The average personal loan interest rate is 14.47%, according to WalletHub data. Personal loan interest rates can fluctuate drastically based on factors like the borrower’s credit score and where they live, as well as the type of lender the loan comes from. Overall, personal loan interest rates range from around 4% to 36%.
It’s important to note that personal loan providers typically disclose their APRs (annual percentage rates) rather than interest rates. An APR represents the interest rate plus fees that the lender charges. Below, you can learn more about average personal loan APRs in popular categories, as well as get some tips on how to minimize the interest you pay on a personal loan.
Average Personal Loan Interest Rate Over Time
|Quarter||Average Personal Loan APR|
Average 24-Month Personal Loan APR from Banks
|Year||Average Personal Loan Rate|
The Federal Reserve keeps data on the average interest rate for two-year personal loans from banks. This rate is significantly lower than the overall average personal loan APR. In addition, it has gone down a lot in the last few decades. This rate peaked in 1982 at 18.65% and hit its lowest point in August 2020, at 9.26%.
Average 36-Month Personal Loan APR from Banks and Credit Unions
Note: All values in the table are for Q4 of the corresponding year.
The National Credit Union Administration provides data on the average APR of 36-month unsecured, fixed-rate personal loans from banks and credit unions. The rates are fairly close between the two types of lenders, but credit unions consistently have a slightly lower average. That makes sense because federal credit unions can’t charge an APR higher than 18% by law, and state credit unions also have caps set by the state.
Typical Personal Loan Interest Rate by Lender
|Best Egg||5.99% - 29.99%|
|LendingPoint||9.99% - 35.99%|
|Lending Club||8.05% - 35.89%|
|Payoff||5.99% - 24.99%|
|Prosper||6.95% - 35.99%|
Average Personal Loan APR by Credit Score
|Credit Score Range||Average Personal Loan APR|
|Excellent (750 - 850)||12.71%|
|Good (700 - 749)||17.62%|
|Fair (640 - 699)||16.49%|
|Bad (300 - 639)||27.39%|
Note: WalletHub data for Q1 2021.
The higher your credit score is, the lower your personal loan APR is likely to be. People with excellent credit can secure rates as low as 3.99% with certain lenders, though they’re not always guaranteed a lender’s lowest rate. On the opposite end of the spectrum, people with bad credit are likely to receive a rate closer to a lender’s highest APR, which can be 36%+ in some cases.
How to Get a Lower-Than-Average Personal Loan APR
- Raise your credit score. Having a higher credit score gives you a better chance of getting a lender’s minimum APR. If you’re unsure what your credit score is, you can join WalletHub to check it for free as well as get personalized tips on how to improve.
- Raise your income. Making more money reduces your risk as a borrower, and makes you more likely to get lower rates as a result. Of course, this is easier said than done, but some ways to raise your income include working extra hours, adding a second job or side business, and negotiating a raise.
- Borrow less. Smaller personal loans with shorter payoff periods will typically have lower APRs than bigger loans with longer payoff periods. Keep in mind that this is not the case for payday lenders, which offer very small, short-term loans with extremely high APRs.
- Consider different types of lenders. Credit unions are often a good option because their APRs tend to have lower caps than banks or online lenders. But online lenders tend to have the lowest minimum APRs, which is useful for people with excellent credit.
- Apply with lenders whose requirements you exceed. If you just barely meet a lender’s approval requirements, you likely won’t get its lowest APR. But if you far exceed what the lender is looking for, you’ll be able to score a lower rate.