- The average interest rate for a 24-month personal loan was 9.41% in February 2022, according to data from the Federal Reserve.
- The interest rate you get on your personal loan can vary depending on several factors.
- Before deciding on a personal loan, shop around with several lenders to find the best deal.
The average interest rate for a 24-month personal loan was 9.41% in February 2022, according to data collected by the Federal Reserve.
Personal loans can be used for a variety of reasons, including paying for major purchases and covering emergencies. Often, personal loans are also used for debt consolidation, where one loan is used to turn credit card debt into one loan and one monthly payment. Personal loans can sometimes have a lower interest rate than credit cards – the average credit card had an APR of 16.17% in Q1 2022.
Before getting a personal loan, consider all the factors that could affect your interest rate. A lower
credit score
could mean paying more for your loan, making it less useful for your purchase. Comparing offers from several different lenders could also help find the lowest interest rate.
Average personal loan rate per year
The average personal loan interest rate has fluctuated over time and is now slightly above its lowest point in 2021. Several factors influence the average personal loan interest rate and loan interest rate. including the federal funds rate, or the amount banks pay to borrow money. Other factors include the reason for the loan and the length of the loan.
* Rates for a 24-month personal loan.
Since 2017, the average personal loan interest rate has gone up and down. Since 2019, the average personal loan interest rate has fallen by nearly one percentage point to 9.41% in February 2022.
Average personal loan interest rate by state
Where you live will also affect the interest rate on your personal loan. State loan laws can affect the average personal loan interest rates available. Across the country, personal loan interest rates can vary by more than 5 percentage points, depending on where you live. Here’s the average personal loan interest rate in each state, according to data from S&P Global as of May 2022.
*Unsecured personal loan of $5,000, 36 months
Hawaii had the lowest personal loan interest rates of the 50 states, at 6.86%, while Rhode Island had the highest rate, with the average personal loan carrying an interest rate of 11.89 %.
Average personal loan rate by lender
Personal loans are sometimes available from traditional banks like Wells Fargo. They may also be offered by credit unions, member-owned banking institutions that often offer lower interest rates.
According to data from the National Credit Union Association,
credit unions
may offer lower interest rates on personal loans:
*Rates in effect in March 2022.
Credit unions often have membership requirements, but they are usually simple to meet and are based on living in a certain area. If you are already a member of a credit union, it may be worth checking to see how their interest rates on personal loans compare to other offerings from banks and online lenders. It may be more affordable to borrow from a credit union.
Average personal loan rate by credit score
Your credit score will play an important role in how much you pay to borrow. A credit score is like a financial grade point average, taking into account information such as your borrowing and repayment history. Credit scores are reported as a single number between 300 and 850.
As with many other types of loans, the higher your credit score, the less interest you will pay over the life of a personal loan.
The amount you’ll pay for your personal loan will vary greatly depending on your credit score, ranging from around 5% APR for those with higher scores to over 30% for those with lower scores. According to data from Bankrate, here’s what the highest rates look like for each credit score range.
Since your credit score can have such a big effect on your interest rate, checking your credit score is a good way to start your search for a personal loan. Checking your credit score should always be free. Once you know your credit score, start shopping around for personal loans and compare the interest rates and loan terms offered to you by several different lenders.
