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Is a personal loan right for you?
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Personal loan rates continue to fluctuate with average interest rates on 5-year personal loans up slightly to 24.77% from 24.29% the week prior, according to Bankrate’s most recent data for the week ending June 6. Average rates on 3-year personal loans were also up slightly to 24.18% from 23.51% the week before. But those with excellent credit may significantly pay less, with average 5-year personal loan rates sitting at 14.71% and 3-year personal loan rates at 13.30%. (You can see the lowest rates you may qualify for here.)
Data from LendingTree reveals that nearly 20 million Americans have a personal loan. And if you can get decent rates and terms, they can be a good way to consolidate high-interest debt or pay for an emergency expense, as they tend to offer lower rates than credit cards. They also typically don’t require any collateral to qualify for, and some personal loans fund in as little as one day.
That said, personal loans often have higher rates than home equity loans or HELOCs. And if you don’t repay them on time, your credit score may take a hit, which can impact your future ability to get loans at decent rates. Because personal loans can be easy to get, experts say it’s important that borrowers don’t get carried away taking out more money than they actually need. To make sure you get the best rates and terms, experts advise getting quotes from a few different lenders.
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