March 11, 2025—Rates Slip – Forbes Advisor
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Last week, rates on personal loans moved lower. So long as you’re a qualified borrower, you’ll likely pick up a decent interest rate. For many, this means financing a major purchase or project is within reach.
From March 3 to March 8, the average fixed interest rate on a three-year personal loan was 14.02% for borrowers with a credit score of at least 720 who prequalified on Credible.com’s personal loan marketplace. That’s down 0.81 percentage points from the previous week, according to Credible.com. The average rate on five-year personal loans fell last week from 19.89% to 18.79%.
The most qualified borrowers generally receive the best rates. In fact, well-qualified borrowers may receive a significantly lower rate than average. The rate you receive depends on various factors, including your credit profile and the loans available through your chosen lender.
These rates are accurate as of March 8, 2025, and based on the three-year fixed rate.
Related: Best Personal Loans
Current Personal Loan Interest Rates for March 11, 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 Lowest Personal Loan Rates
We recommend using these steps to compare and get the best personal loan rates:
- Prequalify. Prequalifying can allow you to understand the rates you might be offered before officially applying. Although the loan terms shown aren’t guaranteed because prequalification is not an offer of credit, you can use these offers to compare lenders.
- Compare your offers. We recommend prequalifying with multiple lenders so you can compare offers side by side. Interest rates, loan amounts, repayment terms and potential fees will help you understand the cost of borrowing from each lender, but be sure to consider other attributes as well. Some lenders charge fees such as prepayment penalties and others offer loan deferment if you have trouble making payments.
- Apply. After you choose your lender, submit an application. Have any required documentation ready to share, including bank statements, W-2s and employer information.
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:
- 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.
- 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.
- 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.
- 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
Personal loans are available through a variety of institutions, which should help you find a lender that meets your needs. Your credit profile and financing needs typically determine the best lender for you. You can get personal loans from:
- Banks: Best for in-person banking or if you have an existing banking relationship.
- Credit unions: Best for existing credit union members or those who meet a local credit union’s eligibility requirements.
- Online lenders: Best for an online-only experience with flexible requirements.
Frequently Asked Questions (FAQs)
What is a good interest rate on a personal loan?
A good rate on a personal loan is less than the market average. As of March 8, 2025, the current average personal loan interest rate for a three- and five-year loan is 14.02% and 18.79%, respectively.
Why is interest on personal loans so high?
High personal loan interest rates are a result of current market conditions and/or low credit scores. Lenders set their interest rates based on the economy and your credit profile. If you want to get the lowest rates possible, work on improving your credit score and debt-to-income (DTI) ratio before applying.
