Comparing Personal Loans

Choosing the right personal loan for your situation can be difficult. Here are some tips to inform your decision.

APR

According to the Federal Truth in Lending Act, all lenders must disclose the APR of personal loans in bold on your consumer loan agreement. The APR, or annual percentage rate, represents the total cost of borrowing. This figure takes into account the interest rate in addition to all charges and fees. APR is usually expressed as a percentage of the loan's principal. For comparison purposes, the APR is the most reliable criterion. When you are deciding on a personal loan, compare the various loans' APRs. You want to go with the loan with the lowest APR.

Fees

The APR of personal loans should include all charges and fees, but the APR will not itemize what these fees are. To know exactly what fees and charges you're paying, ask your lender for an itemized list of them. If you see any charges that look unnecessary or excessive, ask your lender about them. Some lenders might be willing to negotiate charges and fees. With the personal loans of our lenders, you will usually have to pay a finance charge that is a percentage of the amount you borrow (varies by lender).

Term

This is a very important criterion to consider when choosing a personal loan. The term of a loan refers to how long you have to pay it back. With most personal loans from our lenders, you will have until your next payday to repay the loan. On your payday, the loan will be withdrawn automatically from your bank account (varies by lender). However, not all lenders adhere to this practice, so your loan's term could be longer or shorter. Consult your loan agreement for specifics on when your loan is due.

Repayment Options

Personal loans from different lenders often come with drastically different repayment options. While some lenders will require immediate payment on the loan's due date, others might be more flexible. Some personal loan lenders will allow you to extend the loan for more repayment time if you pay the interest charges on the original due date (varies by lender). Of course, this will cost you an additional finance charge, but, to some, the flexibility may be worth the cost. If repayment flexibility is important to you, look for personal loans that offer extensions.

Lender Reputation

Especially with personal loans, you don't want to borrow money from just anyone. Remember that this company will have access to your checking account for deposit and withdrawal purposes, so you want to be sure you can trust your lender. The best way to weed out the bad lenders from the good is to get a referral from an independent site like ours.