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When shopping for a personal loan, most borrowers make the interest rate their top priority. The lower the interest rate, the less the total cost of the loan will be. While other factors like fees and term lengths also are important when you're selecting a lender, interest rates are critical in making your final choice.
Best Low-Interest Loan for Large Loans: LightStream Personal Loan
LightStream lends amounts of as much as $100,000 for borrowers looking to find large expenses with a loan that has low interest rates. The company offers same-day funding if the application is approved, verified, and signed before 2:30 p.m. ET.
LightStream also has a wide range of repayment term lengths, from two to 12 years. This is great if you're looking to spread out the cost of your loan over a long period.
Watch out for: Lightstream doesn't have preapproval. Borrowers looking for low-interest loans like to shop around to compare rates. Usually, this involves getting preapproved by several different companies and comparing the offers before settling on one. LightStream doesn't offer preapprovals for its personal loans. You'll have to go through the full approval process. That includes a hard pull of your credit report, which can temporarily lower your credit score.
Best Low-Interest Loan for Money-Back Guarantee: Discover Personal Loans
Discover personal loans come with a 30-day money-back guarantee, differentiating them from competitors. If you decide within 30 days of getting your loan that you don't want it anymore, you may return the funds via check and won't be charged any interest. This may be helpful if you find a lender with a lower interest rate or if you end up not needing the loan amount you initially requested.
Discover also has repayment terms ranging from three to seven years, so you have options if you want to spread out the cost of your loan. You're also able to pay off your loan early at any time without a fee.
Watch out for: Hefty late fee. Discover charges up to $39 in late fees. If you fall behind on your payments, those fees will increase the overall cost of your loan. Some other lenders on our list don't charge any fees.
Best Low-Interest Loan for Low Minimum APR: American Express Personal Loan
American Express has some of the lowest minimum APRs available. If you have an excellent credit score and can qualify for the lowest interest rate, this could be a great lender for you.
The company also gets you funds quickly. Borrowers will usually get their money within one to two business days after loan approval.
Watch out for: Eligibility requirements. To get a personal loan with American Express, you need to be a card member. You need a relationship with the company outside of your personal loan, which may be an added step you prefer to avoid.
Best Low-Interest Loan for Low Credit Scores: Upstart Personal Loan
Upstart has low interest rates and can get you your money faster than many other lenders. You may be able to get your loan proceeds as soon as the day after you apply.
Upstart's minimum credit score is 300. If you have a poor credit history, it may be easier to qualify for a loan with low rates from this lender than with some of the others on our list. Keep in mind that you'll usually be charged a higher interest rate with a lower credit score.
Watch out for: High origination fees. Upstart's personal loans can have origination fees up to 8%. On a $5,000 loan, for example, that would work out to an origination fee of $400.
Best Low-Interest Loan from a Brick-and-Mortar Lender: Wells Fargo Personal Loan
Wells Fargo is one of the largest banks in the country, with roughly 4,700 locations in 36 states. Borrowers looking for a low-interest personal loan who prefer face-to-face interactions will find ample opportunities to connect with a Wells Fargo representative. States where branches aren't available are Ohio, Michigan, Kentucky, West Virginia, Missouri, Oklahoma, Louisiana, Maine, Vermont, New Hampshire, Massachusetts, Rhode Island, and Hawaii.
Wells Fargo also has a high maximum loan limit of $100,000, which is perfect for borrowers who need to finance a large purchase.
Watch out for: History of controversies. Wells Fargo's recent past has been mired in scandals, including a December 2022 ruling from the Consumer Financial Protection Bureau ordering the bank to pay a $3.7 billion penalty as a result of widespread legal violations, including in the auto and mortgage loan space. Other lenders on our list don't come with the same baggage.
Best Low-Interest Loan for Debt Consolidation: Reach Financial Personal Loan
Reach Financial could be a good choice for borrowers looking for the best low-interest personal loan for debt consolidation. It has very fast funding speed. The company pays off your creditors directly — you won't have any money go into your account — and will do so within roughly 48 hours after your loan is approved.
The company's loan minimum is relatively low — you're able to take out a loan as small as $3,500. See our guide to the best debt consolidation loans for options with higher limits.
Watch out for: Limited loan purposes. You're only able to use your loan funds to consolidate or refinance debt. The other lenders on our list allow borrowers to use a personal loan for pretty much any purpose. Borrowers looking to cover other expenses will have to choose a different lender.
Best Low-Interest Loan for Cosigned Loan: Prosper Personal Loan
Prosper allows you to add a co-borrower to your account, a feature not all lenders offer. Enlisting a co-signer can help you get a lower interest rate on your personal loan than you would've otherwise received, or qualify for a loan that was out of reach on your own.
The company also has a low loan minimum of $2,000 and may be a good option for borrowers who only need a little bit of cash.
Watch out for: Many eligibility requirements. You may have trouble meeting all of Prosper's qualifications for a personal loan, particularly if your finances aren't in great shape. These include a debt-to-income ratio below 50%, and fewer than nine credit bureau inquiries (excluding duplicate inquiries) within the last six months.
Secure the Best Low-Interest Personal Loans
Why Interest Rates Matter
Interest rates are a critical component to consider when taking out a loan because, in combination with the term length, they determine the amount you will pay to borrow money over time.
A higher interest rate will mean higher monthly payments and more money out of your pocket over the life of the loan. Conversely, a lower interest rate means lower monthly payments and less total interest paid, making the loan more affordable. Longer loan terms usually come with higher interest rates than shorter-term loans because they're riskier for the lender.
Where to Find the Best Low-Interest Options
You can find the best personal loans with low interest through a variety of institutions:
Online Lenders
Online lenders, because they don't have the same amount of overhead costs as their brick-and-mortar counterparts, can often offer very competitive interest rates. They also can be more flexible when it comes to working with borrowers who don't have the best credit.
Credit Unions
Credit unions, which are member-owned financial institutions, frequently have better personal loan interest compared with banks for members in good standing. Interest rates for all types of credit union loans are capped at 18% by the National Credit Union Administration.
Banks
Banks, while they have established reputations and familiarity, often do not have the lowest interest rates you can find for personal loans unless you have an excellent credit score. However, banks sometimes offer perks including interest-rate discounts for existing customers.
What Makes a Personal Loan 'Low Interest?'
Three main factors determine whether you'll be able to get a low-interest personal loan:
1. Your Creditworthiness
Your creditworthiness is perhaps the most important factor that influences the interest rate offered to you. Lenders assess your credit score and payment history to determine the risk of lending to you. Those with the highest credit scores usually qualify for lowest interest rates due to the lower risk you pose to the lender.
2. Loan Term and Amount
The loan term and amount you borrow also are important factors. Shorter loan terms and smaller loan amounts tend to have lower interest rates because they carry less risk for the lender.
3. Market Conditions
The general conditions in the credit market also play a large role in determining whether you can get a low-interest personal loan. When interest rates set by the Federal Reserve are low, lenders can offer loans at lower rates to borrowers.
Low-Interest Loan Company Trustworthiness
Whether you're interested in taking out a $5,000 loan or a $50,000 loan, finding the right provider can help with your loan approval experience. We've looked at each institution's Better Business Bureau score to offer you another piece of information to pick a company that provides low-interest personal loans. The BBB measures businesses based on factors like their responsiveness to customer complaints, truthfulness in advertising, and openness about business practices. Here is each company's score:
| Lender | BBB Grade |
| LightStream Personal Loan | A |
| American Express Personal Loan | NR |
| Reach Financial Personal Loan | A+ |
| Upstart Personal Loan | A+ |
| Discover Personal Loan | A+ |
| Prosper Personal Loan | A |
| Wells Fargo Personal Loan | F |
Our top picks are rated A or higher by the BBB, with the exception of Wells Fargo, which has a history of problematic behavior and American Express, which currently has no rating because it is currently responding to previously closed customer complaints.
Most recently, the Consumer Financial Protection Bureau in December 2022 ordered Wells Fargo to return $2 billion to customers and pay a $1.7 billion penalty for legal violations involving auto loans, mortgages, and deposit accounts. The bank illegally charged fees and interest penalties on auto and mortgage loans. Additionally, it misapplied payments to those loans for many customers.
If these and other legal issues with Wells Fargo in recent years make you uncomfortable, you may consider getting a personal loan from a different lender.
Know that a high BBB score does not ensure a positive relationship with a credit card consolidation loan provider, and you should keep researching and talk to others who have used the company to get the most complete information possible.
FAQs About Low-Interest Loans
If you are being offered excessively high interest rates when you apply for a personal loan, it's probably because your credit score and other factors such as debt-to-income ratio make you a higher risk for that lender. Some lenders are more flexible when it comes to personal loans for bad credit.
The rate you get on a personal loan will depend largely on your credit score. The higher your credit score, the lower the rate you'll pay. The lowest personal loan rates for borrowers with excellent credit can be between 7% and 8%.
You should shop around extensively if you want a low-interest loan. It's important to compare low-interest rate personal loans from multiple lenders to find the best option. Even a small difference in the APR can save a lot in interest over the life of the loan.
If you have an outstanding personal loan with a high interest rate and you can qualify for a loan at a lower rate, you can use the money borrowed at the lower rate to pay off the balance of the higher-interest loan. Be sure to understand the full cost of borrowing, including all fees, before doing so.
Secured loans, which are backed by some sort of collateral such as your home or automobile, typically have lower interest rates than unsecured loans. Most personal loans are unsecured, meaning they are issued solely on the basis of your creditworthiness.
Generally, the best way to get a low-interest personal loan is to have an excellent credit score. While you can't dramatically improve your credit score overnight, you can start by making sure you pay your bills on time and in full. Additionally, you can reduce your credit utilization ratio.
Why You Should Trust Us: How We Chose the Best Low-Interest Loans
We assign every personal loan we review a rating on a 1-5 scale. This rating is a weighted average that takes into account seven different categories, some of which are judged more heavily than others. These include:
- Interest rate (20% of rating)
- Fees (20% of rating)
- Term lengths and loan amounts (15% of rating)
- Funding speed (15% of rating)
- Borrower accessibility (15% of rating)
- Customer support (7.5% of rating)
- Ethics (7.5% of rating)
See our broader ratings methodology for personal loans »
