What is the average interest rate for a personal loan in 2026?

As of early 2026, average personal loan interest rates (APRs) typically range from 6% to 36%, depending heavily on the borrower's credit score, debt-to-income ratio, and the loan term. Borrowers with excellent credit scores (740+) can expect rates on the lower end, often below 10-12%.

Can I get a personal loan with bad credit?

Yes, it is possible to get a personal loan with bad credit, but it will likely come with a much higher interest rate (closer to the 30-36% range) and potentially higher fees. You may also need a co-signer or be limited to secured personal loans or lenders specializing in bad credit, such as some online lenders.

How long does it take to get approved for a personal loan?

The approval time for a personal loan varies by lender. Online lenders often provide instant pre-qualification and can disburse funds within 1-3 business days after final approval. Traditional banks and credit unions may take longer, typically 3-7 business days, due to more extensive review processes.

What is the difference between a personal loan and a credit card?

A personal loan provides a lump sum of money that you repay in fixed monthly installments over a set term with a fixed interest rate. A credit card offers a revolving line of credit that you can use repeatedly, with variable minimum payments and typically higher, variable interest rates. Personal loans are better for large, one-time expenses or debt consolidation, while credit cards are suited for everyday spending and building credit.

Will a personal loan hurt my credit score?

Applying for a personal loan involves a hard credit inquiry, which can temporarily lower your score by a few points. However, if you manage the loan responsibly by making all payments on time, it can positively impact your credit score by demonstrating good payment history and diversifying your credit mix. Missed payments will significantly harm your score.

Can I use a personal loan for a down payment on a house?

While technically possible, using a personal loan for a down payment on a house is generally not recommended and often not allowed by mortgage lenders. Mortgage lenders prefer to see your down payment come from your own savings, as a personal loan adds to your debt-to-income ratio, making it harder to qualify for a mortgage.

Are there any fees associated with personal loans?

Yes, many personal loans come with fees. The most common is an origination fee, which is a percentage of the loan amount (typically 1-8%) deducted from the disbursed funds. Other potential fees include late payment fees, returned payment fees, and, less commonly, prepayment penalties if you pay off the loan early. Always check the loan agreement for all associated fees.

Personal Loans Explained: Smart Banking Choices | One…