Personal loan rates have come down. But is a personal loan right for you?

The pros say personal loans can be a decent option for consolidating high-interest debt or paying for emergency expenses you don’t have the savings to fund.

Getty Images

Average personal loan rates have fallen. Average 5-year personal loan rates declined to 18.77% and 3-year personal loan rates fell to 20.65% from the previous week. If you have great credit, you’ll likely pay a lot less, with average 5-year personal loan rates for those with very high credit scores at 13% and for 3-year personal loans at 11.98%, according to Bankrate’s most recent data for the week ending June 20. You can see the lowest personal loan rates you qualify for here.

The pros say personal loans can be a decent option for consolidating high-interest debt or paying for emergency expenses you don’t have the savings to fund — assuming, of course, you get it. a decent rate on the loan. They’re also handy when you need money fast, as some personal loans can be funded in as little as a day and don’t usually require a borrower to post collateral.

That said, they tend to have higher rates than home equity loans and HELOCs (see the lowest rates you can get here). Plus, because personal loans can be so easy to get, it can be tempting to take out more than you need. But experts warn against this as it can get expensive and not repaying a personal loan can hurt your credit score.

To get the best rates and terms on a personal loan, make sure your credit score is as high as possible, your finances are in order, and you get quotes from a few different lenders.

Comments are closed.