How Hard Is It To Get a Personal Loan In 2024? (2024)

FAQs

Are personal loan interest rates going down in 2024? ›

Personal loan annual percentage rates lowered for the first time in nearly two years in the second quarter of 2024, but like other types of credit, average rates are still higher than they were in 2020 and 2021.

It's not hard to get a personal loan from a bank if you have a good credit score and enough income to repay the loan. The bank will require some basic information from you and will consider factors such as your credit score, income, and existing debts to determine your eligibility for approval.

You'll have the best chance of getting approved with an excellent credit score, such as one above 800. You may struggle to find a lender that will approve a $50,000 loan for folks with poor or bad credit. A "poor" credit score is considered 580 or under. Most lenders require at least a "fair" score of around 670.

Mortgage rates should continue declining this year as the U.S. economy weakens, inflation cools and the Federal Reserve cuts interest rates. The 30-year fixed mortgage rate is expected to fall to the low-6% range through the end of 2024, potentially dipping into high-5% territory in 2025.

But a good rate for you depends on your credit score. For example, if you have excellent credit, a rate below 11 percent would be considered good, while 12.5 percent would be less competitive.

To qualify for a personal loan, borrowers generally need a minimum credit score of at least 580 — though certain lenders have even lower requirements than that. However, your chances of getting a low interest personal loan rate are much higher if you have a “very good” or “excellent” credit score of 740 and above.

Banks tend to be a solid pick for established borrowers with a positive credit history. Perks tend to include lower rates and more customer service options. Private lenders can be a great choice for borrowers who need funds fast. If you need more lenient approval for whatever reason, this may be an option to explore.

Some of the easiest loans to get approved for if you have bad credit include payday loans, no-credit-check loans, and pawnshop loans. Before you apply for an emergency loan to obtain funds quickly, make sure you read the fine print so you know exactly what your costs will be.

This allows them to look at your history from the past seven years and see whether you've typically made payments on time. For a $30,000 loan, you'll typically need a credit score above 600 just to qualify or above 700 to get a competitive rate.

How much income do you need for a personal loan? ›

Lenders may also look at your employment history to predict if your income is likely to continue. Beyond this, some lenders may require you to have a minimum household income to qualify for a personal loan. For example, Discover requires its personal loan applicants to have at least $25,000 in household income.

The monthly payment on a $50,000 loan ranges from $683 to $5,023, depending on the APR and how long the loan lasts. For example, if you take out a $50,000 loan for one year with an APR of 36%, your monthly payment will be $5,023.

You can borrow from $1,000 to $100,000 or more with a 700 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.

With FICO, fair or good credit scores fall within the ranges of 580 to 739, and with VantageScore, fair or good ranges between 601 to 780. Many personal loan lenders offer amounts starting around $3,000 to $5,000, but with Upgrade, you can apply for as little as $1,000 (and as much as $50,000).

On July 31, 2024, the FOMC decided to hold steady on interest rates. The benchmark rate remains at 5.25-5.5 percent. Most personal loans have fixed rates, so current borrowers do not need to worry about their interest rates changing.

Undergraduate loans now carry a rate of 6.53% for the 2024-2025 school year, up from 5.50% last school year. Graduate direct loans have a rate of 8.08%, up from 7.05%. And PLUS loans for grad students and parents of undergraduates rose to 9.08%, up from 8.05% this year.

Despite recent easing, wage growth has remained above the 3.0%-3.5% range seen as consistent with the Fed's 2% inflation target. The Fed was expected to deliver a 25 basis point cut each in the four quarters of 2025. Markets are currently pricing around 200 basis points of reductions by end-Q3 2025.

Fed watchers now see at least two rate cuts before the end of the year, but some are betting on three, with more to come in the spring. Some economists say the benchmark rate could be as low as 3 to 3.5 percent by the second half of 2025.