Best Low-Interest Personal Loans

Before applying for a loan, it's important to do some research and compare different lenders to see which one offers you the lowest rate and the loan term and amount you need. Here are some factors to keep in mind when shopping for low-interest loans from different lenders.

APR

Not all lenders offer the same interest rates and fees. Compare the annual percentage rate, or APR, across all lenders to see which one offers the lowest APR. The lower your APR, the less you can expect to pay in interest over the lifetime of your loan.

Fees and restrictions

Some fees -- like origination fees -- are included in the APR. But there are also separate fees you may be charged, such as late fees for paying your bill after the due date or prepayment penalties for paying your loan off early. Review any extra fees lenders might charge before selecting one. 

Additional perks

While finding the lender with the lowest interest rate and fewest fees are the primary factors to consider, some lenders also offer additional perks. For instance, some lenders offer an auto-pay discount that reduces your interest rate. Others might offer a welcome bonus or a cash bonus if you refer a friend who gets approved for a loan. 

Prequalification options

It's a good idea to get prequalified for a loan to find out if you're likely to get approved -- and to review the rates and terms you're offered. If a lender offers prequalification, you'll need to input your credit, income and borrowing details. Prequalification doesn't impact your credit score. While many lenders offer this option, not all do.

Your loans APR is based on a few different factors, including:

• Credit score. Your credit score is the most important factor in determining your APR. In general, the higher your credit score, the lower your rate. If your credit score is lower, you should expect a higher APR. To qualify for the lowest APRs available for personal loans, you'll typically want a good-to-excellent credit score. If your credit score is on the lower end and you don't need to borrow money right away, you might consider taking steps to improve your credit score before applying for a loan.
• Amount to borrow. Different lenders have different borrowing requirements. How much you borrow could impact your APR. Some lenders may charge higher APRs for higher loan amounts, since they're taking on a bigger risk.
• Debt-to-income ratio. Your DTI refers to how much debt you pay each month divided by how much income you bring in each month. For example, if your debt payments equal $1,000 each month and you earn $3,000 each month, your DTI would be 33% ($1,000 divided by $3,000). Personal loan lenders tend to offer the lowest APRs to borrowers with lower DTIs. If you have a higher DTI, you may get approved for a loan at a higher APR.
• Loan terms. Typically personal loans with longer terms have higher APRs.
• Employment and income. Some lenders have specific employment and income requirements and may offer you a higher APR -- or not approve you at all -- if you don't meet these requirements.

1. Check your credit score and report. Before applying, be sure to check in on your credit score and credit profile. If you don't have access to these reports, visit annualcreditreport.com and pull credit reports from the three major credit bureaus, Experian, Equifax and TransUnion. This will show you what lenders see when they pull your credit report. If your score is too low to qualify for a lower interest rate, you can work on building your credit before taking out a loan. Or, you could explore personal loans designed for lower credit scores.
2. Compare lenders and get prequalified. Now that you know your score, you can start comparing lenders and once you've narrowed down your search to a few options, consider getting prequalified to compare interest rates, repayment terms, fees, perks and any other features that are important to you.
3. Complete an application. Once you've settled on a lender, it's time to apply. You'll need some personal and financial details, like pay stubs, tax returns . 
4. Get your money. If approved, you can set up an online account for your loan and add your bank account information to receive your funds. You can also set up a payment option and enroll in autopay at this time.

• Alliant
• Axos bank
• Discover
• Happy Money
• LightStream
• Marcus by Goldman Sachs
• PenFed
• PNC
• SoFi
• U.S. Bank
• Wells Fargo 

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*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.

Payment example: Monthly payments for a $10,000 loan at 6.99% APR with a term of 3 years would result in 36 monthly payments of $308.73. 

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