Best Low-Interest Personal Loans of 2022

A personal loan can help you pay for debt consolidation, home improvement or other expenses, but you’ll need to pay it back – with interest. Shopping around for a competitive rate, even on a low-interest personal loan, can reduce the interest you pay. Find out where to shop for low-interest rate personal loans and what to ask before you agree to a new loan.

Here's what you'll learn:

Why is a low-interest personal loan important?

What is a good interest rate on a personal loan?

Can you get a low-interest loan?

What Are the Best Low-Interest Personal Loans?

Our Personal Loans Methodology U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders. To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. Personal loan companies are evaluated based on customer service ratings, interest rates, maximum loan term, minimum and maximum loan amounts, minimum FICO score, online features, and origination fees. The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender. To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.

What Is the Best Interest Rate on a Personal Loan?

personal loan rate is 9.54%. Last week's average rate was 9.54%.* The averageis. Last week's average rate was.* *Rate as of Mar. 16, 2022

Personal Loan Finder

Select your desired loan amount and loan purpose, your credit score range, and your state to see estimated annual percentage rates and loan terms.

Why Is a Low-Interest Personal Loan Important?

The lower your personal loan interest rate, the less you'll pay to borrow money. This scenario shows how interest rates affect the cost of a personal loan:

Let's say you received an offer for a $5,000 personal loan with a 9.3% annual percentage rate and a four-year repayment term. With this loan, you would pay $1,006.66 in interest alone.

Now assume that you were approved for a $5,000 personal loan with a 6.75% APR and the same four-year term. Your total interest charges on this loan would be $719.30, resulting in interest savings of $287.36.

How to Compare Low-Interest Personal Loans

You'll want to consider a number of factors when choosing the best low-interest personal loan:

What terms can I expect? Not only will you want to lock down a low interest rate, but you'll also want to get the loan repayment length you need. Use these factors to calculate your monthly payment to be confident the loan is something you can afford.

Not only will you want to lock down a low interest rate, but you'll also want to get the loan repayment length you need. Use these factors to calculate your monthly payment to be confident the loan is something you can afford. What fees does the lender charge? Some lenders charge an origination fee that can vary from 1% to 10% of the loan amount, which greatly affects the payout you'll actually receive. Also check for prepayment penalties, late payment fees and any other fees the lender lists.

Some lenders charge an origination fee that can vary from 1% to 10% of the loan amount, which greatly affects the payout you'll actually receive. Also check for prepayment penalties, late payment fees and any other fees the lender lists. What loan amounts does the lender offer? Most lenders offer a minimum and a maximum loan amount, so it's worth noting before you apply. After all, if a lender's maximum amount is less than you need, don't waste your time.

Most lenders offer a minimum and a maximum loan amount, so it's worth noting before you apply. After all, if a lender's maximum amount is less than you need, don't waste your time. What are the repayment options? Lenders usually offer multiple payment options, including online, check and automatic payments. Automatic payments might come with a discount. Some lenders also provide flexibility with your payment date, so you can change it to a date that works best for you.

Lenders usually offer multiple payment options, including online, check and automatic payments. Automatic payments might come with a discount. Some lenders also provide flexibility with your payment date, so you can change it to a date that works best for you. Are there any loan use restrictions? Some lenders have restrictions on how you can use your loan, and be sure to be honest about how you'll use the money – lying on your loan application can be deemed loan fraud and result in extra charges.

Some lenders have restrictions on how you can use your loan, and be sure to be honest about how you'll use the money – lying on your loan application can be deemed loan fraud and result in extra charges. How is the lender's customer service? Check online reviews, such as the Better Business Bureau, Trustpilot or the Consumer Financial Protection Bureau. If the lender is a financial institution, you might reach out to family and friends about their personal experience.

What Is a Good Interest Rate on a Personal Loan?

A good interest rate on a personal loan is lower than the national average, according to the credit bureau Experian. The average rate for a 24-month personal loan in November 2021 was 9.09%, according to the Federal Reserve.

That could be good news if you need to pay off high-interest credit card debt. You'll pay down debt faster on a personal loan than on credit cards with higher interest rates, says David Bakke, personal finance expert at Dollar Sanity, a financial education website.

But getting approved for a low-interest personal loan depends on your credit profile, including credit history and score, income, and debt. All lenders have their own criteria for setting borrowers' personal loan interest rates and terms.

What Are the Pros & Cons of Low-Interest Personal Loans?

Pros

Save money. Low-interest personal loans may help borrowers consolidate high-interest credit card debt and pay it off more quickly at a lower interest rate.

Low-interest personal loans may help borrowers consolidate high-interest credit card debt and pay it off more quickly at a lower interest rate. See a quick turnaround. You may potentially receive funds for personal loans in as little as one business day.

You may potentially receive funds for personal loans in as little as one business day. Provide no collateral. Low-interest personal loans are typically unsecured, so you won't need to use your home or car for collateral.

Cons

There may be fees. Your lender may charge an origination fee, prepayment fee or late payment fee.

Your lender may charge an origination fee, prepayment fee or late payment fee. Restrictions may apply. Some lenders may restrict how you can use the money. For example, you may not be able to use it to pay for college tuition.

Some lenders may restrict how you can use the money. For example, you may not be able to use it to pay for college tuition. You may not qualify. If you don't have stellar credit, you likely won't qualify for a low-interest personal loan.

Which Factors Affect Your Personal Loan Rate?

Here are a few key areas that lenders look at to determine personal loan approvals and interest rates:

Your credit score is one of the major factors lenders consider for personal loan eligibility, says Lauren Anastasio, director of financial advice at Stash, a financial technology firm.

"Lenders don't always disclose whether they have a minimum credit score for applicants, but often they prefer to see a good or excellent credit history," she says.

Meeting the minimum credit score doesn't mean you'll qualify for the lowest loan rates advertised. A FICO credit score in the mid-700s or higher is considered very good to exceptional and generally earns you a competitive interest rate.

Borrowers with fair or bad credit shouldn't expect low interest rates on personal loans.

A co-signer, ideally one with strong credit, agrees to make payments if you can't or don't. Lenders may be more willing to approve a loan at a lower interest rate when you have a co-signer.

"If you don't have a stellar credit score or don't make very much, adding a co-borrower to your loan might increase your chances of approval," Anastasio says. "They might also help you get a better interest rate and repayment terms."

Your debt-to-income ratio is the percentage of your gross monthly income – your earnings before taxes or other deductions – you put toward debt. It helps lenders gauge whether you can manage a personal loan payment without financial hardship.

"In a nutshell, the maximum debt-to-income ratio you want if you're looking for a personal loan is right around 35%," Bakke says. "Anything higher than that and the lender will be thinking twice about whether or not to extend the loan."

Additionally, some lenders may have a minimum annual income requirement.

Type of Personal Loan

Whether your personal loan is secured or unsecured can influence your interest rate. With a secured loan, you are providing collateral that the lender can claim if you default on your loan.

"Secured loans, backed by assets owned by the borrower, like a car or house, are less risky to the lender and therefore often come with much lower interest rates, reducing the cost of borrowing over the life of the loan," Anastasio says.

But before jumping on a secured personal loan, factor in the risk of losing whatever you used as collateral if you can't make the monthly payments.

Discounts

Some lenders offer a small APR percentage point reduction for existing customers or signing up for automatic payments. Some lenders list interest rates that include autopay discounts.

Do You Qualify for a Low-Interest Loan?

Take these steps to find the lowest rates on personal loans.

1. Check Your Rate

Lenders may advertise an APR range, but you won't find out your rate until a lender checks your credit. Prequalification uses a soft credit inquiry, which doesn't hurt your credit score, to tell you whether you could be approved for a low interest rate personal loan.

"Many lenders allow potential borrowers to see if they prequalify for a loan before applying," Anastasio says. "This process shows how much the loan would potentially be approved for (and) what your repayment terms and your interest rate could possibly be."

Not all lenders offer prequalification, but online lenders generally do.

The information you will need to prequalify can vary by lender but may include your desired loan amount and your income. If you can prequalify online, the process can take just a few minutes.

Prequalifying for a personal loan doesn't guarantee approval when you apply. But this option gives you great insight into whether you might meet borrower criteria and estimates loan terms without a hard credit check that could lower your credit score.

2. Check With Your Bank or Credit Union

When you're rate shopping, getting a quote from a financial institution you have a relationship with could pay off.

"Your bank or credit union would be a great place to start," Bakke says. "However, rates and fees do vary, so it's recommended that you get quotes from at least three lenders."

Your bank or credit union might be able to offer a more competitive rate or origination fee than rivals because it has a window into your finances that the others don't. If you have deposit accounts, for example, the bank may consider your wages, spending patterns and savings.

3. Work on Your Credit and Try Again

If you can't get approved for a competitive interest rate on a personal loan, you might want to pause and focus on raising your credit score. Check your credit reports for errors to dispute, pay down debt, make on-time monthly payments, and take other steps to improve your credit before you reapply for a personal loan.

Can You Get a Low-Interest Rate Personal Loan With Bad Credit?

If you have bad credit, you likely won't be able to qualify for a low-interest loan. Borrowers with bad credit often end up with high interest rates and other less-than-ideal terms for personal loans. Take some time to compare lenders and choose a loan with the lowest overall cost, factoring in APRs, account fees, repayment terms, collateral requirements and lender reviews.

Which Bank Is Best for Low-Interest Personal Loans?

Carefully review personal loan options before you commit to a loan. Read full reviews of the best lenders for the lowest interest rate personal loans.

Loan terms vary. In addition to interest rate, you can learn about each lender's:

Loan amount range.

Minimum credit score requirement.

Minimum income requirement.

Loan terms, or time to pay off the loan.

Customer service ratings, such as from the Better Business Bureau.

What Are the Alternatives to Low-Interest Personal Loans?

Depending on why you need the funds, there may be alternatives to consider before committing to a personal loan.

Look at other types of loans. A home equity loan or a home equity line of credit may be an option for home repairs, and an auto loan for a new or used car purchase. Compare other types of loans and their terms to see if they offer a better rate.

A may be an option for home repairs, and an auto loan for a new or used car purchase. Compare other types of loans and their terms to see if they offer a better rate. Make a payment arrangement. Costs such as unpaid medical expenses can significantly impact your credit score, but always attempt a payment arrangement with the medical provider before taking out a personal loan.

Costs such as unpaid can significantly impact your credit score, but always attempt a payment arrangement with the medical provider before taking out a personal loan. Tap into your 401(k). Although traditional advice would strongly dissuade you from taking money out of your retirement account, a 401(k) loan is a valid option under certain circumstances. As long as you pay back the loan within about a year, the impact on your long-term gains should be minimal.

Although traditional advice would strongly dissuade you from taking money out of your retirement account, a 401(k) loan is a valid option under certain circumstances. As long as you pay back the loan within about a year, the impact on your long-term gains should be minimal. Borrow from a family member. Asking for money may be difficult, but if someone is in a position to help, then it may be even better than a low-interest personal loan. It's up to you to weigh the pros and cons of borrowing from friends or family.

View More Best Low-Interest Personal Loans

Emergency lighting technology & terms - the basics

Emergency lighting plays a critical role in building safety, particularly in an evacuation scenario. It's designed to provide prompt, automatic lighting in an emergency situation where the main power supply is cut and the normal mains lighting fails. Emergency lighting acts as a lifeline in hazardous situations – reducing panic, delivering essential illumination and guiding the occupants of a building towards safe exit points.

There are many circumstances in which the activation of emergency lighting becomes necessary, including mains power failure, evacuations or fire hazards where reduced visibility requires additional light sources. The selection of emergency lighting products is dependent upon their primary purpose, which may be emergency exit lighting, escape route lighting, standby lighting, open area (or anti-panic) lighting, the illumination of exit signs, specific lighting for high-risk task areas or a combination of the above throughout a building.

Controlling Emergency Lighting

Emergency lighting is lighting that either stays ON or automatically turns ON to facilitate safe and orderly building evacuation during a power outage.

Traditionally, emergency lighting solutions focused on dedicated battery-powered emergency units (e.g., “bug eye” luminaires) to provide the 1 footcandle of egress path illumination for at least 90 minutes, as required by code. While functional, they’re not attractive, sitting dark until needed.

The LED revolution produced many luminaires with built-in switching and dimming. This facilitated a trend of using the same luminaires for both general and emergency lighting, powered by battery, backup generator, or UPS. This eliminates emergency units but creates a control challenge. The dual-function luminaires must be controllable for energy management and visual needs, while overriding these inputs to power to full brightness during a power failure.

Several codes regulate emergency lighting, the most influential arguably being the National Electrical Code (NEC) (NFPA 70) and the Life/Safety Code (NFPA 101). Other codes and standards may apply, such as UL 924 (emergency lighting and power equipment), UL 1008 (transfer switches), International Building Code, International Fire Code, and NFPA 110 and 111 (standby power systems). For specifics and interpretation for your project, consult the authority having jurisdiction.

Article 700 of the 2014 NEC added a requirement that directly controlled luminaires used for emergency lighting be listed (UL 924) for that use. The 2017 NEC and UL 924 define “directly controlled luminaires” as having the ability to automatically override any control setting and produce an appropriate light output/light level during a power outage.

According to Anthony Campbell, VP Brand Management, Hubbell Lighting, directly controlled luminaires on emergency circuits must be 924-listed, and so must any bypass device or control equipment featuring a built-in bypass device. If a device is used to transfer to emergency power in either a feeder or branch emergency circuit, it should be UL 1008-listed.

Michael Brown, Product Manager, Pow-R-Command Lighting Control, Eaton, said UL 924-listed directly controlled luminaires equipped with integral battery and loss-of-voltage sensing electronics can be controlled by remotely operated two-pole circuit breakers designed with normal and emergency lighting connections. Alternately, UL 924-listed relays can be used, available in switching-only and switching-and-dimming models. These relays are typically installed separately outside lighting relay panels or lighting control panelboards.

Project participants should review the listing of each component and then test the entire system to ensure code-compliant light levels are provided upon loss of power, whether that be by transfer, bypass, or control system state. The authority having jurisdiction may inspect the system to ensure compliance. Some manufacturers provide a test button to simplify testing.

Adoption of LED lighting with built-in control functionality is facilitating using luminaires for both normal and emergency lighting. The designer must take care to ensure these luminaires are properly listed and operate in accordance with life/safety codes, regardless of how they’re controlled during normal operation. Manufacturers can be a valuable source of support for challenging applications.