Best Personal Loans in Michigan for 2024
Updated: April 15, 2024
Advertising & Editorial Disclosure
First Tech and PenFed are MoneyGeek's top picks for personal loans in Michigan, with scores of 97 and 96, respectively. They stand out for excellent customer service, competitive rates and clear lending practices.
When looking for a personal loan, your credit score, income history and debt-to-income ratio are key. The average credit score in Michigan is 719, per Experian data from 2023, suggesting the average borrower may qualify for favorable loan terms.
MoneyGeek's analysis considered customer support, rates and fees, loan options, the application process and lender reliability. Knowing these factors can help Michiganders choose wisely for financial stability.
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 35-40% or below for secured loans, and 40-45% 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 and so approval may be more difficult, or your loan may come with higher interest rates. — Alvin Yam, CFP®
Calculate Your Monthly Michigan Loan Payment
According to our analysis, lenders in Michigan offer personal loan products averaging about 50 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®
The Impact of Credit Score on Loan Repayment in Michigan
When considering a personal loan in Michigan, be aware that your credit score, income and debt-to-income ratio are critical factors lenders evaluate to determine your eligibility and the terms of the loan. The rankings by MoneyGeek for the best personal loan lenders in the state include considerations of the lender's reputation and transparency, APR ranges, minimum credit score requirements and the flexibility of loan repayment terms.
A higher credit score can significantly improve your loan terms, often resulting in lower APRs, so taking steps to boost your credit score before applying could be beneficial.
Refer to the table provided to understand how your credit score may influence your monthly loan payments when securing a personal loan.
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.
Understanding Personal Loans: Pros and Cons
Personal loans offer several advantages, such as potentially lower interest rates compared to credit cards and the convenience of consolidating various debts into a single payment. Often providing quick access to funds, they allow for flexibility in usage, ranging from unexpected expenses to planned projects, and may help improve your credit score with timely repayments.
However, it's important to consider the associated risks, including possible origination fees and the danger of asset loss with secured loans; for further insights, consider weighing the pros and cons of personal loans.
Frequently Asked Questions About Michigan Personal Loans
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 Michigan for personal loans is First Tech, with a MoneyGeek score of 97 and average APR of 12%.
In Michigan, you can obtain personal loans from online lenders, banks and credit unions. For in-person services with local access, consider credit unions, such as CommunityChoice Credit Union, Michigan First Credit Union and Lake Michigan Credit Union.
PenFed offers the lowest APR in Michigan for personal loans, according to MoneyGeek, at 7.99%. Note that the best rates are often reserved for individuals with excellent credit scores, and the best offer for you might differ based on your financial needs and circumstances.
The use of personal loan funds may differ by lender, but typically, you can use personal loans for home or auto repair, to consolidate debt or for wedding expenses. They usually cannot be used for college tuition or gambling.
When considering personal loans, beware of red flags, such as extremely high APRs, lack of transparency about loan originators and a high number of poor consumer reviews. Also, be cautious if there’s little information on how the application will impact your credit score.
Yes, lenders do consider your income level when you apply for a personal loan. They evaluate your debt-to-income ratio, credit score, employment history and credit history. It's advisable to avoid opening new lines of credit during the application process as it can affect your application negatively.
sources
- Experian. "What Is the Average Credit Score in the US?." Accessed April 6, 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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