What Is a Personal Loan Rate?
A personal loan rate is the cost of borrowing with a personal loan over the course of a year, and it’s expressed as a percentage. Personal loan rates typically range from around 4% to 36%, according to WalletHub data, and a good rate is anything under 12%.
It is important for borrowers to understand what personal loan interest rates are and how they work because comparing one personal loan rate to another can quickly give you a sense of which offer may be more worthwhile.
Key Things to Know About Personal Loan Rates
- Many factors can affect a personal loan’s rate, including the applicant’s credit score and income, the type of lender, and the loan’s origination fee.
- Personal loan rates are often cheaper than the rates on credit cards.
- There are two types of personal loan rates: the interest rate and the APR (interest rate plus fees).
You can see what personal loan rates to expect by checking for pre-qualification with multiple lenders.
How Do Personal Loan Rates Work?
A personal loan rate determines your total annual cost of borrowing based on interest (and sometimes fees charged by the lender). Lenders use personal loan rates to offset their risk in lending, as more risky borrowers typically pay higher rates.
Once a lender sets your personal loan rate based on your creditworthiness, it uses that rate to calculate your monthly payments. You must repay the lender based on this rate, which you agree to before taking out the loan.
The basic concept is pretty simple. But in order to fully understand how personal loan rates work, you need to know what determines how high or low they are.
Factors That Affect Personal Loan Rates
- Credit score. The better your credit score is compared to a lender’s minimum, the lower your rate will typically be.
- Income. The more money you make, the more funds you have to pay off debts. People with higher incomes may be able to score lower rates because they are less risky customers.
- Existing debts. The more debt you have overall, the more risk you have of defaulting and the higher your rate will likely be.
- Type of lender. Banks often set their highest personal loan rates at less than 25%. Federal credit unions are required to have a maximum rate no higher than 18% (state credit union maximums are set by the state). Online lenders often have maximum rates as high as 36%.
- Origination fee. Some lenders charge this fee to process a personal loan. Sometimes, it is built into the loan’s APR, and the cost is spread out across the life of the loan. Other lenders charge the fee upfront instead.
- Loan size and timeline. The more money you want to borrow and the longer the payoff period, the riskier the transaction is and the higher your rate is likely to be.
Personal Loan Rate vs. APR
The difference between APR and interest rate on a personal loan is simple: The APR is the total yearly cost of borrowing, while the interest rate is equal to the APR minus the portion of that cost that comes from fees. Both the APR and interest rate are expressed as percentage rates, but the APR is always higher unless the loan includes no fees.
Below, you can see how fees make the APR different from the interest rate with two different loans of the same size and length.
| Category | Example Lender A | Example Lender B |
|---|---|---|
| Loan amount | $10,000 | $10,000 |
| Loan length | 24 months | 24 months |
| Interest rate on the loan | 15% | 16% |
| Origination fee charged | $300 (3%) | $200 (2%) |
| Amount you pay each month | $485 | $490 |
| Annual percentage rate (APR) | 18.1% | 18.1% |
How to Compare Personal Loan Rates
The best way to compare personal loan rates is to use a personal loan calculator to estimate the total cost of each loan, between interest and fees.
Simply seeing which lender has a lower interest rate range could end up being misleading if you don’t know where your rate will fall in the lender’s advertised range or whether any fees will be added to it. As a result, checking for pre-qualification to see what your potential rates and fees will be with the lenders you’re considering is an important step to take if you want an accurate comparison.
For a more general comparison of personal loan rates, you can look at the minimum and maximum APRs charged by various lenders below.
Personal Loan APRs by Lender
| Lender | APR |
|---|---|
| LightStream | 7.44% - 25.39% |
| Wells Fargo | 7.24% - 24.74% |
| SoFi | 8.74% - 35.49% Fixed APR with all discounts** |
| Happy Money | 7.95% - 29.99% |
| Achieve Personal Loans | 8.99% - 29.99% |
| Best Egg | 6.99% - 35.99% |
| American Express | 6.9% - 19.97% |
| LendingClub | 6.53% - 35.99% |
| Prosper | 8.99% - 35.99% |
| Discover | 7.99% - 24.99% |
| Marcus by Goldman Sachs | 6.99% - 24.99% |
| Avant | 9.95% - 35.99% |
Note: Some lenders are WalletHub partners.
SoFi Platform personal loans are made either by SoFi Bank, N.A. or , Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 11/03/25 and are subject to change without notice. Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors.
Loan amounts range from $5,000–$100,000. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 9.99% of your loan amount for Cross River Bank originated loans which will be deducted from any loan proceeds you receive and for SoFi Bank originated loans have an origination fee of 0%-7%, will be deducted from any loan proceeds you receive.
Autopay: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi.
SoFi Plus Discount: SoFi Plus members are eligible for an interest rate reduction of 0.25% on a Personal Loan. To be eligible for the discount, you must meet the SoFi Plus eligibility criteria within 31 days of the funding of your loan. For complete SoFi Plus eligibility, please see the SoFi Plus terms. When you enroll in SoFi Plus, the discount will lower the interest rate that applies to your loan only during periods in which you are enrolled in SoFi Plus. The discount will be removed during periods in which SoFi determines you are not enrolled in SoFi Plus. Each time your loan is re-amortized, your monthly payment amount will change based upon the interest rate that was in place. SoFi reserves the right to change or terminate this offer for unenrolled participants at any time. You are not required to enroll in SoFi Plus to be eligible for Loan approval.
Direct Deposit Discount: To be eligible to receive an additional (0.25%) interest rate reduction on your Personal Loan (your “Loan”), you must set up Direct deposit with a SoFi Checking and Savings account offered by SoFi Bank, N.A., or enroll in SoFi Plus by paying the SoFi Plus Subscription Fee, all within 30 days of the funding of your Loan. Once eligible, you will receive this discount during periods in which you have enabled Direct Deposit to an eligible Direct Deposit Account in accordance with SoFi’s reasonable procedures and requirements to be determined at SoFi’s sole discretion, or during periods in which SoFi successfully receives payment of the SoFi Plus Subscription Fee. This discount will be lost during periods in which SoFi determines you have turned off Direct Deposit to your Checking and Savings account or in which you have not paid for the SoFi Plus Subscription Fee. You are not required to enroll in Direct Deposit or to pay the SoFi Plus Subscription Fee to receive a Loan.
Direct Pay: Terms and conditions apply. Offer good for personal loan customers with credit cards and personal loans in their name only and subject to lender approval. To receive the offer, you must: (1) register and/or apply through this landing page; (2) complete a loan application with SoFi within 90 days of your application submit date; (3) meet SoFi’s underwriting criteria; (4) apply 50% or more of your loan proceeds directly to your lenders/creditors. Once conditions are met and the loan has been disbursed, the interest rate shown in the Final Disclosure Statement will include an additional 0.25% rate discount. SoFi reserves the right to change or terminate the Direct Pay Rate Discount Program to unenrolled participants at any time with or without notice. It takes about 3 business days for your creditor/lender to receive payment after your loan is signed. You will be responsible for making all required payments to avoid credit card and other loan fees.
To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status, be residing in the U.S., and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates reserved for the most creditworthy borrowers. If approved, your actual rate will be within the range of rates at the time of application and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, income, and other factors. If SoFi is unable to offer you a loan but matches you for a loan with a participating bank, then your rate may be outside the range of rates listed above. Rates and Terms are subject to change at any time without notice. SoFi Personal Loans can be used for any lawful personal, family, or household purposes and may not be used for post-secondary education expenses. Minimum loan amount is $5,000. The average of SoFi Personal Loans funded in 2024 was around $33K. Information current as of 11/03/25.SoFi Personal Loans originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org). See SoFi.com/legal for state-specific license details. See SoFi.com/eligibility for details and state restrictions.
What Is a Good Personal Loan Rate?
The lowest APR on a personal loan is around 3.99%, and the average APR for a personal loan is 12.42%, according to WalletHub data.
You’ll likely only be able to get rates close to 3.99% if you have excellent credit. If you have bad credit, you can probably expect rates between 18% and 36%.
Good APR for a Loan by Credit Rating
| Credit Rating | Good APR |
|---|---|
| Excellent (750 - 850) | Below 12% |
| Good (700 - 749) | Below 17% |
| Fair (640 - 699) | Below 21% |
| Bad (300 - 639) | Below 27% |
Note: The “good APR” is slightly below the average APR for the credit level, taken from WalletHub data for Q1 2021.
You can learn more about the best personal loan rates on WalletHub.
What Is the Average Personal Loan Rate?
The average personal loan rate is 12.42%, as of Q1 2021. That includes loans of all sizes, from all types of lenders, for people of all credit levels. Naturally, narrowing down the type of loan or type of customer has an impact on the average personal loan rate.
Average Personal Loan Rates
- The average 24-month personal loan APR from a bank is 9.46%.
- The average 36-month personal loan APR from banks and credit unions is 10.24%.
- The average personal loan rate for people with excellent credit is 12.71%.
- The average personal loan rate for people with bad credit is 27.39%.
Learn more about average personal loan rates.
Final Thoughts
Personal loan rate can be very cheap or quite expensive depending on the lender and other factors like your credit and income. In general, personal loans are a good borrowing option for people who aren’t able to get cheaper rates with a credit card and don’t want to consider borrowing from home equity.
But before applying for a personal loan, it’s always good to get pre-qualification from any lenders you’re interested in. After you pre-qualify for a few loans, you can take those numbers and plug them into WalletHub’s free personal loan calculator to determine your total cost of borrowing over the life of each loan. That will help you determine which loan will be the cheapest.
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