- May 8, 2020
- Posted by: Ganeshcbani
- Category: Blog
If you’re looking for a low-cost loan, personal loan interest rates can be a great option for you. However, there are a few things to keep in mind before choosing one.
In this article, we’ll discuss the different types of personal loans and their interest rates. We’ll also give you some tips on how to choose the best loan for your needs.
How much does personal loan interest rates vary?
According to Bankrate.com, the average interest rate on a personal loan is around 6.84%. But that’s not always the case. In fact, some banks charge much higher rates than others. So what’s driving the variation?
There are a few factors at play, but one big reason personal loan interest rates vary is how much money you borrow and what type of loan you get. For example, if you borrow $10,000 from a bank, that bank may charge a lower interest rate than if you borrowed the same amount from a credit union. That’s because credit unions are typically prohibited from lending money to people with bad credit histories.
Another big factor is the term of your loan. If you take out a personal loan for two years, your interest rate will be higher than if you take out a personal loan for five years. That’s because the longer your term, the more expensive the loan will be in terms of interest payments.
Finally, there’s also the interest rate differential between different types of loans. A car loan may have a higher interest rate than a personal loan because car loans are considered more risky by lenders.
Types of Interest Rate
The interest rates on personal loans can vary quite a bit, depending on the loan type and the credit score of the borrower.
Here are some of the most common types of personal loan interest rates:
- Fixed interest rate: This is the rate that stays fixed throughout the life of the loan, regardless of how much is borrowed or paid back.
- Variable interest rate: This is the interest rate that changes over time, based on a set percentage or index.
- APR (annual Percentage Rate): This is simply the interest rate as a percentage of the total amount borrowed each year.
- PMI (payment maternity index): This is an interest rate modifier applied to certain types of personal loans when a woman becomes pregnant. It adjusts the regular interest rate to account for the additional costs associated with borrowing money during pregnancy.
What are the best personal loan interest rates?
There are a few things you need to consider before choosing the right personal loan interest rate. The interest rate is one factor, but you also need to consider the loan amount, the terms of the loan, and your credit score.
Here are some of the best personal loan interest rates according to Credit Karma:
- J.P. Morgan Chase offers competitive interest rates on personal loans up to $50,000 with no down payment required. The bank offers an introductory 0% APR offer for first-time borrowers through January 13, 2019.
- Citibank offers competitive interest rates on personal loans up to $100,000 with no down payment required. The bank offers an introductory 0% APR offer for first-time borrowers through February 15, 2019.
- Capital One offers competitive interest rates on personal loans up to $50,000 with no down payment required. The bank offers an introductory 0% APR offer for first-time borrowers through January 31, 2020.
- Barclays offers competitive interest rates on personal loans up to $100,000 with no down payment required. The bank offers an introductory 0% APR offer for first-time borrowers through February
Reducing / Diminishing rate of interest
Interest rates continue to decline across the board, but some loans may offer a lesser rate of interest. This could be due to a variety of reasons, including: the loan’s terms, your credit score, and the type of loan you’re getting.
Here are a few tips to help you take advantage of this trend:
- Compare rates before applying for a loan. It’s important to find the lowest rate possible for your specific needs. Different lenders have different criteria for qualifying for loans, so be sure to compare rates before applying.
- Compare terms and conditions. Interest rates can vary depending on how long you have to pay back the loan, how much money you borrow, and other factors. Be sure to read the terms and conditions carefully before signing anything.
- Get a low-interest credit card offer. A low-interest credit card may offer a better rate than some loans. Generally speaking, cards with lower interest rates offer better terms than those with higher rates. Consider comparing offers before making a decision.
- Consider refinancing an existing loan if possible. Refinancing can often result in lower interest rates, especially if you have a
Interest rates are a big topic of discussion for many people, and for good reason. When it comes to personal loans, the interest you pay can have a significant impact on how much money you end up spending over the life of your loan. While there are many different types of loans available, all of them have an associated interest rate. The good news is that there are ways to reduce your interest rate, which we’ll discuss below. So whether you’re looking to borrow money to buy a car or take out a mortgage – or just want to know what the best interest rates currently are – read on!