What is the Average Interest Rate on Personal Loans?

If you’re considering taking out a personal loan, you’re probably wondering what the average interest rate is. The answer depends on a number of factors, including your credit score, income, and the type of loan you’re looking for. In this blog post, we’ll break down everything you need to know about personal loan interest rates.

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Introduction

The average interest rate on personal loans can vary depending on a number of factors, including the amount of money you borrow, your credit score, and the length of the loan. However, the average interest rate on a personal loan is usually between 10% and 30%.

What is the average interest rate on personal loans?

The average interest rate on personal loans can vary depending on a number of factors, but the current national average is 10.22%. Personal loan interest rates are typically higher than other types of loans, such as home equity loans or auto loans, because they are unsecured loans, which means they are not backed by collateral.

Factors that affect personal loan interest rates

There are a few different factors that can affect the interest rate you’re offered on a personal loan, including your credit score, income, employment history, and the lenders you apply to.

Your credit score is one of the most important factors in determining your interest rate. If you have a high credit score, you’re more likely to be offered a lower interest rate. Your income and employment history can also affect your interest rate. Lenders want to see that you have a steady source of income and a good employment history.

The type of lender you borrow from can also affect your interest rate. Traditional banks and credit unions tend to offer lower interest rates than online lenders. But it’s important to compare rates from multiple lenders before you choose one.

If you have a good credit score, steady income, and are employed, you’re likely to be offered a lower interest rate on your personal loan.

How to get the best interest rate on a personal loan

When you’re looking to take out a personal loan, one of the main things you’ll want to consider is the interest rate. This is because the interest rate will have a big impact on how much your loan will cost you in the long run.

The good news is that there are plenty of things you can do to get the best interest rate on a personal loan. Here are a few tips:

-Shop around: Don’t just go with the first lender you come across. Instead, compare rates from a few different lenders to see who can offer you the best deal.

-Check your credit score: Your credit score is one of the main factors that lenders will look at when considering you for a loan. The better your credit score, the more likely you are to be approved for a loan and to get a lower interest rate.

-Apply for a secured loan: If you have collateral (such as a car or home), you may be able to get a lower interest rate by applying for a secured loan.

-Consider a shorter loan term: The shorter your loan term, the less interest you will pay over time. So, if you can afford it, opt for a shorter loan term in order to save money on interest.

Conclusion

Different lenders offer personal loans at different interest rates, so there is no one “average” interest rate on personal loans. However, the average interest rate on a personal loan in the United States was 10.37% as of 2019. That means that, on average, borrowers can expect to pay just over 10% interest on their personal loans.