Personal Loan Interest Rates August 2024: Starting @10.85% (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.

Monetary Policy Summary, August 2024

At its meeting ending on 31 July 2024, the MPC voted by a majority of 5–4 to reduce Bank Rate by 0.25 percentage points, to 5%. Four members preferred to maintain Bank Rate at 5.25%.

The Mortgage Bankers Association predicts in its August Mortgage Finance Forecast that mortgage rates will fall from 6.7% in the third quarter of 2024 to 6.5% by the fourth quarter. The industry group expects rates will fall to 5.9% at the end of 2025 and will continue to average 5.9% in 2026.

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.

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.

That means the widespread expectation is for an initial cut of 0.25 percentage point, or 25 basis points, to benchmark rates, from the current range of 5.25% to 5.5%. With two more policy meetings left later in 2024, the Fed is seen as likely to keep easing policy into the end of the year.

Lawrence Yun, chief economist at the National Association of Realtors, even told CNBC last year that he doesn't think mortgage rates will reach the 3% range again in his lifetime.

Is 7% high for a personal loan? ›

A good personal loan interest rate depends on your credit score: 740 and above: Below 8% (look for loans for excellent credit) 670 to 739: Around 14% (look for loans for good credit) 580 to 669: Around 18% (look for loans for fair credit)

Calculating the monthly cost for a $50,000 loan at an interest rate of 8.75%, which is the average rate for a 10-year fixed home equity loan as of September 25, 2023, the monthly payment would be $626.63. And because the rate is fixed, this monthly payment would stay the same throughout the life of the loan.

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.

But economists at the World Bank expect that inflation will moderate over the next two years and by the end of 2026 interest rates will come down along with it, which experts say will buoy the housing market.

In July 2023, overnight interest rate climbed to 5%, the highest since 2001. We expect the overnight interest rate to decline between 1.5% to 2% from its peak by the end of 2026. The long-term trend of declining yields has ended and we are unlikely ever to see low rates like those of 2020-2021 or the 2009-2010 again.