The average personal loan rate for a 24-month term now sits above 12% for borrowers with good credit, and closer to 20% — sometimes higher — for anyone with a score under 670.
Compare that to early 2022, when the same loan often priced in the single digits.
The Fed's rate hikes get the headlines, but this is where they quietly show up in your mailbox.
Personal loans were once the escape hatch from credit card debt.
The gap between a 29% credit card APR and a 17% personal loan is still real, but it's thin enough that fees and a longer repayment window can eat most of the savings.
Lenders also tightened who they'll approve.
Several big online lenders now require a minimum score near 700 for their best advertised rates, and the "rates as low as" banner on the homepage is doing a lot of heavy lifting.
Most approved borrowers pay two to five points above that teaser number.
Three things: credit score, debt-to-income ratio, and whether you let the lender pre-qualify you without a hard pull.
Pre-qualification uses a soft credit check, so it costs you nothing to compare five offers side by side.
Skipping that step is the single most expensive mistake borrowers make.
Some lenders charge 1% to 8% of the loan amount and simply subtract it from what you receive.
Borrow $10,000 with a 6% fee and you get $9,400 while repaying the full $10,000 plus interest.
That's not a rate problem — it's a math problem hiding inside one.
Credit unions are worth a phone call right now.
Many still price personal loans three to four points below the national average for members, and membership often just means opening a small savings account.
It's slower and less slick than an app, but the difference on a $15,000 loan can run past $1,000 over the term.
One more thing worth checking: whether a 0% balance transfer card beats a personal loan entirely.
If you can pay off the balance inside the promo window, you may pay nothing in interest.
If you can't, the post-promo rate can be worse than the loan you were about to take.
Get pre-qualified with at least three lenders, compare the APR including fees, not the advertised rate, and check whether a credit union or balance transfer option wins outright.
Ten minutes of comparison shopping is worth more than any negotiation you'll try later.
The reality is that cheap personal loans aren't coming back soon.
Rates follow the Fed down slowly and up quickly, and lenders have no incentive to compete on price when demand stays strong.
Final Thoughts
If you need to borrow, treat it like a grocery run — compare, clip, and walk away from the first offer.