How to Find and Get Low-Interest Loans

A low interest loan can fix a crisis or fund a major purchase.

A woman contemplating low interest loans to help with her finances

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At some point, we all need a little help with our finances. Medical bills, car repairs, and other unexpected expenses can spring up and require cash that you might not have on hand. Getting a low interest personal loan can help you smooth your cash flow and meet your financial needs.

Low interest loans are preferable because you’ll pay fewer costs overall. Here’s what you need to know about getting a low rate personal loan.

What Are Low-Interest Loans?

When you work with a lender, they usually provide a range for interest rates they charge on loans. They might advertise rates between 4.99% and 36.99% APR. Lenders decide how much to charge borrowers based on various qualifications related to their creditworthiness.

If you have a better credit score, you’re likely to get the lowest rate advertised, or at least a rate that is much lower than someone with poor credit would get. Lenders charge higher interest rates to offset some of the risks they take on when lending to borrowers with lower credit scores.

How to Qualify for Low Interest Loans

You’re never guaranteed a personal loan or a loan rate. Lenders have their own criteria for deciding who gets a loan—and what rate they receive. Here are some of the factors that lenders are likely to consider.

Credit Score

Many lenders start with your credit score. A higher credit score leads to a lower interest rate. Working on your credit score by paying bills on time and paying down debt can help you boost your score.

Credit History

Even though your credit score is built based on your credit history, many lenders still look at your credit report separately to see what kinds of accounts you have, how long you’ve had them, and how you’ve managed them.

Debt-To-Income Ratio

Lenders are likely to look at your monthly income and compare it to your monthly obligations. If a large chunk of your monthly income goes toward making debt payments, it might be an indication that you will struggle to repay your loan.


Finally, lenders will likely look at your employment to ensure that you have a stable job and enough income to make the loan payments.

While lenders might look at other factors or emphasize different criteria if you focus on these four items, you’ll be more likely to qualify for a loan—and if you have a high credit score and low debt-to-income ratio, you’re also more likely to get a lower interest rate.

If you'd like to get a head start on calculating your interest rate and overall cost of your loan, you can plug your credit score and loan amount into our loan calculator:

How to Find Low Interest Loans

There are lots of lenders willing to provide low interest loans. Start your search online at comparison sites websites that offer reviews and access to different lenders. You can review potential rates and even enter some of your information to get a rate quote.

Once you have some quotes, compare them with what’s available at a local financial institution. Consider visiting your bank and asking about personal loan options and sharing the quotes you received online. A local credit union might also be able to give you a good interest rate on a loan.

Don’t forget to look at other loan factors. Origination and other fees can boost the cost of the loan, for example.

What If You Don’t Qualify for a Low Interest Personal Loan?

If you receive rate quotes that are higher than you like or can afford, consider getting a co-signer to help you get a lower rate.

A co-signer is someone who is responsible for repaying your loan if you stop making payments. Someone with good credit, who is willing to cosign on your behalf, will be considered as an applicant and can result in a lower interest rate or even a higher loan amount.

Before you get someone to co-sign for you, though, understand that it might put a strain on your personal relationship, especially if you fail to make payments. If you don’t pay on your loan, it could damage their credit and cause a personal rift between you.

Alternatives to Personal Loans

You can also look for ways to get the money you need without getting a low interest personal loan.


If you have savings, you can use the money to pay your costs, rather than adding to your debt. If you’re tapping your emergency fund, be sure to replenish it as soon as you can. 

Secured Loans

When you have something of value, you can use it as collateral to get a loan. If you have equity built up in your home, for example, you can tap it using a loan or line of credit secured with your home. You can do the same with a car or other vehicle (just don’t get a car title loan, which is expensive). 

Credit Cards

Few credit cards can match personal loan APRs, and if you’ve been denied a low interest loan, you probably aren’t eligible for a credit card with a zero interest offer. That said, if it’s an emergency, a credit card could be your best option.

Your Stuff

Consider selling items to cover your costs, rather than going into debt. See if selling some of your stuff can reduce what you borrow.

Family and Friends

You might also get help from family and friends to meet your bills. They might be willing to give you money or lend it to you without charging interest.

In the end, it’s important to carefully consider your situation and your financial needs before making a decision about getting a loan. Once you decide you need a loan, getting the lowest rate possible should be a top consideration.