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Personal loan interest rates generally range from 6% to 36%, depending on your credit score, income, current debts, and other factors, such as loan term and amount.
But not all factors impact the personal loan interest rate you’ll receive in the same way. We’ll look at what types of interest rates you can expect to come across, how to secure the best interest rates, and average personal loan interest rates from different lenders.
- Average interest rates by credit score
- Average interest rates from online lenders
- Average personal loan rates at banks
- Average personal loan rates at credit unions
- What’s a good interest rate?
- What factors affect my rate?
- How to get the best personal loan rate
- How interest rate affects borrowing costs
- APR vs. interest rate: What’s the difference?
Average personal loan interest rates by credit score
Your credit score plays a major role in determining the personal loan rates you’ll qualify for. Lenders use credit scores to assess your creditworthiness and the level of risk involved in lending to you. A higher credit score indicates a history of responsible financial behavior, such as making timely payments, maintaining low credit card balances, and managing debts effectively.
With a high credit score, you present less risk to lenders, making you eligible for lower interest rates on personal loans. On the other hand, individuals with low credit scores may be perceived as high-risk borrowers, resulting in higher interest rates or potential difficulty in obtaining loans. It’s important to monitor and maintain a good credit score to increase your chance of securing more favorable loan rates.
| Credit score | Average APR 3-year loan | Average APR 5-year loan |
|---|---|---|
| 780 and above | 8.42% | 10.61% |
| 720 to 779 | 11.58% | 14.25% |
| 680 to 719 | 16.09% | 17.40% |
| 640 to 679 | 21.91% | 22.96% |
| 600 to 639 | 27.23% | 27.50% |
| 0 to 599 | 31.12% | 29.45% |
Each lender has its own underwriting criteria, risk assessment methods, and business models, which influence the rates it offers. That’s why it’s crucial to research and compare rates from different lenders.
Personal loan interest rates from online lenders
Online lenders may be able to offer lower interest rates than competitors with brick-and-mortar branch locations. Funding times are generally faster, and you can often check your rate via a soft credit check.
It’s important to note that personal loan interest rates and origination fees can vary significantly among online lenders.
| Lender | Fixed rates | Loan amounts | Check rates |
|---|---|---|---|
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 9.95% - 35.99% APR | $2,000 to $35,000** | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 11.79% - 20.84% APR | $10,000 to $50,000 | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.99% - 35.99% APR | $2,000 to $50,000 | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 24.99% APR | $2,500 - $40,000 | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 11.72% - 24.67% APR | $3,000 to $40,000 | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 9.57% - 35.99% APR | $1,000 to $40,000 | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.49% - 25.49% APR with autopay | $5,000 to $100,000 | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 18.0% - 35.99% APR | $1,500 to $20,000 | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.49% - 17.99% APR | $600 to $50,000 (depending on loan term) | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 14.3% - 35.99% APR | $3,500 to $40,000 | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.99% - 25.81% APR10 | $5,000 to $100,000 | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 11.69% - 35.99% APR7 | $1,000 to $50,000 | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.49% - 35.99% APR | $1,000 to $50,000 | |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 6.4% - 35.99% APR4 | $1,000 to $50,0005 | |
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Average personal loan rates at banks
The average personal loan interest rate at banks was 11.48% for a 24-month personal loan, according to the Federal Reserve Board, as of February 2023 (the most recent data). Like online lenders, rates and fees can vary greatly by bank.
Here’s an example of five popular banks and their current personal loan interest ranges.
| Lender | Loan amount |
|---|---|
| Wells Fargo | 7.49% to 23.74% APR |
| Citibank | 12.49% to 19.49% APR |
| U.S. Bank | 8.74% to 21.24% APR |
| PNC Bank | Up to 30.00% APR |
| TD Bank | 8.99% to 21.99% APR |
Average personal loan rates at credit unions
Credit unions have a loan interest rate ceiling of 18%, according to the National Credit Union Administration. Let’s take a closer look at how credit union personal loan rates can vary.
| Credit Union | Interest Rates |
|---|---|
| PenFed Credit Union | 7.74% to 17.99% APR |
| Navy Federal Credit Union | 7.49% to 18.00% APR |
| Connexus Credit Union | 9.49% to 18.49% APR |
| Alliant Credit Union | As low as 10.99% to 12.99% APR |
| First Tech | As low as 7.99% to 13.29% APR |
How do I know if I have a good interest rate?
Determining whether you have a good interest rate on your personal loan varies from person to person. However, as a general guideline, if your interest rate is lower than the average rate or is on the lower end of the specific lender’s rate range, it’s probably a good rate.
Also important is whether the rate is “good” regarding the loan’s purpose. For example, if you’re using a personal loan for debt consolidation, the interest rate should be lower than the overall rate you were paying before (or lower than the lowest interest rate you were paying).
What factors affect the rate I get?
Several factors can affect the interest rate you receive on a personal loan. The most important include:
- Credit score: Lenders use your credit score, among other factors, to determine how likely you are to make timely payments and pay back the personal loan. A higher credit score indicates a history of responsible credit management, which typically results in a lower interest rate. Lenders perceive borrowers with higher credit scores as less risky, making them eligible for more favorable rates.
- Loan amount and term: The amount of money you borrow and the repayment term can impact your interest rate. Larger loan amounts or longer repayment terms may result in higher interest rates, since they carry a higher risk for lenders.
- Employment history: Lenders often consider your employment history to evaluate stability and assess your ability to make consistent loan payments. A steady employment record can potentially lead to a lower interest rate.
It’s important to note that the importance of each of these factors can vary across lenders, and each lender has its own unique criteria for determining interest rates.
How to get the best personal loan rate
To secure the best personal loan rate, consider the following strategies:
- Improve your credit score: Having a good credit score is one of the best ways to get a low personal loan interest rate. To improve your credit score, pay your bills on time, reduce outstanding debt, and avoid taking on new credit obligations. A high credit score demonstrates responsible financial behavior and increases your chances of qualifying for a low interest rate.
- Apply with a cosigner: If your credit score is low, a creditworthy cosigner can improve your interest rate and the likelihood that you’ll be approved for a personal loan. Since the cosigner is equally responsible for the debt, they provide added reassurance to the lender that it will be repaid.
- Opt for a smaller loan amount: Requesting a smaller loan amount can contribute to a more favorable interest rate. Lenders may view smaller loans as less risky.
- Choose a shorter repayment term: Although a shorter repayment term usually results in higher monthly payments, it often leads to a lower interest rate, which can significantly reduce the cost of your loan.
- Compare multiple lenders: Prequalify with online lenders to compare interest rates, and reach out to your local bank or credit union to see if its rates are competitive.
How your interest rate affects the cost of borrowing
The interest rate on a loan significantly impacts the overall cost of borrowing. Let’s consider some examples to illustrate this:
| Borrowed amount | $15,000 | $15,000 | $15,000 | $15,000 |
| Interest rate | 12.00% | 8.00% | 12.00% | 8.00% |
| Loan term | 3 years | 3 years | 5 years | 5 years |
| Total interest | $2,936 | $1,922 | $5,020 | $3,249 |
A four percentage point difference in interest rate over the same three-year term results in about $1,000 in additional interest. The difference is even more extreme for a longer repayment period: If the same loan is repaid over five years, instead of three, it costs almost $2,000 more with the higher rate.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
APR vs. interest rate: What’s the difference?
Interest rate refers to the annual cost of a loan, expressed as a percentage. APR (annual percentage rate) includes the interest rate along with additional charges or fees, such as the loan origination fee. (Loan origination fees typically range from 0% to 10%, depending on the lender.)
The APR provides a more comprehensive view of the overall cost of borrowing, letting you compare loan costs accurately. While the interest rate affects the monthly payment, the APR gives a broader understanding of the total expenses associated with the loan.
Kat Tretina has contributed to the reporting of this article.
