For those with excellent credit, average interest rates on 60-month personal loans reached 14.32% and for 36-months at 13.25%, both up slightly from the previous week, according to the latest data from Bankrate for the week ending March 14. But overall, rates fell: for 36-month personal loans, average interest rates were 22.61%, down slightly from the previous week, while 60-month personal loans or 5 years were 23.46%, down from 24.01% the previous week. You can see the lowest fares you could qualify for here.
Advantages and disadvantages of personal loans
Personal loans can be used to cover a variety of expenses, from debt consolidation to unexpected medical expenses, planned home improvement projects to small business expenses – and they’re usually funded faster than other loans. , sometimes in as little as a day or so. And unlike other loans, personal loans often don’t need to be secured, which means collateral isn’t necessarily required to take out a personal loan.
That said, personal loans generally carry higher interest rates than some other loans like HELOCs and home equity loans (both of which use your home as collateral), so it’s important to do your homework when deciding. which loan to take out. Also, not repaying a personal loan in a timely manner can hurt your credit score – and you should be careful when using a personal loan for things like discretionary spending.
Although personal loans can be an attractive method of obtaining a lump sum of cash, personal loans often include an origination fee, which usually ranges from 1% to 8% of the loan amount – and this number is usually deducted from the amount. of the loan, so plan accordingly based on how much money you need and what portion will be taken from the top for fees when your loan is funded.
How do personal loans work?
Personal loans are loans you get through a bank, credit union, or online lender, and they typically range between $1,000 and $100,000. Personal loan repayment terms typically last between one and seven years, and you tend to repay these loans at regular intervals, often monthly.
How to get a personal loan
Before applying for a personal loan, try to raise your credit score as much as possible to ensure you get the lowest rates. Prequalifying can help you understand the rates you can afford, without affecting your credit score, and price comparison is important because rates and fees can vary and showing APR, repayment terms and more can help you choose the best personal loan for your situation. This guide will help you understand the necessary documents and information you need to get a personal loan. You can see the lowest fares you could qualify for here.