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Average personal loan interest rate of January 2022

Competitive interest rates range from 4% to 36% — here's where to apply.

This article was reviewed by Brad Stevens, a member of the Finder Editorial Review Board and 30-year veteran of the credit industry who specializes in rehabilitating struggling banks.

The average personal loan interest rate was 9.39% in the third quarter of 2021, according to the Federal Reserve. In general, the interest rate you receive on a personal loan will range from a low 4% to a high 36%.

To score the lowest rates, you need to have excellent credit. Some experts identify 760 or higher as the sweet spot. Other aspects of your finances, the loan term and the amount you apply for can also influence your rate.

We reviewed over 130 lenders before selecting lenders with the best personal loan rates. Comparing offers from multiple lenders can help you find the best deal available to you.

Interest rate vs. APR: What you need to know

Interest rate and annual percentage rate (APR) are often used interchangeably by banks, credit unions and online lenders. But there’s an important distinction. When you’re looking at the average interest rate on a personal loan, you’re seeing a number that doesn’t include regular fees.

APR includes fees, like application fees and origination fees, charged by the lender. This gives you a more well-rounded picture of what your loan will cost each year. But since many lenders don’t charge fees, your APR could be the same as your interest rate.

Personal loan interest rates

Personal loan interest rates depend on a wide range of factors, including your credit score and the type of financing you get.

Interest rates by credit score

Your credit score is often a deciding factor when it comes to the rate you receive. As this table shows, even borrowers with good credit — a score of 670 to 739 — often don’t get the lowest available rates. With bad credit — any score below 580 — you likely won’t be able to qualify for a personal loan and may have to turn to high-cost alternatives.

Credit score rangeAverage rate
720 and up10.73%
680–71919.04%
660–67924.74%
640–65930.18%
620–63937.09%
580–61965.93%
560–579102.36%
560 and under156.11%

Source: LendingTree constumer data, Q3 2021

While some personal loans stop at 36%, fair and bad credit borrowers can struggle to qualify for a personal loan at all. In many cases, they may be turning toward short-term loans like payday and installment loans. These can come with rates that top 300%.

Interest rates by financing type

Lenders tend to price different types of financing differently. Here’s how personal loan rates compare to credit cards and car loans from banks in the beginning of 2020.

Type of financingAverage rates at a bank
Personal loan9.39%
Car loan (48 months)5.14%
Car loan (60 months)4.60%
Credit card14.54%

Source: Federal Reserve Consumer Credit Statistics, Q3 2021

Personal loans vs. credit cards

As you can see from the Federal Reserve data, credit cards tend to have a higher average interest rate than personal loans. Unlike credit cards, a fixed-rate loan has a set interest rate.

This means interest payments don’t fluctuate — helping the average interest rate be a little lower. You can also borrow more on overage, even with a lower credit score.

But personal loans don’t come with some of the benefits of a credit card. This makes personal loans a bad choice for regular spending — but a great choice for expenses like debt consolidation.

What is a good interest rate on a personal loan?

While the average personal loan interest rate was under 10% as of September 2021, any interest rate under 12% is generally considered a good interest rate.

Personal loan interest rates vary widely depending on your credit score. So if you have good to excellent credit, you can expect to receive an interest rate around the average.

But for those with poor credit, you can expect higher interest rates. While these may be higher than the national average, they can still be good — especially if you have a shaky credit history.

Average personal loan rates from top lenders

Most borrowers won’t qualify for the lowest advertised interest rate. So we considered the full range of rates lender offers when coming up with this list.

We also didn’t exclude offers that are only available to a select few borrowers such as community bank, local credit union or invitation-only loans. And we limited the number of connection services — many share the same lowest rates because they work with similar partners.

The interest rate you receive will depend on factors like your credit history, annual income and overall financial situation. Prequalify with multiple lenders to find the best personal loan interest rate available to you.

Online lenders

LenderAPR range
Avant9.95%–35.99%
Best Egg5.99%–35.99%
Earnest2.49%–17.24%
Read review
FreedomPlus7.99%–29.99%
Laurel Road7%–25%
Read review
LendingClub7.04%–35.89%
LendingPoint9.99%–35.99%
LendingTreeAs low as 2.49%
Read review
LightStreamCompetitive
Monevo1.74%–35.99%
OneMain Financial18%–35.99%
Payoff5.99%–24.99%
Prosper7.95%–35.99%
Rocket Loans5.97%–29.99%
Read review
SoFi4.99%–19.53%
Upgrade5.94%–35.97%
Upstart3.5%–35.99%

Banks and credit unions

LenderAPR range
AlliantStarting at 6.24%
Read review
Citibank7.99%–23.99%
Read review
Citizens Bank7.99%–20.89%
Read review
Discover5.99%–24.99%
Read review
Marcus by Goldman Sachs6.99%–19.99%
M&T Bank6.49%–14.24%
Read review
Navy Federal Credit Union7.49%–18%
Read review
PenFedStarting at 4.99%
PNC BankAs low as 5.99%
Read review
Santander6.99%–24.99%
Read review
TD Bank6.99%–19.99%
Read review
U.S. Bank5.99%–18.49%
Read review
USAA7.24%–18.51%
Read review
Wells Fargo5.74%–19.99%
Read review

Banks tend to have lower interest rates

Online lenders are fast, but they often charge more for the convenience — notable exceptions being SoFi and LightStream. A 36-month personal loan from a bank had an average interest rate of 10.09% — slightly higher than the national average for a 24-month personal loan. But credit unions only had an interest rate of 8.95%, according to data from the National Credit Union Administration.

Banks and credit unions are able to offer lower average interest rates because they usually only work with current account holders.

That being said, the average personal loan rate doesn’t differ significantly between banks and online lenders. You may be able to find lower personal loan rates with banks, but that doesn’t mean you’ll qualify.

Your best course of action will be to compare personal loans from both banks and online lenders before you make a final decision.

9 factors that impact interest rate

The average personal loan interest rate is typically based on requirements and conditions lenders set. But there are a few common factors that influence rates with every personal loan lender.

  1. The better your credit score and credit history, the more likely you are to qualify for a competitive interest rate below 10%.
  2. Opting for a smaller loan amount is a good way to score an interest rate on the lower end of the spectrum.
  3. A shorter loan term will have higher interest rates on average. But long loan terms, even with lower interest rates, often cost more overall.
  4. Some lenders will offer a rate discount between 0.25% to 0.5% off your APR — that’s interest plus fees — when you sign up for autopay.
  5. Fees don’t directly impact your personal loan interest rate. But since an origination fee or application fee is worked into the APR, it will have an affect on the overall cost of your loan.
  6. A cosigner or coapplicant with good to excellent credit can help lower your interest rate by agreeing to take on shared responsibility for your loan.
  7. A secured loan will often have lower average interest rates than an unsecured loan. If you have a savings account, CD or other collateral, you may be able to use it to secure your loan and qualify for better terms.
  8. Having a higher income is a good way to get a personal loan with a lower interest rate. But no worries if you don’t have the best income out there. Your debt-to-income ratio often matters more.
  9. Your debt-to-income ratio is the percentage of debt you have compared to your income. The lower you’re already paying on loans and credit cards, the better your chances of getting a good interest rate.How to get a low interest rate on a personal loan.

Compare lenders by more than just interest rate

Personal loan interest rates are one of the most important factors when it comes to how much you spend. But they’re not the be-all, end-all when you’re looking to keep your monthly payment low and your costs down.

APR: A lower interest rate doesn’t mean much if the fees that your lender charges make the APR higher than other personal loans you qualify for.

Discounts: Any discount to your interest rate or APR can significantly reduce your costs. Not all lenders offer discounts, so be on the lookout for those that do.

Fees: There are no-fee personal loans out there. While it’s uncommon, lenders like SoFi won’t charge origination fees, prepayment fees or late fees. But even a lower late fee can make the difference when it comes to the right personal loan.

4 common personal loan fees

Your personal loan interest rate isn’t the only expense that you need to take into account. Weigh these other expenses when you compare lenders.

    • Some lenders charge an origination fee of around 1% to 5% of the loan amount at closing. Some deduct this from the funds you receive, while others add it to your loan balance. This is the only fee included in the APR.
    • Most lenders charge a flat late fee of around $15 to $35 or 5% of the payment due. Most also have a 15-day grace period before the late fee kicks in. This is also not included in the APR.
    • A nonsufficient funds fee (NSF), also known as a returned check or returned payment fee, will be charged if a payment bounces from your account. Typically it’s the same as a late fee, though sometimes it’s slightly higher.
prepayment penalty if you repay your loan early. Usually this is based on how much you would have paid in interest.

Be aware of your monthly payment

Your monthly payments have the most immediate impact on your budget and are arguably the most important cost to consider when you apply for a loan. Monthly payments are based on the amount, rate and repayment term of your loan.

When you apply for a personal loan, you must show that you consistently have a high enough income and low enough debts to cover the monthly payment over the life of the loan.

Longer loan terms can give you higher monthly repayments. But that will increase the overall cost of your loan. Go for the shortest loan term you can afford to save on the monthly and total cost.

Calculate how much you might pay

Using the average interest personal loan interest rate, you can estimate your monthly payment by entering your desired loan amount, loan term and interest rate into our personal loan calculator.

Feel free to experiment. Loan amount and loan term affect monthly payment just as much as interest rate, so see what yours could be with different settings.

Bottom line

The key to getting a competitive rate on a personal loan is comparing lenders. While almost every lender considers your credit score, each has their own method of evaluating your application that could result in a higher or lower rate.

You should compare low-interest personal loans to find some of the most competitive interest rates out there. And here are some top lenders we compare — including their APR range, minimum credit score requirement and the loan amount they offer.

Name Product Filter Values APR Min. Credit Score Loan Amount
Credible personal loans
2.49% to 35.99%
Fair to excellent credit
$600 - $100,000
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Best Egg personal loans
5.99% to 35.99%
600
$2,000 - $50,000
A prime online lending platform with multiple repayment methods.
PenFed Credit Union personal loans
4.99% to 17.99%
650
$600 - $25,000
With over 80 years of lending experience, this credit union offers personal loans for a variety of expenses.
SoFi personal loans
4.99% to 19.53%
680
$5,000 - $100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.
Monevo personal loans
1.99% to 35.99%
None
$500 - $100,000
Quickly compare multiple online lenders with competitive rates depending on your credit.
Tally+ Express Line of Credit
7.9% to 25.9%
660
$2,000 - $30,000

Only available for Line of Credit and Debt consolidation

Upgrade personal loans
5.94% to 35.97%
600
$500 - $50,000
Affordable loans with two simple repayment terms and no prepayment penalties.
Avant personal loans
9.95% to 35.99%
600
$2,000 - $35,000
Conveniently check your loan options without affecting your credit score.
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