MarketWatch has highlighted these products and services because we think readers will find them useful. We may earn a commission if you buy products through our links, but our recommendations are independent of any compensation that we may receive.
That’s likely due, in part, to the fact that personal loans can be pretty easy and quick to obtain — you might be able to apply, get approved and receive funds within 24 hours — and their rates are low right now. See the lowest rates you can get on a personal loan here. Indeed, for a certain type of personal loan and for highly qualified applicants, Lightstream has rates under 3%. Though that is at the very low end, other issuers have rates starting at around 6%. And that, too, can save you money: “If you only make minimum payments, $5,000 of credit card debt at 16% could keep you in debt for more than 15 years and cost you more than $5,400 in interest. Your minimum payment would start at $117.
That said, personal loans come without pitfalls. They are unsecured debts, so you may pay more in interest than you would with say an auto loan or mortgage, points out Lauren Anastasio, a certified financial planner at SoFi — and, of course, the rates you get will be better the better your credit score and debt-to-income ratio are, she adds. You should also watch out for the origination fee, says Annie Millerbernd, a personal loans expert at NerdWallet.
5 things you might want to use a personal loan to pay for: 3 things you should not take a personal loan out for:
good