Best Personal Loans in Iowa for 2024
Updated: April 11, 2024
Advertising & Editorial Disclosure
First Tech and PenFed rank as the top lenders in MoneyGeek's analysis, scoring 97 and 96, respectively, thanks to their customer service, low fees and flexible terms. When looking for a personal loan in Iowa, you should know how lenders evaluate you based on your credit score, income and other financial factors. With an average credit score of 730, according to Experian data from 2023, the average Iowan could receive good loan offers.
Having a lower score doesn't mean you can't find a loan—getting the best rates might be more challenging. MoneyGeek considered factors like reputation, APR, minimum credit scores and flexibility of loan terms to identify the best lenders.
The amount of monthly debt payments you have relative to your monthly gross income is called your debt-to-income ratio, or DTI.
Most lenders prefer to see a debt-to-income ratio of 35% to 40% or below for secured loans and 40% to 45% or below for unsecured personal loans. Debt includes items like mortgages, car loans, credit cards, and existing personal loans. A debt-to-income ratio above 50% is considered high, so approval may be more difficult, or your loan may come with higher interest rates. — Alvin Yam, CFP®
Calculate Your Monthly Loan Payment
According to our analysis, lenders in Iowa offer personal loan products averaging about 49 months. Explore your loan options with our personal loan calculator, a simple tool to calculate monthly payments and total loan costs based on amount, interest rate and term length, helping you make informed decisions before committing.
Interest on personal loans is generally not tax deductible as personal loans are considered consumer debt. But there are some exceptions where the interest may qualify:
- When consolidating high-interest qualifying debts like credit cards or student loans, if used to pay off those debts.
- If used for home improvements that increase the home's value.
- If the loan proceeds can be demonstrated as used exclusively for business expenses or starting a business.
- In some cases, if the loan is used for investment purposes related to income-generating assets.
— Alvin Yam, CFP®
Impact of Credit Score on Loan Repayment in Iowa
When considering a personal loan in Iowa, lenders will evaluate your credit score, credit history, income and debt-to-income ratio. MoneyGeek's criteria for the best personal loan lenders in this state include assessing the lender's reputation, transparency, the ranges of annual percentage rates (APRs), the minimum credit requirements and the flexibility of the loan terms. Having a higher credit score is key to securing better loan terms.
Refer to the table below to see how different credit scores can affect your monthly loan payments.
This table offers an approximation of monthly payments, calculated using median personal loan interest rates typical for various credit score ranges. Please remember that these numbers are median estimates provided for general guidance. They should not be taken as precise rates for everyone in each credit score category. Actual interest rates can differ due to lender-specific policies, prevailing market conditions and unique borrower profiles.
Pros and Cons of Personal Loans in Iowa
Personal loans offer the flexibility to manage your finances with benefits like lower interest rates and the ability to consolidate multiple high-interest debts into a single payment. They also provide the convenience of quick funding and a range of uses, from covering unexpected expenses to financing home renovations.
Despite these advantages, it's important to be aware of potential drawbacks, such as origination fees or prepayment penalties, and to understand that borrowing more than you need can lead to unnecessary debt. For a comprehensive understanding, consider the pros and cons of personal loans.
FAQ About Personal Loans in Iowa
If you have questions about personal loans, MoneyGeek has answers to help you make an informed decision before applying.
According to MoneyGeek's analysis, the best lender in Iowa for personal loans is First Tech, with a MoneyGeek score of 97. Their average APR is 12%.
Personal loans can be obtained from online lenders, banks, and credit unions in Iowa. For those seeking local in-person services, Greater Iowa Credit Union, Midland Credit Union and GreenState Credit Union are among the local credit unions that offer personal loans.
PenFed is identified by MoneyGeek as offering the lowest available APR for personal loans in Iowa, starting at 7.99%. The best low rate for you may vary based on your specific needs and financial situation; achieving the best rates often requires an excellent credit score.
While the restrictions on the use of personal loans may vary by lender rather than state, they can generally be used for consolidating debt, covering emergency circumstances or financing home repairs. Personal loans typically can't be used for college tuition or illegal activity.
When considering personal loans, be aware of red flags like extremely high APRs, unusual repayment penalties, lack of transparency about loan origin and negative consumer reviews. Be cautious of lenders not requiring proper verification of identity or income.
Yes, lenders do consider income level, among other factors, such as debt-to-income ratio, credit score, employment history, whether you are self-employed and overall credit history. Limit opening new credit lines when seeking a personal loan, as it may affect approval odds.
sources
- Experian. "What is the Average Credit Score in the US?." Accessed April 4, 2024.
The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.
Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about
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