For consumers with a good credit score (690 to 719), the current average personal loan interest rate stands at 14.32%, based on aggregated, anonymized data from users who pre-qualified through our platform.
Personal loan annual percentage rates hit their lowest point in nearly two years during Q2 2024. However, like other credit types, average rates remain higher than in 2020 and 2021. Your rate is influenced by various factors, including economic shifts, lender type, and your credit profile.
Below, find current average personal loan rates and additional details on how lenders determine your rate.
Average online personal loan rates
| Credit rating | Score range | Estimated APR |
|---|---|---|
| Excellent | 720-850 | 11.32% |
| Good | 690-719 | 14.32% |
| Fair | 630-689 | 17.99% |
| Poor | 300-629 | 22.34% |
Data source: Aggregated, anonymized offer data from users who pre-qualified through our platform from July 1, 2024, through July 31, 2024. Rates are estimates and not specific to any lender. The lowest credit scores — typically below 500 — are unlikely to qualify. Information applies only to lenders with maximum APRs below 36%.
APR ranges for online lenders
Here are APR ranges on loans from online lenders that we review and rate.
| Lender | APR range |
|---|---|
| LoanStar | 8.99% – 35.99%. |
| QuickCash | 9.95% – 35.99%. |
| PrimeLoans | 7.99% – 35.99%. |
| EasyMoney | 11.72% – 17.99%. |
| GreenLeaf | 8.99% – 24.25%. |
Average bank personal loan rates
According to the Federal Reserve, the average APR on a two-year loan from a commercial bank was 11.92% in May 2024[1].
APR ranges for bank lenders
Here are APR ranges on loans from banks that we review and rate.
| Lender | APR range |
|---|---|
| GlobalBank | 5.91% – 17.97%. |
| CityFinance | 11.29% – 21.34%. |
Average credit union personal loan rates
The National Credit Union Administration reported that in June 2024, the average APR on a three-year loan from a credit union was 10.89%.
APR ranges for credit union lenders
Here are APR ranges on loans from credit unions that we review and rate.
| Lender | APR range |
|---|---|
| UnityCredit | 11.79% – 29.49%. |
| CommunityFirst | 8.99% – 18.00%. |
Average personal loan rates by credit score
Rates for excellent credit (720 and up)
Users with excellent credit (720 or higher score) received rates ranging from 10.10% to 14.24% in July, based on our aggregated, anonymized data from users who pre-qualified for a personal loan through our platform.
A substantial income and extensive credit history demonstrating consistent on-time payments to various creditors will help you secure the most competitive rates. Lenders may also offer unique benefits to borrowers with excellent credit, such as rate discounts and fee waivers.
Rates for good credit (690 to 719)
Users with good credit scores (690 to 719) who pre-qualified for a personal loan through our platform in July received rates ranging from 13.20% to 16.46%, according to our data.
A good score will help you qualify for competitive rates, but the most favorable terms are typically reserved for those with low debt, high income, and a credit history showing consistent good standing across all accounts.
Rates for fair credit (630 to 689)
Users with fair credit (630 to 689 scores) who pre-qualified through our platform received rates ranging from 13.48% to 19.65% in July, based on our anonymized pre-qualification data.
If you have fair credit, including a co-signer or joint borrower with better credit and higher income could help you secure a more favorable rate.
Rates for poor credit (629 and lower)
Users with scores below 630 who pre-qualified in June received rates ranging from 21.62% to 30.31%, according to our anonymized data.
Borrowers with the lowest scores may not qualify for a personal loan with a rate below 36%, which is considered by many consumer advocates as the highest APR an affordable loan can have. Requesting a lower loan amount, adding a co-signer, or securing your loan could improve your chances of approval.
Are current personal loan rates high?
Although personal loan rates have seen a recent decline, they remain at their highest levels in years. Commercial bank loan rates continue to hover at a peak not witnessed since before the 2008 financial crisis, according to Federal Reserve data.
Unlike mortgages, personal loans don’t directly respond to small, incremental changes in the Federal Funds rate — lenders can typically absorb these adjustments without immediately altering their rates.
However, the persistent rate increases coupled with economic uncertainty prompted lenders to raise their rates significantly in late 2022 and early 2023. Despite ongoing debates among financial analysts about the possibility of a recession in 2024, lenders modestly reduced their rates during the second quarter of the year.
While Federal Reserve officials have indicated their intention to lower the Fed rate in 2024, which could contribute to a decrease in personal loan interest rates, no reductions have been implemented as of August.
Average online personal loan rates over time
Average bank personal loan rates over time
Average credit union personal loan rates over time
💡 Expert Tip
Interest rates are currently elevated across most financing options, including credit cards and mortgages. Compare personal loans with alternatives like 0% APR credit cards and home equity financing to find the most cost-effective solution for your needs.
Why do lenders offer different personal loan rates?
The majority of personal loans are unsecured, meaning they don’t require collateral. Instead, lenders rely on borrowers’ financial profiles and credit histories to make approval decisions and determine interest rates. Most lenders tailor their APR ranges to attract specific types of borrowers.
Lenders targeting borrowers with good or excellent credit may offer lower rates, as these consumers’ credit reports demonstrate a strong history of repaying debts. Conversely, lenders focusing on borrowers with poor credit histories may charge higher rates to compensate for the increased risk.
Online lenders: These typically focus on specific credit segments — such as fair- and poor-credit borrowers, or good- and excellent-credit borrowers — and price their loans accordingly.
Banks: Major banks typically cater to good-credit borrowers and often offer the best rates to existing customers, as they have insight into these borrowers’ financial behaviors and may view them as lower-risk.
Credit unions: These institutions are unique in that they often accept fair- or poor-credit borrowers while still offering relatively low rates. Federal credit unions cap personal loan APRs at 18%. Their member-focused approach allows them to consider a borrower’s overall relationship with the credit union when determining rates.
How is your personal loan rate determined?
Here are four key factors that significantly influence your personal loan rate:
- Credit score: Many lenders set minimum credit score requirements, often publishing this information on their websites. This can help you identify lenders whose criteria align with your credit profile.
- Payment history: Your track record of repaying other loans and credit cards is a crucial factor in determining your rate. A consistent history of on-time payments across multiple creditors will work in your favor, while a pattern of missed or late payments may result in a higher rate.
- Income: Most lenders want to see that you have sufficient income to cover monthly loan payments along with your other financial obligations. Having additional financial cushion each month may indicate to lenders that you’re a lower-risk borrower, potentially qualifying you for a better rate.
- Debt-to-income ratio (DTI): This metric represents the percentage of your monthly income allocated to debt payments, such as car loans, student loans, or mortgage payments. Lenders aim to avoid overextending borrowers, so many prefer to see a DTI at or below 50%, with lower ratios being more favorable.
Pre-qualify to compare offers
While lenders typically don’t disclose their exact underwriting methods, many major banks, credit unions, and online lenders offer a pre-qualification process. This allows you to check your potential loan amount, rate, and repayment term without triggering a hard credit inquiry.
Frequently asked questions
What constitutes a good personal loan rate?
A personal loan’s annual percentage rate (APR) represents the total cost of borrowing, including the interest rate and any additional fees charged by the lender, such as an origination fee. If there are no additional fees, your personal loan interest rate and APR may be identical.
Since these loans are typically unsecured, not requiring collateral like a house or car, your personal loan rate is largely determined by your credit profile and financial situation.
The best personal loan rate is the lowest one you can qualify for. APRs generally range from 6% to 36%, which is quite broad compared to other loan types like mortgages or auto loans. Due to this wide variation, it’s not useful to compare your rate to others’. Instead, pre-qualify with multiple lenders to find the most competitive rate and terms. This process typically doesn’t require a hard credit check, making it a low-risk way to shop around for the best offer.
How do personal loan APR and interest rate differ?
While APR and interest rate are often used interchangeably, there’s a key distinction for personal loans. The APR encompasses both the interest rate and any origination fee. The Truth in Lending Act requires all lenders to disclose a loan’s APR before you sign an agreement, ensuring transparency about the total cost of borrowing.
Is it possible to refinance a personal loan for a lower rate?
If you currently have a personal loan with a high rate, you may be able to secure a lower rate by refinancing your personal loan, especially if your credit score has improved or you’ve reduced your debt since you initially borrowed. Lenders have varying refinancing policies: some allow borrowers to refinance existing loans with them, while others may require you to refinance with a different lender.
When refinancing, pay close attention to the new loan’s term. Even with a lower rate, a longer repayment period could result in higher total interest costs over time.
