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Personal loans are one of the fastest growing types of debt, and with good reason. These loans tend to have reasonable interest rates, especially for well-qualified borrowers. They are also a flexible type of financing — personal loans are available from banks, credit unions, and online lenders and the money can be used for almost any purpose.
While interest rates for the best personal loans tend to be well below the rates offered by credit cards, these rates can vary depending on a borrower's credit history and financial profile. It's helpful for those shopping for loans to have an idea of the typical personal loan interest rates being charged in 2026 to better determine if a loan offer is a good deal.
This guide will help you understand more about the personal loan market, how to get a loan, and the rates you could expect to pay if you borrow.
Key facts about personal loans
First, let's take a look at some basics about the personal loan marketplace. Here's where things stand:
- The total outstanding personal loan balance in the United States is roughly $257 billion
- 24.8 million Americans have outstanding personal loans
- The average loan is $11,676
- The average interest rate on a two-year-long personal loan was 11.14%
- Defaulting on personal loans is relatively rare, as just 3.37% of personal loan borrowers were 60 days behind or more on payments
- One popular reason for getting a personal loan is to cover large purchases or consolidate debt
Sources: TransUnion, The Federal Reserve
Average personal loan interest rates in 2026
Personal loan rates vary widely, with rates commonly falling between 6% and 36% for borrowers with fair to good credit.
One factor that affects the rate you can expect to pay is the lender you choose. For example, the national average interest rate for an unsecured fixed rate 36-month personal loan in late 2025 was 10.72% from all credit unions and 12.06% from all banks.
But while lender choice can impact your rate, credit score is the biggest driving force that determines what you'll pay for a loan, as the table below shows. The lower your credit score, the higher your APR is likely to be.
| Credit Score Range | Average Loan APR |
| 560 or less | 31.24% |
| 560-579 | 33.39% |
| 580-619 | 31.96% |
| 620-639 | 30.57% |
| 640-659 | 29.19% |
| 660-679 | 27.30% |
| 680-719 | 23.27% |
| 720 or higher | 15.46% |
Loan term can impact rates as well, with shorter-term loans generally having lower rates than loans with longer repayment timelines.
Sources: NCUA, LendingTree
Personal loan trends
While personal loans used to be less common and often considered only by borrowers desperate to repay debt, the marketplace of personal loan lenders has grown rapidly as more Americans have decided to take advantage of this affordable type of financing.
Americans of all ages now take out personal loans, but in recent years, the average personal loan balance among millennials has grown quickly. Despite this, they haven't yet caught up to the amount of debt Baby Boomers have taken on, as the table below shows.
| Generation | Average Personal Loan Balance |
| Baby Boomers | $21,972 |
| Generation X | $21,910 |
| Millennials | $16,882 |
| Gen-Z | $9,466 |
Fintech companies have helped to drive the increase in personal loan borrowing, especially among younger borrowers, as these online-only lenders offer quick approval, fast access to cash, and affordable loans. Qualifying for loans with online lenders can also be easier than obtaining financing from traditional banks or credit unions, so the market has opened up to more would-be borrowers.
Fortunately, even as the number of consumers taking out personal loans has rapidly increased, default rates have remained very low.
Rates have also been relatively consistent in recent years, so it's unlikely that there will be substantial change in rates in 2026. Here's a snapshot of the average rates for a 24-month personal loan over the last 5 years:
- 11.14% in the 3rd quarter of 2025
- 12.27% in 2024
- 11.87% in 2023
- 9.87% in 2022
- 9.38% in 2021
Sources: Experian, The Federal Reserve
What affects your personal loan interest rates?
When you're applying for a personal loan, you won't necessarily get a loan at the average rate. Your loan's rate will depend upon how well-qualified of a borrower lenders think you are. A number of different factors will go into determining your rate, including:
- Which lender you borrow from
- The amount you borrow and the length of your loan term
- Your income
- Your credit score
- The amount of outstanding debt you have
- Your debt payments relative to your income (debt-to-income ratio)
If you have ample income, good credit, and you're borrowing a reasonable sum, you can expect to get a loan at a competitive rate.
Those with lower credit scores, less income, and more existing debt will likely be offered loans only at higher rates. Applying with a cosigner, however, could help these borrowers to qualify for a more competitive loan.
FAQs
What is a good interest rate on a personal loan?
A good interest rate will differ for a borrower with good credit versus a borrower with poor credit. In general, however, any personal loan rate below the averages listed above would be considered a fairly good one.
What bank has the best personal loan rates?
The best personal loan rate for each individual borrower will vary depending on many factors, including outstanding debt, credit score, and prior relationships with financial institutions.
To find the best interest rates, consumers should shop around and obtain quotes from at least three lenders. It is important that borrowers compare not just rates but also fees, whether the interest rate is fixed or variable, and repayment timelines when choosing the most affordable loan for their situation.
What's the best place to get a personal loan?
Personal loans can be obtained from major banks, community banks, credit unions, online lenders, and peer-to-peer lenders.
There are pros and cons to each option, and the best source of financing will vary by buyer. This guide to the best places to get a personal loan can help you to explore different options for obtaining the funding you need.
Where can I get a personal loan with low interest?
It is possible for well-qualified borrowers to get a low interest personal loan from many different sources. However, borrowers with a lower credit score may have fewer options for financing and may not qualify for loans with lenders offering the most competitive rates.
Any borrower should shop around both online and with local lenders to compare rates and see which financing provider offers the lowest cost loan for someone with their particular financial history.
The bottom line: Personal loans are likely to become more popular
Personal loans is a growing category of debt in the United States and that trend is likely to continue.
In fact, personal loans could become even more widely available since the Federal Reserve Consumer Financial Protection Bureau, and several other financial agencies previously issued a joint statement encouraging lenders to consider alternative data — besides just credit scores — in making decisions on loan approval.
But while personal loans are a common and often affordable source of financing, borrowers should always do their due diligence and ensure they compare offers to find a loan with terms that are favorable for their situation. And, as always, borrowers should avoid taking on more debt than is necessary and should borrow for essential expenses only in order to keep interest costs down.
