Personal loan interest rates are typically fixed, but federal rate changes and inflation can indirectly impact rates for new borrowers. Understanding how inflation and federal rate changes affect loans is crucial as the average personal loan interest rate is 12.19%. Credit score, loan amount, and lender influence rates, with online lenders offering rates ranging from 6.24% to 35.99%.

The Federal Reserve has dropped the federal funds rate three times in 2025, with the current rate ranging from 3.5% to 3.75%. U.S. inflation sits at 3% month over month. Different lenders offer varying interest rates, with credit unions typically offering lower rates compared to banks. Average personal loan debt per borrower in the U.S. is $11,724.

Understanding how interest rates impact monthly payments and total interest paid is crucial when taking out a personal loan. Factors like loan amount, term, and interest rate affect monthly payments and total interest paid over the life of the loan. Getting the lowest interest rate possible can save borrowers thousands of dollars in the long run.

Read more at Yahoo Finance: Current personal loan statistics in 2026