Bottom line: Below 12% is a good rate for a personal loan regardless of credit score. Under 10% is excellent. Above 20% is high enough that you should compare alternatives. At 30%+, a personal loan is expensive debt and alternative borrowing options should be exhausted first.
"Good" is relative in personal loan pricing because the rate you qualify for depends almost entirely on your credit score and income. A 15% rate is excellent for someone with fair credit and poor for someone with excellent credit. The meaningful benchmark is how your rate compares to what you should qualify for at your credit tier.
Current Personal Loan Rate Benchmarks by Credit Score (2026)
| Credit score range | Tier | Average APR range | What to aim for |
|---|---|---|---|
| 780–850 | Excellent | 7–10% | Under 9% |
| 720–779 | Very good | 9–13% | Under 11% |
| 680–719 | Good | 12–17% | Under 14% |
| 640–679 | Fair | 16–22% | Under 19% |
| 600–639 | Near subprime | 22–28% | Under 25% |
| Below 600 | Subprime | 28–36% | Below 30% if possible |
These are averages from online lenders. Credit unions often offer rates 2–4% below these benchmarks for their members. Rates also vary by loan amount and term — shorter terms and smaller amounts sometimes get better pricing.
Why Rate Varies This Much
Personal loans are unsecured — no collateral backs them. The lender's only protection is your creditworthiness. Higher credit scores indicate lower default risk, which lenders price into the rate. The 30-point spread between 600 and 850 represents an enormous difference in statistical default probability, hence the large rate difference.
The federal funds rate also influences personal loan rates — they tend to move directionally with Fed policy, though with a lag and not in a fixed ratio.
What to Compare Beyond Rate
APR vs. interest rate: APR (Annual Percentage Rate) includes the interest rate plus origination fees, expressed as a single annual cost. Always compare APR, not just the stated interest rate. A 10% interest rate with a 5% origination fee on a 3-year loan has an APR significantly above 10%.
Total interest paid: On a $15,000 loan over 48 months, the difference between 10% and 18% APR is approximately $2,900 in total interest. Calculate the actual dollars, not just the percentage.
Origination fees: Charged by many lenders at 1–8% of the loan amount, deducted from your proceeds or added to your balance. A $10,000 loan with a 6% origination fee either funds $9,400 or creates a $10,600 balance. LightStream charges no origination fees; Upgrade charges 1.85–9.99%.
- If your rate offer is above 20% and you own a home, a home equity loan or HELOC will almost certainly be cheaper — rates are typically 7–10% because the loan is secured by your property. The trade-off is using your home as collateral; only appropriate for borrowers confident in repayment.
- Prequalify with multiple lenders using soft pulls before committing. SoFi, LightStream, Upgrade, Upstart, and your local credit union may offer materially different rates for the same borrower. The best rate in your inbox after 20 minutes of prequalification is always better than the first rate you see.
- A co-borrower with stronger credit can lower your rate significantly. Unlike a co-signer (guarantor), a co-borrower appears on the loan equally and both credit profiles are evaluated. Both parties are equally responsible for repayment.
When to Accept a Higher Rate vs. Wait
Sometimes you need the money and the rate is what it is. In those cases, the comparison is not "is this rate good?" but "is borrowing at this rate better than the alternative?"
A personal loan at 22% to pay off credit cards at 27% saves money. A personal loan at 28% to fund a vacation loses money over time. The rate is only one input into the decision about whether to borrow at all.
If your rate is high because of credit score:
- Consider waiting 6–12 months and improving credit before borrowing non-urgently
- Target credit score above 680 — the improvement in rate tier at that threshold is often 5–8 percentage points
- A secured personal loan (backed by savings) may offer a lower rate than unsecured alternatives in the subprime range
Personal loan rates change with Federal Reserve policy and lender competition. Compare current offers at the time of application.
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