Finance

This week’s personal loan rates edge down for 3-year loans, rise for 5-year loans

Published

11 months ago

April 2, 2024

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The latest trends in interest rates for personal loans from the Credible marketplace, updated weekly. (iStock)

Borrowers with good credit seeking personal loans during the past seven days prequalified for rates that were lower for 3-year loans and higher for 5-year loans when compared to fixed-rate loans for the seven days before.

For borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender between March 18 and March 24:

Rates on 3-year fixed-rate loans averaged 14.64%, down from 14.71% the seven days before and up from 14.18% a year ago.
Rates on 5-year fixed-rate loans averaged 21.26%, up from 21.14% the previous seven days and from 16.78% a year ago.

Personal loans have become a popular way to consolidate debt and pay off credit card debt and other loans. They can also be used to cover unexpected and emergency expenses like medical bills, take care of a major purchase, or fund home improvement projects.

Average personal loan interest rates

Average personal loan interest rates decreased over the last seven days for 3-year loans and increased for 5-year loans. While 3-year loan rates fell by 0.07 percentage points, rates on 5-year loans rose by 0.12 percentage points. Interest rates for both terms remain significantly higher than they were this time last year, up 0.46 percentage points for 3-year loans, and 4.48 percentage points for 5-year loans.

Still, borrowers can take advantage of interest savings with a 3- or 5-year personal loan, as both loan terms offer lower interest rates on average than higher-cost borrowing options such as credit cards.

But whether a personal loan is right for you depends on multiple factors, including what rate you can qualify for, which is largely based on your credit score. Comparing multiple lenders and their rates helps ensure you get the best personal loan for your needs.

Before applying for a personal loan, use a personal loan marketplace like Credible to comparison shop.

Personal loan weekly rate trends

Here are the latest trends in personal loan interest rates from the Credible marketplace, updated weekly.

The chart above shows average prequalified rates for borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender.

For the month of February 2024:

Rates on 3-year personal loans averaged 21.68%, down from 22.16% in January.
Rates on 5-year personal loans averaged 24.88%, down from 25.26% in January.

Rates on personal loans vary considerably by credit score and loan term. If you’re curious about what kind of personal loan rates you may qualify for, you can use an online tool like Credible to compare options from different private lenders.

All Credible marketplace lenders offer fixed-rate loans at competitive rates. Because lenders use different methods to evaluate borrowers, it’s a good idea to request personal loan rates from multiple lenders so you can compare your options.

Current personal loan rates by credit score

In February, the average prequalified rate selected by borrowers was:

12.78% for borrowers with credit scores of 780 or above choosing a 3-year loan
30.11% for borrowers with credit scores below 600 choosing a 5-year loan

Depending on factors such as your credit score, which type of personal loan you’re seeking and the loan repayment term, the interest rate can differ.

As shown in the chart above, a good credit score can mean a lower interest rate, and rates tend to be higher on loans with fixed interest rates and longer repayment terms.

How to get a lower interest rate

Many factors influence the interest rate a lender might offer you on a personal loan. But you can take some steps to boost your chances of getting a lower interest rate. Here are some tactics to try.

Increase credit score

Generally, people with higher credit scores qualify for lower interest rates. Steps that can help you improve your credit score over time include:

Pay bills on time: Payment history is the most important factor in your credit score. Pay all your bills on time for the amount due.
Check your credit report: Look at your credit report to ensure there are no errors on it. If you find errors, dispute them with the credit bureau.
Lower your credit utilization ratio: Paying down credit card debt can improve this important credit-scoring factor.
Avoid opening new credit accounts: Only apply for and open credit accounts you actually need. Too many hard inquiries on your credit report in a short amount of time could lower your credit score.

Choose a shorter loan term

Personal loan repayment terms can vary from one to several years. Generally, shorter terms come with lower interest rates, since the lender’s money is at risk for a shorter period of time.

If your financial situation allows, applying for a shorter term could help you score a lower interest rate. Keep in mind the shorter term doesn’t just benefit the lender – by choosing a shorter repayment term, you’ll pay less interest over the life of the loan.

Get a cosigner

You may be familiar with the concept of a cosigner if you have student loans. If your credit isn’t good enough to qualify for the best personal loan interest rates, finding a cosigner with good credit could help you secure a lower interest rate.

Just remember, if you default on the loan, your cosigner will be on the hook to repay it. And cosigning for a loan could also affect their credit score.

Compare rates from different lenders

Before applying for a personal loan, it’s a good idea to shop around and compare offers from several different lenders to get the lowest rates. Online lenders typically offer the most competitive rates – and can be quicker to disburse your loan than a brick-and-mortar establishment.

But don’t worry, comparing rates and terms doesn’t have to be a time-consuming process.

Credible makes it easy. Just enter how much you want to borrow and you’ll be able to compare multiple lenders to choose the one that makes the most sense for you.

About Credible

Credible is a multi-lender marketplace that empowers consumers to discover financial products that are the best fit for their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options – without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 6,500 positive Trustpilot reviews and a TrustScore of 4.7/5.

Finance

China carries big risks for investors, money manager suggests

Published

31 minutes ago

February 22, 2025

Business Finance News

Investors may want to reduce their exposure to the world’s largest emerging market.

Perth Tolle, who’s the founder of Life + Liberty Indexes, warns China’s capitalism model is unsustainable.

“I think the thinking used to be that their capitalism would lead to democracy,” she told CNBC’s “ETF Edge” this week. “Economic freedom is a necessary, but not sufficient precondition for personal freedom.”

She runs the Freedom 100 Emerging Markets ETF — which is up more than 43% since its first day of trading on May 23, 2019. So far this year, Tolle’s ETF is up 9%, while the iShares China Large-Cap ETF, which tracks the country’s biggest stocks, is up 19%.

The fund has never invested in China, according to Tolle.

Tolle spent part of her childhood in Beijing. When she started at Fidelity Investments as a private wealth advisor in 2004, Tolle noted all of her clients wanted exposure to China’s market.

“I didn’t want to personally be investing in China at that point, but everyone else did,” she said. “Then, I had clients from Russia who said, ‘I don’t want to invest in Russia because it’s like funding terrorism.’ And, look how prescient that is today. So, my own experience and those of some of my clients led me to this idea in the end.”

She prefers emerging economies that prioritize freedom.

“Without that, the economy is going to be constrained,” she added.

ETF investor Tom Lydon, who is the former VettaFi head, also sees China as a risky investment.

“If you look at emerging markets… by not being in China from a performance standpoint, it’s provided less volatility and better performance,” Lydon said.

Finance

Read Warren Buffett’s latest annual letter to Berkshire Hathaway shareholders

Published

1 hour ago

February 22, 2025

Business Finance News

Warren Buffett’s Berkshire Hathaway raised its stakes in Mitsubishi Corp., Mitsui & Co., Itochu, Marubeni and Sumitomo — all to 7.4%.

Bloomberg | Bloomberg | Getty Images

Warren Buffett released Saturday his annual letter to shareholders.

In it, the CEO of Berkshire Hathaway discussed how he still preferred stocks over cash, despite the conglomerate’s massive cash hoard. He also lauded successor Greg Able for his ability to pick opportunities — and compared him to the late Charlie Munger.

Finance

Warren Buffett amasses more cash and sells more stock, but doesn’t explain why in annual letter

Published

2 hours ago

February 22, 2025

Business Finance News

Warren Buffett walks the floor and meets with Berkshire Hathaway shareholders ahead of their annual meeting in Omaha, Nebraska on May 3rd, 2024.

David A. Grogen | CNBC

The mystery over Warren Buffett’s surprisingly defensive stance deepened over the weekend.

The 94-year-old CEO of Berkshire Hathaway sold more stocks in the latest quarter and grew a record cash pile even larger to $334 billion, but failed to explain in his highly anticipated annual letter why the investor known for his astute equity purchases over time was seemingly battening down the hatches.

Instead Buffett said that this posture in no way represented a move away from his love for stocks.

“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” Buffett wrote in the 2024 annual letter released Saturday. “That preference won’t change.”

Berkshire’s monstrous ownership of cash has raised questions among shareholders and observers especially as interest rates are expected to fall from their multi-year highs. The Berkshire CEO and chairman in recent years has expressed frustration about an expensive market and few buying opportunities. Some investors and analysts have grown impatient with the lack of action and have sought an explanation why.

Despite his repeated selling of stock, Buffett said Berkshire will continue to prefer equities to cash.

“Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities – mostly American equities although many of these will have international operations of significance,” Buffett wrote. “Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned.”

Shareholders will have to wait a little longer it seems as the Omaha-based conglomerate net sold equities for a ninth consecutive quarter in the final period of last year, according to the company’s annual report, which was also released on Saturday.

All told, Berkshire sold more than $134 billion worth of stocks in 2024. This is mainly due to the sales of Berkshire’s two largest equity holdings — Apple and Bank of America.

Meanwhile, it appears Buffett is not finding his own stock attractive either. Berkshire continued its buyback halt, repurchasing no shares in the fourth quarter or in the first quarter through Feb. 10.

This is despite a massive increase in operating earnings reported by the conglomerate on Saturday.

‘Often, nothing looks compelling’

Buffett’s sitting on his hands amid a raging bull market that’s seen the S&P 500 gain more than 20% for two years in a row and move into the green again so far this year. Although, some cracks have begun to develop in the past week with some concerns about a slowing economy, volatility from rapid policy changes from new President Donald Trump and overall stock valuations.

Berkshire shares were up 25% and 16% respectively the last two years and are up 5% so far this year.

Buffett did offer perhaps a small hint about stock valuations being a concern in the letter.

“We are impartial in our choice of equity vehicles, investing in either variety based upon where we can best deploy your (and my family’s) savings,” wrote Buffett. “Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities.”

In this year’s letter, Buffett did endorse designated successor Greg Abel in his ability to pick equity opportunities, even comparing him to the late Charlie Munger.

“Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities. Greg has vividly shown his ability to act at such times as did Charlie,” Buffett said.

At last year’s annual meeting, Buffett surprised many by announcing that Abel, vice-chairman of non-insurance operations, will have the final say on all Berkshire’s investing decisions, including overseeing the public stock portfolio.

Some investors and analysts have speculated Buffett’s conservative moves in the last year are not a market call, but him preparing the company for Abel by paring outsized positions and building up cash for him to deploy one day.