For the week ending May 31, average personal loan rates for 5-year loans increased to 24.29% from 22.08% the previous week, and average 3-year loan rates peaked 8 weeks by 23.51%. But fortunately for those with excellent credit, rates are significantly lower, with 5-year loans at 14.87% and 3-year loans at 13.90%, according to the latest data from Bankrate. (You can see the lowest fares you could qualify for here.)
Personal loans can be used for a variety of reasons, from consolidating high-interest debt to paying for big purchases like a needed home repair. Some personal loans fund in as little as a day, and many personal loans don’t require collateral, so if you’re looking for quick and easy access to a lump sum of money, you’ll probably want to consider a personal loan. .
On the other hand, personal loans often come with higher interest rates than home equity loans or HELOCs, meaning you’ll pay more over the life of the loan. And experts advise borrowers to withdraw only the amount they really need, instead of inflating their loan. Just because it’s easy to get your hands on a personal loan, if you withdraw more than you’ll actually use, you’ll still have to repay the loan in full, plus interest.
To ensure you get the best rates and terms, experts recommend getting quotes from a few different lenders and making sure your credit score is as high as possible and your finances are in order. Read our guide to the 6 things to know before taking out a personal loan here.