This week’s average personal loan rates: September 26, 2022 | Rates drop for borrowers with good credit scores

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Average personal loan rates for borrowers with good credit scores (between 660 and 719) are down by 10% from two weeks ago, while rates for borrowers with excellent credit scores (720 and higher) and poor scores (less than 620) are up slightly. Personal loans can be used for a variety of purposes, like covering the cost of a medical bill or financing a home improvement project.

Compare Personal Loan Rates

Average personal loan rates

We’ve compiled a database of 28 personal loan products and averaged their current rates so you see the current personal loans climate. The better your credit score, the more likely you’ll qualify for a lower rate.  

 This week’s ratesAverage overall rate19.59%Average low rate9.68%Average high rate29.92%Highest rate99.99%Lowest rate4.99%

The lowest rate of the companies we track is LightStream Personal Loan, which has a minimum APR of 4.99%. The highest rate of the companies we track is NetCredit Personal Loans, which has a maximum APR of 99.99%.

The actual rate available to you depends on your creditworthiness and other aspects of your financial situation. Check your rates with any lenders you are interested in to see what you qualify for. 

Average personal loan rates by credit score

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These rates are based on data from about 172 borrowers who applied for loans and received rates.

Credit score

This week’s average APR

Average APR from 2 weeks ago

Minimum APR

Maximum APR

Excellent (720+)

16.10%

15.76%

3.99%

159.99%

Good (660-719)

20.90%

30.56%

3.75%

159.14%

Fair (620-659)

36.72%

43.90%

11.50%

174.33%

Poor (<620)

105.11%

98.87%

28.47%

159.99%

Average loan amount and term length by credit score

These loan amounts and term lengths are based on data from about 172 borrowers who applied for loans and received rates.

Credit score

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Average requested loan amount

Average loan term length

Maximum loan term length

Excellent (720+)

$30,562.50

52.1 months

120 months

Good (660-719)

$26,633.33

57.9 months

240 months

Fair (620-659)

$10,982.35

44.7 months

84 months

Poor (<620)

$7,236.25

23.1 months

60 months

Percentage of borrowers by loan purpose

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These loan purposes are based on data from about 182 borrowers who applied for loans and received rates.

Loan purpose

Percentage of borrowers

Debt consolidation

48%

Other

10%

Home improvement7%Auto6%Large purchases4%Household expenses4%Credit card refinancing3%Business3%Medical/Dental3%Boat3%Special Occasion3%Baby1%Vacation1%Moving1%Student loan1%Wedding1%

 

Frequently asked questions

How do I pick the best personal loan for me?

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To choose the best personal loan, consider the factors that are most important to you. Many borrowers look for the lowest interest rate. But it’s important to also look at any fees, the minimum credit score needed, and the accessibility of the lender’s customer service.

You should also look at the different types of lenders. Some people may feel comfortable with an online lender, while others may prefer a credit union or bank. You’ll also want to make sure you can get a term length that works for you and that your loan’s purpose is allowed by the lender you choose.

What credit score do I need for a personal loan?

Many lenders don’t disclose their minimum credit score, but they may be able to give you a general sense of your approval chances when you offer them your financial information. Generally, the lower your credit score, the higher a rate you’ll pay. 

To improve your credit score:

Request and review a copy of your credit report. Look for any mistakes on your report that may be hurting your score. If you find any, reach out to the credit bureau to talk about correcting the errors.Maintain low credit-card balancesHaving a credit-utilization ratio — the percentage of your total credit you’re using — of 30% or less will prove to lenders that you can aptly handle your credit.Create a system for paying bills on time. Your payment history makes up a significant percentage of your credit score, and lenders prefer to see consistent and reliable past payments. Design calendar reminders or automatic payments so you don’t fall behind.

What are the alternatives to a personal loan?

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Instead of small loans, you might find that a 0% APR credit card would be a better fit. Such cards can be especially useful for consolidating credit card debt or making purchases that you’d like to pay off over time. Generally, they have 0% APRs for the first 12 to 16 months from opening. Pay off the card in full before the introductory period is up, and you won’t pay interest on your purchase. 

Homeowners sometimes find that home equity lines of credit are better to fund major repairs or renovations with lower interest rates.

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