A good interest rate on a personal loan typically ranges from 10% to 12%, depending on factors like your credit score, income, and the lender. Rates below 10% are considered excellent, while rates above 12% may be higher than average. 10.25%. 11.25%.
As far as personal loans go, 7-8% is generally a pretty great rate and very close to the lowest one can get.
The rates for a traditional personal loan are about 13% to 29% but can be as low as 7.5% if you get a loan from your local credit union. Personal loan rates are much more affordable than payday loan rates, which can equal an APR as high as 600%.
Yes, 11.00% is a good personal loan rate for people with good credit. Applicants with a credit score of 660+ could qualify for a personal loan with a 11.00% APR if they choose the right lender and have enough income to afford the loan.
As of January 2025, the average personal loan rate is 12.48 percent, while the average credit card rate is 20.15 percent. Borrowers with excellent credit scores can qualify for average personal loan rates of around 10.73 percent to 12.50 percent.
Personal Loan Maximums
Most lenders state that their maximum personal loan amount is $50,000, though some will go as high as $100,000. Some borrowers, usually wealthy and with high credit scores, might be able to borrow more.
Even people with good credit scores make mistakes, and a bank may charge a penalty APR on your credit card without placing a negative mark on your credit report. Penalty APRs typically increase credit card interest rates significantly due to a late, returned or missed payment.
A good personal loan interest rate is typically one that's lower than the national average rate, which is 12.17% as of Q3 2023.
A $20,000 loan at 5% for 60 months (5 years) will cost you a total of $22,645.48, whereas the same loan at 3% will cost you $21,562.43. That's a savings of $1,083.05. That same wise shopper will look not only at the interest rate but also the length of the loan.
The cost of borrowing: Banks borrow money from one another at an interest rate that is based on the federal funds rate. This cost is then passed on to the consumer—if the cost of borrowing money is high, then interest rates for personal loans will be even higher.
Pay off your most expensive loan first.
Then, continue paying down debts with the next highest interest rates to save on your overall cost. This is sometimes referred to as the “avalanche method” of paying down debt.
In most circumstances, a 12% interest rate on a personal loan definitely qualifies as a good rate unless the borrower has nearly perfect credit. To guarantee that you will be able to qualify for an interest rate near 12%, you will need to have a good to excellent credit score of over 700 points.
The rule is this: 72 divided by the interest rate number equals the number of years for the investment to double in size. For example, if the interest rate is 12%, you would divide 72 by 12 to get 6. This means that the investment will take about 6 years to double with a 12% fixed annual interest rate.
Look for an APR below 36%, which consumer advocates agree is the highest rate an affordable loan can have, and make sure the monthly payments fit comfortably in your budget.
Deciding the rate of interest
Your score directly affects the rate of interest you are offered by the lender. Higher scores often result in lower rates as they indicate lower risk to the lenders. This is because a history of responsible credit behaviour suggests that you are likely to continue this trend.
The best personal loans for a 700 credit score are from LightStream because they offer $5,000 - $100,000 with APRs of 7.49% - 25.99% and repayment periods of 24 - 84 months.
Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.
Yes, you can pay off your loan early by making larger monthly payments or settling the full balance at once. This can save you money on interest and reduce debt, but it's important to investigate potential downsides first.
For example, the interest on a $30,000, 36-month loan at 6% is $2,856. The same loan ($30,000 at 6%) paid back over 72 months would cost $5,797 in interest. Even small changes in your rate can impact how much total interest amount you pay overall.