Have you noticed that your mailbox has been full of companies such as Lending Club, Marcus by Goldman Sachs, and others that are practically begging to lend you their money? You aren't alone -- according to Credit Suisse, non-bank lenders sent out 41% more mail solicitations in May 2018 than they did a year ago.

Consumers are taking advantage of some of the offers they receive. Personal loan debt is now $120 billion, 18% more than it was last year.

While they aren't the only way to lower the interest you pay on credit card debt, personal loans can be a good way to save money. The average personal loan interest rate is 10.22%, which may sound a bit on the high end. Keep in mind, though, that the average credit card interest rate is around 17% right now, and many are significantly higher.

Man in a suit holding a check.

Image source: Getty Images.

You absolutely have to shop around

Rate shopping is a good way to get a slightly lower interest rate on a mortgage or auto loan, but it can make an enormous difference when it comes to personal loans. The average personal loan customer taking out a three-year loan borrows $10,328. And the difference in the annual percentage rate (APR) between the best and worst personal loan offers that the average borrower receives is a breathtaking 8.79% (879 basis points), according to a new report by LendingTree. Here's a breakdown of the difference in loan offers by credit tier:

Credit Score Range

Minimum APR Offered

Maximum APR Offered

Potential Interest Savings

640-679

24.46%

33.01%

$1,726

680-719

17.19%

26.02%

$1,694

720-759

10.69%

19.97%

$1,695

760 or higher

7.55%

16.38%

$1,566

All Borrowers

18.51%

27.30%

$1,701

Data Source: LendingTree.

In other words, the average borrower could save over $1,700 over the course of a three-year loan just by shopping around.

One interesting observation is that the widest interest rate spread (9.28%) was in the 720-759 credit score tier. These are individuals who generally are considered to have good credit and may not think they need to rate shop to get favorable loan terms.

And it's important to mention that many borrowers obtain loans for significantly more -- there are personal lenders who will make loans of up to $100,000 to qualified borrowers -- so your savings could be even greater. Furthermore, if you plan to repay your loan over a term of more than three years, the impact of a better rate is even more dramatic.

Also, keep in mind that rate shopping doesn't hurt your credit score. Not only are there special rate-shopping provisions in the FICO credit scoring formula, but most personal lenders will let you check your rate with absolutely no impact on your credit score whatsoever.

A few hours of your time for $1,700 in savings?

Here's the bottom line: A personal loan used to consolidate high-interest credit card debt can save you money. The right personal loan can save you a lot more.

It may seem like a pain to spend a few hours comparison shopping, but if you save as much as the average borrower, it can be well worth it. Think of it this way -- even if you spend four hours comparing all of your available loan options and end up saving $1,000 (well below average) in interest over the term of your loan, you essentially made $250 per hour for your time.

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