Personal finance

This week’s average personal loan rates: December 6, 2022 | Rates hold steady

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The average overall personal loan rate this week is 20.01%, a two basis-point increase from last week.

While this week’s increase is small, personal loan interest rates have been climbing steadily this year. As the Federal Reserve increased the federal funds rate six times in 2022 to combat high inflation, consumer borrowing costs for everything from personal loans to credit cards and mortgages have risen in tandem.

You can get a personal loan for many reasons. A majority of borrowers use them for debt consolidation. Other popular uses for the money include financing a home improvement project, paying a medical bill, and covering general household expenses.

Average personal loan rates

We’ve compiled a database of 28 personal loan products and averaged their rates so you know the current landscape. You’re more likely to qualify for a better rate with a higher credit score. Rates are basically unchanged from last week and are high in general.

The lowest rate of the companies we track is tied between Lightstream, Wells Fargo, American Express, and Reach which have minimum APRs of 5.99%. The highest rate is from NetCredit Personal Loans, which has a maximum APR of 99.99%.

You aren’t guaranteed to get the average rate shown above. The rate you’ll get depends on your creditworthiness and other aspects of your financial situation. You can find the rates you’ll qualify for by applying with each lender you’re interested in.

Average personal loan rates by credit score

These rates are based on data from 133 borrowers who applied for loans and received rates.

Average loan amount and term length by credit score

These loan amounts and term lengths are based on data from 133 borrowers who applied for loans and received rates.

Percentage of borrowers by loan purpose

These loan purposes are based on data from 149 borrowers who applied for loans and received rates. One borrower used loan funds to pay for baby expenses this week.

Frequently asked questions

Many lenders don’t disclose a minimum credit score, but they may be able to give you a general sense of your approval chances when you offer them your financial information. If your score is too low to qualify, take steps to improve it by reviewing your credit report and lowering your credit utilization ratio (the percentage of your credit limit you’re currently using).

A debt consolidation program will often help your credit in the long run because it will reduce your debt and your monthly minimum payments, which all affect your credit score. If you consolidate your debt, you will benefit from a lower interest rate. That will increase the amount you are paying toward your balances each month, which will then decrease the amount of time it takes to pay off your debt.

Most personal loans allow a variety of uses, and while most include credit card consolidation or debt consolidation, not all do. Make sure to read the fine print of any personal loan you’re applying for, and make sure that debt consolidation is an acceptable use of your loan. All of the loans we considered had an option to use the loan for debt consolidation, if not a separate loan, which we included details for.

Ryan Wangman is a reporter at Personal Finance Insider reporting on personal loans, student loans, student loan refinancing, debt consolidation, auto loans, RV loans, and boat loans. He is also a Certified Educator in Personal Finance (CEPF). In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership. He graduated from Northwestern University and has previously written for The Boston Globe. Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services here >>

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.

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Source: https://www.businessinsider.com/personal-finance/personal-loan-rates-today-tuesday-december-6-2022-12?op=1

Donovan Larsen

Donovan is a columnist and associate editor at the Dark News. He has written on everything from the politics to diversity issues in the workplace.

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