This Week’s Average Personal Loan Rates: January 5, 2023

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The average overall personal loan rate this week is 21.03{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, an increase of nearly 1 percentage point from last week. 

The average low rate is 10.07{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, about the same as last week. Personal loan interest rates have been going up over the past twelve months 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 many reasons. Borrowers often 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.

Insider’s Featured Personal Loan Companies

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APR

5.99{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to 23.99{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} with AutoPay (Rates as of 01/03/2023. Rates vary by loan purpose.)

Fees

4.5/5

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Fees

4.25/5

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APR

7.99{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} – 23.43{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} (with all discounts)

Fees

4.25/5

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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 from American Express, which has a minimum APR of 5.91{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. The highest rate is from NetCredit Personal Loans, which has a maximum APR of 155{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.

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 108 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 108 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 educational expenses this week. 

Frequently asked questions

Many lenders don’t tell you 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).

A payday loan is aimed at bridging the gap between paydays, so term lengths are much shorter than personal loans.  They also come with incredibly high APRs — the average interest rate on a payday loan is roughly 400{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} — so if you happen to miss a payment, the high interest rate could trap you in a cycle of debt quickly.

Payday loans also have lower minimums, which generally start around $50. This is much lower than the smallest amount you can borrow with a personal loan, which is $1,000 on our list of top picks.

Payday loans usually have more lax requirements than personal loans. Many payday lenders don’t run a credit check or even ensure you have the ability to repay the loan. Payday loans are also banned in many states due to predatory lending practices, whereas personal loans are generally accessible across the US. 

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. 

Christopher Lewis

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