The average rate on a two-year personal loan slipped under 11% this month, the lowest reading since early 2023, according to the latest bank survey data.
For anyone staring down a $6,000 credit card balance at 24% APR, that gap is not a rounding error.
It is the difference between paying off debt in three years and being stuck in it for seven.
A $6,000 balance at 24% APR costs you roughly $120 a month in interest alone if you only make minimum payments.
Move that same balance to a personal loan at 11% and you are paying about $55 a month in interest.
That is $65 a month back in your pocket, or nearly $800 a year, for a five-minute application.
The catch is that 11% is an average, and averages lie.
Borrowers with credit scores above 760 are seeing offers in the 6% to 9% range at credit unions and online lenders.
If your score sits in the 640 to 680 zone, expect quotes closer to 18% or 20%.
At that point, a 0% balance transfer card with a 3% fee may beat a personal loan outright.
Where you shop matters as much as your score.
Banks tend to price personal loans highest because they build in overhead.
Credit unions, especially ones you already have a checking account with, frequently undercut them by two or three points.
Online lenders like SoFi, LightStream, and Discover sit in the middle and fund fast, often within a day.
Two mistakes burn people every time rates dip.
The first is applying to six lenders in one afternoon, which pings your credit and shaves points off your score right when it matters.
Use prequalification tools instead, which show your rate with a soft pull that does not affect your credit.
The second is borrowing more than the debt you are actually trying to kill, then spending the difference.
Read the fine print before you sign anything.
Look for origination fees, which typically run 1% to 8% of the loan amount and get deducted before the money hits your account.
Check whether the rate is fixed or variable, and confirm there is no prepayment penalty, because you want the option to pay it off early without being charged for it.
The rate environment will not stay like this forever.
The Federal Reserve has signaled it is in no hurry to cut further, and personal loan rates track broader borrowing costs closely.
If you have been sitting on high-interest debt waiting for a better moment, this is about as good as the moment is likely to get this year.
My take: if you are carrying credit card debt above 15% APR and your credit score is decent, run the prequalification numbers today.
The savings are real, the process takes minutes, and the worst outcome is that you learn your actual rate and walk away.
Final Thoughts
Just do not let a lower payment trick you into a longer term than you need.