | $722 |
| 24 months | 15% | $388 |
| 36 months | 15% | $277 |
| 48 months | 15% | $223 |
| 8.00% | 12.35% | |
|---|---|---|
| Seven-Year Repayment | $779.31/month, $15,462.10 in interest over time | $892.02/month, $24,929.90 in interest over time |
| 10-Year Repayment | $606.64/month, $22,796.56 in interest over time | $727.51/month, $37,300.90 in interest over time |
| Payoff period | APR | Monthly payment |
|---|---|---|
| 36 months | 15% | $3,467 |
| 48 months | 15% | $2,783 |
| 60 months | 15% | $2,379 |
| 72 months | 15% | $2,115 |
Many give preference to borrowers with good or excellent credit scores (690 and above), but some lenders accept borrowers with bad credit (a score below 630). The typical minimum credit score to qualify for a personal loan is 560 to 660, according to lenders surveyed by NerdWallet.
A $20,000 loan at 5% for 60 months (5 years) will cost you a total of $22,645.48, whereas the same loan at 3% will cost you $21,562.43. That's a savings of $1,083.05. That same wise shopper will look not only at the interest rate but also the length of the loan.
Interest Rates and Fees
In the fourth quarter of 2023, the average personal loan rate was 10.78% at credit unions and 11.37% at banks, according to NCUA data. That may not seem like a huge difference, but a rate that's just a half-point lower can save you hundreds (or sometimes thousands) while you repay the loan.
The easiest banks to get a personal loan from are USAA and Wells Fargo. USAA does not disclose a minimum credit score requirement, but their website indicates they consider people with scores below 640, so even people with bad credit may be able to qualify.
The bottom line. An excellent credit score, consistent income and low debt-to-income ratio are key to securing a low-interest personal loan.
The personal loan interest rate play an important role in determining the EMIs and total repayment amount. The interest rate of your personal loan depends on your financial report and credit score. You can negotiate your interest rate to adjust your EMI to make it more manageable.
Why is my APR so high with good credit?
Key takeaways. Your credit card APR can go up if the prime rate changes, you paid your credit card bill late, your intro APR offer ended or your credit score dropped. If your APR increases, you can work on paying down your balance or transfer your balance to a card with a low or 0 percent intro APR offer.
Higher interest rates and fees: Banks tend to charge higher interest rates and more fees compared to their credit union and online lender counterparts. 12 If you don't qualify for a discount rate, you might end up paying more through a bank than you would with another lender.
Personal loans generally aren't hard to get and are available from credit unions, banks, and online lenders. There are various types of personal loans to consider, depending on how much money you need to borrow.
A Personal Loan is money you borrow and pay back with low interest or high interest over multiple years. However Personal Finance is a Shari'a Compliant contract based product, where the bank sells an asset at a profit, as Islamic Banks are prohibited from charging interest. So this product is Riba free.
Lower personal loan rates may be on the horizon in 2024 after the Fed made progress curbing inflation at the end of 2023. That progress came after four more Federal Reserve rate hikes in 2023.
