What is the Interest Rate on Personal Loans?

Generally, a good personal loan interest rate should be lower than the national average. The interest rates offered will fluctuate over time.

As of February 2025, the average interest rate for a 5-year personal loan is approximately 19.93%, according to Forbes.

In general, personal loan interest rates vary dramatically based on your credit score, income, loan repayment terms, and debt-to-income ratio.

Additionally, as of February 2025, online lenders typically offer personal loan rates ranging from 10% to 36%, depending on factors like credit score and loan amount.

Personal loans have an APR, or annual percentage rate, which indicates the total cost of the loan along with the principal balance. Your credit score is one of the main factors that influence your APR, while a high credit score increases your chances of obtaining lower interest rates.

Interest rates on personal loans are generally lower than interest rates on credit cards. Currently, the average credit card interest rate in the United States is approximately 24.20%, according to the Federal Reserve, which explains why personal loans are often used to consolidate debt.

Unsecured debt, which doesn’t require collateral, usually has higher interest rates than personal loans, making them costlier than mortgages or car loans.

Tip: Consider using a personal loan interest calculator to simplify things up. You can also use a loan comparison tool to help you compare numerous lender interest rates.