Average Personal Loan Interest Rates in August 2025

Personal loan rates rose for 3- and 5-year terms during the week ending July 27, 2025.

By Meredith Mangan

Written by

Senior editor

Meredith Mangan is a senior editor at Credible. She has more than 18 years of experience in finance and is an expert on personal loans.

Edited by Savannah Plasch

Written by

Savannah Plasch

Editorial assistant, Credible

Savannah is an editorial assistant at Credible. She received her BA in English from UCLA and an MFA in creative writing from Queens University of Charlotte.

Reviewed by Barry Bridges

Written by

Barry Bridges

Editor

Barry Bridges is the personal loans editor at Credible. Since 2017, he’s been writing and editing personal finance content, focusing on personal loans, credit cards, and insurance.

Updated July 30, 2025

Editorial disclosure: Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

Average personal loan rates for 3- and 5-year terms have risen since this time last week. Three-year terms had fallen for the three consecutive weeks prior. This is the second week in a row that 5-year terms have risen.

Here are the latest trends in personal loan interest rates from the Credible marketplace, updated weekly. Personal loan interest rates below are expressed in terms of annual percentage rate or APR.

During the week ending July 27, 2025:

Average personal loan rates on 3-year loans were at 13.96% APR, up more than half a percentage point from 13.24% last week and down significantly from 15.76% a year ago.
Average personal loan rates on 5-year loans were at 19.62% APR, up slightly from 19.46% last week and down slightly from 19.76% a year ago.

Current personal loan rates

Where we get our data

Credible is a personal loans marketplace that partners directly with lenders to offer loans for a wide range of credit profiles and loan purposes. Because of the relationships with our bank and fintech partners, we have access to the most current rates that real borrowers are being approved for, along with average rates by credit score and loan purpose, how easy or hard it is to get approved, and more. The data we use is primary source data, updated weekly, and does not include any personally identifiable information about borrowers.

Personal loan historic rate trends

The chart below shows average prequalified rates for borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender.

Tip

Personal loans are a popular way to consolidate and pay off credit cards and other debt. Prequalify to gauge whether you're likely to get approved for a personal loan and the rates you might qualify for.

Current personal loan interest rates by credit score

Rates on personal loans typically range between 6.49% APR and 35.99% APR, but the rate you qualify for depends on factors including your credit score and the length of the repayment term. For example, the data chart below shows that borrowers with excellent credit scores are more likely than others to qualify for APRs in the low to mid-teens on 3-year loans and 5-year loans. It also shows that rates for longer-term loans tend to be higher, regardless of credit score.

Here are current ranges for average interest rates for borrowers in different credit score categories, according to Credible personal loan marketplace data:

Excellent credit: 11.18% on 3-year loans, 16.78% on 5-year loans
Very good credit: 13.87% on 3-year loans, 19.36% on 5-year loans
Good credit: 20.71% on 3-year loans, 24.71% on 5-year loans
Fair credit: 29.38% on 3-year loans, 31.58% on 5-year loans

Borrowers with bad credit tend to receive the highest APRs of any credit score category, with rates typically falling in the 32% to 36% range. Keep in mind that all lenders use different methods to evaluate borrowers, which is why it's important to prequalify with several.

Where are interest rates headed?

While rates continue to fluctuate across different types of credit and savings accounts, the federal benchmark that helps determine interest rates remains unchanged. The Federal Reserve voted to hold rates steady at its most recent meeting on July 30, as it did at previous meetings in January, March, May, and June.

The Fed chairman and other members have cited concerns about inflation, consumer prices, tariffs, and other factors in deciding to keep rates steady so far in 2025. However, some forecasters believe that the Fed hasn't ruled out making two small rate cuts of 0.25 points apiece by the end of this year.

The target range for the federal funds rate currently sits at 4.25% to 4.50%. This is down from a high of 5.25% to 5.50% last year, prior to the Fed's September, November, and December rate cuts.

See other personal loan rates:

What are personal loans used for?

The most common use for a personal loan is debt consolidation, according to Credible marketplace data. Debt consolidation, including credit card refinancing, accounted for over $80 million of disbursed loans in June — about 63% of people approved for a loan via the Credible marketplace used it for either debt consolidation or credit card refinancing. The average disbursed loan amounts for debt consolidation and credit card refinancing were $27,944 and $23,531, respectively.

Home improvement was the next most common loan purpose, with over $9 million disbursed in June. The average amount for home improvement loans was $19,252.

About Credible

Credible is a multi-lender marketplace that empowers consumers to compare prequalified rates across dozens of lenders based on their credit score, income, and other financial factors. Credible's integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score.

Credible also provides no-cost credit monitoring tools that help you manage debt and check your credit score for free.

The Credible marketplace provides an unrivaled customer experience, as reflected by more than 7,432 5-star Trustpilot reviews and a TrustScore of 4.8/5.

FAQ

What is a good interest rate on a personal loan?

Open

A good interest rate depends primarily on your credit score. Personal loan interest rates typically range from 6.49% APR to 35.99% APR. Shorter terms generally have lower APRs, and borrowers with exceptional credit (an 800 FICO score or higher) are eligible for the lowest rates (below 10%).

Average APRs for 3- and 5-year personal loans for borrowers with 720 FICO scores and higher were 13.96% and 19.62%, respectively, according to Credible data for the week ending July 27.

How does a personal loan affect your credit score?

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A personal loan can have multiple effects on your score. When you apply, most lenders conduct a hard credit pull, which can bring your score down by up to 10 points for up to a year. Plus, adding a new loan to your credit report can decrease the average age of your accounts, which could also ding your score.

However, on-time loan payments can improve your score significantly over time. If you use the loan to pay off credit card debt, you could see a substantial score boost within a month.

What personal loan term length should I choose?

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If you’re concerned about interest costs, choose the shortest repayment term available with affordable payments. You’ll pay less in interest if you pay off a loan over fewer years. Plus, rates are generally lower for loans with shorter repayment terms. But it’s crucial that you can comfortably afford the payments in order to avoid credit damage. Monthly payment amounts are often higher on shorter terms, even with a lower interest rate.

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Meet the expert:

Meredith Mangan