Good news for borrowers. Last week, rates on personal loans inched down. So long as you’re a qualified borrower, you’ll likely pick up a fair interest rate. For many, this means financing a major purchase or project is within reach.

For borrowers with a credit score of at least 720 who prequalified on Credible.com’s personal loan marketplace, the average interest rate on a three-year personal loan was 13.85% from March 17 to March 22. According to Credible.com, that’s a 0.28 percentage-point drop from the previous week. The average rate on a five-year personal loan fell 0.77 percentage points last week, from 18.82% to 18.05%.

The rate you’ll actually receive depends on several factors, including your credit profile and the loans available through your chosen lender. Borrowers with the highest credit scores are more likely to receive rates significantly lower than average.

These rates are accurate as of March 22, 2025, and based on the three-year fixed rate.

Related: Best Personal Loans

Current Personal Loan Interest Rates for March 25, 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.

How To Get the Best Personal Loan Rates

Since each lender sets its own personal loan rates, use these three simple steps to compare personal loan interest rates:

  1. Prequalify. Prequalifying with multiple lenders lets you find and compare potential personal loan interest rates. You’ll see terms and amounts you may be eligible for without impacting your credit score. It’s not an offer of credit, however, and your loan isn’t guaranteed until you submit a formal application and sign your loan agreement, which will affect your score.
  2. Review your offers. After prequalification, review and compare your offers. In some cases, the lowest rates may be the cheapest loan option since origination and other fees can increase your cost of borrowing. Comparing all of the loan features can help you find the best option for your situation.
  3. Submit an application. After you’ve compared choices, collect all necessary documentation, including your bank statements, W-2s and photo identification. Submitting an application results in a hard credit inquiry, which temporarily dings your credit score.

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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 To 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)

Why is my APR so high with good credit?

While borrowers with strong credit typically get more favorable interest rates, lenders also rely on current market conditions to set interest rates. If you have good credit but your annual percentage rate (APR) is high, it may mean interest rates are generally high. That said, it can also mean your income isn’t high enough to qualify for lower rates or your debt-to-income ratio (DTI) is too high.

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.