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Average personal loan rates for 5-year loans decreased slightly to 17.99% from 18.00% the week prior, according to Bankrate’s most recent data for the week ending July 4. Meanwhile, average rates on 3-year personal loans also decreased to 19.02% from 19.43% the week prior. If you have excellent credit, you’ll likely pay far less though: 5-year personal loan rates for those with very high credit scores sit at 12.70%, and for 3-year personal loans rates average an even lower rate of 11.39%. You can see the lowest personal loan rates you qualify for here .
Data from LendingTree reveals that nearly 20 million Americans have a personal loan. And one of the reasons they’re so popular is because they tend to fund quickly (sometimes in as little as a day) and usually don’t require a borrower to put down any collateral. Pros say that borrowers looking to fund a large purchase or consolidate high-interest debt may want to consider taking out a personal loan.
That said, personal loans tend to have higher rates than other types of loans, like HELOCs and home equity loans, for example. That’s one reason experts say it’s important that borrowers don’t get carried away taking out more money than they actually need, because you’ll have to pay it all back plus interest. If you don’t repay the money, it will hurt your credit score, which can impact the rates you pay on loans for years to come. If you decide a personal loan is right for you, make sure your credit score is as high as possible and your financials are in order. Then get quotes from a few different lenders to make sure you’re getting the best rates and terms possible.