Typical rates by loan type, fall 2026
| Loan | Benchmark | What drives your rate |
|---|---|---|
| 30-year fixed mortgage | 7.28% (Freddie Mac, Oct. 1, 2026) | Credit score, down payment, points, loan type |
| New-car loan | 6.35% average; 4.41% super prime to 16.11% deep subprime | Credit tier, term, dealer markup |
| Used-car loan | 11.19% average | Credit tier, vehicle age, term |
| Personal loan (24-month, banks) | 11.86% (Q2 2026) | Credit, income, debt-to-income; online lenders range to about 36% |
| Federal undergraduate student loan | 6.52% fixed (2026–27) | Set by law; same for every borrower |
| Credit card (for comparison) | 22.15% on accounts charged interest | Credit, card type |
Source: Freddie Mac PMMS; Experian State of the Automotive Finance Market Q2 2026; Federal Reserve G.19 (Sept. 8, 2026); Federal Student Aid.
How borrowing costs work
The interest rate is what the lender charges to lend you money. The APR, as the CFPB explains, is the interest rate plus origination charges and other fees charged when the loan is made. Two loans with the same rate can have very different APRs. Some personal loan lenders charge origination fees of up to 9.99%, and they usually take the fee out of the money you receive.
Term matters as much as rate. A longer term lowers the monthly payment but raises total interest. The CFPB warns that a lower payment from a longer term can cost more overall. On a $400,000 30-year mortgage, rates half a point apart (7.28% vs. 6.78%) differ by about $134 a month, or roughly $48,400 over the life of the loan.
Choosing the right kind of loan
- Buying a home: Conventional loans go up to $832,750 in most areas in 2026 ($1,249,125 in high-cost areas). FHA loans allow 3.5% down with a 580 score but add mortgage insurance. Eligible service members and veterans can use VA loans with no down payment and no monthly mortgage insurance, though most pay a one-time funding fee.
- Buying a car: The CFPB says dealer financing is generally more expensive because dealers can add a markup to the lender's rate. Get preapproved by a bank or credit union first, then let the dealer try to beat it. In early 2026, 30.9% of new-car trade-ins carried negative equity, averaging $7,183, that often gets rolled into the next loan.
- Paying for school: Use federal student loans first; they have fixed rates and federal repayment options. Since July 1, 2026, new graduate borrowers can no longer use Grad PLUS loans and face annual caps ($20,500, or $50,000 for professional programs), so more students will need private student loans to fill the gap.
- Consolidating debt: A personal loan at a lower APR can replace credit card balances. It only helps if you stop adding new balances. See our debt consolidation guide.
- Running a business: SBA-backed loans include 7(a) loans up to $5 million, 504 loans up to $5.5 million for real estate and equipment, and microloans up to $50,000.
- Tapping home equity at 62+: A HECM reverse mortgage requires counseling with a HUD-approved counselor first. Costs include a 2% upfront mortgage insurance premium and origination fees capped at $6,000.
Common mistakes
- Getting only one quote. For mortgages, the CFPB suggests requesting Loan Estimates from at least three lenders. With FICO, multiple mortgage, auto or student loan inquiries within 14 days count as one for scoring purposes (45 days in newer FICO versions).
- Shopping by monthly payment. Stretching a car loan to 84 months makes the payment look affordable but increases interest and the chance you will owe more than the car is worth.
- Ignoring fees. Origination fees, points and closing costs belong in your comparison.
- Using your home as collateral for unsecured debt. The CFPB notes that if you do not repay a home equity loan, you could lose your home to foreclosure.
- Missing a tax break. For 2025 through 2028, interest on loans for some new U.S.-assembled vehicles may be deductible, up to $10,000 a year, with income limits.
Free help before you borrow
You can check your credit reports for free each week at AnnualCreditReport.com before applying. The CFPB's website has tools for comparing Loan Estimates and lets you file complaints about lenders. Veterans can get a Certificate of Eligibility through VA.gov, and SBA's Lender Match connects small businesses with participating lenders. If debt is already a problem, nonprofit credit counselors affiliated with the NFCC or FCAA can review your options. Our mortgage lender guide explains how to compare offers line by line.
Guides in this section
Frequently asked questions
What is the difference between APR and interest rate?
According to the CFPB, the interest rate is the cost of borrowing the money, while the APR is the interest rate plus additional fees charged by the lender, such as origination charges. APR gives a better picture of total cost when comparing loans.
Does shopping for a loan hurt my credit?
Each application can cause a hard inquiry, but FICO counts multiple mortgage, auto or student loan inquiries within a short window as one: 14 days in older FICO versions and 45 days in newer ones. Do your rate shopping within two weeks to be safe.
Should I get a car loan from the dealer or my bank?
Get a preapproval from a bank or credit union first. The CFPB says dealer-arranged rates are generally higher because the dealer can add interest on top of the lender's buy rate. A preapproval gives you a rate to compare and negotiate against.
Is a personal loan cheaper than a credit card?
Often, for borrowers with good credit. The Federal Reserve's Q2 2026 data showed 11.86% on 24-month bank personal loans versus 22.15% on credit card accounts charged interest. Online lenders charged roughly 6% to 36% APR, sometimes with origination fees, so compare the APR.
How much does a mortgage rate difference really matter?
A lot over 30 years. On a $400,000 loan, 7.28% vs. 6.78% changes the principal and interest payment by about $134 a month, or about $48,400 over the full term. That is why comparing at least three Loan Estimates is worth the effort.
Sources
- CFPB – What is APR?
- Federal Reserve – G.19 Consumer Credit (Sept. 8, 2026)
- Mortgage News Daily – Freddie Mac PMMS history
- Experian – Average car loan interest rates by credit score
- CFPB – What is dealer markup?
- Federal Student Aid – Interest rates for 2026–27
- FHFA – Conforming loan limit values for 2026
- CFPB – Loan Estimate and Closing Disclosure
- CFPB – Consolidating credit card debt
- VA – Funding fee and closing costs
- HUD – How the HECM program works
- SBA – 7(a) terms, conditions and eligibility
Rates, fees and terms change often. Figures were checked in October 2026; confirm current details with the provider before you apply.