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October 6, 2021

What Is the Interest Rate on Personal Loans?

Generally, a good personal loan interest rate is one that’s lower than the national average personal loan interest rate, which currently stands around 9.41%, according to Experian.

There are various factors that will determine personal loan interest rates and this includes your repayment term, your credit score, and debt-to-income ratio.

In general, personal loan interest rates can vary anywhere from 6-35%, which is why it’s important to compare loan rates before applying for a loan.

Personal loans use the term APR, or annual percentage rate, to refer to the cost of the loan in addition to the principal balance. One of the biggest factors in determining your APR is your credit score.

With a high credit score, you’ll have better chances of getting lower interest rates.

Interest rates on personal loans are significantly lower than interest rates on credit cards – which is currently on an average of 17% – which is why personal loans are often used to consolidate debt.

Unsecured debt that doesn’t require collateral will attract higher personal loan interest rates and that’s why your personal loan interest rate might be higher than your mortgage or car loan.

💡 Tip: Use our personal loan interest rate calculator here.

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    Lorien is the Country Manager for Financer US and has a strong background in finance and digital marketing. She is a fintech enthusiast and a lover of all things digital.

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    Last Updated: October 6, 2021

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