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Best Personal Loans for Excellent Credit of February 2024

The average personal loan rate is 11.94% as of Feb. 7, according to a Bankrate survey. Personal loan interest rates are trending higher in 2024 so far, up nearly a full percentage point from July 2023:

Personal loan rates vary widely based on creditworthiness. Borrowers with very good or excellent credit scores will see much lower interest rates than those with fair or poor credit. Often, borrowers with bad credit will apply for a secured personal loan that uses an asset as collateral in order to achieve lower rates:

Bankrate Averages

Find the Personal Loan That’s Right for You

To find the lowest interest rates, you can prequalify for loans with a soft inquiry that won’t damage your excellent credit score.

You’ll want to consider whether you’re getting a fixed or variable rate. With a fixed rate, your loan payments always stay the same. You’re gambling a little with a variable rate because rates could rise, but you save money if they drop.

You should always shop around for rates regardless of your credit score, says Chase Peckham, director of community outreach for the San Diego Financial Literacy Center. “Even if you have excellent credit, every institution with which you are applying is going to have different factors for approving and setting rates for loans,” he says.

He reminds borrowers that credit score is a big factor, but not the only one, when determining loan options and terms.

Two main components make up the cost of a personal loan: interest rate and fees. That number is expressed as your APR, and it reflects how much you pay to borrow money on a yearly basis.

Your APR hinges on details such as your credit score, income and financial history. Getting a personal loan with excellent credit means your rates are usually on the lower end.

Fees can include origination fees, prepayment penalties or any other service fees the lender charges.

“Origination fees and the rates and terms can depend on a variety of factors,” says Caleb Cook, vice president of consumer lending at Digital Federal Credit Union.

Lenders charge you an origination fee upfront to process your application and underwrite the loan. You might pay a flat fee or a percentage of the loan amount deducted from the loan proceeds.

You may also be charged a prepayment penalty if you pay off the loan early.

The smallest personal loan is typically $1,000. The largest amount you can borrow is $100,000, but $50,000 is a more common borrowing limit. Credit score, income and other factors will influence the loan amount you receive.

Generally, you can spend your personal loan on whatever you want, but sometimes restrictions apply. For example, lenders may not allow you to use a personal loan for college expenses, business expenses, investments or gambling costs.

Repayment terms, or the time to pay back your personal loan, range from 12 to 60 months or longer.

Lenders can offer shorter or longer repayment options, depending on how much you borrow. You might get two years to repay a smaller loan, for example, or five years or longer for a larger loan.

Keeping the repayment term in mind is important for making sure personal loan payments fit your budget now and later.

Your excellent credit score will likely lose a few points when you formally apply for a personal loan because the lender will perform a hard credit inquiry.

Prequalify first to avoid multiple hard credit pulls. You can then review various personal loan offers and apply only for the loan with the best terms for you. In any case, you’re trading a temporary credit score hit for access to necessary funds from a personal loan.

On the positive side, personal loans can add diversity to your credit mix, which accounts for 10% of your FICO credit score. Also, paying your loan on time contributes to a positive payment history, which makes up 35% of your credit score – the most important factor. Since you have an excellent score, that means you’ve already been paying your bills on time, so you may not see a big boost from adding a personal loan.

Before you compare personal loans, confirm your excellent credit score. In addition to free sources of your score, such as your credit card issuer or various personal finance websites, you could take a look at your credit scores from all three major credit bureaus – Equifax, Experian and TransUnion.

If your score is excellent, you are ready to compare these details for every loan offer:

  • Minimum and maximum borrowing amounts.
  • Minimum credit score requirements.
  • Interest rate range and whether rates are fixed or variable.
  • Loan fees, including origination, prepayment and late fees.
  • What the loan can be used for and whether any exclusions apply.
  • Minimum and maximum loan repayment terms.

Also, consider the ease of application and the speed of disbursal. If you need money from a personal loan to cover an emergency expense, timing could affect the lender you select. Some online lenders can approve your loan and distribute funds the same day you apply or the next business day, while a personal loan from a bank could take a little longer.
Finally, keep in mind that you can still be denied for a personal loan, even with excellent credit, Peckham says. For example, the lender may be overrun with applications and working through a backlog, or it may be carrying too much debt and lack capital to lend. That’s why shopping around for the right personal loan is important, he says.

U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.

To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. Personal loan companies are evaluated based on customer service ratings, interest rates, maximum loan term, minimum and maximum loan amounts, minimum FICO score, online features, and origination fees.
The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.

To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.

To recap, here are the picks:

Best Personal Loans for Excellent Credit of February 2024

Personal loans aren’t one-size-fits-all. The best loan for you may be different from the best one for someone else, even if you both have excellent credit. You’ll need to consider factors that make a loan ideal for your needs. You can use a personal loan for everything from improving your home to consolidating debt to planning a wedding. Because qualifying isn’t a concern if you have excellent credit, you may choose a personal loan based on the best deal you can get. Interest rate and repayment term could be top considerations as you make your decision.

When seeking personal loans for excellent credit, you have several options for borrowing, including:

Unsure where to start? Check your local community bank or credit union first, Cook says.

To keep you as a customer, these institutions may offer you incentives, such as rate discounts or fee waivers, according to the Consumer Financial Protection Bureau.

Credit unions have a reputation for offering low rates for loans, but you have to be a credit union member to borrow money. Check out the credit union’s membership requirements; they vary from living in a certain area to working in a specific industry or belonging to a particular organization or even contributing to a distinct cause.

The application process may also vary, depending on the lender you choose. For instance, if you’re applying for a loan at a bank or credit union, you may need to go to a branch to fill out an application. Online lenders and peer-to-peer lenders allow you to apply and upload all of your supporting documents digitally.

For a three-year term personal loan, a 18.4% rate is common. For a five-year term personal loan, a 19% rate is common.

Sarah Goldberg
Sarah Goldberg

Sarah is a seasoned financial market expert with a decade of experience. She's known for her analytical skills, attention to detail, and ability to communicate complex financial concepts. She holds a Bachelor's degree in Finance, is a licensed financial advisor, and enjoys reading and traveling in her free time.

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