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An unsecured personal loan can help you cover a large expense, pay for an emergency car or home repair or consolidate your debt. You can use funds from a personal loan for almost any purpose.
Each lender offers unique features and benefits, and some work better for certain borrowers and expenses than others. NerdWallet's personal loan guide will help you compare different lenders and find a loan that fits your budget and financial goals.
NerdWallet has rated and reviewed personal loans from more than 35 financial institutions. We collect over 50 data points from each lender and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender's pre-qualification flow and follow up with company representatives. We do not receive compensation for our ratings. Read more about our personal loan star ratings methodology and our editorial guidelines.
A personal loan is money you borrow from a bank, credit union or online lender. Loan amounts are from $1,000 to $100,000, and they’re typically repaid over a term of two to seven years. To qualify, lenders look at factors including your credit score, credit history and debt-to-income ratio.
» MORE: How to get a personal loan
You can use personal loan funds for nearly any reason. Ideally, getting one positively impacts your overall financial health by helping you pay off debt faster, for example, or adding to the value of your home. Here are some top ways consumers use personal loans:
Debt consolidation: Use a debt consolidation loan to roll your debts into one monthly payment, potentially reducing the interest you pay and helping you pay it off faster.
Home improvement: Need to repair your roof, add a home office or install a swimming pool? Use a personal loan to finance home improvements.
Large expenses: You can use a personal loan to buy a boat, RV or other items with large price tags.
Life events: It can be expensive to finance your wedding or a vacation with a personal loan, but having one lump sum of money can help you stick to a budget.
Emergencies: Because personal loans are funded quickly, they can help cover an urgent home or car repair. Compare a loan with other low- or no-interest options.
Medical bills: A personal loan can help pay for medical or dental procedures, covering costs associated with out-of-network charges, high deductibles or specialty care.
Online lenders offer a convenient way to find and compare personal loans. Some online lenders offer low rates to good- and excellent-credit borrowers, while others can approve borrowers with poor or limited credit.
Some national banks, including Wells Fargo, U.S. Bank and Discover, offer personal loans with competitive rates and in-person support. Banks may offer rate discounts if you’re already a customer, but they typically have tougher eligibility requirements than online lenders.
Credit union loans may carry lower rates than banks and online lenders, especially for those with fair or bad credit, and loan officers may be more willing to consider your total financial picture.
» MORE: Where to get a personal loan
Personal loan annual percentage rates typically range from about 6% to 36%.
Lenders assess primarily your financial and credit information to determine your rate, but may consider other factors like whether you own your home, your education level and your work history. Consumer advocates say 36% is the highest annual percentage rate a loan can have and still be considered affordable.
Borrowers with good to excellent credit scores (690 and higher) typically get the lowest interest rates and can borrow larger amounts. They also have the most options when shopping for a loan.
Those with fair to bad credit (scores below 690) may have to look a little harder and pay a higher rate for a personal loan. Having steady income, low debt, a long credit history and a record of on-time payments will improve your chances of approval.
Here’s what average personal loan APRs currently look like:
Borrower credit rating | Score range | Estimated APR |
Excellent | 720-850. | 11.11%. |
Good | 690-719. | 14.35%. |
Fair | 630-689. | 17.46%. |
Bad | 300-629. | 22.37%. |
Source: Average rates are based on aggregate, anonymized offer data from users who pre-qualified through NerdWallet from Oct. 1, 2024, through Oct. 31, 2024. Rates are estimates only and not specific to any lender. The lowest credit scores — usually below 500 — are unlikely to qualify. Information in this table applies only to lenders with maximum APRs below 36%.
Macroeconomic conditions guide personal loan lenders to determine their rates. For example, changes in the wider economy (like high inflation and Federal Funds rate increases) prompted lenders to tighten their underwriting standards in 2022 and 2023.
After keeping the Fed rate steady for more than a year, the committee that sets the rate lowered it half a point in September 2024 and another quarter point in November.
If you have a personal loan, a lower Fed rate won’t affect your monthly payments because personal loan rates are fixed for the full repayment term.
If you’re considering a personal loan, a lower Fed rate could mean a chance at a modestly better rate later in the year.
Regardless of economic changes, the biggest factors that determine your personal loan interest rate are your creditworthiness, income and outstanding debts.
NerdWallet tracks and compares current APRs from more than 35 lenders. Here are lenders with the lowest personal loan rates this month.
Lender | APR range | Loan amount | Min. credit score |
---|---|---|---|
8.99% - 29.99%. | $5,000 - $100,000. | None. | |
7.99% - 24.99%. | $2,500 - $40,000. | 660. | |
6.99% - 25.29%. | $5,000 - $100,000. | 660. | |
7.80% - 35.99%. | $1,000 - $50,000. | None. | |
8.19% - 24.99%. | $1,000 - $35,000. | None. | |
7.49% - 23.74%. | $3,000 - $100,000. | None. | |
8.99% - 29.99%. | $5,000 - $50,000. | 640. | |
7.99% - 35.99%. | $2,000 - $50,000. | 600. | |
7.99% - 35.99%. | $1,000 - $36,500. | 640. |
Though average personal loan rates aren’t as low as they were in 2021, borrowers can still get low personal loan rates in 2024. The key is to be able to show strong credit, solid income and keep your other debts low. You also don’t need to accept the first loan you’re offered. It might feel like lenders have the upper hand when you’re applying, but consumers can pre-qualify and rate shop with multiple lenders before they commit to one offer.
— Annie Millerbernd, Personal Loans Assistant Assigning Editor
Use this calculator to estimate monthly payments for a personal loan, based on the loan amount, rate and term. See how different rates and terms affect the monthly payment as well as the payoff date.