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Personal loan rates dropped last week. This means if you’re looking to finance a home remodeling project, large purchase or unexpected bills, you can still snag a reasonable rate, as long as you’re a qualified applicant.
From June 2 to June 7, the average fixed rate on a three-year personal loan was 13.88% for borrowers with a credit score of at least 720 who prequalified on Credible.com’s personal loan marketplace. The rate was 13.93% the previous week, according to Credible.com. The average rate on a five-year personal loan rose 0.54 percentage point last week to 19.25% from 18.71%.
The most qualified borrowers generally receive the best rates. In fact, well-qualified borrowers may receive a significantly lower rate than average. The rate you receive depends on various factors, including your credit profile and the loans available through your chosen lender.
These rates are accurate as of June 7, 2025, and based on the three-year fixed rate.
Related: Best Personal Loans
Current Personal Loan Interest Rates for June 11, 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.
Personal Loan Rates by Credit Score
Your credit score plays a major role in the interest rate a lender offers for a personal loan. Lenders use your credit profile and other factors to evaluate your risk as a borrower. In general, the higher your credit score, the lower the interest rate you’ll receive.
The table below compares average personal loan interest rates by credit score, showing how much your score can affect your rate and how much you could save over time.
How To Get the Lowest Personal Loan Rates
Since each lender sets its own personal loan rates, use these three simple steps to compare personal loan interest rates:
- Prequalify. Prequalifying with multiple lenders lets you find and compare potential personal loan interest rates. You’ll see terms and amounts you may be eligible for without impacting your credit score. It’s not an offer of credit, however, and your loan isn’t guaranteed until you submit a formal application and sign your loan agreement, which will affect your score.
- Review your offers. After prequalification, review and compare your offers. In some cases, the lowest rates may be the cheapest loan option since origination and other fees can increase your cost of borrowing. Comparing all of the loan features can help you find the best option for your situation.
- Submit an application. After you’ve compared choices, collect all necessary documentation, including your bank statements, W-2s and photo identification. Submitting an application results in a hard credit inquiry, which temporarily dings your credit score.
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 Can You 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)
Why is my APR so high with good credit?
While borrowers with strong credit typically get more favorable interest rates, lenders also rely on current market conditions to set interest rates. If you have good credit but your annual percentage rate (APR) is high, it may mean interest rates are generally high. That said, it can also mean your income isn’t high enough to qualify for lower rates or your debt-to-income ratio (DTI) is too high.
Why is interest on personal loans so high?
High personal loan interest rates are a result of current market conditions and/or low credit scores. Lenders set their interest rates based on the economy and your credit profile. If you want to get the lowest rates possible, work on improving your credit score and debt-to-income (DTI) ratio before applying.