Personal loan rates for 3 year fixed rate loans are dropping to their lowest point this year. Should You Consider Getting a Personal Loan?

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The average rate on a 3 year fixed rate personal loan fell to 10.70% in the week of September 20, its lowest point of the year. And the average interest rate on a 5-year fixed-rate loan also fell from 14.88% to 14.35% in the same week. However, the interest rate that you personally get on a personal loan depends on factors such as creditworthiness, loan duration, loan size and lender. and some rates start at 2.49%; See the lowest prizes you can qualify for here and below. Note that in order to get the lowest interest rates, you will typically have excellent credit ratings, use personal loans for certain things, and get shorter repayment terms. And these loans are not for everyone. Here’s what you should know before taking one out.

How are these prices compared to the previous weeks?

3 year fixed loan 5 year fixed rate loan
Week of 08/02/21

11.53%

13.71%

week 08/09/21

11.31%

13.82%

week 08/16/21

11.34%

13.76%

week 08/23/21

11.44%

13.89%

week 08/30/21

11.72%

16.51%

week 06/09/21

11.97%

15.30%

week 09/20/21

10.70%

14.35%

What is a personal loan?

Quite simply, it’s a fixed-amount loan that you get from an online lender, bank, or credit union that you typically repay every month over a period of one to seven years. The loan amounts are typically between $ 1,000 and $ 100,000.

Should You Take out a Personal Loan?

If you have excellent credit and are in need of quick cash, getting a personal loan can mean a quick approval process and lower rates than a credit card. However, if your credit is not good, personal loan interest rates can be high.

Make sure that in addition to being able to repay the loan (if it doesn’t affect your creditworthiness and ability to get future loans on good terms), you also consider fees like the commitment fee. Annie Millerbernd, NerdWallet personal loan expert, says that the fee can be anywhere from 1% to 10% of the loan amount – or a one-time flat rate – based on your loan. Learn more about personal loan origination fees here.

What should – and shouldn’t – use a personal loan for?

“If you can qualify for a lower interest rate than the alternatives, a personal loan can be an attractive way to consolidate credit debt, medical debt, finance your business, or improve your home,” said Ted Rossman, senior industry analyst at Bankrate. “Refinancing private student loans with a personal loan might make sense, but I don’t recommend them for federal student loans because they have more generous forbearance and forgiveness policies,” Rossman says.

Don’t use a personal loan for arbitrary purchases like vacation or paying for a wedding, experts say, as interest costs can easily add up. “It’s easy to end up spending too much and paying a lot of money in interest. It would be better to save if possible and pay off your savings, ”says Rossman.



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