Personal loan rates have recently increased, with the average fixed interest rate on a three-year loan rising to 15.88% for borrowers with good credit. This uptick, noted between October 7 and October 12, indicates a need for potential borrowers to be proactive in securing favorable rates. While the average rate for a five-year loan has also seen a slight increase, well-qualified borrowers can still find lower rates by leveraging prequalification processes offered by lenders. This allows individuals to understand the terms they may qualify for without impacting their credit score. To improve chances of securing a better rate, borrowers should focus on enhancing their credit scores and reducing existing debt. Practical steps include checking credit reports for errors, lowering credit utilization, and ensuring timely bill payments. Understanding how to calculate monthly payments and total interest is essential, as it helps borrowers assess the true cost of their loans.
Read the full article here.