Rates were higher for three-year loans and marginally lower for five-year loans during the week ending July 5, 2026:
- Average personal loan interest rates on 3-year loans were at 13.82% APR, up slightly by 0.23 percentage points from 13.59% last week and down from 14.36% at this time last year.
- Average personal loan interest rates on 5-year loans were at 18.13% APR, down slightly by 0.07 percentage points from 18.20% last week and down significantly from 19.64% at this time last year.
Below, find current interest rates across lenders, credit score categories (excellent, very good, good, fair, and poor), and loan purposes, along with historical rate trends and where rates are headed.
Weekly personal loan interest rate trends
Since this time last year, average rates for three-year loans are down around one-half of a percentage point, and average rates for five-year loans are down over one percentage point. 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
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
Personal loan interest rates tend to range between 5.96% APR and 36% APR, but the rate you qualify for depends on factors including your credit score and the length of the repayment term. For example, the data chart below shows that borrowers with excellent credit scores are more likely than others to qualify for APRs in the 11% to 15% range on three-year loans and five-year loans. On the other hand, borrowers with fair credit may expect much higher APRs.
Below are average APRs borrowers in different credit score categories prequalified for on the Credible marketplace:
Borrowers with excellent credit receive the lowest rates — around 11% APR for three-year loans. Regardless of credit score, shorter-term loans tend to have lower rates. Bad-credit borrowers receive the highest APRs of any credit score category, with rates typically falling in the 32% to 36% range. We've excluded them from the table above since too few qualify on a monthly basis to be statistically significant.
Keep in mind that all lenders use different methods to evaluate borrowers, which is why it's important to prequalify with several.
What are personal loans most commonly used for?
The most common use of a personal loan is debt consolidation, according to data from the Credible marketplace. Debt consolidation, including credit card refinancing, accounted for over $111.6 million of disbursed loan funds in June — more than 68% 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 $23,266 and $22,121, respectively.
Top loan purposes in June also included home improvement (more than $12.5 million disbursed, with an average of $19,686), major purchases (more than $7.4 million disbursed, with an average of $15,160), bills or rent (more than $1.7 million disbursed, with an average of $5,430) and special occasion (more than $1.8 million, with an average of $10,541).
Personal loan interest rates by loan purpose
What you use a personal loan for also affects the interest rate. For instance, loans used to pay off existing debt or credit cards tend to have lower rates than loans for major purchases — these loans may be less risky to lenders since you're not adding to your debt.
See how average interest rates across a range of top loan purposes vary. Data is sourced from the Credible personal loan marketplace from July 2025 through June 2026.
Based on 61,269 closed loans from July 2025 through June 2026 on the Credible personal loan marketplace. Source: Credible.
Where are personal loan interest rates headed?
Personal loan interest rates may hold steady for the next couple of months, but lingering inflation could lead to increases before the end of the year.
The Federal Reserve's Federal Open Market Committee sets benchmark rates that indirectly influence personal loan rates. The committee met in mid-June and kept its benchmark rate unchanged, with nearly half of members projecting a higher likelihood of increases over the next several months. Committee members have cited inflation as the primary reason they've left the federal funds rate unchanged since last December. Inflation has been rising since the U.S. and Israel launched military strikes against Iran in late February, with the U.S. inflation rate hitting its highest mark (4.2%) since 2023 in May.
This week, the CME FedWatch forecasting tool predicted a 76.6% probability of a higher benchmark rate by December and a 23.4% probability of no change.
The Fed's next meeting on interest rates is scheduled for July 28-29. Expect lenders and markets to keep a close eye on the Federal Reserve and ongoing peace negotiations with Iran in the coming weeks.
Read More: The Fed's Effect on Personal Loan Rates Explained
Compare other personal loan rates:
Further context
While rate cuts are generally good for the labor market and consumer borrowing, they can also make everyday goods more expensive, reduce buying power, and decrease the returns on savings accounts.
Factors that impact your personal loan interest rate
While your credit score is key, it's not the only factor that lenders consider when evaluating your application — whether to approve you and what terms to offer. The top factors that lenders consider include:
- Credit score: Most lenders use a FICO score model, such as TransUnion FICO Score 9, to gauge the level of risk you present as a borrower.
- Income: Having enough income to make monthly payments is essential. Even a good credit score with a low income could result in a loan denial.
- Debt-to-income ratio (DTI): Your DTI is another income metric. It's used to assess how much income you have left over after making your current debt payments. In other words, how much money you have to put toward new debt.
- Employment status: Lenders want to know you have a reliable income stream in order to afford payments for the duration of the loan term.
- Loan purpose: As noted above, some loan purposes are more risky than others and, therefore, carry higher interest rates.
- Repayment term: Since a longer-term loan means more time for you to miss payments or default, the lender's risk increases. This is why longer terms carry higher interest rates.
- Collateral: Though most personal loans are unsecured, some lenders provide the option of securing your loan with an asset you own, such as your car or the fixtures in your home. Adding this sense of security for lenders can result in a lower rate or easier approval process.
How do I get the lowest personal loan rate?
The best way to lower the rate you'll get approved for is to improve your credit score. Since that can be hard to accomplish in a short period of time, here are a few other tips:
- Choose a short repayment term: Borrowers with very good and excellent credit were able to shave between 4% and 5% off their interest rates, on average, by choosing a 3-year over a 5-year repayment term, according to the most recent month's data.
- Use the loan to consolidate or refinance current debt: On average, loans used to pay off current debt had lower rates than most other loan purposes. If you can also reduce your monthly debt payments, you could potentially use the freed-up funds to finance something else.
- Become an authorized user: If a family member (or very close friend) is willing to add you as an authorized user on one or more of their credit cards, you could see a quick boost in your credit score. This is because those accounts will be added to your report, potentially increasing your available credit and improving your payment history and average age of accounts. However, this tip will only work if the account owner has good credit, plus a good payment history and low credit utilization on those accounts. You should also avoid using the card yourself in order to keep your credit utilization low.
- Offer collateral: A few lenders will let you secure a personal loan with a car you own, the fixtures in a home you own, or a savings account or CD held with the lender. This reduces lender risk since it can seize the asset if you default, but it means a lower rate for you.
- Apply with a joint applicant: If using a loan for a joint purpose, such as improving the home that you and your partner share, applying together could lower your rate. This works best if your partner has good credit, a strong income, and low debt. Not all lenders accept joint applications.
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 8,371 5-star Trustpilot reviews and a TrustScore of 4.8/5.
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 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.
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