Excellent credit scores could save borrowers over $4k on personal loan rates

By Ava Crawford · · 2 min read
Fact Checked
two girls sitting in living rooms looking at an ipad looking at good personal loan rates because they have excellent credit

Everyone knows that when applying for a personal loan, having a good credit score can give you an advantage. But just how much of an advantage does a good credit history provide?

After crunching the numbers, it seems that squeaky clean credit can actually make all the difference when it comes to interest rates on your personal loan. Your credit score can be the deciding factor between an extremely competitive interest rate and a fairly high interest rate on your personal loan.

Surveying the over 200 personal loans in the Mozo database showed that you can save a considerable amount of money taking out a personal loan with excellent credit vs with average credit.

  • The average interest rate for a borrower with an average credit score on a $30,000 personal loan paid back over 5 in the Mozo database years is 13.18%, costing you an average of $11,122 in interest.
  • The average personal loan interest rate in the Mozo database for a borrower with excellent credit on the same loan amount and terms is 7.65%, costing you an average of $6,197 in interest.
  • Having excellent credit could save you $4,925 in interest on a $30,000 personal loan paid back over 5 years.**

Some lenders operate on a credit-based tiered interest rate system and reserve the best rates for borrowers with stellar credit. So if you’ve put in the long-term work of maintaining a perfect credit record, then why not reap the benefits with a personal loan that will reward you for that?

So, if you’ve got top notch credit and you’re after a personal loan to match, check some top picks below

**Based on 39 unsecured personal loans in the Mozo database that offer a range of interest rates depending on the applicant. Savings calculated as difference between the average of the lowest rates (7.65%) and the average of the mid-point from each products range of rates available (13.18%).