After hitting record highs at the start of the COVID-19 pandemic in 2020, personal loan rates are expected to remain low in 2022. The Federal Reserve cut interest rates in March 2020 and maintained the benchmark funds rate federal to almost 0%. in 2021. The Federal Open Market Committee (FMOC) has forecast that this rate will not increase until 2023.
Personal loan rates are expected to remain stable in 2022
Personal loan rates have been flat throughout 2021 and aren’t expected to change much in 2022. “Rates are pretty much at a standstill, but cases of lenders adding or restricting their supply have been the main dynamic in place. The average rate has gone down, not because rates have come down ironically, but because we’ve seen some uncompetitive offers disappear,” says Greg McBride, CFA, Bankrate’s chief financial analyst.
Since the Federal Reserve has decided to keep interest rates low, the personal loan interest rate should remain stable. “With the Fed on the sidelines, there is no catalyst for a broad-based rate move,” McBride said.
At the end of January 2022, the average personal loan interest rate was 10.28%, although lenders offered rates ranging from 3% to 36%.
Lenders could ease their lending standards as the economy recovers
Due to the negative impact of COVID-19 on our economy, some lenders have responded by tightening their lending standards, which has made it more difficult for some borrowers to obtain a personal loan. If you struggled to qualify for a personal loan in 2021, a lender might be more willing to lend you money as the economy recovers. “If anything, I expect conditions to ease and lenders looking to expand to expand the number of borrowers they are willing to lend to given the strengthening economy and labor market growth,” McBride said.