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The average overall interest rate for debt consolidation loans this past week was 18.24%, unchanged from the previous week. The best rates were as low as 5.99%. Borrowers with credit scores below 620 got loans with average rates of 19.79%, while those with scores above 720 got loans with average rates of 15.47%.
While you can take out a personal loan to pay for everything from home renovation projects to medical expenses and income taxes, most borrowers use them to consolidate debt. That purpose is so popular that some lenders, including Happy Money and Reach Financial, specialize in them.
See Insider’s picks for the best debt consolidation loans and the best credit card consolidation loans »
Compare Personal Loan Rates
Average Debt Consolidation Rates
We’ve put together these average rates from our database of 25 debt-consolidation loan products for this past week:
Debt Consolidation Rates by Credit Score
A higher credit score generally means you’ll receive a lower rate — but not always.
The average rates (APRs), terms, and loan amounts were provided by Even Financial sourced through Fiona.com. This information is based on aggregated, anonymized offer data from Fiona’s lender marketplace of financial services providers as of March 20. The data presented in this table applies only to lenders with APRs below 30%, and is not specific to any individual lender or consumer.
Percentage of Borrowers by Loan Purpose
These loan purposes are based on data from 125 borrowers who applied for loans and received rates.
Average Overall Personal Loan Rates
We’ve put together a database of 28 personal loan products and averaged their rates to help you get a handle on the current landscape of loans for all purposes. You’re more likely to get for a lower rate with a better credit score. Rates are unchanged from last week.
The lowest rate of the companies we track is from American Express, which has a minimum APR of 5.91%. The highest rate is from NetCredit Personal Loans, which has a maximum APR of 155%.
All borrowers aren’t necessarily qualified for the rates above. The rates you’ll get depend on your credit score and other aspects of your financial situation.
Average Personal Loan Rates by Credit Score
These rates are based on data from 122 borrowers who applied for loans and received rates on loans for all purposes.
The average personal loan rate for borrowers with excellent credit scores (720+) is up 14 basis points from last week, while those for borrowers with poor scores (<620) dropped by about 60 percentage points.
Debt Consolidation Loan Frequently Asked Questions
A debt consolidation loan may temporarily lower your credit score. However, a debt consolidation program often boosts your credit in the long term because it can reduce your debt and your monthly minimum payments, which all affect your credit score. If you consolidate your debt, you’ll benefit from a lower interest rate. That increases the amount you’re paying toward your balances each month, which will reduces the amount of time it takes to pay off your debt.
Consider your individual financial situation before deciding to consolidate credit card debt. It may help you keep tabs on your debt more easily with one fixed, monthly payment. To consolidate credit card debt, you get a loan from one lender for the total amount of debt you’d like to combine and use it to pay off the individual, smaller debts. Then all of your debt is rolled into one monthly payment, one deadline for debt repayment, and a lower interest rate.
Depending on the lender, you may be able to get your money as soon as the same day you apply. Often a lender will send the money relatively quickly after the application is approved, but there is usually no guarantee on the speed of the approval process.
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