Is 30% APR High? A Look at What This Rate Means for You
Understand if 30% APR is high and its true financial impact on your borrowing.
Understanding the costs involved in borrowing, particularly the Annual Percentage Rate (APR), is fundamental to sound financial management. APR serves as a crucial indicator of the overall expense associated with credit and loans, allowing individuals to make informed decisions that align with their financial goals.
Understanding Annual Percentage Rate
The Annual Percentage Rate (APR) represents the total cost of borrowing money over a one-year period. This rate encompasses the stated interest rate and any additional fees or charges levied by the lender, such as an origination fee. Expressed as a percentage, the APR provides a standardized metric for comparing different lending products.
A 30% APR signifies that the total annual cost of borrowing will amount to 30% of the principal loan amount, inclusive of both interest and applicable fees. If a loan carries no additional charges beyond the interest itself, then the interest rate and the APR would be identical. The inclusion of various fees will elevate the APR above the nominal interest rate.
30% APR Compared to Other Lending Rates
Comparing a 30% APR to rates across various financial products helps illustrate its position within the broader lending market.
For credit cards, the average APR for interest-accruing accounts was approximately 22.25% in 2025. For consumers with less robust credit, credit card APRs can approach or exceed 27%. A 30% APR is notably higher than the average credit card rate, nearing the upper end even for those with lower credit scores.
Personal loans feature APRs ranging from 6% to 36%. The average personal loan APR was about 12.57% in 2025. Borrowers with excellent credit may secure rates lower than 30%, while those with poorer credit profiles might encounter rates closer to this figure. A 30% APR on a personal loan falls at the higher end of the typical range, often indicative of increased lending risk.
Auto loans generally present lower APRs compared to unsecured debt. In 2025, the average APR for new car loans was about 6.73%, and for used car loans, it was around 11.87%. Even for borrowers with less favorable credit, auto loan rates usually remain below 22%. A 30% APR is considerably elevated for an auto loan, suggesting a very high-risk borrower profile.
Mortgages, secured by real estate, offer the lowest interest rates. In 2025, the average 30-year fixed mortgage APR was approximately 6.70%, with 15-year fixed mortgages averaging around 5.93%. A 30% APR is virtually unheard of in the conventional mortgage market.
The Cost of 30% APR
Carrying debt at a 30% APR significantly impacts the total cost of borrowing and the repayment timeline. Interest accumulates rapidly at such a high rate, meaning a substantial portion of each payment goes toward covering interest charges rather than reducing the principal balance. For example, on a $5,000 loan at 30% APR, the annual interest alone would be $1,500 if no payments were made.
If the borrower makes minimum payments on a $5,000 loan at 30% APR, a larger percentage of that payment will be consumed by interest in the initial stages of the loan. This leaves a smaller amount to apply to the principal, prolonging the repayment period. The borrower pays back far more than the initial amount borrowed.
A high APR like 30% can extend the repayment period. Even modest balances can become long-term burdens when interest accrues aggressively. The total amount repaid can easily double or triple the original principal, affecting a borrower’s financial health for an extended period.