If your interest is around those averages or lower, it's probably a good rate. The average APR for personal loans is 9.34%, according to the most recent Fed data. The average APR for credit cards is almost double, at 16.43%. In some cases, it may be wiser to apply for a personal loan rather than building up a large credit card balance, but not always.
And while it sounds great to be debt-free, the reality is that most of us are paying off some type of debt. But how do you know if you're getting the best rate? However, this doesn't mean you should resort to payday loans, which can carry APRs greater than 100%. These loans make it very easy to fall into an endless cycle of debt. Instead, consider applying for a loan or financial aid from a local credit union or a non-profit financial aid organization.
With a higher interest rate, you may end up paying more interest over the life of the loan. There is no firm definition of what is considered a high interest rate. However, some experts define it as any rate greater than 6 to 8 percent. If they only offer you personal loans at very high rates, above the national average rates, you should consider why.
