Damircudic/Getty Images; Illustrations by Richard Tran/Bankrate
According to Bankrate’s weekly Bankrate Monitor Survey of Major US Banks, as of March 19, 2025, the average personal loan interest rate is 12.37%. Follow the trends in personal loan fees and compare lenders to get competitive rates.
Average personal loan interest rates based on credit score
A good or good credit score may get an annual rate (APR) 2-3 times lower than what you get with a fair or bad credit score. Good credit interest rates are usually around or below the national average. A fair or inadequate credit score can mean an APR that is comparable to the interest rates on a credit card.
This table provides an overview of the average interest borrowers pay with their credit scores, based on a bank rate survey.
| Credit score | Average loan interest rate |
|---|---|
| 720-850 | 10.73%-12.50% |
| 690-719 | 13.50%-15.50% |
| 630-689 | 17.80%-19.90% |
| 300-629 | 28.50%-32.00% |
Are you considered a good interest rate for personal loans?
Good interest rates on personal loans are lower than average rates in the market. However, a good rate for you depends on your credit score. For example, if you have good credits, a rate below 11% is considered good, while 12.5% is less competitive.
To improve your chances of getting a good rate, pay your credit account on time, minimize credit card usage, and avoid opening too many new accounts. To get the best conditions, always check the rates with at least three different lenders.
Average personal loan interest rates by lender type
Local banks and credit unions tend to offer rate specials and discounts to their customers or members. However, online lenders who specialize in personal loans often offer lowest fees for excellent credit.
To find the best deal, compare your bank or credit union offering with online lenders you may be familiar with, and qualify for multiple lenders in advance if possible.
Average personal loan interest rates from online lenders
Average personal loan interest rates from banks
Average personal loan interest rates from credit unions
Other factors affecting your personal loan rate
Your credit score plays the biggest role in the interest rates on personal loans that you can qualify for. Your lender will look at other details to measure your creditworthiness and even measure qualifying features. Factors that are evaluated often include:
- Your income. Some lenders offer discounted rates for high incomes. To qualify for the best personal loan amount, you need to earn significantly more than the average person.
- Your debt to income (DTI) ratio. Your lender measures how much of your current income is placed against your debt. A low DTI ratio can cause a lower APR.
- Your loan period. Usually, you get a lower rate in shorter terms. However, since monthly costs are high in the short term, check your budget to make sure your payments are affordable.
- Your loan amount. Some lenders offer lower fees for more loan amounts. The other side also applies. You may need to pay a smaller amount and a higher fee.
- Your banking related. Banks and credit unions may also offer discounts if they have checking accounts.
- where you live. Because of the state you live in, you may be stuck at a higher rate.
- Your employment history. Personal loans are secure, so lenders will dig deep into the history of your work to ensure that your work is stable regularly.
When applying for a personal loan, you can expect to provide the following documents:
- Photo ID.
- Employment contact information.
- Income verification such as payment stubs and bank statements.
- Proof of address.
Why different lenders claim different personal loan rates
Personal loan companies set fees based on the type of borrower you want to lend. In many cases, online lenders can find far lower rates.
Banks and credit unions may offer low fees to existing customers, especially if they have substantial balances in their savings accounts, such as checks and savings. This means that if you have fair or bad credit, you still need to shop at a low price.
The defective rates for credit lenders may vary significantly, and some may approve them based on other factors, such as the time you worked at work and the type of work you were working for. Lenders that offer conditions shorter than the 24-month standard may offer rock bottom fees if they qualify for monthly payments.
How is the average personal loan interest rate trending?
The average personal loan rate began to rise in March 2022, when the Fed announced the first announcement of several rate hikes aimed at cooling inflation. Despite forecasts for a decline in overall interest rates in 2024, the average personal loan rate continued to rise throughout the first year and second quarter, peaking in October.
Unfortunately, even if Fed cuts occur in September, November and December, the decline in the economy and the Fed’s attention to further declines could lead to higher consumer borrowing rates. The central bank stabilized its target interest rate in March 2025 and paid continued attention. Personal loans are more closely linked to consumer health, and soft economy can lead to unemployment or shorter hours for workers, and personal loan lenders may be stable. People with excellent credits may have slightly lower prices.
Conclusion
If you are considering a personal loan, check the average interest rate as your starting point. Your credit score, the type of lender you choose, and even your location can affect the rate you are ultimately entitled to. Always compare fees from multiple lenders and take steps to improve your credit score to get the highest possible interest rate.
