When you're looking for a personal loan it's important to compare different lenders' 澳洲幸运5官方开奖结果体彩网:annual percentage rates (APRs), a figure that includes both interest and fees. A "good" APR is typically one that's at or below the 澳洲幸运5官方开奖结果体彩网:national average at that point in time. But your APR can also vary according to how cr🍎editworthy lenders think you are. Here is what you need to know to get a good rate. 

Understanding the APR on a Personal Loan

The annual percentage rate, or APR, is the cost you pay (expressed as a percentage) to take out a personal loan from a lender, which includes the 澳洲幸运5官方开奖结果体彩网:interest rate and any additional fees. For example, if your lender charges an 澳洲幸运5官方开奖结果体彩网:origination fee or an applicatio༒n fee, that amount will be rolled into your APR. If your lender doesn't charge any additional fees, the APR for the loan will be the same as the interest rate. 

Using the APR is a more accurate way to compare personal loans from different lenders. Think of it a𒁃s an apples-to-apples comparison. 

The factors that can affect the APR on a loan include the prevailing interest rates at the time, the length or term of the loan, how much you borrow, whether the loan has a 澳洲幸运5官方开奖结果体彩网:fixed or variable interest rate, and whether it is secured by some form of collateral or unsecured.

Your creditworthiness, as perceived by the lender, can also have a major impact on the rates you're offered. Lenders are likely to check your 澳洲幸运5官方开奖结果体彩网:credit reports and 澳洲幸运5官方开奖结果体彩网:credit score and calculate your 澳洲幸运5官方开奖结果体彩网:debt-to-income ratio (DTI) based on the information you supply in your application. If you apply wi꧅th a cosigner or co-borrower their creditworthiness will be factored in, too. Many lenders may also offer different APRs depending on whether you're applying for a secured or unsecured loan. 

In general, the more risk a lender thinks you pose, the higher your APR will be. For example, if you have a relatively low credit score combined with a high DTI, you won't get as attractive a rate as someone with a high credit score and a lower DTI. In fact you may have difficulty getting a loan at all, except from a lender that specializes in 澳洲幸运5官方开奖结果体彩网:loans for borrowers with p൩oor credit.

As an illustration, this table shows the 澳洲幸运5官方开奖结果体彩网:average APRs on personal loans quoted through approximately 19,000 through MoneyLion in August 2024, based on the borrower's credit score✃ range.

How to Get a Low APR on a Personal Loan

Getting a personal loan with a low APR could save you hundreds or even thousands of dollars in interest costs and fees. One of the best ways you can boost your chances of qualifying for a low APR is to improve your credit score, if necessary.

To start, check your credit reports to see what factors may be negatively affecting your credit score and work on improving them. You should also check for any errors and dispute them as soon as possible. By law you're entitled to a free credit report from each of the 澳洲幸运5官方开奖结果体彩网:three major credit bureaus at least once a year. The official website for obtaining all three is AnnualCreditReport.com.

Other actions you can take include making consistent on-time payments, avoiding applying for new loans unless absolutely necessary, and lowering your 澳洲幸运5官方开奖结果体彩网:credit utilization ratio (the percentage of your available澳洲幸运5官方开奖结果体彩网: revolving credit, such as on credit cards, that you'r🅺e curren🦹tly using). 

Other ways you can 🌼aim to get a lower APR include:🔜

• Put up collateral. Secured personal loans typically have lower APRs than unsecured ones since you're lessening the risk for the lender. Your 澳洲幸运5官方开奖结果体彩网:collateral acts as a good faith promise that you'll pay back your loan, and if you fail to, the lender has the right to seize the collateral and sell it. 
• Consider a co-signer. Applying with someone who has good credit can improve your chances of qualifying for competitive APRs if your own credit isn't up to par. Be sure your 澳洲幸运5官方开奖结果体彩网:co-signer understands their legal obligations, especially if you fail to make loan payments. 
• Opt for a shorter term. Some lenders offer lower APRs for shorter loan terms, because they're considered less risky.
• Shop around. Getting quotes from multiple lenders gives you a chance to find the lowest rate based on your financial profile. Some may also offer inducements like 澳洲幸运5官方开奖结果体彩网:no origination fees, which can result in a lower APR.

The Bottom Line

Getting the 澳洲幸运5官方开奖结果体彩网:best personal loan for you may require some shopping around. Lenders can differ in the APRs they charge, even when considering borrowers with identical🅷 credit profiles. Before you apply, it could also help to check your credit reports and credit score and, if necessary, take steps to improve them.