When to apply for a personal loan:
- Want to consolidate high-interest debts.
- Need to finance a large expense.
- Have good to excellent credit.
- Can make monthly payments over the loan term.
- Interest rates on personal loans generally range from 6% to 12% and borrowers with good or better credit may qualify for a rate at the low end of that range.
- A personal loan is an installment loan, which means you get money in a lump sum and make fixed monthly payments over a specific period, usually two to five years. Many online lenders let you pre-qualify for a loan to see estimated rates, with no impact to your credit score.
- Low rates, high borrowing amounts, and fixed repayment terms make personal loans an option for consolidating debt or financing large expenses, such as home improvements.
- The rate you receive on a personal loan largely depends on your credit score. Lenders also assess your credit history, income, and debt-to-income ratio.