Low-interest personal loans can be a useful financial tool.
Personal loans are a type of installment loan that let people borrow a lump sum of money, then pay it back with fixed monthly payments over a period time with interest. These loans can offer interest rates that are potentially much lower than for a credit card, and you can often apply for a loan and receive the money the same day.
You can use a personal loan to help consolidate debt, cover an unexpected expense or even finance a dream vacation or pay for a wedding.
Let’s take a closer look at our picks for top low interest personal loans.
- Good for large loan amounts: Sofi
- Good for longer repayment options: LightStream
- Good for a credit union option: PenFed
- Good for Wells Fargo checking account holders: Wells Fargo
- Good for debt consolidation: Happy Money
- Good for bad credit: Upstart
- Good for a variety of uses: Discover
- What is a good APR on a personal loan?
- How can I get a low rate on a personal loan?
- Alternatives to personal loans
- FAQs about low-interest loans
Good for large loan amounts: Sofi
Why a Sofi personal loan stands out: If you need a large personal loan, SoFi may be a good option. You can borrow as much as $100,000 if you have excellent credit and qualify. That means you may be able to cover big expenses like home improvements, IVF payments, debt consolidation or a wedding.
Pros
- Loan amounts up to $100,000
- Same-day funding possible
- Option to prequalify and check your potential rate
- Member perks like financial planning services and exclusive events
Cons
- Origination fee: 0% to 7%
- Minimum loan is $5,000 — not great for smaller expenses
Read more about SoFi personal loans.
Good for longer repayment options: LightStream
Why a LightStream personal loan stands out: If you need a sizeable home improvement loan that you can take your time paying back, LightStream is worth considering, with loan terms of up to 20 years if your proceeds are used for home improvements. Most other loan uses have a maximum of seven years to pay back. But keep in mind that longer loan terms mean paying more in interest over the life of the loan.
Pros
- Large loan amounts of up to $100,000
- No origination fee
- Competitive rates
- Same-day funding possible
Cons
- No option to prequalify
- Requires strong credit, credit history and income
Read reviews of LightStream personal loans to learn more.
Good for a credit union option: PenFed
Why a PenFed Federal Credit Union personal loan stands out: While you’ll need to be a credit union member to apply, requirements are easy to fulfill, making this a good option for a personal loan. PenFed doesn’t charge an origination fee and has competitive rates.
Pros
- Borrow up to $50,000
- Loan terms up to five years
- No origination fee or prepayment penalties
Cons
- Must be a PenFed member
Read more about PenFed personal loans.
Good for Wells Fargo checking account holders: Wells Fargo
Why a Wells Fargo personal loan stands out: If you have a Wells Fargo checking account that’s been open for at least 12 months, you may qualify for a rate discount between 0.25% and 0.5%. Different accounts qualify for different rate discounts, and you’ll have to make automatic loan payments from a Wells Fargo account as well.
Pros
- Loan amounts from $3,000 to $100,000
- No origination or prepayment fees
- Competitive rates
- Typically fast funding
Cons
- Must be an existing Wells Fargo customer
Read reviews of Wells Fargo personal loans to learn more.
Good for debt consolidation: Happy Money
Why a Happy Money personal loan stands out: Happy Money markets its Payoff Loan personal loans as a tool to help you out of credit card debt. Once you’re approved for a personal loan, the company can use your loan proceeds to pay off your current debts directly — so you won’t have to manage it all yourself.
Pros
- Loan amounts between $5,000 and $40,000
- Credit doesn’t have to be perfect to qualify
- Option to prequalify
Cons
- Not a direct lender
- Origination fee of 1.5% to 5.5%
- Funding can take three to six business days
Read reviews of Happy Money personal loans to learn more.
Good for bad credit: Upstart
Why an Upstart personal loan stands out: It’s hard to find low-rate personal loans if your credit isn’t great. Upstart considers candidates with bad credit — and caps its loan rates at 35.99%. While that’s not the lowest rate around, unfortunately personal loans for bad credit often come with a higher cost.
Pros
- Loan amounts range from $1,000 to $50,000.
- Potential to receive your loan funds the day after you sign
- Option to prequalify
Cons
- Possible origination fee of up to 12%
- Most expensive interest rates are high
- Only two loan terms offered
Read reviews of Upstart personal loans to learn more.
Good for a variety of uses: Discover
Why a Discover personal loan stands out: You can use a Discover personal loan to pay for weddings, vacations, medical expenses, car repairs, pet emergencies and more. Its loan amounts range from $2,500 to $40,000, which gives you the flexibility for all but the largest purchases.
Pros
- Direct payments for debt consolidation available
- No origination fee
- Possible fast funding as soon as the next business day
Cons
- No co-applicants allowed
Read reviews of Discover personal loans to learn more.
What is a good APR on a personal loan?
The average interest rate on a two-year personal loan was 12.33% in the third quarter of 2024, according to the Federal Reserve’s most recent data. But people with excellent credit may be able to find rates lower than that.
Some lenders that target consumers with strong credit offer interest rates that start around 8% to 11% for people with the best credit. Rates top out around 20% to 36% for borrowers whose credit isn’t quite as solid.
However, interest rates can change rapidly depending on the state of financial markets. When the Federal Reserve raises interest rates, the APRs on personal loans are likely to increase as well.
How can I get a low rate on a personal loan?
Typically, only borrowers with really good credit scores will be offered the lowest interest rates. For some lenders, this amounts to a fraction of people who apply. You’ll likely need good-to-excellent credit scores of at least 750 to be eligible for the best rates.
If your credit isn’t perfect, lenders may quote you higher interest rates and be more restrictive about the amount you can borrow — or you may not get approved. If this happens, applying for loans with no credit check might be an option. Or you could look into a 0% interest credit card. If your credit is in particularly rough shape and you’re shopping for a loan, you may want to look into personal loans for bad credit.
Saving up cash or focusing on building your credit before applying for a loan is the ideal way to go if you can take the time you need to set yourself up.
Alternatives to personal loans
A personal loan can be a great way to get the cash you need for a variety of situations. But you might want to weigh other possible options, depending on your credit profile — and what you need the cash for.
Balance transfer card
A balance transfer lets you move credit card debt to a different credit card.If you’re looking to pay off debt and you have good credit, you may qualify for a balance transfer credit card with a 0% introductory balance transfer APR.
This could give you up to a year or more to make payments on your debt without being charged any interest at all. Just be aware that if you can’t pay off your balance or make a late payment before the intro rate expires, potentially hefty interest charges may apply.
0% intro APR credit cards
A credit card with a 0% introductory purchase APR could be a good alternative to a personal loan to pay for some purchases. If you get a credit card with a 0% intro APR, that means you won’t be charged interest on your purchases for a certain period as long as you make on-time payments.
But if you can’t pay off the amount borrowed by the time the promotional period ends, you’ll face interest at potentially high rates.
Debt paydown strategies
If you’re looking for a debt management approach that doesn’t involve borrowing, you could try a momentum-building repayment strategy like the snowball method or avalanche method.
You could also try getting low- or no-cost counseling through a nonprofit credit counseling organization.
Home equity loans
If you’re a homeowner, you might want to consider a home equity loan or home equity line of credit (HELOC). This type of financing lets you tap into your home equity to borrow money.
Keep in mind that your house becomes the collateral for these types of accounts. If you default, your lender may have the right to foreclose on your home as payment for the loan.
Our methodology: How we pick the best personal loans
Credit Karma’s editors evaluate the best personal loans by reviewing key features of dozens of popular lenders. Those features fall into three important categories:
- Affordability: We start by checking if a lender’s rates are competitive: are they higher than average or are they lower than many competitors? From there, we analyze if fees — particularly an origination fee — may make your loan more unaffordable. Last, we’ll check if the lender offers rate discounts for items such as automatic payments that may reduce your rate.
- Customer-friendly features: Taking out a personal loan is a big financial commitment, so we prioritize lenders that make things easier for you. For instance, do they offer a wide range of loan amounts for people with different borrowing needs? Do they offer at least several loan terms to give you more flexibility with your monthly payment? And, crucially, can they fund your loan quickly? A lender will also get bonus points for offering direct payments for debt consolidation or other customer-friendly features.
- Transparency: We believe personal loan terms should be easy to find and decipher. Prequalification, which lets you check what rate you may qualify for without a hard credit inquiry, is particularly important. We also check to see if a lender has been recently penalized by regulators.
Estimate personal loan costs
To better understand the total cost of any personal loans you’re considering, use an online calculator like Credit Karma’s simple loan calculator. A loan calculator can help you estimate your monthly payment and how much you’d pay in interest versus principal over the length of the loan.
FAQs about personal loans
When you take out a personal loan, you receive a specific amount of money and pay it back over an agreed period of time, at a set interest rate. Personal loans can be unsecured or secured by collateral, which is typically an asset that you own. Getting a personal loan could help you pay for different expenses, including consolidating debt or paying for a wedding, vacation or home repair.
To apply for a personal loan, start by deciding how much you want to borrow and what loan payments you can afford. Then, you can start applying for prequalification and checking your terms with different lenders. If you’re happy with your prequalification terms, you can then submit a formal application for a personal loan.
It’s rare to find a zero-interest personal loan from a lender like a bank or credit union. Certain cash advance apps offer loans without interest or fees, but they may have restrictions on who qualifies for a loan.
*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.