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

The average interest rate for a personal loan in 2026 can vary significantly based on credit score, lender, and loan term. For borrowers with excellent credit (720+), rates might range from 7% to 12% APR. For those with fair credit (600-669), rates can be much higher, potentially ranging from 20% to 36% APR.

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 higher interest rates and potentially stricter terms. Lenders specializing in bad credit loans or secured personal loans (where you provide collateral) might be options. Be prepared for APRs at the higher end of the spectrum, possibly up to 36%.

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 offer instant pre-qualification and can provide final approval and fund disbursement within 1-3 business days. Traditional banks and credit unions may take longer, typically 3-7 business days, due to more extensive review processes.

What documents do I need to apply for a personal loan?

To apply for a personal loan, you typically need proof of identity (driver's license, passport), proof of address (utility bill), proof of income (pay stubs, W-2s, tax returns), and bank statements. Some lenders may also request your Social Security number for a credit check.

Will applying for a personal loan hurt my credit score?

Applying for a personal loan involves a hard credit inquiry (also known as a hard pull), which can temporarily lower your credit score by a few points. However, if you're just pre-qualifying, lenders typically perform a soft credit inquiry, which does not affect your credit score.

Can I use a personal loan for debt consolidation?

Yes, debt consolidation is one of the most common and effective uses for personal loans. You can take out a single personal loan to pay off multiple high-interest debts, such as credit cards, simplifying your payments and potentially lowering your overall interest costs.

Are there any fees associated with personal loans?

Some personal loans come with fees. The most common is an origination fee, which is a one-time charge deducted from the loan proceeds, typically ranging from 1% to 8% of the loan amount. Other potential fees include late payment fees or, less commonly, prepayment penalties. Always review the loan agreement carefully for all associated fees.

Personal Loans Guide 2026: Smart Borrowing | One Percent…