How to Find Low-Interest Personal Loans For People With Bad Credit

The Federal Reserve reports that the average rate for a personal loan with a term of two years is 10.7 percent. However, you may be eligible for a rate even lower than that.

The following suggestions can help you get approved for a personal loan despite your low credit score and reduce the cost of borrowing money over the loan's lifetime.

5 Ways to Improve Your Chances of Getting a Low Personal Loan Interest Rate

1. Shop around

If you checked with your local bank or credit union or received a preapproval offer in the mail, you've already taken the first step toward getting your loan. However, the first deal that pops up isn't always the best.

One way to find the best deal on a loan is to shop around and see what different lenders offer in terms of interest rates, fees, and other terms. Most online loan providers will let you check rates with a soft credit pull that won't affect your score. But don’t look far; check out Alpha Loans for the lowest rates without worrying about the state of your credit score!

2. Work with a credit union

Credit unions, in contrast to banks, are cooperatives owned by their customers rather than shareholders. As a result, credit unions and similar organizations frequently give back to their members by reducing the interest and fees they charge for various services and by increasing the interest they pay on deposits to checking and savings accounts.

The one catch is that you must become a credit union member before applying for a loan from them. To become a credit union member, you usually need to meet membership requirements such as living or working in a specific area, being a member of a particular organization, or is related to an existing member.

3. Avoid fees

The APR of a personal loan incorporates not only the interest rate but also several other fees. The origination fee is the one you should be especially wary of. It can be anywhere from 1% to 8% of the total loan amount and is typically taken out upfront before you receive your money.

Check the total APR as a lender that waives the origination fee may make up the difference in interest rate. However, lenders like Alpha Loans don't tack on any origination fee and are completely transparent about it. 

4. Get a co-signer

Some financial institutions allow for a co-signer when applying for a personal loan. Since the co-signer is essentially guaranteeing the loan, their good credit and steady income will increase the likelihood of approval and the loan's terms.

This strategy can be financially beneficial if your co-signer is aware of and willing to shoulder their share of the bill and you make prompt payments a top priority. So make sure your co-signer knows what they're getting into before you try this.

5. Lower your debt-to-income ratio 

Income is one factor that lenders consider when evaluating a borrower's capacity to repay a loan. As a result, they will calculate your debt-to-income ratio (the total amount of monthly debt payments as a percentage of your monthly gross income) to see if you are financially stable enough to take on additional debt.

If your ratio is low, you might be able to get a better interest rate, while if it's high, you might not get approved at all.

Two ways to reduce your debt-to-income ratio are to increase your monthly income or reduce your monthly debt payments. A plan to repay your debt is essential if you have accumulated a substantial amount. If you're short on funds, it's time to get creative about how to boost your earnings.

If you need a personal loan and want to pay the lowest interest rate possible, Alpha Loans is your best bet. Get a loan application in right away!

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Eligibility Criteria

To be eligible for a loan

  • You must have a job,
  • You must have direct deposit pay,
  • You must have access to your online banking.


Alpha Loans is NOT a payday lender. Our loans carry a term EXCEEDING 62 days with an APR of 29% interest. Therefore, Alpha Loans is NOT REQUIRED to obtain a lending license in CANADA. Some brokerage fees and admin fees might be added to the installments. Please read your contract carefully.