Interest rates on personal loans range from about 6% to 36% depending on your credit score, income, and the lender

The rate you see advertised — often 6% or 8% — is what lenders offer to borrowers with excellent credit. If your credit score is below 670, you will likely see rates between 18% and 36%. Most people fall somewhere in the middle: a score between 670 and 739 typically lands you a rate between 10% and 18%.

The rate matters because it determines how much you actually pay back. A $10,000 loan at 8% costs you roughly $1,700 in interest over five years. The same loan at 24% costs you roughly $5,200 in interest. That difference is real money that comes out of your pocket.

Rates change daily and vary by lender. A bank, credit union, and online lender will quote you three different numbers for the same loan amount. Shopping around — getting quotes from at least three lenders — usually takes an hour and can save you hundreds of dollars.

Key Takeaways

  • Personal loan rates range from 6% to 36%, with your credit score being the single biggest factor in where you land.
  • A higher rate means you pay significantly more over the life of the loan — the difference between 8% and 24% on a $10,000 loan is roughly $3,500.
  • Banks, credit unions, and online lenders quote different rates for the same borrower, so comparing at least three offers is standard practice.
  • Your rate depends on credit score, income, debt-to-income ratio, employment history, and whether you offer collateral.
  • Rates are set by the lender and do not change after you lock in an offer, but they vary daily based on market conditions.

How Your Credit Score Determines Your Rate

Lenders use your credit score as the primary predictor of whether you will repay the loan. A higher score means lower risk to them, so they charge you less. The relationship is direct and steep: every 50-point jump in your score typically lowers your rate by 1% to 3%.

A score of 750 or higher usually qualifies you for rates in the 6% to 12% range. A score between 670 and 739 typically gets you 10% to 18%. Below 620, most mainstream lenders will not offer you a personal loan at all, or will charge 30% or higher. If you have no credit history, lenders treat you similarly to someone with a low score.

Your score reflects your payment history (35%), amounts owed (30%), length of credit history (15%), new credit inquiries (10%), and credit mix (10%). Missing payments, carrying high balances, or opening many new accounts in a short time all lower your score and raise the rate you are offered.

What Else Lenders Look At Besides Credit Score

Credit score is the biggest factor, but lenders also examine your income, employment history, and debt-to-income ratio. If you earn $30,000 a year and already owe $20,000 in car loans and credit cards, a lender may decline you or charge a higher rate because your existing debts consume most of your income.

Employment matters too. A job you have held for two years looks more stable than one you started three months ago. Self-employed borrowers often face higher rates because income is harder to verify. Some lenders require tax returns going back two years; others will not lend to self-employed people at all.

A few lenders will lower your rate if you offer collateral — a car, savings account, or other asset the lender can seize if you do not repay. This is called a secured personal loan. Unsecured personal loans (the standard kind) have no collateral backing them, so rates are higher to compensate for the lender's risk.

How Rates Differ Between Lenders and Loan Types

Banks typically offer rates between 7% and 18% but require good credit and a long banking relationship. Credit unions often beat banks by 1% to 3% if you are a member, and some credit unions lend to people with lower credit scores. Online lenders range from 6% to 36% and often approve people banks decline, but they charge higher rates to offset that risk.

Peer-to-peer lending platforms connect you directly to individual investors and typically charge 6% to 36% depending on your credit profile. Some online lenders specialize in bad-credit loans and charge 25% to 36%. These lenders approve faster — sometimes in hours — but the speed comes with a cost: higher rates and sometimes hidden fees.

The loan term also affects your rate. A 24-month loan usually carries a lower rate than a 60-month loan for the same borrower, because the lender's money is at risk for a shorter time. Shorter terms mean higher monthly payments but lower total interest paid.

Fixed Rates Versus Variable Rates

Nearly all personal loans come with a fixed rate, meaning your interest rate stays the same for the entire loan term. If you lock in 12%, you pay 12% for all 36 or 60 months. This makes your monthly payment predictable and protects you if market rates rise.

A few lenders offer variable rates that change over time, usually tied to a benchmark like the prime rate. Variable rates start lower — sometimes 2% to 4% below the fixed rate — but can rise if the benchmark rises. This is rare in personal lending because most borrowers prefer the certainty of a fixed payment. If you see a variable-rate personal loan, read the terms carefully to understand how often the rate can change and what the maximum rate could be.

What Happens to Your Rate After You Borrow

Once you sign the loan agreement and receive the money, your rate is locked in. Market rates can rise or fall, but your rate does not change. You cannot refinance into a lower rate with the same lender unless they offer a refinance program, which most do not.

You can refinance with a different lender if your credit score improves or if market rates drop significantly. Refinancing means taking out a new loan to pay off the old one. You will go through the full application process again, get a new rate based on your current credit and income, and start a new loan term. Refinancing makes sense only if the new rate is at least 1% lower than your current rate, because the application process and any fees eat into your savings.

How to Compare Rates and Find the Best Offer

Get quotes from at least three lenders: a bank, a credit union (if you are a member), and an online lender. Most lenders let you check your rate without a hard credit inquiry, which means the quote does not affect your credit score. This is called a soft inquiry or pre-qualification.

When you compare, look at the interest rate, the loan term, the monthly payment, and the total amount you will pay back. A lower rate is not always the best deal if it comes with a longer term that costs more overall. A loan calculator (available free on most lender websites) shows you the total cost for each option.

Watch for fees. Some lenders charge an origination fee (1% to 8% of the loan amount), a prepayment penalty (charged if you pay off early), or a late fee. These add to your true cost. A lender with a slightly higher rate but no fees may cost less than one with a lower rate and a 5% origination fee.

Frequently Asked Questions

Why did I get offered a higher rate than the advertised rate?

The advertised rate is the best rate the lender offers, reserved for borrowers with excellent credit and income. Your actual rate depends on your credit score, income, debt, and employment history. Most borrowers receive a rate higher than the advertised one.

Can I negotiate my interest rate with a lender?

Personal loan rates are set by the lender's underwriting system and are not negotiable. However, you can shop around and choose the lender offering the best rate. If your credit score improves, you can refinance with a different lender to get a lower rate.

What is a good interest rate for a personal loan?

A rate below 10% is considered good and usually requires a credit score above 700. A rate between 10% and 18% is typical for borrowers with fair credit. Anything above 20% is expensive and worth avoiding if you have other options, such as a credit union loan or a credit card with a lower rate.

Does the loan amount affect the interest rate?

Slightly. Larger loans sometimes carry slightly lower rates because the lender's cost to process the loan is spread over a bigger amount. The difference is usually small — less than 1%. Your credit score and income matter far more than the loan size.

Can I get a personal loan with no credit history?

Yes, but you will face higher rates — typically 24% to 36% — because lenders cannot assess your repayment history. Some online lenders and credit unions specialize in lending to people with no credit. Building credit with a secured credit card first may help you may have access to for a lower rate later.