Personal loans to get you one step ahead

A personal loan is a type of loan that you can get within days or hours from some banks, credit unions, and online lenders. Loan funds are typically deposited in your bank account and can be used for almost anything, such as paying for a vacation, wedding, home improvements, or consolidating debt.

To get a personal loan, you’ll generally need a reliable source of income, a credit score that meets the lender’s minimum requirement — many lenders prefer a FICO score above 670 — and a debt-to-income ratio (DTI) under 36%. But different lenders have different eligibility criteria. For example, some lenders consider applicants with fair and bad credit, while others only consider applicants with good credit or better.

Average personal loan rates may be leveling off after some sharp fluctuations to begin the new year, but the outlook for significantly lower rates is still uncertain. Credible personal loan data for the week ending February 8 show average rates on 3-year loans (13.44%) and 5-year loans (18.11%) down slightly from the previous week.

The Federal Reserve left the benchmark interest rate unchanged at its first meeting of 2026. While lower by about 1 to 2 percentage points since this time last year, average rates have yet to show a sustained decline since the Fed approved three rate cuts in the final months of 2025.

The federal funds rate is the benchmark rate that determines how much it costs for banks to lend money to one another overnight, which in turn affects how personal loan rates are set. In setting rates, the Fed aims to find a balance between controlling inflation (higher rates) and promoting economic growth (lower rates).

The Fed's next rates meeting is scheduled for mid-March. Keep an eye on personal loan rates in the coming weeks as lenders and markets continue adjusting to changes in the economic landscape.

Read More: The Fed’s Effect on Personal Loan Rates Explained

Pros:

• Can be used for most purposes, including emergency expenses, home improvements, and debt consolidation
• Large loan maximums are available to certain borrowers
• Can have quick funding (the same day you apply, in some cases)
• Most are unsecured (no collateral required)
• Years-long repayment terms
• May be able to prequalify and compare potential rates
• Can be used to build credit
• Can be refinanced (e.g., if you improve your credit score and become eligible for a lower rate)

Cons:

• Potentially high annual percentage rates (APRs) for those with fair and bad credit
• Approval may be difficult without good credit and a low DTI
• Debt may be unnecessary
• Some lenders charge origination fees, which can reduce the amount you receive