Best Personal Loans in Minnesota for 2024
Updated: April 9, 2024
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First Tech and PenFed are the two top lenders for personal loans in Minnesota according to MoneyGeek. With respective scores of 97 and 96, they offer good interest rates, service and flexibility. When looking for personal loans, your credit score, debt-to-income ratio and income history are important.
In Minnesota, the average credit score is 742, based on Experian's 2023 data, suggesting the average borrower here has good credit, which can help secure a favorable loan. However, not all loans are guaranteed.
MoneyGeek considers lender reputation, APR and loan options when picking the best. Choose a loan that fits your financial situation and goals.
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 and so approval may be more difficult, or your loan may come with higher interest rates.
— Alvin Yam, CFP®
Calculate Your Monthly Minnesota Loan Payment
According to our analysis, lenders in Minnesota offer personal loan products averaging about 47 months. Explore your loan options with our personal loan calculator. This helpful and user-friendly tool lets you calculate your monthly payments and the total loan cost over its lifetime, using different inputs for the loan amount, term and interest rate, enabling you to make an educated decision about borrowing.
Interest on personal loans is generally not tax deductible because 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 Minnesota
When you apply for a personal loan in Minnesota, lenders will evaluate your credit score, credit history, income and debt-to-income ratio to determine your creditworthiness. Your credit score heavily influences the loan terms you're offered. Higher credit scores often lead to lower APRs, so it might benefit you to improve your credit score before applying.
Refer to the table below to see how your credit score can affect your monthly loan payments.
This table approximates monthly payments, calculated using median personal loan interest rates typical for various credit score ranges. 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 Minnesota
Personal loans offer a multitude of advantages, such as the potential for lower interest rates compared with credit cards and the convenience of consolidating multiple debts into one manageable payment. They also provide quick financial access and can enhance your credit mix if managed responsibly.
However, personal loans are not without risks, including possible origination fees and the jeopardy of losing assets with secured loans. For a balanced view on personal loan benefits and drawbacks, first do your homework.
FAQ About Minnesota 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 Minnesota for personal loans is First Tech with a MoneyGeek score of 97. The average APR is approximately 12%.
In Minnesota, personal loans can be obtained from online lenders, banks and credit unions. For those preferring in-person services, local credit unions like Minnesota Valley Federal Credit Union, Mid Minnesota Federal Credit Union and Minnco Credit Union offer personal loans.
PenFed offers the lowest starting APR at 7.99% according to MoneyGeek's analysis. The best low rate for you may vary based on your individual financial needs and securing such rates commonly requires an excellent credit score.
In Minnesota, the use of personal loans funds varies by lender but typically can be used for wedding expenses, vacation or travel, and emergency circumstances. They cannot generally be utilized for gambling purposes or any illegal activity.
When considering personal loans, be wary of extremely high APRs, unusual repayment penalties and a lack of transparency about the loan originator. Also be cautious of lenders with a high frequency of poor consumer reviews or negative press about predatory practices.
Yes, lenders factor in your income level alongside your debt-to-income ratio, credit score, employment history, and whether you have a W2 or are self-employed. Avoid opening new lines of credit concurrently when seeking a personal loan as this might affect your application's success.
sources
- Experian. "What is the Average Credit Score in the US?." Accessed April 5, 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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