Best Low-Interest Personal Loans: Borrow Without Breaking the Bank

The average interest rate on a two-year personal loan is about 12% in 2024, according to Federal Reserve consumer credit data. But with the right lender for your personal situation, you might be able to score a much lower rate.

Personal loan lenders that offer low-interest loans may offer other advantages, too, like no origination fees, perks for members, or flexible repayment options. In my experience, going with a reputable lender that offers low interest rates is a good way to save serious cash when borrowing money.

The lenders in our roundup below offer low interest rates on personal loans plus other benefits that can help you pay off debt and meet your other goals in life.

How we evaluate products

To determine our top low-interest personal loans, we compiled a list of personal loan lenders, including online lenders and peer-to-peer lenders, seeking out those that offer interest rates below the national average of 12%.

We eliminated from our list those that didn’t offer low interest rates on personal loans. Then, we evaluated each lender for its interest rates, fees, funding time, qualification criteria, loan amounts, and loan terms.

We selected the top five lenders that offer low interest rates, a variety of loan amounts and terms, and low or no fees. We reviewed our list to make sure it contained options for a variety of credit scores and other qualifying criteria.

Best personal loans with low interest rates

• Lightstream
• SoFi®
• Discover
• Upstart
• Happy Money

Comparing low-interest personal loans

Lender	Best for	APRs starting at
Lightstream	Large loan amounts	6.94% (as of 12/23/24) with autopay
Sofi	Membership perks	Fixed APR rates ranging from 8.99%-29.99% (as of 09/05/24) with all discounts
Discover	No origination fee	7.99%-24.99% (as of 12/23/24)
Upstart	Fair credit	7.80%-35.99% (as of 07/01/24)
Happy Money	Credit card consolidation	8.95% (as of 12/4/24)

Lightstream

LightStream offers some of the lowest rates around, starting at 6.94% (as of 12/23/24) APR if you sign up for the company’s AutoPay discount. The company offers loan amounts up to $100,000, which is much higher than most other personal loan lenders I’ve seen.

On top of its low rates, LightStream offers to beat any qualifying rate offer from a competitor. Plus, if you’re not satisfied, there’s a $100 loan experience guarantee.

You’ll need good to excellent credit for a LightStream personal loan. Credit requirements include yearslong credit history, good credit mix, and positive payment history with no or few negative marks. Other financial requirements include steady and sufficient income and assets that show a pattern of saving.

Visit LightStream | Learn more in our Lightstream personal loans review

SoFi

SoFi® offers fixed-rate and variable-rate personal loans up to $100,000, which is enough to consolidate some serious debt or fund a big-time home renovation. When you take out a personal loan with SoFi, you become a SoFi member, which grants you access to special perks like personalized financial advice, referral bonuses, and travel discounts.

SoFi also can fund your loan as fast as the same day you sign. There are no origination fees required, but you’ll need to have a steady job to qualify and SoFi will check your credit during the application process. You can prequalify online with no impact on your credit score.

Visit SoFi Personal Loans | Get more details in our SoFi loan review

Discover

Discover was the lender I chose to work with when I needed to fund a home renovation project. I was already a fan of the Discover it^® Miles, and the low interest rates and no fees made Discover extra appealing for personal loans, too.

You won’t need to pay any fees on a Discover personal loan as long as you make your payments on time. The lender also offers flexible loan terms, with options between three and seven years, and you can get your funds as soon as the next business day.

Find out more in our Discover Bank review

Upstart

Upstart may be the right fit for a low-interest personal loan when you have fair credit. The online personal loan lender considers additional factors to determine whether to approve a loan and to help set rates. It will review your education and job history alongside traditional requirements such as credit, income, and DTI.

If you’re looking for smaller loan amounts, Upstart offers personal loans starting at just $1,000. You’ll need a credit score of 620 and proof of income to qualify for an Upstart personal loan.

Visit UpStart | Read our Upstart review to learn more

Happy Money

If you’re looking for a low-interest personal loan to consolidate credit card debt, Happy Money (formerly known as Payoff) could be a smart option. The online lender offers personal loans designed for credit card consolidation, with APRs starting at 8.95% (as of 12/4/24). That APR includes an origination fee, which ranges from 0-5%.

To qualify for a Happy Money loan, you’ll need a credit score of 640 or higher and no delinquencies on your report.

Visit Happy Money | Learn more in our Happy Money personal loans review

How to get lower personal loan rates

Understanding what goes into personal loan rates can help you make informed decisions. When you know what goes into personal loan rates and offers, you’ll be better equipped to evaluate lenders as you shop for a personal loan.

Be a well-qualified borrower

Currently, the best personal loan rates start around 7% APR. Whether lenders will offer you rates that low, however, will depend on how comfortably you meet their requirements for personal loans.

Here’s a look at the factors that most borrowers will need to have in place to qualify for low-interest personal loans.

• High credit score: Your credit score can indicate how likely it is that you’ll repay a loan. The higher your score, the more likely it is that a personal loan provider will offer you low interest rates. Typically, the lowest rates are reserved for borrowers with a good or excellent credit score — meaning a FICO score of around 720-740 or higher.
• Positive credit history: On top of considering your credit score, a personal lender is likely to review your credit reports and borrowing history. You might have a better chance at getting lower rates if you have a longer credit history, a positive payment history, and few negative or derogatory marks on your report.
• Lower debt-to-income (DTI) ratio: This factor measures how much of your monthly income goes toward debt payments. Lenders often look at this to be sure you can reasonably afford to repay the loan you’re borrowing, and it can also play a role in how they set rates. Lower is better, with a good debt-to-income ratio sitting at or below 30%.

Choose low-interest loan terms

The personal loan rates you’ll pay are about more than just your borrower profile. The type of personal loan you choose can also affect what you can expect to pay.

Here are some choices that could net you a lower personal loan rate.

• Shorter loan terms: A shorter loan term represents a lower risk to the lender, as they’ll get their money back faster. So choosing a personal loan with a shorter term of three years or less can often result in more favorable interest rates.
• Variable interest rates: You might be offered lower initial rates if you select a variable-rate rather than a fixed-rate personal loan. The rate on this type of personal loan, however, will rise and fall with market interest rates. The lender passes some of the costs of fluctuating rates onto you as the borrower, lowering their risk — and allowing them to offer lower upfront APRs on variable rate personal loans.

Compare lenders

Shopping around and comparing prices is a given with most major purchases. This process can be just as effective at saving you money when applied to personal loans, as the advertised rates are just part of the story. Take time to vet personal loan providers, request rate offers generated with soft credit checks, and compare various offers. Also check with local credit unions and banks to see if they offer low-interest personal loans with competitive rates.

Add a cosigner

Consider adding a cosigner with a solid credit history to your personal loan. Most lenders will evaluate the credit scores of both you and your cosigner, which could net you a better rate.

Build your credit

Consider working to improve your credit and applying once it’s better. You can put in some work to bring up your credit score, apply once it’s higher, and have a better chance at qualifying for lower personal loan rates.

Shopping for a low-interest personal loan can feel like a hassle. While you might spend a few hours researching personal loan options, remember that you’ll likely be repaying the loan for years. It’s worth the effort to find a lower personal loan rate, which will keep borrowing costs affordable and help you avoid high interest charges.

FAQs

Other lenders we considered

Some personal loan lenders didn’t make our list, but could still offer a loan that fits your needs:

• Upgrade: This online personal loan lender offers low-interest personal loans between $1,000 and $50,000. However, you’ll need to pay an origination fee if you use an Upgrade loan.
• Prosper: Prosper offers what’s called “peer-to-peer lending,” which means it facilitates loans between you and another individual. You may be able to qualify for a Prosper loan of up to $40,000; you’ll need a credit score of at least 640 to qualify.