People strive to reach a point in life where the income on its own is enough to cover all needs, but the reality is that there will be challenges or situations that can throw someone out of their monthly budget. This can be anything from a medical emergency, an unexpected home repair, or even to fund important milestones such as a wedding.
Whenever life takes a different turn, and you don’t have the financial means to support it yet, then credit options like a personal loan make it possible to make big purchases. This type of installment loan is a go-to choice since it allows anyone to borrow a fixed amount of money and pay in installments between 12 to 84 months.
While personal loans often offer lower interest rates compared to other types of loans, getting a good deal out of it heavily depends on factors such as your credit score, income, and loan repayment terms. This begs the question: what is a good personal loan interest rate, and how can you acquire it?
Determining What Defines a Good Personal Loan Rate
The average personal loan rate in the USA marks at 9.46 percent since February 2021, though, as mentioned earlier, your credit history will influence your approved loan’s interest rate. Here is a good basis for identifying at what percentage your credit score falls into:
740 and above: Below 8%
670 to 739: Around 14%
580 to 669: Around 18%
Below 579: Around 30%
The higher the credit score, the better your chances of getting the lowest possible interest rate. This is because your financial history reveals your capability to meet monthly payments, which lenders need to use as a metric for measuring your risk level.
Factors that Influence Your Personal Loan Rate
Your credit score is the number one factor that will impact the rates available to you;
Your income and employment will also serve as proof that you have the means to pay back the lender;
Whether you’re borrowing a fixed or variable interest loan;
Whether the loan is secured or unsecured;
The amount you’re borrowing, wherein bigger loans come with higher risks.
The Bottom Line: Exploring Different Ways to Seal the Deal on a Good Personal Loan Interest Rate
Personal loans often serve as a silver lining for people strapped for cash. Whether the reason for borrowing a large sum is negative or positive, the fact remains that your financial history will have a heavy hand on the interest rate you get with your personal loan.
Why Choose Athens Finance For Your Personal Loans in Athens, AL?
Finding and obtaining the best loan that suits your financial situation can be tricky for anyone, even for experienced borrowers. Athens Finance can help simplify the process as our lenders offer various personal loan sizes to meet different needs, making it possible to get good rates on a personal loan even with bad credits.
We ensure the loan process is as stress-free as possible, so you can move forward with an affordable payment plan. Your comfort and convenience are our priority, so get in touch with us today at 256-291-4862 and see how our services can make loan shopping easier.