Current Personal Loan Interest Rate And Trends (Week Of November 13th, 2023)
Published 11/20/2023 by
Benjamin Locke
Edited by
Andrew Latham
Summary:
During the week of November 13th, 2023, APR rates for personal loans showed diverse trends across credit tiers. Exceptional credit scores (800-850) experienced a 1.41% decrease in average APR and a 4.19% reduction in median APR. Very good credit scores (740-799) saw a 1.27% decrease in average APR and a slight 0.28% drop in median APR. Meanwhile, good credit scores (670-739) observed a 0.94% decrease in average APR and a 0.71% increase in median APR.
In the week commencing November 13th, 2023, the landscape of personal loan APR rates saw diverse shifts across credit score categories. For those with exceptional credit scores (800-850), there was a decrease of 1.41% in average APR and a significant 4.19% drop in median APR. Very good credit scores (740-799) experienced a 1.27% reduction in average APR and a slight 0.28% decrease in median APR. Borrowers with good credit scores (670-739) observed a minor decrease of 0.94% in average APR, but a marginal increase of 0.71% in median APR. Fair credit scores (580-669) witnessed a slight increase of 0.93% in average APR, with an almost unchanged median APR, decreasing by just 0.01%. For those with poor credit scores (below 580), the average APR decreased by 1.70%, while the median APR remained
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Current personal loan rates
This week’s personal loan rates, categorized by credit score, are presented in terms of both median and average APRs.
It’s evident that these rates are significantly higher than the minimum rates promoted by lenders. It’s important to understand that these figures represent the average of prequalified loan offers that borrowers received on SuperMoney’s platform. This is based on the information they provided to lenders for rate determination rather than the ideal low rates that lenders often emphasize.
| Rating | FICO Score | Average APR Nov 12 | Median APR Nov 12 |
|---|---|---|---|
| Exceptional | 800-850 | 15.21% | 13.72% |
| Very Good | 740-799 | 15.94% | 14.99% |
| Good | 670-739 | 37.47% | 27.01% |
| Fair | 580-669 | 76.89% | 64.74% |
| Poor | 300-579 | 133.89% | 160.00% |
Change in median and average personal loan interest rates
| Rating | FICO Score | Average APR Nov 5 | Average APR Nov 12 | Change in Average APR | Median APR Nov 5 | Median APR Nov 12 | Change in Median APR |
|---|---|---|---|---|---|---|---|
| Exceptional | 800-850 | 16.62% | 15.21% | -1.41% | 17.91% | 13.72% | -4.19% |
| Very Good | 740-799 | 17.21% | 15.94% | -1.27% | 15.27% | 14.99% | -0.28% |
| Good | 670-739 | 38.41% | 37.47% | -0.94% | 26.30% | 27.01% | +0.71% |
| Fair | 580-669 | 75.96% | 76.89% | +0.93% | 64.75% | 64.74% | -0.01% |
| Poor | 300-579 | 135.59% | 133.89% | -1.70% | 160.00% | 160.00% | 0.00% |
In the week leading up to November 12th, 2023, the APR rates for personal loans exhibited significant changes across various credit tiers. Individuals with exceptional credit scores (800-850) saw a decrease in their average APR by 1.41% and a more notable reduction in their median APR by 4.19%. Those in the very good credit bracket (740-799) experienced a decrease of 1.27% in average APR and a slight drop of 0.28% in median APR. Borrowers with good credit scores (670-739) encountered a minor decrease of 0.94% in average APR, but a slight increase of 0.71% in median APR. For those with fair credit scores (580-669), the average APR slightly increased by 0.93%, while the median APR remained virtually unchanged with a minimal decrease of 0.01%. Lastly, individuals in the poor credit category (below 580) observed a decrease of 1.70% in average APR, with no change in the median APR.
Pro Tip
Given the current fluctuations in personal loan APR rates, particularly the notable decreases for those with exceptional and very good credit scores, it’s an opportune time for individuals in these categories to consider securing loans. The recent trend indicates a favorable borrowing environment for those with higher credit scores. However, it’s crucial to remain vigilant and compare offers from multiple lenders. This approach not only ensures you capitalize on the current lower rates but also helps in finding the most advantageous terms tailored to your financial situation. Remember, even small differences in APR can lead to significant savings over the life of a loan.
Average and median personal loan rates for 24-month loans
This is what the rates look like for borrowers applying for a 24-month loan.
| Rating | FICO Score | Average APR (Nov 12) | Median APR (Nov 12) |
|---|---|---|---|
| Exceptional | 800-850 | 10.27% | 15.21% |
| Very Good | 740-799 | 10.46% | 15.94% |
| Good | 670-739 | 47.15% | 37.47% |
| Fair | 580-669 | 69.50% | 76.89% |
| Poor | 300-579 | 89.30% | 133.89% |
As illustrated in the graph below, personal loan interest rates often fluctuate based on various elements, including the federal funds rate, lending practices, and prevailing market dynamics. Observe the disparity when considering all loan durations and amounts versus focusing solely on loans exceeding $20,000 with a 24-month term.
Personal loan interest rates compared to other loans
As highlighted earlier, personal loan rates can fluctuate significantly based on the loan’s size, duration, and borrower’s credit rating. This makes drawing comparisons with other credit types a complex task. The subsequent chart utilizes the most recent data from the Federal Reserve, focusing on 24-month personal loans provided by commercial banks. These banks usually set higher baseline loan amounts and enforce stricter qualification criteria. Including all loan durations and non-traditional lenders, which often adopt more lenient underwriting standards and charge elevated rates, would present a contrasting rate landscape.
Compare the median with the lowest available.
How are personal loan interest rates determined?
Various factors play a pivotal role in determining personal loan rates and eligibility. A borrower’s creditworthiness, reflected in their credit score, often stands as a primary determinant, with higher scores typically fetching lower interest rates. Additionally, lenders consider aspects like financial stability, employment status, loan duration, and even the type of lending institution, all of which collectively influence the terms and rates of a personal loan. The table below gives a breakdown.
| Factor | Description |
|---|---|
| Creditworthiness | Borrowers with higher credit scores typically receive lower interest rates. The credit score reflects the borrower’s history of managing debts and payments. |
| Financial Stability | Lenders assess the borrower’s income and debt-to-income ratio to gauge their ability to repay the loan. |
| Employment Status | The borrower’s employment status and stability can influence the lender’s confidence in their ability to repay the loan. |
| Loan Term | The duration of the loan can impact the rate. Short-term loans often have higher interest rates compared to long-term loans. |
| Lender Type | Online lenders might offer lower starting rates, especially for those with excellent credit, compared to traditional banks and credit unions. |
| Other Factors | Events like recent bankruptcies or open collections cases, as well as lender-specific criteria like minimum income or credit score requirements, can influence loan rates. |
Pro Tip
“Your credit score is going to be the top influential factor when a lender is deciding whether or not to approve you at all, as well as what rates and terms to offer. Your credit score essentially tells them how trustworthy you are when it comes to borrowing money, which impacts their confidence level in how well you will pay back the loan. So, the best thing you can do to secure favorable terms is really focus on building your credit score.” – David Kemmerer | CEO at CoinLedger
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