Today’s Personal Loan Rates: October 23, 2023—Rates Move Lower Once Again

Rates on personal loans declined last week, giving qualified borrowers a chance to pick up a fair interest rate and finance a project, purchase or even unexpected bills.

From October 16 to October 21, the average fixed rate on a three-year personal loan was 15.25% for borrowers with a credit score of 720 or higher who prequalified on Credible.com’s personal loan marketplace. The rate was 15.28% the previous week, according to Credible.com. The average rate on a five-year personal loan rose 0.48% last week to 21.02% from 20.54%.

Keep in mind that the rate you’ll receive depends on several factors, including your creditworthiness and the loans available through your chosen lender. The most creditworthy borrowers may be able to receive rates significantly lower than average.

These rates are accurate as of October 16, 2023.

Related: Best Personal Loans

Compare Personal Loan Rates

When you start shopping for a loan, look for lenders that offer a prequalification process. Lenders provide a range of rates online, not an exact rate based on your specific qualifications. Prequalifying provides a more accurate picture of the rate you’ll receive. During the prequalification process, lenders run a soft credit check, which has no impact on your credit score.

Lenders generally provide you with a list of options after you prequalify that includes loan rates, terms and limits. You can find the best loan for your circumstances by prequalifying at multiple lenders and comparing loan offers.

You aren’t guaranteed approval if you prequalify. Lenders still require that you submit a formal application and additional documentation. After submitting your formal application, lenders typically run a hard credit check, which can ding your credit score by one to five points.

Related: 5 Personal Loan Requirements To Know Before Applying

Estimate Your Personal Loan Payments

You can estimate your monthly payment and how much you’ll pay in interest once you know your personal loan interest rate, term and amount.

For example, let’s say you get a $5,000 personal loan with a term of five years at a fixed interest rate of 21.02%. You’d pay around $135 monthly and approximately $3,119 in interest over the life of the loan, according to the Forbes Advisor personal loan calculator. Overall, you’d pay $8,119 in total, which includes both principal and interest.

Getting the Best Rates

Personal loan interest rates are based on a number of factors, including your overall creditworthiness, credit score, income and debt-to-income (DTI) ratio. Two quick ways to help you receive more favorable rates include paying down existing debt to help lower your DTI and improving your credit score.