What is a Personal Loan?
By Peter Schaaf · Feb 19, 2025
A personal loan is a type of loan typically used for personal expenses such as vacations, school fees, or home improvements.
With Blue Sky Loans, you can get cash when you need it, often faster than a home equity line of credit.
What are current personal loan interest rates?
Personal loan interest rates will vary depending on the lender, but they are usually lower than credit card rates.
When shopping for a personal loan, it's crucial to compare offers from multiple lenders.
Average Personal Loan Interest Rates by Credit Rating
| Credit Band | Credit Score Range | Average Interest Rate |
|---|---|---|
| Excellent Credit | 720–850 | 10.3%–12.5% |
| Good Credit | 690–719 | 13.5%–15.5% |
| Average Credit | 630–689 | 17.8%–19.9% |
| Bad Credit | 300–629 | 28.5%–32.0% |
Pros and Cons of Personal Loans
Pros
- Lower interest rates than credit cards
- No collateral required
- Can be used for various purposes
Cons
- High cost if not paid on time
- Risk of falling into debt
What are the Different Types of Personal Loans?
Personal loans come in different forms, including debt consolidation and emergency expenses loans. Make sure to shop around for the best interest rate and terms.