The Fed raised rates, but you can still get a good APR on a personal loan. These lenders can help

The Federal Reserve has increased the federal funds rate for the first time since 2023.

When the Fed raises its benchmark interest rate, borrowing costs can increase for banks. That expense is usually passed onto consumers in the form of higher interest rates on personal loans.

That doesn't mean it's impossible to get a good APR on a loan, though.

The higher your credit score, the more likely you are to get a better interest rate. Lenders usually require a 580 FICO Score for approval and a 740 or higher for the most attractive rates. A higher credit score may also enable you to enjoy a longer repayment period and take out a larger amount of money.

You can check your credit history at AnnualCreditReport.com and get your score from your credit card issuer — although they rarely offer both FICO and VantageScore numbers from all three bureaus.

CreditWise from Capital One provides free FICO Score 8 from TransUnion, while *Experian Boost® delivers your Experian credit report and the FICO 8 score it generates. A paid subscription to myFICO comes with access to your FICO scores from all three bureaus, including specialized versions used for mortgages and auto loans.

If you have time to improve your credit score before applying, it can make a significant difference. A FICO Score in the very good range (740-799) can earn you an APR that's up to 13% lower than one in the bad range (579 or below), according to data from loan marketplace LendingTree.

The best way to raise your credit score is to establish a history of making on-time payments, since payment history makes up 35% of your FICO Score. Another strategy is to lower your credit utilization rate, or the amount of credit you're currently using compared to your total limit across all your accounts. Paying down your bills will do that, but you can also ask a credit card issuer to raise your limit.

If you know someone with good credit willing to guarantee your loan, it can greatly improve the chances of qualifying for a lower APR on a personal loan. Depending on your score, a co-borrower with excellent credit can shave up to five percentage points off your rate, according to data from online lender Earnest.

A co-signer is responsible for paying off the loan if you default. A co-borrower has the same obligation, but applies for the loan alongside the primary borrower and may share legal ownership of any asset purchased with the loan.

Not all lenders allow you to add other applicants. Our top picks include Upgrade for co-borrowers (also known as joint loans), and OneMain Financial for co-signers.

Most personal loans are unsecured, but if you have weak credit, providing collateral can improve the odds of getting approved for a low APR.

Upstart and Oportun both allow you to use a vehicle you own outright as collateral, so long as there's no existing lien, the car is insured and it meets age and mileage standards, among other requirements.

Best Egg will let you secure your loan with your home's permanent fixtures, like kitchen cabinets, light fixtures or bathroom vanities. You'll typically avoid the risk of foreclosure if you default on your loan, but you'll have to pay off the balance before you can sell or refinance the home.

Whether we're in a tightening cycle or not, you always need to shop around to get the best deal on a loan. You can often get prequalified to get a sense of the rate and term a lender is likely to approve you for, without damaging your credit score.

When comparing lenders, look at the APR (annual percentage rate), which incorporates fees and is a better barometer of the overall cost of borrowing than just the interest rate.

Other factor to consider:

• Approval requirements: Save time and energy by narrowing your search to lenders with credit score and debt-to-income requirements you can meet.
• Loan terms: Choose a lender with repayment terms that match your budget. A longer term means lower monthly payments but more interest over the life of the loan.
• Loan amount: Make sure the lender provides enough to cover your expenses without forcing you to borrow more than necessary.
• Monthly payment: Don't base your decision solely on payment size, but make sure it fits your budget.
• Approval and funding speed: If you need the money quickly, look for lenders that advertise same-day or next-day funding.
• Secured and joint loans: If you intend to use collateral or apply with a co-borrower, make sure you're looking at lenders that make those options available.
• Lender reputation and customer service: Research a lender's Better Business Bureau rating and its scores on consumer-review sites like Trustpilot. Make sure you're happy with the customer support hours and digital experience.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. 

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*Results will vary. Not all payments are eligible. Some users may not receive an improved score or approval odds. Not all lenders use Experian credit files and not all lenders use scores impacted by Experian Boost.