This Week’s Personal Loan Rates: June 24, 2025—Rates Drop
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Rates on personal loans dropped last week. This means if you’re in the market for a personal loan, whether to finance a project or major purchase, you can grab a worthwhile interest rate, so long as you’re a qualified borrower.
For borrowers with a credit score of at least 720 who prequalified on Credible.com’s personal loan marketplace, the average interest rate on a three-year personal loan was 13.38% from June 16 to June 21. According to Credible.com, that’s a 0.21 percentage-point drop from the previous week. The average rate on a five-year personal loan rose 0.30 percentage points last week, from 18.88% to 19.18%.
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 several factors, including your credit profile and the loans available through your chosen lender.
These rates are accurate as of June 21, 2025, and based on the three-year fixed rate.
Related: Best Personal Loans
Current Personal Loan Interest Rates for June 24, 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.
Personal Loan Rates by Credit Score
Your credit score plays a major role in the interest rate a lender offers for a personal loan. Lenders use your credit profile and other factors to evaluate your risk as a borrower. In general, the higher your credit score, the lower the interest rate you’ll receive.
The table below compares average personal loan interest rates by credit score, showing how much your score can affect your rate and how much you could save over time.
How To Get the Best 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 Can You 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)
How do you calculate personal loan payments?
Once you have your interest rate, loan term and amount borrowed, you can calculate your loan payments. A personal loan calculator can help with this.
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.