Personal loan rates have been drifting in a direction that's easy to miss if you're not actively shopping.
According to weekly data from Bankrate, the average two-year personal loan sits close to 12 percent, while three-year loans hover just above it.
That's a far cry from the 8 percent range borrowers enjoyed a few years ago, and it changes the math on everything from debt consolidation to an unexpected vet bill.
Unlike mortgage rates, which track the 10-year Treasury and move almost daily, personal loan rates are tied more closely to what the Federal Reserve does with its benchmark rate.
And while the Fed has been cutting, banks have been slow to pass those cuts along to consumer borrowers.
Lenders price in risk, and when unemployment ticks up or credit card delinquencies rise, they get cautious.
Translation: you may wait a while for relief that mortgage shoppers are already seeing.
Borrowers with credit scores above 760 are still seeing offers in the 6 to 9 percent range from credit unions and online lenders.
Drop below 670, and advertised rates can jump into the high teens or low twenties.
Below 600, and you're looking at 25 percent or more, if you get approved at all.
The gap between the best and worst offers has widened, which means shopping around matters more than it did three years ago.
The temptation right now is to consolidate credit card debt.
The average card APR is still north of 20 percent, so swapping that for a 12 percent personal loan sounds like a no-brainer.
Many lenders charge an origination fee of 1 to 8 percent, which gets subtracted from what you actually receive.
A 12 percent loan with a 6 percent origination fee can effectively cost more than the advertised rate suggests, especially if you stretch the term out to five or seven years.
Stretching a $10,000 balance from three years to five years can shave $80 or more off your monthly payment, but it can also add well over $1,000 in total interest.
If the goal is getting out of debt, the shorter term usually wins.
If the goal is surviving a tight month, the longer term can help, but go in knowing what it costs.
A few practical moves if you're shopping this month.
Check rates at a local credit union before you check the big online lenders, since credit unions often have lower overhead and friendlier pricing for members.
Get at least three quotes within a two-week window so the credit pulls count as one inquiry.
And read the fine print on prepayment penalties, because you want the option to pay it off early without a fee.
Also worth knowing: some lenders now advertise "rates as low as" numbers that almost nobody actually gets.
That 5.99 percent banner usually requires excellent credit, a large loan amount, autopay enrollment, and sometimes a pre-existing banking relationship.
Assume the real offer will be higher than the headline, and budget accordingly.
If you're considering a personal loan to pay off credit cards, do the honest math first.
Add up the monthly payments you'd free up, compare them to the new loan payment, and see whether you'd actually come out ahead after fees.
If the numbers are close, the loan may not be worth the hassle.
Personal loan rates aren't catastrophic, but they're no longer the bargain they were in 2021, and lenders are pricing in more caution than the headlines suggest.
Final Thoughts
Shop like it's a job, because the difference between the first offer and the best offer can easily be thousands of dollars over the life of the loan.