What Is a Good Interest Rate on a Personal Loan? (2024 Guide) (2024)

FAQs

What Is a Good Interest Rate on a Personal Loan? (2024 Guide)? ›

At this time, 10% is a good interest rate for a personal loan for a borrower with good credit. Anything below the national average personal loan interest rate, set by the Federal Reserve, is considered a good personal interest rate. Borrowers with poor credit scores will likely be offered a higher interest rate.

At this time, 10% is a good interest rate for a personal loan for a borrower with good credit. Anything below the national average personal loan interest rate, set by the Federal Reserve, is considered a good personal interest rate. Borrowers with poor credit scores will likely be offered a higher interest rate.

A good personal loan interest rate depends on your credit score: 740 and above: Below 8% (look for loans for excellent credit) 670 to 739: Around 14% (look for loans for good credit) 580 to 669: Around 18% (look for loans for fair credit)

The Federal Reserve has indicated it may cut rates later in 2024. Certified financial planner Amy Hubble told CNBC Select she doesn't expect a rate cut until at least September.

A good interest rate on a personal loan is generally on the low end of the range, which currently starts around 7 percent. For example, if you have excellent credit, a rate below 11 percent would be considered good, while 12.5 percent would be less competitive.

Also, mortgage rates are still much higher than we've been used to in recent years. On 30 May 2024, the average 2 year fixed mortgage rate is 5.80%. While this is a significant drop from its July 2023 peak of 6.86%, it's still much higher than December 2021 when was 2.34%.

Factors that increase your APR may include federal rate increases or a drop in your credit score. By identifying changes to your APR and understanding the actions that led to your increased rate, you can take steps that may help reduce your interest charges in the future.

The majority of lenders state that their maximum personal loan amount is $50,000, though some will go as high as $100,000. Some borrowers—such as those who are wealthy and with high credit scores—might be able to borrow more.

Which bank gives the best personal loan? ›

Offer collateral for lower interest: Providing collateral, such as property or savings, can help secure a personal loan at a reduced interest rate. Consider a co-signer: Having a co-signer with a strong credit history increases your chances of obtaining better terms and rates on a loan.

Whether your loan is a variable rate or your fixed rate is due to expire, speak to your Loan Market broker to see if they can negotiate a better interest rate with your current lender or another. Some reasons you may be able to get a better interest rate include: 1. You've been meeting or exceeding your repayments.

In 2025, however, rate cuts could start coming. The Fed's Summary of Economic Projections, released at its June meeting, "shows four cuts penciled in for next year, with the benchmark rate expected to dip to about 4.1% by the end of 2025," said CBS News.

Right now, the Fed interest rate is 5.25% to 5.50%. The FOMC established that rate in late July 2023. At its most recent meeting in June, the committee decided to leave the rate unchanged. June 11-12, 2024.

In summary, it is unlikely that mortgage rates in the US will ever reach 3% again, at least not in the foreseeable future.

The interest rate on federal direct undergraduate loans will be 6.53%. That's the highest rate in at least a decade, according to higher education expert Mark Kantrowitz. The undergraduate rate for the 2023-2024 year is 5.5%.

On June 12, 2024, the FOMC decided to hold steady on interest rates. The benchmark rate remains at 5.25-5.5 percent. Most personal loans have fixed rates, so current borrowers do not need to worry about their interest rates changing.

Prediction of Mortgage Rates for 2025

Keep in mind that inflation is still a factor, and mortgage rates may continue to hover around 6%. Here are some predictions for 2025 from key players and industry associations in the mortgage space: Fannie Mae: 6.1% Mortgage Bankers Association: 5.9%