Personal loan rates rose last week. But you can still snag a reasonable rate, whether you’re looking to finance a home remodeling project, deal with unexpected bills or temporarily improve your cash flow.
For borrowers with a credit score of at least 720 who prequalified on Credible.com’s personal loan marketplace, the average interest rate on a three-year personal loan was 14.40% from March 31 to April 5. According to Credible.com, that’s a 1.32 percentage-point increase from the previous week. The average rate on a five-year personal loan rose 1.11 percentage points last week, from 17.78% to 18.89%.
The rate you’ll actually receive depends on several factors, including your credit profile and the loans available through your chosen lender. Borrowers with the highest credit scores are likely to receive rates significantly lower than average.
These rates are accurate as of April 5, 2025, and based on the three-year fixed rate.
Related: Best Personal Loans
Current Personal Loan Interest Rates for April 8, 2025
Personal loan rates fluctuate frequently, and each lender determines and sets different rates. While your rate isn’t guaranteed until you sign your loan agreement, you can get an idea of average lender rates below.
Personal Loan Rate Trends Over Time
The table below compares personal loan rates for three- and five-year terms to help you understand rate trends. Lenders typically consider your loan term and credit history to determine your interest rate.
How To Get the Lowest Personal Loan Rates
We recommend using these steps to compare and get the best personal loan rates:
- Prequalify. Prequalifying can allow you to understand the rates you might be offered before officially applying. Although the loan terms shown aren’t guaranteed because prequalification is not an offer of credit, you can use these offers to compare lenders.
- Compare your offers. We recommend prequalifying with multiple lenders so you can compare offers side by side. Interest rates, loan amounts, repayment terms and potential fees will help you understand the cost of borrowing from each lender, but be sure to consider other attributes as well. Some lenders charge fees such as prepayment penalties, and others offer loan deferment if you have trouble making payments.
- Apply. After you choose your lender, submit an application. Have any required documentation ready to share, including bank statements, W-2s and employer information.
Related: 5 Personal Loan Requirements To Know Before Applying
Should I Get a Personal Loan?
We recommend you get a personal loan only when it’s necessary. If you’re considering a personal loan, these steps can help you understand if it’s the right choice:
- Identify why you need funds. Before taking out a personal loan, understand how you would use the funds. Some common personal loan uses include home improvement, debt consolidation and covering emergency expenses. It’s best to avoid using personal loans for nonessential expenses that you could potentially save up for, like vacations and holiday gifts.
- Determine how much financing you need. Once you identify why you need the funds, calculate how much you need to cover your costs. This amount will typically inform you of the loan amount you need or if you can use an alternative.
- Consider personal loan alternatives. If you only need to borrow a small amount of money, such as under $2,000, consider alternative options such as a payday alternative loan (PAL) or a buy now, pay later service.
- Find a lender that fits your needs. If you can’t find an alternative that fits your needs, find a personal loan lender that provides sufficient financing.
Pro Tip
In some cases, getting a personal loan may not be the best decision. For example, we don’t recommend a personal loan if you can’t afford the monthly payments or if you can wait to save up the money you need.
Where To Get a Personal Loan
You can find a personal loan online or in person, depending on the institution. With varying lenders offering personal loans, you can find one that works best for you. Lenders offering personal loans include:
- Banks: Best for in-person banking and opening a personal loan with your current bank.
- Online lenders: Best for flexible qualification requirements and an online-only experience.
- Credit unions: Best for those who meet a nearby credit union’s eligibility requirements or are current members.
Frequently Asked Questions (FAQs)
How do you calculate personal loan payments?
Once you have your interest rate, loan term and amount borrowed, you can calculate your loan payments. A personal loan calculator can help with this.
Is a 7% interest rate high for a personal loan?
Whether an interest rate is high depends on several factors, including current market conditions and your credit profile. Based on current average personal loan interest rates, a 7% interest rate would be considered competitive.
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