Personal Loan Interest Rates - Latest Interest Rate in 2024 (2024)

FAQs

Personal Loan Interest Rates - Latest Interest Rate in 2024? ›

According to the most recent Federal Reserve projections (made in December 2023), the median expectation is for three quarter-percentage-point cuts to the federal funds rate in 2024.

According to the most recent Federal Reserve projections (made in December 2023), the median expectation is for three quarter-percentage-point cuts to the federal funds rate in 2024.

The current average personal loan interest rate is 12.22%.

You might get a better deal in 2024

While interest rates are up right now, things could start to change in 2024 if the Fed decides to cut rates. So next year might be a better time to put a personal loan in place. Let's say you're looking to borrow $10,000 and pay it back over a five-year period.

If you're already struggling to afford your existing monthly payments, now is not the time to take on additional debt. While it's tempting to use a personal loan to help pay off high-interest debt such as credit cards, it still comes with the risk that your monthly payments will remain unaffordable.

A good personal loan interest rate depends on your credit score: 740 and above: Below 8% (look for loans for excellent credit) 670 to 739: Around 14% (look for loans for good credit) 580 to 669: Around 18% (look for loans for fair credit)

There are no sources for officially projected interest rates in five years, but the Mortgage Bankers Association does predict rates on 30-year mortgages will drop to 5.9% by the end of 2025. Fannie Mae predicts a 6.6% rate.

The median projection for the benchmark federal funds rate is 5.1% by the end of 2024, implying just over one quarter-point cut. Through 2025, the FOMC now expects five total cuts, down from six in March, which would leave the federal funds rate at 4.1% by the end of next year.

Right now, the Fed interest rate is 5.25% to 5.50%. The FOMC established that rate in late July 2023. At its most recent meeting in June, the committee decided to leave the rate unchanged. June 11-12, 2024.

What is a good APR rate for a personal loan? ›

Your credit score has a huge impact on the interest rate you get on your personal loan so focus on improving it. Pay your bills on time, pay off short term or pay day loans and make sure you are paying any loan repayments on time. We've got an article called “How to improve your credit score” if you need more help.

On June 12, 2024, the FOMC decided to hold steady on interest rates. The benchmark rate remains at 5.25-5.5 percent. Most personal loans have fixed rates, so current borrowers do not need to worry about their interest rates changing.

As inflation shows signs of slowing, borrowers may see lower personal loan rates in 2024. Any Fed cuts will likely have a direct effect on personal loan rates. “Personal loans are pegged to short term interest rates like the prime rate that moves in concert with Fed interest rate cuts,” McBride explains.

Mortgage rates are expected to go down in the second half 2024. Depending on which forecast you look at for housing market predictions in 2024, 30-year mortgage rates could end up between 6.5% and 7% by the end of the year.

There are no sources for officially projected interest rates in five years, but the Mortgage Bankers Association does predict rates on 30-year mortgages will drop to 5.9% by the end of 2025. Fannie Mae predicts a 6.6% rate.

Personal loans are typically unsecured, which means there's no collateral to back the loan. Your credit score plays a significant role in determining your personal loan interest rate, and a poor credit score can result in a higher interest rate.