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4 best low-interest personal loans

Well-rated lenders with competitive rates

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Written by Sandy Baker
Edited by Cassidy McCants

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    SoFi, Best Egg and LightStream
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    A personal loan is an opportunity to borrow money for almost anything you want. These loans can help with debt consolidation, home improvement, medical costs, paying for a vacation or making a large purchase. There are several types of personal loans, with the most appealing options having low starting APRs.

    If you’re seeking a low-interest personal loan, it helps to know which lenders offer not just the lowest rates but also cheaper fees. Our four picks for loans with low interest are Best Egg, SoFi, Marcus by Goldman Sachs and LightStream.

    Our top picks

    What makes a good lender? As a general rule, you want to borrow from a trustworthy lender with a history of happy customers, fair rates and transparent pricing.

    Methodology: We looked at a variety of factors when choosing our top personal loan providers, including which lenders have the lowest interest rates. We also chose lenders that offer transparent fees, which helps you know exactly what to expect when you borrow. Additionally, we factored in borrowing limits, repayment terms and minimum credit score requirements.

    • Online reputation: We compared ratings and reviews on our site and across the internet. We also checked in with the Better Business Bureau to see current alerts and government actions related to marketplace activities.
    • Rates and fees: We looked for transparency and gave preference to lenders with lower APR ranges, lower origination fees and no prepayment penalties.
    • Availability: We confirmed that all of our picks are currently available throughout most of the U.S. We also eliminated lead generators.
    Best Egg AUTHORIZED PARTNER
    • Loan amounts: $2,000 to $50,000
    • APR range: 5.99% to 35.99%
    • Minimum credit score: 640
    • Term length: 36 or 60 months
    • Origination fee: 0.99% to 5.99%
    • Availability: Most states (not IA, VT or WV)

    What we like: Best Egg offers personal loans with a wide range of benefits, including loans of up to $50,000 with APRs starting at 5.99% for qualified borrowers. As an online lender with few overhead costs, it's able to offer competitive interest rates.

    Best Egg 4.9 offers both unsecured and secured loans. With a secured loan, which requires using an asset to secure the loan, you may be able to get a lower interest rate. The company also has specific features set up to make debt consolidation easier.

    What to consider: Best Egg charges an origination fee that could range from 0.99% to 5.99%, which could add a significant cost for some borrowers.

    What people say: Overall, ConsumerAffairs users like Best Egg for fast, low-interest personal loans, with many noting that the company helps borrowers secure low interest rates and offers refinancing and debt consolidation options. One borrower from Texas, for instance, praises the company's simple process and excellent customer service. They also like how easy the website is to navigate.

    SoFi AUTHORIZED PARTNER
    • Loan amounts: $5,000 to $100,000
    • APR range: 6.99% to 21.78% (includes autopay discount)
    • Minimum credit score: Varies
    • Term length: 24 to 84 months
    • Origination fee: None
    • Availability: Most of the U.S.

    What we like: SoFi has a simple online loan application process, which eliminates hassles. It offers pre-qualification with a soft credit pull, which means you can learn if you’re likely to qualify for a loan without hurting your credit.

    SoFi 3.8 provides personal loans up to $100,000, though loan maximums depend on a borrower’s credit history, income and expenses, among other factors. Another benefit is that SoFi doesn’t charge an origination fee, which helps keep your overall loan costs down.

    What to consider: SoFi offers long-term personal loans. By stretching out a loan for a longer period (up to seven years), borrowers end up paying more interest. However, a longer repayment term typically also means you have lower monthly payments, which may make paying off a personal loan a bit easier to manage.

    What people say: Overall, people on our site are satisfied with SoFi’s personal loan services, like a reviewer from South Carolina who wrote, “I can honestly say my interactions with SoFi have been superior to other lenders I have done business with over the years.”

    Marcus by Goldman Sachs
    • Loan amounts: $3,500 to $40,000
    • APR range: 6.99% to 19.99%
    • Minimum credit score: Varies
    • Term length: 36 to 72 months
    • Origination fee: None
    • Availability: Nationwide

    What we like: Marcus by Goldman Sachs is a solid personal loan option. The lender is known for its consumer-friendly features and application process. The entire process takes place online without a lot of back-and-forth.

    Marcus 3.9 is a good choice if you're consolidating high-interest credit card debt. The company offers direct payment to creditors, which speeds up the process. Marcus also offers a discount for those who set up autopay and has a deferral option that lets you defer a payment without interest after you've made 12 consecutive monthly payments.

    Its repayment terms are flexible, so you can choose what works best for you.

    What to consider: The company doesn’t offer secured loans, but it does lend up to $40,000 to qualified borrowers.

    What people say: On our site, reviewers note the ease of working with Marcus by Goldman Sachs — like a reviewer from New York who used the funds to refinance high-interest credit card debt into a lower monthly payment.

    “My loan was able to pay off three accounts in full and pay off a large [chunk] of other balances that were haunting me every month," they said. "My one monthly payment along with not using these credit cards has made my credit score go from good to excellent in seven months!”

    LightStream AUTHORIZED PARTNER
    • Loan amounts: $5,000 to $100,000
    • APR range: 3.49% to 19.99% (with autopay)
    • Minimum credit score: Varies
    • Term length: 36 to 72 months
    • Origination fee: None
    • Availability: Nationwide

    What we like: LightStream offers loans up to $100,000 for qualified borrowers, which makes it another good option to use if you plan to consolidate your existing debts. LightStream also has some of the lowest interest rates on this list. There’s also no origination fee, which means lower upfront costs.

    LightStream’s 3.9 personal loans are also a good option for those who need funds for home improvement projects. Its interest rates for qualified borrowers are competitive with home equity loans (a typical option for remodeling). 

    What to consider: To qualify with LightStream, you need good credit; the company defines this as having several years of credit history, a good payment history and a variety of account types. You must also have a stable and sufficient income and have demonstrated an ability to save.

    What people say: Overall, borrowers on our site are pretty happy with LightStream — one reviewer from Florida wrote that LightStream “could not be any more user friendly and customer driven! They plant a tree for every loan! They offer lots of repayment options and allow you to change payment time and amount whenever you need to make it more convenient.”

    Interest rate vs. APR

    As you consider the right personal loans for your needs, keep in mind the difference between the terms interest rate and annual percentage rate (APR).

    The interest rate is the cost of borrowing money from a lender. It’s expressed as an annual percentage of the loan amount borrowed. Each month, a portion of your payment will go toward interest, and another portion will go to the principal (the total amount borrowed).

    APR is a bit different. It’s also an annual percentage of the loan amount, but it provides a broader glimpse of the real cost of borrowing. APR includes interest as well as other associated fees (like origination fees) — for this reason, you’ll notice that APRs are typically a bit higher than the interest rate on most loans. However, it’s a better overall representation of what you’ll pay to borrow money from a lender.

    What’s a good interest rate on a personal loan?

    Personal loan rates vary considerably. Most lenders provide their APR ranges — if not, ask before you apply. Beware of predatory lenders with absurdly high rates, and avoid loans with rates that top 35.99% whenever possible. These tend to get very expensive and difficult to repay.

    Do your best to find a personal loan with an APR of 9.99% or lower. For those with good credit, 4% to 5% APRs aren’t too uncommon.

    What counts as a good rate depends on several factors, but it’s typically a good idea to try to find a loan with a rate no higher than 9.99%. If you have good credit, you might be able to score a rate as low as 4% to 5%.

    Lenders tend to offer lower rates on secured personal loans, which require you to use an asset as collateral the lender can seize if you fail to repay the debt. 

    Those with lower credit can expect to pay a bit more. However, there are lenders that offer competitive rates to those with a steady income who are working to improve their credit through financial management techniques.

    The best way to determine what rates to accept is to do plenty of comparison shopping. You can also research national averages to get a better idea of what rates are considered normal or average at the time you’re looking. These rates can change daily, which is why it’s a good idea to act quickly if you need funds and have been quoted a low rate from a trusty lender.

    How to get a personal loan with low interest rates

    Finding a personal loan with a low interest rate takes a bit of work. While the lenders listed here have some of the lowest rates, it’s also important to factor in your own creditworthiness to determine if those rates and terms apply to you. Each lender sets its own qualifications for loans and borrower requirements, so it’s important to look at several lenders to find the best interest rate for you.

    If you don’t have good or excellent credit and you’re not in a big rush to borrow, it’s a good idea to work on improving your score before applying for a loan.

    Whenever necessary (and possible), work to improve your credit score before you apply for a personal loan. Consider these tips:

    • Always make payments on time. Payment history is a significant factor when credit bureaus calculate your credit score. To minimize the risk of making late payments, set up automatic payments with each of your lenders.
    • Keep balances as far from the credit limit as possible. Your credit utilization is the second-most important factor in your credit score. Paying down debt reduces the amount of available credit you’re using.
    • Avoid applying for several loans that require hard credit pulls within a short period of time. This adds inquiries to your credit report, which lower your score. Many lenders use soft credit pulls to pre-qualify your application and give you an idea of what your rate will be.
    • Use credit. It’s not possible to build up your credit score if you aren’t using credit, paying it down and using it again responsibly.

    Be sure to check your credit report from each of the three credit bureaus: TransUnion, Equifax and Experian (you can request each annually for free at annualcreditreport.com). Look for any inaccurate or missing information on your report that could affect your credit score.

    As you start to compare lenders, turn to those that offer pre-qualification with a soft credit pull. This gives both you and the lender a better understanding of your creditworthiness and doesn’t harm your score with a hard inquiry.

    Where to get a personal loan with low interest

    Online lenders are growing in popularity among people searching for personal loans. It’s easy to compare online lenders for rates, terms and availability. Online lenders are typically available to borrowers throughout the U.S. and offer a wide range of loan options.

    There are other options, however. A local bank or credit union may also be a good option, especially if you already have a relationship with one (most local banks and credit unions also share their availability and rates online). It’s worth doing a bit of comparison shopping for personal loans from various lenders, including both online lenders and lenders with physical locations.

    Bottom line

    If you’re considering taking out a personal loan, it’s critical to factor in the cost of borrowing — both upfront and down the line. Compare APRs from the best lenders to determine which is willing to lend you money at the lowest cost. Always consider the amount you can borrow, the loan term, the monthly payment amount and fees.

    Ultimately, you'll get the best rate on a personal loan by ensuring your credit score is the best it can be and working with a reputable lender you can trust.

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