Loan
What Is a Good Interest Rate on a Personal Loan?
Personal loan interest rates vary wildly — from as low as 6% to over 35%. What counts as "good" depends on your credit score, loan amount, and lender. Here's how to benchmark your offer.
Average Personal Loan Rates by Credit Score
| Credit Score | Average APR Range | Rating |
|---|---|---|
| 720–850 (Excellent) | 6% – 12% | Excellent |
| 690–719 (Good) | 13% – 17% | Good |
| 630–689 (Fair) | 18% – 25% | Average |
| 300–629 (Poor) | 26% – 36% | High risk |
What Affects Your Rate?
- Credit score — the single biggest factor
- Income and employment — stable income means lower risk to lenders
- Debt-to-income ratio — lower is better
- Loan term — shorter terms often have lower rates
- Lender type — credit unions and online lenders often beat banks
If your rate offer is above 20%, it's worth improving your credit score before borrowing — even waiting 3–6 months can save hundreds or thousands in interest.
How to Get a Better Rate
- Check your credit score and dispute any errors first
- Pay down credit card balances to improve utilization
- Apply with a co-signer who has excellent credit
- Compare at least 3–5 lenders before accepting
- Consider a credit union — they often have rates 2–4% below banks
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