This week's average personal loan rates: December 28, 2022 | Rates continue to rise

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The average overall personal loan rate this week is 20.11%, a 10 basis-point increase from the beginning of December. 

The average low rate is 10.08%, having increased steadily from 9.98% over the past four weeks. Personal loan interest rates have been going up this year as the Federal Reserve has raised the federal funds rates to try to slow inflation, leading to higher consumer borrowing costs across the board. 

You can get a personal loan for a variety of reasons. Many borrowers take them out for debt consolidation. Other popular uses for the money include financing a home improvement project, paying a medical bill, and covering general household expenses.

Average personal loan rates

We've compiled a database of 28 personal loan products and averaged their rates so you know the current landscape. You're more likely to qualify for a better rate with a higher credit score. Rates are basically unchanged from last week and are high in general.

The lowest rate of the companies we track is tied between LightStream Personal Loan, American Express Personal Loans, and Reach Financial Personal Loan which have minimum APRs of 5.99%. The highest rate is from NetCredit Personal Loans, which has a maximum APR of 99.99%.

The rates shown above aren't locked in. The rate you'll get depends on your creditworthiness and other aspects of your financial situation. You can find the rates you'll qualify for by applying with each lender you're interested in. 

Average personal loan rates by credit score

These rates are based on data from 114 borrowers who applied for loans and received rates.

Average loan amount and term length by credit score

These loan amounts and term lengths are based on data from 114 borrowers who applied for loans and received rates.

Percentage of borrowers by loan purpose

These loan purposes are based on data from 126 borrowers who applied for loans and received rates. One borrower used loan funds to pay for baby expenses this week. 

Frequently asked questions

What credit score do I need for a personal loan?

Many lenders don't disclose a minimum credit score, but they may be able to give you a general sense of your approval chances when you offer them your financial information. If your score is too low to qualify, take steps to improve it by reviewing your credit report and lowering your credit utilization ratio (the percentage of your credit limit you're currently using).

Are online personal loans legitimate?

Yes, online loans with a reputable lender are perfectly safe to take out. Read reviews of the company online, look for additional information about the company, and ignore offers that seem too good to be true. Look for personal loans that are backed by a Member FDIC bank or NCUA accredited credit union.

You can watch out for potential scams by looking out for these telltale signs:

• The lender doesn't ask about your payment history or credit score. 
• The lender's website is unsecured.
• The lender guarantees approval. 
• The lender isn't transparent about fees.
• The lender coerces you into taking out a loan immediately. 

How much will a personal loan cost?

This depends entirely on how much you'd like to take out, what APR you receive from your lender, and how long it takes you to pay off the loan. The higher the loan amount and APR, the more a loan will cost you. With a longer term length, you will spread out your payments over an extended period so your monthly payments will be smaller, but you will pay more in the long run.