Interest rates on personal loans are increasing, but qualified borrowers can still find reasonable rates. As of early August 2024, the average fixed rate for a three-year personal loan is 16.49% for those with a credit score of 720 or higher, up from 15.89% the previous week. For five-year loans, rates have climbed to 20.41%. To find the best rates, borrowers should consider prequalifying with multiple lenders, as this process allows for a soft credit check, providing tailored loan options without impacting credit scores. It's crucial to remember that prequalification does not guarantee loan approval; a formal application is still necessary. To secure the best rates, borrowers should check their credit reports well in advance, aiming for a score of 720 or higher. Additionally, using a personal loan calculator can help estimate monthly payments and total interest paid over the loan's life, ensuring that the loan fits within the borrower's budget.
Read the full article here.