Best Low Interest Personal Loans

If you’re in the market for a personal loan and have excellent qualifications, these five lenders could be some of your best options.

Here are The Ascent's top picks for personal loans with low interest:

  • Freedom Plus - Borrowers with good to excellent credit scores
  • SoFi - Low APR for borrowers with high income
  • Marcus by Goldman Sachs - Low overall APR
  • LendingClub - Low overall APR
Offer Best For Min. Credit Score Loan Amounts APR Range Next Steps
Best For:

Borrowers with good to excellent credit scores

Min. Credit Score:

640

Loan Amounts:

$10k - $40k

APR Range:

4.99 - 29.99%

Check Rate
Best For:

Low APR for borrowers with high income

Min. Credit Score:

660

Loan Amounts:

$5k - $100k

APR Range:

5.74-16.49%

Check Rate
Best For:

Low overall APR

Min. Credit Score:

660

Loan Amounts:

$3.5k - $40k

APR Range:

5.99 - 28.99%

Best For:

Low APR for borrowers with good to excellent credit scores

Min. Credit Score:

600

Loan Amounts:

$1k - $40k

APR Range:

6.95 - 35.89%

Check Rate

Why you can trust me

I’m a Certified Financial Planner® and have extensive experience reviewing personal finance products and making recommendations to clients, friends, and family. In addition, I’m not just a reviewer in this case -- I’ve also obtained a personal loan and have firsthand experience with many of these personal lenders’ loan products and application processes.

What is a personal loan?

The term personal loan means an unsecured, amortizing, fixed-rate loan that is given to a consumer.

If you aren’t familiar with all of the terms in that sentence, here’s an explanation. An unsecured loan is one that isn’t backed by any assets. For example, a mortgage is backed by the property that it is used to purchase. An amortizing loan is one that has a set repayment period – so a loan that amortizes over a five-year period will be completely paid off after five years. And finally, a fixed-rate loan is one that has an interest rate that stays the same over the entire term. While variable-rate personal loans do exist, the overwhelming majority of personal loans have fixed interest rates.

Reasons to get a personal loan

There are a few reasons why getting a personal loan could be a smart idea. For example, if you have credit card debt, a personal loan could allow you to pay off your debt and consolidate several smaller balances into one fixed monthly payment. Or, if you want to do some home remodeling, pay for medical expenses, or cover pretty much any other expenses you may have, a personal loan can allow you to finance these things without having to max out credit cards.

For many borrowers, personal loan interest rates are significantly lower than they could hope to get from a credit card. Plus, it’s also important to realize that the vast majority of personal loans have fixed interest rates – so if market rates rise significantly, your personal loan interest rate will stay the same. On the other hand, credit card interest rates are variable and can increase over time.

Best low-interest personal lenders

Since the prospect of saving money on interest is certainly enticing to many potential personal loan borrowers, here are four of the best personal lenders that offer excellent interest rates to certain borrowers.


Freedom Plus

Best For: Borrowers with good to excellent credit scores

With loans starting at a 4.99% APR, FreedomPlus has the lowest advertised interest rate of any personal lender I’ve seen. However, there’s a catch. In order to get a 4.99% APR, you’ll need top-notch credit, your loan amount can’t be greater than $14,000, and you must agree to a two-year repayment term. So, if you want to borrow more, or don’t really want to pay the loan back quite so fast, you won’t qualify for the best rate.

Having said that, while most borrowers won’t qualify for the lowest interest rate FreedomPlus offers, the company does offer competitive rates for borrowers with strong credit histories.


SoFi

Best For: Low APR for borrowers with high income

SoFi, which stands for Social Finance, primarily targets high-income borrowers with strong credit histories. For this reason, SoFi offers lower APRs than many competitors. The most recent APR range offered by SoFi is 6.99%-14.99%, which includes a 0.25% discount for auto payment. In fact, the high end of this range is the lowest among all personal lenders I’ve seen.

SoFi is also the place to go if you need a large personal loan. With a maximum personal loan amount of $100,000, SoFi is willing to loan at least twice as much as any of its peers. Not only does SoFi have a low APR range, but the company doesn’t charge any fees. This means no origination fees, no prepayment penalties, and no late fees.


Marcus by Goldman Sachs

Best For: Low overall APR

Goldman Sachs’ Marcus platform offers loans with APRs ranging from 6.99%-24.99% with no additional fees. Marcus focuses on borrowers with prime credit, and its minimum FICO credit score is 660. One of the biggest perks of being a Marcus customer is that you’ll have access to U.S. based customer service representatives that actually answer the phone when you call -- no automated systems whatsoever during business hours.


LendingClub

Best For: Low overall APR

The downside to peer-to-peer lender LendingClub is its origination fees, which range from 1% to a massive 6% of the loan amount (“A” grade loans average 3.46%). Having said that, with a starting APR of 6.95%, LendingClub offers low-APR loans to high-credit borrowers, so it could still be worth a look. The company reports that its average borrower who uses a loan to consolidate existing debt saves nearly $300 per month, so even with the origination fee, LendingClub still could be a good choice in many cases.


These companies offer low-interest personal loans, but can you qualify?

It’s important to mention that for each lender, the lower end of the APR range is generally reserved for borrowers with excellent credit scores (think 760 FICO® scores or higher). Additionally, the best interest rates may only be available in some cases. For example, I mentioned that to get the rock-bottom 4.99% APR from a FreedomPlus loan, you’ll need to have excellent credit, borrow $14,000 or less, and agree to a short two-year repayment term.

The point is that you generally need a “perfect storm” of qualifications and loan terms to get the very best interest rates. Just keep this in mind when evaluating the lenders on this list.

Your interest rate isn’t the only important factor

To be clear, while the interest rate is certainly an important piece of the puzzle, it’s not the only thing you should consider when deciding on a personal loan. Here are a few potential factors to include in your decision-making process:

  1. Make sure the loan term results in a monthly payment that is manageable. Some lenders only offer repayment terms of up to four years, while others will let you stretch out your repayment for as long as seven years. Now, you should aim to pay your loan off in as little time as possible, but while simultaneously keeping your payments at an affordable level.
  2. These personal lenders all have different minimum and maximum loan ranges. For example, SoFi will make personal loans of as much as $100,000, but if you want to borrow less than $5,000, you’ll need to look elsewhere. And keep in mind that just because a certain lender offers loans of a certain amount doesn’t necessarily mean that you’ll qualify for the amount you want to borrow.
  3. Some of the lenders on this list don’t charge any fees whatsoever, while others charge origination fees when you obtain a loan. If a lender that charges an origination fee offers a lower interest rate or better terms than a no-fee lender, it can still be the better option, but fees definitely should be taken into consideration.
  4. Competition among personal lenders has never been higher, and as a result, some lenders offer unique perks that can also factor into the decision process. For example, one lender allows borrowers to skip a monthly payment (and add an extra payment at the end of the loan) at any point after making 12 on-time payments.

How to choose the best low-interest personal loan for you

The number one rule when you’re choosing a personal loan is to shop around. And this doesn’t just mean researching your options like you’re doing right now. Smart consumers take the time to pre-qualify with several personal lenders to see the offers they qualify for with each one.

Because the industry is still relatively young, different personal lenders have dramatically different underwriting processes. It isn’t uncommon for one borrower to get offered an interest rate from one lender that’s 8 or 9 percentage points greater or less than the rate they get offered by another. And most personal lenders (including all five discussed here) allow you to check your interest rate and loan terms without affecting your credit score, so there’s really no good reason not to check a few (or all) of the potential lenders before making a decision.

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To summarize, here are the best low interest personal loans

Offer Best For Min. Credit Score Loan Amounts APR Range Next Steps
Best For:

Borrowers with good to excellent credit scores

Min. Credit Score:

640

Loan Amounts:

$10k - $40k

APR Range:

4.99 - 29.99%

Check Rate
Best For:

Low APR for borrowers with high income

Min. Credit Score:

660

Loan Amounts:

$5k - $100k

APR Range:

5.74-16.49%

Check Rate
Best For:

Low overall APR

Min. Credit Score:

660

Loan Amounts:

$3.5k - $40k

APR Range:

5.99 - 28.99%

Best For:

Low APR for borrowers with good to excellent credit scores

Min. Credit Score:

600

Loan Amounts:

$1k - $40k

APR Range:

6.95 - 35.89%

Check Rate