Why December 2021 Is The Best Time To Take Out A Personal Loan

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Personal loan rates are currently at an all-time low, so if you’ve been thinking about taking out a loan in the near future, now is a great time to do it. The Fed has kept its benchmark lending rates very low over the past two years, which has affected the economic climate overall.

The average interest rate for a personal loan currently is down to 10.46 percent, which is incredibly low when compared to historic personal loan rates. Average rates for personal loans have gone down significantly in the past 20 years.

The average rate for a personal loan in 2000 was over 13 percent, and while there has been some fluctuation in rates since then, rates have consistently gone down.

In short, if you need some extra funding for an upcoming vacation, home renovation project, or something else, there’s no time like the present to take out a personal loan.

Let’s break down why December 2021 might be the best time to take out a personal loan.

What to Know About Personal Loans and Its Advantages

Personal loans are a form of credit that borrowers can secure from banks, credit unions, and other online lenders. Unlike mortgage loans which you can only use to purchase a home, personal loans can be used for virtually anything.

Many people use personal loans for major life expenses, such as hosting a wedding or starting a business, and because they often come with lower interest rates than credit cards, it’s fairly common to use a personal loan to consolidate debt.

These low-interest rates make personal loans a very attractive option when compared to other forms of credit. They also tend to be more flexible and come with higher borrowing limits, especially for applicants with good credit. Even if you have a steady income, there are times when you might need a bit of extra cash in order to meet your goals.

A personal loan with bad credit is also possible, it just might take some extra time to shop for the best rates or you can apply with a co-signer.

Are there any risks involved?

Borrowing money always comes with some level of risk, and personal loans are no different. When taking out a personal loan, you want to budget carefully to ensure you can afford the monthly payments.

The monthly payments for personal loans tend to be higher than the minimum payments for credit cards. You’ll also need to factor in the fees and interest rates for the specific loan you’re interested in to make sure you can pay it off over time.

Why December 2021 May Be A Great Time to Take out a Personal Loan

If you have been considering taking out a personal loan but have just been waiting for the right time, December 2021 might be the right time to take the leap. Rates are currently at historic lows, but it’s unclear how long it’ll last. So taking out a loan now ensures you’ll be able to secure the best personal loan rates.

During the COVID-19 financial crisis, the U.S. Federal Reserve has taken precautionary measures to keep interest rates low. They’ve done this in order to stimulate the economy. By making loans accessible to a wider range of consumers, they keep money flowing and prevent the economy from falling even further.

Although the world is slowly healing from the pandemic, it’ll take time for the economy to fully recover. This is why interest rates have stayed so low all the way into December.

However, these rates will likely go back up again as the economy heals. Because things are changing quickly, now is a good time to take advantage of these low-interest rates.