Last Updated: January 18, 2022
Borrowers with great credit scores will be surprised how low the average fixed interest rate for 5-year personal loans fell last week, Fox Business reports. Such low rates haven’t been registered since July this year.
Last week’s charts regarding the interest rates for personal loans clearly show that the rates for 3-year personal loans have increased, while the rates for 5-year terms have fallen.
The rates for 3-year fixed personal loans have increased for the first time since the week of October 4, this year. 5-year fixed personal loans rates haven’t been lower since July when the average interest rate in the week of July 19 was 13.11%. Currently, they stand at 13.45%.
Getting a personal loan has become a common way to get a hold of more money to pay off unexpected expenses. That’s why the dramatic fall in rates for the 5-year personal loans, means that borrowers with a credit score of 720 or higher will now apply for such personal loans more than ever. This does not affect people with bad credit scores much, because they’ll still get higher interest rates. They still have the option of applying for a loan with one of the many companies that offer personal loans to people with bad credit scores.
5-Year vs 3-Year Fixed Personal Loans: What Should Borrowers Go For?
Borrowers looking for personal loans might wonder which loan is a better option in the long run. If they want to use this change in rates to their advantage, going for a 5-year fixed personal loan seems like a good idea at the moment. This type of personal loan rate is at its lowest since July this year. During the week of October 25, the average fixed interest rate of 5-year personal loans fell by 0.41%, from 13.86% to 13.45%. The average fixed interest rate of 3-year personal loans, on the other hand, has increased during the same week by 0.17%, from 11.03% to 11.20%.