Three-year loans

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Short-term loans tend to offer lower interest rates, since lenders don’t have to bear the risk of you defaulting for very long.

If you can manage the bigger monthly payments, they’re a smart choice for borrowing money or replacing high-interest debt, like the kind on credit cards.

This past week, three-year fixed-rate personal loans averaged 11.14%, down from 11.97% the week before, the most recent survey reports.

That’s not far off the record low of 10.45%, made in August 2020.

It’s important to note that these figures are just an average, specifically for borrowers with a credit score of at least 720. Better rates are available for people with excellent credit.

Borrowers with scores above 780 are averaging rates closer to 8.92%. On the other hand, people with poor scores under 600 are averaging rates above 32%.

Five-year loans

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Longer-term loans typically have higher rates and cost more in interest over time, but the individual monthly payments can be far more manageable.

That can help if high-interest debt has already drained your bank balance.

This past week, five-year loans averaged 14.88%, down from 15.30% the week before.

That’s not as close to the record low — 12.63%, made back in May 2021 — but it’s much better than the rates borrowers were getting just weeks ago. Average rates on five-year loans spiked to 16.51% at the end of August.

Again, those with excellent credit qualify for significantly better rates, averaging about 10.91%. Those with low scores could suffer rates as high as 29% or worse.

How to get the best personal loan rates

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Whether you’re looking to use a personal loan to pay for a wedding, finance a car, renovate your home or reduce the cost of your debt, a lower rate can make a substantial difference.

Here are three simple steps to ensure you get the best rate possible:

  • Boost your credit score. Lenders look at your credit score to determine how responsible you are with money. Take a free look at your score online and consider taking steps to improve it. A free credit monitoring service can offer you some tips, including ways to eliminate your debt faster.

  • Take advantage of discounts. Some lenders will take a small percentage off your interest rate if you agree to sign-up for autopay. Keep an eye out for any other deals or short-term promotions.

  • Compare your options. The only way to know you’re getting the best deal is to shop around. Different lenders will weigh the factors in your application differently, so make sure to always get multiple quotes before clicking apply.

About the Author

Chris Murray

Chris Murray

Freelance Contributor

Chris Murray is a freelance contributor with

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