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Personal financial factors that affect your loan interest rates include your credit score, income and debt-to-income ratio.
Average Personal Loan Interest Rates: What You Need to Know
Posted on Apr 24, 2026
Updated on May 15, 2026
Personal loans are a versatile financing option that can be used for a wide range of expenses, including debt consolidation, home improvements, unexpected medical bills, large purchases or life events like weddings or vacations. With these loans, you get a lump sum upfront, usually with a fixed interest rate and predictable monthly payments over a set repayment period.
Current average personal loan interest rates
Although the lowest interest rates on consumer loans start at 6.20%, the highest rates are typically found on short-term payday loans. Such loans often come with extremely high costs and have astronomical annual interest rates of 300 - 400%, making them much more expensive than traditional consumer loans.
Below we've put together average rates for personal loans to help you get a sense of the current lending market. These rates are based on data from 2025 - 2026 and may change over time depending on Federal Reserve policy and specific lenders.
| Minimum APR | Average APR* | Maximum APR | Minimum Amount | Average Amount | Maximum Amount | |
|---|---|---|---|---|---|---|
| Excellent (More than 720) | 5.88% | 18.32% | 443.66% | $300 | $20,303 | $750,000 |
| Good (660 - 719) | 6.20% | 28.97% | 450.00% | $300 | $13,741 | $750,000 |
| Fair (620 - 659) | 7.50% | 42.09% | 450.00% | $300 | $9,833 | $694,583 |
| Poor (Less than 620) | 8.50% | 66.30% | 450.00% | $300 | $7,684 | $45,000 |
* Kindly note that not all borrowers will necessarily qualify for the rates below. The rates you'll get depend on your credit score and other aspects of your financial situation.
Today's loan rates by loan type
We've put together these average rates and amounts from borrowers who applied for different types of loans and received their offers.
Unsecured loans
| Minimum APR | This week's average APR* | Last month average APR | Maximum APR | Minimum amount | Average Amount | Maximum Amount | |
|---|---|---|---|---|---|---|---|
| Excellent credit (more than 720) | 6.24% | 18.70% | 18.60% | 443.66% | $300 | $15,013 | $100,000 |
| Good credit (660 - 719) | 6.24% | 30.06% | 29.84% | 450.00% | $300 | $10,589 | $60,000 |
| Fair credit (620 - 659) | 7.99% | 43.94% | 46.39% | 450.00% | $300 | $6,473 | $50,000 |
| Poor credit (less than 620) | 15.61% | 89.35% | 87.53% | 450.00% | $300 | $4,106 | $45,000 |
Secured loans
| Minimum APR | This month average APR* | Last month average APR* | Maximum APR | Minimum Amount | Average Amount | Maximum Amount | |
|---|---|---|---|---|---|---|---|
| Excellent credit (more than 720) | 10.50% | 21.13% | 21.03% | 35.99% | $1,500 | $18,964 | $35,000 |
| Good credit (660 - 719) | 10.50% | 21.84% | 22.06% | 35.99% | $1,500 | $17,419 | $35,000 |
| Fair credit (620 - 659) | 10.50% | 22.51% | 23.10% | 35.99% | $1,750 | $15,398 | $35,000 |
| Poor credit (less than 620) | 10.50% | 23.63% | 25.40% | 35.99% | $1,500 | $14,549 | $35,000 |
Home Equity Lines of Credit (HELOCs)
| Minimum APR | This month average APR* | Last month average APR* | Maximum APR | Minimum Amount | Average Amount | Maximum Amount | |
|---|---|---|---|---|---|---|---|
| Excellent credit (more than 720) | 5.88% | 8.00% | 8.11% | 11.85% | $11,000 | $169,443 | $750,000 |
| Good credit (660 - 719) | 6.20% | 9.10% | 8.89% | 11.90% | $15,000 | $158,604 | $750,000 |
| Fair credit (620 - 659) | 7.50% | 8.44% | 8.94% | 12.25% | $15,000 | $175,918 | $694,583 |
| Poor credit (less than 620) | 8.50% | 8.75% | 8.81% | 9.00% | $16,000 | $25,975 | $29,300 |
Lowest personal loan interest rates
A good rate for a personal loan varies by person, but currently the lowest rate is around 6.20% to 6.49% APR. Such low interest rates are generally reserved for borrowers with the strongest credit. That's why average interest rates can be notably higher than the minimum rates published online.
Among the top lenders offering such competitive rates are:
- Upstart Personal Loans: starting at 6.20%
- LightStream Personal Loans: starting at 6.49%
- Wells Fargo Personal Loans: starting at 6.74%.
Generally speaking, the lower the interest rate, the less you'll pay for the cost of borrowing money, resulting in lower monthly payments and a reduced total cost over the life of the loan.
Understanding personal loan interest rates
When you take out a loan, the interest rate is the extra percentage you pay on top of the original loan amount. To put it simply, it's the cost you pay to a lender for using their money, usually calculated annually on the principal amount.
Interest rates can vary significantly depending on the lender, loan type, loan term, and the borrower's creditworthiness.
How personal loan rates are determined
Loan interest rates are determined by a combination of personal financial factors and broader economic conditions. Key factors include your credit score, income and debt-to-income (DTI) ratio. Lenders may also consider your down payment, employment history, and overall market conditions influenced by the Federal Reserve.
Fixed or variable interest rates
There are two types of interest rates you can get on a loan: fixed and variable. A fixed interest rate stays the same for the entire life of the loan, making monthly payments predictable and easier to manage. In contrast, a variable interest rate can change over time, causing your payments to fluctuate since it is typically tied to the prime rate and depends on economic conditions.
What affects your loan interest rate
An excellent credit score, consistent income and a low debt-to-income ratio are key factors to securing a low-interest loan.
Credit Score
Your credit score is one of the factors that can affect your interest rate. Most lenders typically require a credit score of around 580 or higher to qualify for a personal loan, while the lowest interest rates are usually offered for borrowers with good or excellent credit - those with a FICO score of 720 or higher.
Lenders use your credit scores to predict how reliable you'll be in paying your loan. So, consumers with higher credit scores receive lower interest rates than those with lower credit scores.
It's hard to understand how much your loan will actually cost in dollars when you look at the APRs. So, the example below shows how your credit score can affect the total cost of borrowing $5,000 over 48 months.
| Average APR | Monthly payment | Interest | Total cost | |
|---|---|---|---|---|
| Excellent credit (More than 720) | 20.78% | $154.24 | $2,403.40 | $7,403.40 |
| Good credit (660-719) | 38.35% | $205.10 | $4,844.82 | $9,844.82 |
| Fair credit (620-659) | 60.83% | $279.49 | $8,415.68 | $13,415.68 |
| Poor credit (under 620) | 91.34% | $392.18 | $13,824.51 | $18,824.51 |
Debt-to-Income Ratio
Another factor lenders consider when calculating your interest rate is your debt-to-income (DTI) ratio. The DTI reflects how much debt you have (including mortgage payments, car payments, and credit card payments) relative to your income.
Generally, the higher your DTI, the riskier you may seem to lenders. Each lender sets its own DTI ratio requirement, but lenders typically look for a 35 - 45% DTI ratio, which is one more reason to keep your DTI ratio low.
Income and employment status
Your income and employment status can also affect the rate you're offered on a personal loan. Lenders consider borrowers with a steady and stable income to be less risky and, therefore, offer them lower rates. If you're a freelancer, independent contractor, or business owner, you might need additional paperwork to prove your income.
If your income is irregular, having a co-applicant may help you get approved for more favorable interest rates.
Secured or unsecured personal loans
Personal loans are commonly unsecured loans. However, some lenders offer secured personal loans, which allow borrowers with fair or poor credit to qualify for a loan or get a better rate than they would with an unsecured loan.
When you take out a secured personal loan, the lender uses your assets (like a savings account, a car or a home) as collateral. A Home Equity Line of Credit (HELOC) is one of the more popular and flexible secured loans that uses a home's equity as collateral. Commonly used for home improvements, debt consolidation, and major expenses, they offer competitively low interest rates.
In contrast, an unsecured personal loan doesn't require you to provide any funds or assets as security. As a result, unsecured personal loans typically come with higher interest rates, since there's no collateral backing the loan and the lender assumes greater risk.
Loan amount and term
The loan term is how long you have to repay the money you borrowed, usually discussed in terms of months or years. It's important to remember that while a shorter loan term means higher monthly payments, you'll generally end up paying much less in total interest by the time the loan is paid off. Larger loan amounts might sometimes result in lower rates, but they also increase your overall debt burden.
Where to find the best rates?
Online lenders often offer lower interest rates than traditional banks due to lower operating costs and flexible lending criteria. Although traditional banks can provide competitive rates, especially for customers with established relationships, their rates are often higher due to greater overhead and stricter approval processes.
Credit unions on the other hand, tend to offer competitive rates as well. Since they are member-owned, nonprofit organizations, their focus is on serving members rather than maximizing profits.
When qualifying for a loan, it's a good idea to shop around and compare rates from online lenders, traditional banks, and credit unions to find the best deal. Prequalify, check rates with several lenders, compare your offers and choose the one that fits your budget.
