Last week, personal loan rates increased. Still, if you’re in the market for a personal loan to finance a project or a large purchase, pay unexpected bills or improve your cash flow, it’s possible to pick up a decent rate.
From September 29 to October 4, the average fixed interest rate on a three-year personal loan was 13.43% for borrowers with a credit score of at least 720 who prequalified on Credible.com’s personal loan marketplace. That’s up 0.36 percentage point from the previous week, according to Credible.com. The average rate on a five-year personal loan rose last week from 18.57% to 19.20%.
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 October 4, 2025, and based on the three-year fixed rate.
Related: Best Personal Loans
Current Personal Loan Interest Rates for October 7, 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.
Get the Lowest Personal Loan Rates
We recommend using these steps to compare and get the best personal loan rates:
- Prequalify. Prequalifying can allow you to understand the rates you might be offered before officially applying. Although the loan terms shown aren’t guaranteed because prequalification is not an offer of credit, you can use these offers to compare lenders.
- Compare your offers. We recommend prequalifying with multiple lenders so you can compare offers side by side. Interest rates, loan amounts, repayment terms and potential fees will help you understand the cost of borrowing from each lender, but be sure to consider other attributes as well. Some lenders charge fees such as prepayment penalties, and others offer loan deferment if you have trouble making payments.
- Apply. After you choose your lender, submit an application. Have any required documentation ready to share, including bank statements, W-2s and employer information.
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 get personal loans through several institutions. Depending on the loan you’re looking to borrow and your qualifications, one lender might be better than another. As you look for a personal loan, consider:
- Credit unions: Best for those who meet a local credit union’s eligibility requirements or are existing members.
- Banks: Best for an in-person experience or if you want to keep all your banking under one institution.
- Online lenders: Best for an online experience and flexible qualification requirements.
Frequently Asked Questions (FAQs)
What is a good interest rate on a personal loan?
A good rate on a personal loan is less than the market average. As of October 4, 2025, the current average personal loan interest rate for a three- and five-year loan is 13.43% and 19.20%, respectively.
Is a 7% interest rate high for a personal loan?
Whether an interest rate is high depends on several factors, including current market conditions and your credit profile. Based on current average personal loan interest rates, a 7% interest rate would be considered competitive.
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