When shopping for a personal loan, getting the lowest interest rate should be your top priority. The reason is simple: a lower interest rate can save you thousands over the life of your loan. But there’s more to consider than just interest rates. Fees, loan terms, and the lender’s trustworthiness are all key factors to keep in mind. We’ve gathered the latest data on personal loans in the U.S. for October 2024, reviewing everything from the best loans for bad credit to large loan options. Our guide will help you find the perfect fit, saving you money and time.
Key Highlights and Loan Overview
| Lender | Loan Amount | APR Range | Best For | BBB Rating |
|---|---|---|---|---|
| LightStream Personal Loan | $5,000 – $100,000 | 5.99% – 16.99% | Large Loan Amounts | A |
| Discover Personal Loan | $2,500 – $35,000 | 6.99% – 24.99% | Money-Back Guarantee | A+ |
| American Express Personal Loan | $3,500 – $25,000 | 5.91% – 18.25% | Low Minimum APR | NR |
| Upstart Personal Loan | $1,000 – $50,000 | 5.60% – 35.99% | Low Credit Scores | A+ |
| Wells Fargo Personal Loan | $3,000 – $100,000 | 6.99% – 22.99% | Brick-and-Mortar Lender | F |
Best Low-Interest Loan for Large Loan Amounts
LightStream Personal Loan
Looking for a loan that can cover large expenses, like home renovations or consolidating multiple debts? LightStream offers one of the highest loan amounts available, with a maximum of $100,000. What’s more, it provides some of the lowest APRs in the market for borrowers with excellent credit. One major plus is LightStream’s fast funding—same-day approval and disbursement if you finalize your paperwork before 2:30 p.m. ET.
However, watch out: LightStream doesn’t offer preapprovals, meaning you’ll have to undergo a hard credit inquiry to find out if you qualify, which can slightly lower your credit score.
Best Low-Interest Loan with a Money-Back Guarantee
Discover Personal Loan
Want to lock in low rates but still need flexibility? Discover offers a unique 30-day money-back guarantee. If you find a better loan or change your mind, you can return the funds within 30 days, without paying interest. This no-risk feature makes Discover stand out among competitors.
In addition, Discover offers flexible repayment terms, ranging from three to seven years, making it easy to adjust your loan to fit your budget. But be cautious about late fees—they charge up to $39 for missed payments, which can add up if you’re not careful.
Best Low-Interest Loan for Low Minimum APR
American Express Personal Loan
American Express offers some of the lowest minimum APRs in the market. If your credit score is stellar, you could lock in an APR as low as 5.91%. This is perfect if you’re seeking a loan with minimal interest costs. You’ll also enjoy quick funding—usually within one or two business days after approval.
But beware: You need to be an American Express cardholder to apply for a personal loan, which might exclude potential borrowers who aren’t existing customers.
Best Low-Interest Loan for Borrowers with Low Credit Scores
Upstart Personal Loan
If your credit score has seen better days, Upstart could be a great choice. With a minimum required credit score of 300, this lender is far more flexible than many competitors. Upstart evaluates your creditworthiness by considering factors beyond just your credit score, including your education and job history. Loans can be disbursed as quickly as the next business day.
However, be mindful of Upstart’s origination fees, which can go as high as 8%. On a $10,000 loan, that fee could be a hefty $800.
Best Low-Interest Loan from a Traditional Bank
Wells Fargo Personal Loan
Prefer working with a brick-and-mortar lender? Wells Fargo offers the personal touch of in-person service, with over 4,700 branches nationwide. Wells Fargo also provides loans of up to $100,000, making it an excellent choice for large expenditures.
That said, Wells Fargo has a troubling history of customer scandals, including a 2022 penalty for legal violations in its auto and mortgage loan divisions. If trust is your top priority, you might want to explore other options.
Why Interest Rates Matter
Interest rates significantly impact the total cost of your loan. Even a small percentage difference in the APR can save you hundreds or thousands of dollars in interest payments over the life of a loan. For example, a $10,000 loan at 7% APR over five years would cost you about $1,861 in interest, while the same loan at 5% APR would cost only $1,322 in interest—a savings of over $500.
Where to Find the Best Low-Interest Personal Loans
Here are the best places to start your search:
- Online Lenders:
Often offer the lowest rates due to reduced overhead costs. Popular online lenders, like Upstart and LightStream, are known for their competitive rates and fast approval processes. - Credit Unions:
Typically, they offer lower rates than banks, especially if you’re a member in good standing. Look for credit unions that cap their interest rates at 18% or lower. - Banks:
While traditional banks may have higher rates, they often offer perks like relationship discounts for existing customers. Wells Fargo and Discover are notable examples.
What Makes a Personal Loan ‘Low Interest?’
Several factors determine whether you qualify for a low-interest loan:
- Creditworthiness:
The higher your credit score, the better your chances of securing a low-interest loan. Lenders assess your score, payment history, and overall financial health to gauge their risk. - Loan Amount and Term:
Shorter loan terms usually come with lower interest rates. Smaller loans also tend to carry less risk, allowing lenders to offer lower rates. - Market Conditions:
Interest rates fluctuate with the economy. When the Federal Reserve lowers rates, lenders often pass these savings on to borrowers.
FAQs: Low-Interest Personal Loans
Typically, a credit score of 670 or higher will help you qualify for the lowest rates. However, some lenders like Upstart offer loans to people with lower scores.
Yes, fees can include origination fees, late fees, and prepayment penalties. Always check the loan’s terms for hidden costs.
Yes, lenders like Upstart and Reach Financial cater to people with lower credit scores, although the interest rate may be higher.
Often, yes. Online lenders typically have fewer overhead costs, allowing them to offer more competitive rates.
Why You Should Trust Us: How We Chose the Best Low-Interest Loans
We are a dedicated educational blog with a team of financial experts who conduct thorough research to provide accurate, up-to-date, and unbiased recommendations. Our loan reviews are based on factors like interest rates, fees, customer service, and eligibility to ensure you make the best financial decision. We continuously update our content to reflect the latest market trends, keeping your needs in focus.
Disclaimer: The information provided is for educational purposes only and should not be considered financial advice. Please consult with a professional for personalized recommendations.