Your APR will be based on your credit score, income and other financial factors.
The annual percentage rate, or APR, is one of the most important factors when applying for a personal loan -- or any credit. It determines the overall cost you'll pay to borrow money. The APR combines the personal loan interest rate and any set fees, like origination fees, your lender charges.
APR varies widely depending on the lender you choose and your loan amount, credit score and income, among other factors.
To calculate the APR, lenders take the interest rate for a personal loan and add in the finance charges, which include origination fees and any other administrative fees.
Many lenders list their APR online. If you want to crunch the numbers yourself, you can do so by dividing the interest rate plus total fees by the principal amount. Divide that result by the total number of days in your loan term. Then, multiply by 365 (which represents the number of days in one year) and again by 100 to arrive at a percentage.
While APR and interest rate are sometimes used interchangeably, the interest rate is the amount you are charged when you borrow. Interest rates are expressed as percentages and can be simple or amortized. Interest is charged on top of the principal balance -- the amount you borrowed.
The APR, on the other hand, is a combination of the interest rate and fees. These can include administrative fees, origination fees or application fees. This is why the APR is often higher than the interest rate.
If a lender doesn't charge any additional fees, the APR will be the same as the interest rate. No-fee loans are less common -- you're more likely to qualify for them with an excellent credit score.
APRs can vary based on a variety of factors, including your loan amount, loan term, credit score, annual income and debt-to-income (DTI) ratio. APRs for personal loans can range from around 8 percent to 36 percent. According to a Bankrate study, the average APR for a personal loan is 12.48 percent as of Jan. 15, 2025.
A good personal loan APR is typically below the national average. But to qualify for it, you'll likely need a credit score above 670 and a stable source of income -- or a creditworthy co-signer that meets these requirements.