A good interest rate on a personal loan is one that provides affordable monthly payments. You have a good interest rate if you can afford to pay your loan each month in addition to other monthly bills!
Good interest rates do not complicate the borrowing process. Interest rates affect how much you pay each month and overall to borrow money. If your interest rate is too high, you will struggle to repay the loan each month. But a good interest rate equals a decent monthly payment amount that leaves you with money to spend on other bills and expenses.
When a potential borrower applies for a loan, the lender will analyze their credit history and income. Most lenders prefer working with people with at least a good credit score, which is any score higher than 670. You will likely receive the best loan terms if you have a high credit score. You can look forward to low-interest rates, high loan amounts, and long repayment terms. But what if your credit is bad?
Borrowers with bad credit scores tend to have difficulty getting approval for personal loans. Most personal loans are unsecured, meaning the borrower has no safety net. Lenders have to rely on your past financial history to make a qualifying decision.
Online lenders tend to have flexible approval requirements. There are many online lenders that provide emergency cash to people with low scores. You could still qualify for loans with a 580 credit score! You can get an online personal loan offer with a good interest rate if you have a reliable source of income. Showing proof of your ability to make timely payments can incentivize a lender to provide fast cash despite a low credit score.
If you already have a personal loan but got stuck with a bad interest rate, consider refinancing that loan! Refinancing means replacing your current loan agreement with a new one to get different loan terms that work better with your existing budget. Refinancing a personal loan can help you get a lower interest rate that doesn’t make the repayment process a hassle!