Best Personal Loan Rates for September 2020

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Among the fastest-growing loan products in banking, personal loans became popular after the 2008 financial crisis as a flexible and (sometimes) cheaper alternative to high-interest credit cards. Borrowers can take out personal loans for any number of reasons, but the most common is to consolidate credit card debt.

Personal loan interest rates can vary drastically, from as low as 4% to as high as 36%. This wide range depends on the loan terms (e.g., repayment period, amount borrowed) and your personal credit history. 

What to Know About Personal Loan Rates

Do you have a good credit score and a solid credit history? Lenders look at these factors to calculate their risk and determine if you’re likely to pay back the loan. The better your credit score, the lower your interest rate.

A good rule of thumb: The best personal loan rate for you is one that’s less than what you’re paying now on other debt. If the interest rates on your current debt, such as your credit card debt, are lower than a personal loan would be, you’re better off doing nothing.

If you have average or poor credit, or haven’t established a credit history yet, then getting a cosigner or putting up collateral (e.g., a bank or investment account, car, or house) may help you get a better personal loan rate. But be cautious. Those two strategies may offer peace of mind to the lender, but they also increase your risk. Defaulting on a loan could leave you and your cosigner on the hook for repayment. If you put up collateral, the bank could seize your home or accounts. You need a bulletproof budget in place to ensure those scenarios don’t happen.

What Are the Current Personal Loan Rates?

As of August 7, 2020, the average interest rate for a personal loan is 11.88%, according to Bankrate.

Personal Loan Rates by Credit Level

Based on an “excellent” FICO credit score between 720 and 850, the average personal loan rate is 10.3% to 12.5%. The average rate is 13.5% to 15.5% for a “good” credit score (690–719), 17.8% to 19.9% for an “average” credit score (630–689), and 28.5% to 32.0% for a “bad” credit score (300–629). While some lenders advertise rates much lower than 10.3%, those would be exceptions to the rule and only for people with the very best credit scores.

What is a Good Interest Rate?

Interest rates will vary depending on the terms of a loan and the borrower’s creditworthiness. Typically, a good personal loan interest rate is one that is better than the interest rate on your credit card debt (or the aggregate interest rate if you have multiple credit cards). The average credit card interest rate hovers around 15%. 

The higher the interest rate for a personal loan, the more you could end up spending in the long term, and the greater the chance of getting locked into a cycle of debt. For example, on a $10,000 loan with a term of 5 years, the difference in overall cost between an interest rate of 10% and an interest rate of 25% would be $4,862.56 over a five-year period.

We recommend comparing offers from multiple lenders to get the best rate. All lenders weigh variables (e.g., credit history, credit score, income) differently, so it helps to have a variety of options. You can apply online or call a lender for a quote, though keep in mind these processes will require you to divulge your personal information. You will likely experience a small but temporary drop in your credit score as a result of the credit check that comes with the application.

Institution Current APR Loan Term Range Min. Loan Amt. Max Loan Amt.
LightStream 3.49% – 19.99% 2 – 12 years $5,000 $100,000
SoFi 5.99% – 16.19% 2 – 7 years $5,000 $100,000
Payoff 5.99% – 24.99% 2 – 5 years $5,000 $40,000
Best Egg 5.99% – 29.99% 3 – 5 years $2,000 $35,000
U.S. Bank 6.49% – 16.49% 1 – 5 years $1,000 $25,000
TD Bank 6.99% – 18.99% 1 – 5 years $2,000 $50,000
Discover 6.99% – 24.99% 3 – 7 years $2,500 $35,000
Rocket Loans 7.161% – 29.99% 3 – 5 years $2,000 $45,000
PNC Bank 7.24% – 14.09% 6 months – 5 years $1,000 $35,000
Upstart 7.35% – 35.99% 3 – 5 years $1,000 $50,000
Prosper 7.95% – 35.99% 3 – 5 years $2,000 $40,000
Upgrade 7.99% – 35.97% 3 – 5 years $1,000 $35,000
Avant 9.95% – 35.99% 2 – 5 years $2,000 $35,000
Lending Club 10.68% – 35.89% 3 – 5 years $1,000 $40,000
OneMain Financial 18.00% – 35.99% 2 – 5 years $1,500 $20,000

This list does not represent the entire market. To rank the personal loan rates you’re most likely to be considering, we began by analyzing the 20 most commonly reviewed and searched-for personal loan rates. Then, we cut out any lenders based on the following criteria: 

  1. We eliminated lenders that don’t make it easy to find the above essential loan information on their websites without entering an email or other personal information. Many lenders prominently display this information on their sites, making it easy to compare to other lenders. If you are in the market for a personal loan, we’d recommend a transparent lender that doesn’t require personal information for a rate comparison. 
  2. We ruled out any lenders whose max APR exceeds 40%, which is well above the average APR you can find even if you have bad credit. A high APR will result in you paying more over the course of the loan.
  3. Our list only features direct lenders, rather than intermediaries or loan marketplaces. We also ruled out credit unions, which have unique membership requirements and limit the number of people who could easily consider them for a loan. Credit unions can offer competitive rates to those who qualify; check your local area or use a credit union locator to compare rates.
  4. Also, none of these banks charge any fees or penalties for early payments or otherwise paying off your loan early. We don’t think you should ever have to pay a fee to get out of debt faster, so will never recommend a personal loan that includes such a fee or penalty.

The above rates and loan information is accurate as of August 7, 2020. The NextAdvisor editorial team updates this information regularly, though it is possible APRs and other information has changed since it was last updated. Some of the lowest advertised rates might be for secured loans, which require collateral such as your home, car, or other asset. Also, some loan offerings may be specific to where you live.

Overview of Lenders


Avant is an online lender that offers personal loans ranging from $2,000 to $35,000. Upon approval, you can receive funds as soon as the next business day. Avant is known for being more lenient than other lenders when it comes to credit. You will need a minimum credit score of 580 (considered “fair” by FICO standards).


BestEgg offers personal loans online for debt consolidation, credit card refinancing, home improvement, and other uses. Loans come with an origination fee. To qualify for the lowest APR, you need a 700 FICO score at minimum and a minimum individual annual income of $100,000.


With Discover, you can get a personal loan with flexible repayment terms (starting at 36 months). Discover doesn’t charge origination fees (typically a percentage of the loan charged upon approval). 


LendingClub is a peer-to-peer lender that offers personal loans through an online marketplace that connects borrowers and investors. LendingClub offers personal loans up to $40,000, though they do require borrowers to pay a 2-6% origination fee and to have good-to-excellent credit scores.


Lightstream is the online lender of SunTrust Bank, promising “loans for practically anything.” It offers personal loans of between $5,000 and $100,000 at term lengths between 24 and 144 months. Through the online application, you can receive funds the same day if you get approved quickly. 

Marcus by Goldman Sachs

Marcus is the online-only lender of Goldman Sachs, offering personal loans with amounts ranging from $3,500 to $40,000. No sign-up or origination fees are required, but keep in mind that lenders will often charge higher APR rates instead.

OneMain Financial

OneMain Financial is an online lender geared toward borrowers who may not otherwise qualify for traditional personal loans. This lender is amenable to people with fair to poor credit, but this does mean the interest rates charged will be high.


Payoff is an online lender that solely lends to borrowers for credit card debt consolidation. Personal loans will range from $5,000 and $35,000 with a maximum term of five years for repayment. Payoff does not charge fees on late payments.

PNC Bank

PNC Bank is one of only a handful of brick-and-mortar banks on this list offering competitive rates on personal loans. Loan amounts will range from $1,000 and $35,000. Existing customers can get a 0.25% APR decrease by setting up automatic payments to their personal loan.


Prosper offers personal loans at 3- and 5-year repayment terms, with loan amounts ranging from $2,000 to $40,000. Loans come with an origination fee, but no prepayment penalty. 

Rocket Loans

Rocket Loans offers same-day funding and pre-approved offers on personal loans, which range from $2,000 to $45,000. 


SoFi is an online lender that caters to people with strong credit and employment histories. Its personal loans come with no late fees. You can borrow up to $100,000 for terms between two and seven years.

TD Bank

TD Bank offers unsecured personal loans, unsecured lines of credit, personal secured loans, and what it calls the “TD Express Loan,” which offers loan amounts between $2,000 and $25,000 at competitive interest rates. 


Upgrade is an online lender that offers a wide range of loans for borrowers who have at least fair credit. Personal loans max out at $35,000. Upgrade does not charge pre-payment fees.


Upstart offers online loans between $1,000 and $50,000 for three- and five-year terms. Upstart accepts borrowers with less traditional lending backgrounds, using job history, college education, and its AI technology to supplement its credit history check.

U.S. Bank

U.S. Bank is a traditional brick-and-mortar that offers personal loans up to $25,000. According to its website, current U.S. Bank customers with a FICO credit score of 680 and above are considered the ideal personal loan borrowers.

What is a Personal Loan?

A personal loan lets you borrow a fixed sum of money for a fixed interest rate to be paid over a fixed period of time. Typically unsecured (not requiring collateral like a car or home), personal loans can be used for debt consolidation, home improvement projects, and other large expenses that one may not want or be able to pay for in one go.

Reasons to Get a Personal Loan

One of the most common reasons to get a personal loan is debt consolidation, particularly for credit card debt. This strategy allows you to pay back the debt with a fixed monthly payment at a more competitive interest rate. Other times a personal loan could make sense are for home improvement expenses like roof repair and interior renovation. While some have taken out personal loans for things like weddings, funerals, or even vacations, we don’t recommend it. Getting a personal loan for the wrong reasons could harm you in the long run.

When You Should Get a Personal Loan

The best reason to get a personal loan is to consolidate debt. As long as you get a favorable interest rate and make payments on time, you’ll be benefitting from the simplicity and lower payments of a single loan that takes the place of multiple credit cards or other loans with varying and higher APRs. Home repairs, such as termite extermination and leaking roofs, are also sensible reasons for personal loans, but you need to have a solid plan for repaying the debt.

When You Shouldn’t Get a Personal Loan

Weddings and vacations are not good uses for personal loans. Ending up in debt for costly personal expenses can land you in deep financial trouble, so we don’t recommend personal loans for anything other than emergencies or focused self-improvement. It’s also not recommended that you consolidate student debt, as you could lose access to deferments, forbearances, and other types of payment arrangements.

Pros and Cons of Personal Loans

Personal loans are valued for their flexibility and simplicity. Most personal loans are unsecured with a set interest rate, which means that you borrow a fixed amount of money to pay back over a fixed time period at a fixed rate. You know what to expect every month, in other words. That’s why many people choose to consolidate debt from multiple high-interest credit cards into one personal loan.

The downside is lenders often require a good credit history for approval. If you’ve had issues with making monthly payments, or have filed for bankruptcy in the past, you may find it more difficult to get a personal loan, much less one at a favorable rate. In that case, you’d have to consider getting a cosigner or putting up collateral for a secured personal loan. You might also explore balance-transfer credit cards (cards with 0% introductory rates) and HELOCs (home equity line of credit). 

If you hold credit card debt, we recommend contacting your creditor and asking about lowered interest rates, forbearances, or another form of accommodation. Taking this extra step can help relieve the burden and get you back on the path to financial health. Finally, consider any opportunities to raise your income through side hustles or downsizing your budget.

Is a Personal Loan Worth It?

Personal loans are best used for debt consolidation, planned home repair projects, and emergencies — but only if the interest rate and repayment terms are favorable. If a personal loan is taken out without a clear plan for how to repay it, it is never worth it. If you have bad credit, no credit, or if you’re unemployed, personal loans are probably not worth it.

Personal Loan vs. Credit Cards with Promotional Rates

If you’re looking to consolidate debt, then you may want to consider credit cards with promotional rates instead of a personal loan. Many credit cards come with 0% introductory APR on purchases and balance transfers for as long as 15 months, and those go a long way in helping pay down debt if you can qualify for such offers. Keep in mind, however, that it’s strongly encouraged that you pay off the card within the introductory period. Otherwise you may face interest rates between 15% and 25%. Additionally, if you miss a payment, the 0% APR will revert to the regular purchase and balance transfer APR.

How to Get a Personal Loan

Shopping around is key when getting a personal loan. The trusty national bank branch around the corner may seem like an obvious choice, but there are also advantages that come with community banks, credit unions, online banks, and online lenders. We recommend soliciting multiple offers so you can weigh your options. 

Your credit score and history will help determine the personal loan rate you receive, so make sure to check your credit reports for errors before applying to loans. You’ll also want to review the fine print and make sure you understand the rate offered, repayment terms, and any fees you’ll have to pay upfront or for the duration of the loan. Upon selecting your preferred offer, you will need to furnish the lender with verification of income, employment history, address, and other forms of identification. Depending on the lender, you could receive the loan through direct deposit in a matter of seconds or in a week. 

Terms to Know

APR: Annual percentage rate. The compound interest rate you’ll pay annually for the personal loan.

Secured vs. unsecured: Secured loans require collateral, such as a car, home, bank or investment account, or other asset, as part of the loan agreement. If you fall behind on payments and default on the personal loan, your collateral could be forfeited to your lender. Most personal loans, which are unsecured, do not require collateral.

Repayment term: The length of time you agree to pay back the principal and interest of a personal loan. The shorter the repayment period, the higher the monthly payments.

Credit score impact: When applying for loans, lenders will do a credit check to determine if your credit history meets their standards. Usually, this “hard” credit pull will ding your credit score a few points, but only in the short term.

Fixed vs. variable rate: Most personal loans are offered at a fixed interest rate, which will not change throughout the length of the repayment term. Some personal loans are offered at a variable rate, but those loan products come at higher risk.

Early prepayment penalty: Some banks will charge fees if you pay off your personal loan before the repayment period is up. If you are in the market for a personal loan, we recommend avoiding lenders that charge early repayment fees or penalties.

Pro Tip

Considering a personal loan? Read our full guide to personal loans first:

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