Personal Loan Interest Rate
One size does not fit all and neither does one personal loan interest rate.
No two people are alike, so why should you expect to get the same interest rate as the guy down the street? Your situation is totally different from his. Your lifestyles are totally different. As a result, the banks and lenders are not going to offer you the same interest rates when applying for personal loans.
A personal loan interest rate is granted based upon the individual that is applying for that loan. How long will it take you to pay back the loan? Do you have a job? Do you have a good employment history? Will you provide collateral? Most importantly, do you have a good credit history? Whether you like it or not, all of these factors are used by lenders to determine your personal loan’s interest rate.
Loan Duration
When do you want to pay this amount back to your lender? The loan duration will greatly affect the interest rate and loan payment. Generally, a shorter loan duration will have a lower interest rate. Your payments will be higher but your interest payments will be much lower over the course of the loan.
Employment History
A good employment history will greatly affect your personal loan interest rate. When you have a good employment history, this is a verified way to determine if you will be a risk in the future. Lenders see that you have a stable income for repayment. This along with other factors will put you in favour as being a good credit risk. Thus, lenders will be willing to grant you a lower interest rate than someone who did not have a good employment history.
Collateral
Are you putting collateral up for your personal loan? There are two types of loans – secured and unsecured loans. Secured loans require you to put up collateral before being approved for a personal loan. An unsecured loan does not require collateral. When you put up collateral for a secured loan, you are not viewed as a credit risk to the lender. This is why a secured personal loan interest rate is much lower than an unsecured personal loan interest rate.
Credit History
If you have bad credit, a decent interest rate will not be received. There is too much credit risk. This does not mean that you will not get a personal loan. You can still get one but with a much higher interest rate than others with good credit.
In conclusion, there are many factors that will affect your personal loan interest rate. They are things such as your employment history, collateral, credit history, and the loan duration. Hopefully, these factors will work in your favour.
Featured Personal Loans
| Personal Loan | Details | Min Interest Rate | Min Comparison Rate | Min Loan Amount | Min Loan Terms | Apply Fee | |
|---|---|---|---|---|---|---|---|
 ME Bank Personal Loan | A low rate personal loan from ME Bank with no application fee for a limited time. | 13.59% | 13.81% | $5000 | 1 year | $0 |   |
 Aussie Personal Loan | A smart way to consolidate your bills to save time and money so you can pay for your holiday, a wedding or renovate the house. | 13.90% | 14.84% | $3000 | 1 year | $199 | |
 Sugar Money Personal Loan | Fixed rate personal loan with flexible options to get you funds when you need it. | 13.99% | 15.00% | $3000 | 2 years | $250 | |
 bankmecu Personal Loan | A convenient and fast way to purchase a car or debt consolidation with affordable rates and fees. | 13.49% | 14.55% | $1000 | 1 year | $150 | |
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