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This week’s personal loan rates edge up for 3- and 5-year terms

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Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

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 higher for 3- and 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 July 15 and July 21:

  • Rates on 3-year fixed-rate loans averaged 15.85%, up from 15.38% the seven days before and from 15.58% a year ago.
  • Rates on 5-year fixed-rate loans averaged 19.32%, up from 18.93% the previous seven days and from 18.19% 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 have increased over the last seven days for 3- and 5-year loans. While 3-year loan rates rose by 0.47 percentage points, rates on 5-year loans increased by 0.39 percentage points. Interest rates for 3- and 5-year terms remain higher than they were this time last year, up 0.27 percentage points for 3-year terms and up 1.13 percentage points for 5-year terms. 

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 June 2024:

  • Rates on 3-year personal loans averaged 23.02%, up from 22.35% in May.
  • Rates on 5-year personal loans averaged 24.81%, up from 24.52% in May.

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 June, the average prequalified rate selected by borrowers was: 

  • 13.18% for borrowers with credit scores of 780 or above choosing a 3-year loan
  • 32.55% 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. 

Where are interest rates headed?

The Bureau of Labor Statistics (BLS) reported that inflation slowed in May, raising hopes for multiple interest rate cuts in 2024. When the Fed concluded its June meeting, it signaled one cut by the end of the year while holding rates steady. As of now, we anticipate one 25 basis point (0.25 percentage points) cut this year, and a 100 basis point (1 percentage point) cut in 2025.

Currently sitting at 5.25% to 5.50%, the federal funds rate is the highest it’s been since 2001. Sticky inflation and low unemployment had made any cuts seem unlikely as of a week ago. But the news may deliver relief for borrowers burdened with high interest costs and those considering a loan. However, demand for personal loans has increased and all signs point to this trend continuing, while debt levels and delinquency rates have risen as well. This may indicate more consumers will struggle to be approved at low rates or at all — even if we see rates fall. 

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 7,500 positive Trustpilot reviews and a TrustScore of 4.8/5.

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Powell sees tariffs raising inflation and says Fed will wait before further rate moves

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US Federal Reserve Chair Jerome Powell holds a press conference after the Monetary Policy Committee meeting, at the Federal Reserve in Washington, DC on March 19, 2025. 

Roberto Schmidt | Afp | Getty Images

Federal Reserve Chair Jerome Powell said Friday that he expects President Donald Trump’s tariffs to raise inflation and lower growth, and indicated that the central bank won’t move on interest rates until it gets a clearer picture on the ultimate impacts.

In a speech delivered before business journalists in Arlington, Va., Powell said the Fed faces a “highly uncertain outlook” because of the new reciprocal levies the president announced Wednesday.

Though he said the economy currently looks strong, he stressed the threat that tariffs pose and indicated that the Fed will be focused on keeping inflation in check.

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said in prepared remarks. “We are well positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy.”

The remarks came shortly after Trump called on Powell to “stop playing politics” and cut interest rates because inflation is down.

There’s been a torrent of selling on Wall Street following the Trump announcement of 10% across-the-board tariffs, along with a menu of reciprocal charges that are much higher for many key trading partners.

Powell noted that the announced tariffs were “significantly larger than expected.”

“The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he said. “The size and duration of these effects remain uncertain.”

Focused on inflation

While Powell was circumspect about how the Fed will react to the changes, markets are pricing in an aggressive set of interest rate cuts starting in June, with a rising likelihood that the central bank will slice at least a full percentage point off its key borrowing rate by the end of the year, according to CME Group data.

However, the Fed is charged with keeping inflation anchored with full employment.

Powell stressed that meeting the inflation side of its mandate will require keeping inflation expectations in check, something that might not be easy to do with Trump lobbing tariffs at U.S. trading partners, some of whom already have announced retaliatory measures.

A greater focus on inflation also would be likely to deter the Fed from easing policy until it assesses what longer-term impact tariffs will have on prices. Typically, policymakers view tariffs as just a temporary rise in prices and not a fundamental inflation driver, but the broad nature of Trump’s move could change that perspective.

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” Powell said. “Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices.”

Core inflation ran at a 2.8% annual rate in February, part of a general moderating pattern that is nonetheless still well above the Fed’s 2% target.

In spite of the elevated anxiety over tariffs, Powell said the economy for now “is still in a good place,” with a solid labor market. However, he mentioned recent consumer surveys showing rising concerns about inflation and dimming expectations for future growth, pointing out that longer-term inflation expectations are still in line with the Fed’s objectives.

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Finance

Watch Fed Chair Jerome Powell speak live on interest rates and tariffs

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[The stream is slated to start at 11:25 p.m. ET. Please refresh the page if you do not see a player above at that time.]

Federal Reserve Chairman Jerome Powell speaks Friday to the Society for Advancing Business Editing and Writing conference in Arlington, Va.

The central bank leader’s appearance, including prepared remarks and a question and answer session after, comes at a time of heightened market uncertainty regarding President Donald Trump’s aggressive tariffs against U.S. trading partners.

In March, the Fed voted to hold its benchmark interest rate steady while noting the issues over trade policy. Other Fed officials in recent days have expressed support for staying in a holding pattern until policy issues become clearer, though markets are pricing in four or five cuts this year.

Read more:
Federal Reserve is unlikely to rescue markets and economy from tariff turmoil anytime soon
Trump’s tariff gambit will raise the stakes for an economy already looking fragile
JPMorgan raises recession odds for this year to 60%

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Traders betting Fed will cut rates at least 4 times this year to bail out economy

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Traders work on the floor of the New York Stock Exchange during morning trading on April 03, 2025 in New York City. 

Michael M. Santiago | Getty Images

Traders are now betting the Federal Reserve will cut at least four times this year, amid fears Trump’s tariffs could tip the U.S. into a recession.

Odds of five quarter-point cuts coming this year jumped to 37.9%, up from 18.3% one day prior, according to data from the CME Group on Friday morning. That would put the federal funds rate to 3.00% to 3.25%, down from 4.25% to 4.50% where it has been since December.

Markets are also pricing in a roughly 32% chance the federal funds rate will fall to 3.25% to 3.50%, which would mean four quarter-point cuts from the Fed.

At the same time, the likelihood of a half-percentage point cut coming in June also jumped, to 43.8% from 15.9% previously.

The implied odds the Federal Reserve will cut aggressively rose, after Trump’s tariffs raised fears of a global trade war, and hurt economists’ forecasts for both growth and inflation. Investors are expecting that a slowdown in economic growth could spur the Fed to lower rates in a bid to avoid a recession.

However, many worry the Fed has a tough road ahead of them, as the central bank would have to cut rates in an environment where inflation has yet to go down to its 2% target. If implemented, the tariffs are expected to drive core inflation north of 3%, possibly even as high as 5% according to some forecasts.

On Friday, Roger W. Ferguson, economist and former Fed vice chair, told CNBC the Fed may not cut at all this year, saying the central bank has to worry about the inflation part of its mandate.

— CNBC’s Jeff Cox contributed to this report.

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