What is a Good Interest Rate for a Personal Loan?
Looking for the best interest rate on a personal loan? If so, you’ll want to take a look at your credit scores ASAP, since they have a major impact on what you qualify for. The higher your credit scores are, the lower your interest rate offers will be from lenders, and the more money you can save as a borrower.
As of May 2026, the Federal Reserve reported that the average annual percentage rate (APR) on a 24-month personal loan was 11.86%. But average rates are certainly no guarantee of what you’ll be offered. Many personal loans currently have interest rates ranging up to 36%. However, if you have excellent credit, and you do some comparison shopping, you might find a personal loan rate closer to 6%.
In This Article
What is a good interest rate by credit score?
The average interest rate on a personal loan is anywhere from around 12% and 15% depending on the loan term. However, if you have excellent credit and you do some comparison shopping across multiple lenders, you can potentially find a lower rate. If you’re someone with an average FICO credit score (the national average is currently 714), your rates may be closer to 19%.
According to Experian, these were the rate ranges for a 36-month personal loan in May 2026:
Category | Score range | APR range (36-month loan) |
Exceptional | 800-850 | 11.77%-14.27% |
Very good | 740-799 | 13.51%-15.52% |
Good | 670-739 | 18.18%-20.03% |
Fair | 580-669 | 24.65%-26.42% |
Poor | 300-579 | 25.54%-26.12% |
Based on these rates, the difference in your cost to borrow money can be huge when you have “good” versus “exceptional” credit scores. For example, if you take out a $15,000, three-year loan with 11.77% APR, your total interest charges will be $2,876. But at 19% APR, that total jumps up to $4,794.
Understanding fixed vs. variable rates on personal loans
Most personal loans come with fixed interest rates, but some lenders will give you the option of choosing a variable interest rate instead.
What’s the difference between fixed and variable interest rates? With fixed interest rates, your rate stays the same for the full life of the loan. With a variable-rate loan, the rate can change as often as once a month based on the performance of market benchmarks such as the prime rate.
Variable-rate loans can be appealing as a borrower, since the initial rates are usually lower than rates on fixed-rate loans. However, if the rate increases, your monthly payments and your overall cost of borrowing will also increase. The longer your term on a variable-rate loan, the more you risk having higher, less affordable payments.
Characteristic | Fixed rate | Variable rate |
Can the rate eventually change? | No | Yes |
Can your monthly payment change? | No | Yes |
Can you calculate the total loan cost upfront? | Yes | No |
When do rates change? | N/A | As often as monthly |
How do the rates compare? | They may be higher than the initial rates for fixed loans, but they do not increase. | They may initially be lower than fixed-rate loans, but can be higher overall. |
What is the average interest rate for a personal loan?
The average national APR (which represents interest plus fees) for a personal loan depends on variables like the repayment term. According to the most recent available data from the Federal Reserve, the average rate on a 24-month personal loan is 11.86%. By contrast, the average rate on credit cards is 22.15%.
Experian reports that the average APR for a 36-month personal loan is 13.72%, and that rate rises to 14.92% for a 60-month loan.
Key factors that determine your personal loan rate
Credit scores aren’t the only information a lender uses to determine your interest rate. When it comes to personal loans, lenders often examine all of the following factors:
- Credit profile: Your credit scores and the information in your credit reports.
- Income: Whether you earn enough income to afford loan payments.
- Employment history: How reliable your income is based on your history in role or industry.
- Payment term: The length of your repayment term (longer terms typically mean lower payments but higher interest rates).
- Loan size: The amount you’re applying for (larger loans represent a higher risk for the lender).
- Rate discounts: Discounts for pre-existing customers or for customers who do things like set up autopay.
How to get the best interest rate on a personal loan
If you’re not getting approved for the rates you want on a personal loan, there are ways to change that. You can use any or all of the following strategies to reduce your rate offers moving forward:
- Improve your credit scores
- Reduce your loan amount
- Shorten your loan repayment term
- Find a lender that offers rate discounts
- Apply for a joint-personal loan
To get started improving your credit scores, you can pull and review your credit reports. It’s free to pull them weekly from AnnualCreditReport.com. Not sure how to read your reports? An NFCC-certified, nonprofit credit counselor can help.
Compare at least 3 offers to find the best rate
Personal loan rates can vary a lot from one lender to the next. So if you’re looking for the lowest APR available, don’t forget to compare multiple lenders.
According to data from Experian, comparing offers could help you reduce your interest rate by more than one percentage point and save you hundreds of dollars in interest. In other words, if you don’t do any comparison shopping, you’ll probably get a higher APR (and spend more money than you need to) on a personal loan.
Prosper does not provide tax, financial or legal advice and this post is not intended to be tax, financial or legal advice. We recommend that you consult with your financial or tax advisor if you have any questions.
Written by Sarah Brady
Sarah Brady is a financial writer and speaker who’s written for Forbes Advisor, Investopedia, Experian and more. She is also a former Housing Counselor (HUD) and Certified Credit Counselor (NFCC).