Skip to Main Content

Average personal loan interest rates in May 2025

Personal loan rates fall sharply for 3-year terms as 5-year terms rise slightly

Author
By Meredith Mangan

Written by

Meredith Mangan

Senior editor

Meredith Mangan is a senior editor at Credible. She has more than 18 years of experience in finance and is an expert on personal loans.

Edited by Savannah Plasch

Written by

Savannah Plasch

Editorial assistant, Credible

Savannah is an editorial assistant at Credible. She received her BA in English from UCLA and an MFA in creative writing from Queens University of Charlotte.

Reviewed by Barry Bridges
Barry Bridges

Written by

Barry Bridges

Editor

Barry Bridges is the personal loans editor at Credible. Since 2017, he’s been writing and editing personal finance content, focusing on personal loans, credit cards, and insurance.

Updated May 28, 2025

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

Featured

Average personal loan rates for 3-year repayment terms fell significantly since last week, while 5-year terms hover around last week’s rate. Rates on 3-year loans dropped more than 2 percentage points since early May the last time they were this low was over two years ago in March 2023. 

Here are the latest trends in personal loan interest rates from the Credible marketplace, updated weekly. Personal loan interest rates below are expressed in terms of annual percentage rate or APR.

During the week ending May 25, 2025:

  • Average personal loan rates on 3-year loans were at 12.99% APR, down more than an entire percentage point from 14.20% last week and down from 15.89% a year ago.
  • Average personal loan rates on 5-year loans were at 19.72% APR, slightly up from 19.70% last week and down from 20.67% a year ago. 

Read More: APR vs Interest Rate: Understanding the Differences

Current personal loan rates

Advertiser Disclosure
All APRs reflect autopay and loyalty discounts where available | 1SoFi Disclosures | 2LightStream disclosure | Read more about Rates and Terms | Terms of Service | Privacy Policy

Where we get our data

Credible is a personal loans marketplace that partners directly with lenders to offer loans for a wide range of credit profiles and loan purposes. Because of the relationships with our bank and fintech partners, we have direct access to the most current rates that real borrowers are being approved for, along with average rates by credit score and loan purpose, how easy or hard it is to get approved, and more. The data we use is primary source data, updated weekly, and does not include any personally identifiable information about borrowers.

These rates reflect what's going on in the personal loans marketplace today and may be referenced by other outlets in their weekly rates reporting.

The chart below shows average prequalified rates for borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender.

tip Icon

Tip

Personal loans are a popular way to consolidate and pay off credit cards and other debt. Prequalify to gauge whether you're likely to get approved for a personal loan and the rates you might qualify for.

Current personal loan interest rates by credit score

Rates on personal loans vary considerably by credit score and loan term. For example, the chart below shows that borrowers with fair credit tend to be offered higher rates than borrowers with good credit. Keep in mind that all lenders use different methods to evaluate borrowers, which is why it's important to prequalify with several.

Where are interest rates headed?

The target range for the federal funds rate sits at 4.25% to 4.50%. This is down from a high of 5.25% to 5.50% last year, prior to the Federal Reserve's September, November, and December rate cuts. The Fed left rates unchanged at its most recent meeting on May 7, as it did at previous meetings in January and March. Based on the CME Group's FedWatch tool, there's currently a 94.4% probability that rates will remain unchanged at the Fed's June meeting.

See other personal loan rates:

What are personal loans used for?

The most common use for a personal loan is debt consolidation, according to Credible marketplace data. Debt consolidation, including credit card refinancing, accounted for over $92 million of disbursed loans in April — about 62% of people approved for a loan via the Credible marketplace used it for either debt consolidation or credit card refinancing. The average disbursed loan amounts for debt consolidation and credit card refinancing were $26,587 and $23,050, respectively.

Home improvement was the next most common loan purpose, with over $14 million disbursed in April. The average amount for home improvement loans was $20,199.

About Credible

Credible is a multi-lender marketplace that empowers consumers to compare prequalified rates across dozens of lenders based on their credit score, income, and other financial factors. Credible's integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score.

Credible also provides no-cost credit monitoring tools that help you manage debt and check your credit score for free.

The Credible marketplace provides an unrivaled customer experience, as reflected by more than 7,319 5-star Trustpilot reviews and a TrustScore of 4.8/5.

FAQ

What is a good interest rate on a personal loan?

Open

How does a personal loan affect your credit score?

Open

What personal loan term length should I choose?

Open

Read More:

Meet the expert:
Meredith Mangan

Meredith Mangan is a senior editor at Credible. She has more than 18 years of experience in finance and is an expert on personal loans.