Know your credit score. The interest rate you pay will depend almost entirely on your credit score. It?s the world we live in today. If you have excellent credit, you could pay 11% APR or lower. With bad credit, you?re looking at 29%.
If you don?t know your credit score, no worries. This tool automatically looks up your credit score for free.
Related: Know Your FICO – The Ultimate Guide to Understanding Your Credit Score
For a quick look at estimated Annual Percentage Rate (APR), check out the table below:
Shop around and research. Once you have your list of loan offers, go to your local community bank and credit unions. Ask about their rates. They may have lower rates, especially for those with lower credit scores.
Check out other options. Before you take on a personal loan, consider these options:
a: See if you qualify for a 0% credit card. Depending on your credit, the 0% introductory rate can last up to a year. This is your cheapest option if you can repay your loan during this time.
b: Add a co-signer. If you can?t qualify for a personal loan on your own, consider adding a co-signer. But remember, you are both on the hook to pay it back.
1. Interest Rates – Try to get the lowest rate you can. Secured loans are often less expensive than unsecured loans because the funding provider has recourse to an asset.
2. Repayment flexibility – Make sure there is no penalty for early repayment. Your goal is to pay this loan off as quickly as possible. If you can pay more per month in order to pay it off faster, do this. Just make sure your lender doesn?t charge you for the privilege.
3. Fees and Charges ? Compare origination fees and application fees. Sometimes lenders hide information in the fine print and it becomes a surprise at the end. These fees should be clearly outlined and baked into the overall APR.
4. Customer Service ? Check out their customer reviews.
5. Length of the Loan – Remember, the shorter the term, the less total interest?you will pay. That super low payment attached to a 5-year loan? Sure it looks low, but you will be paying significantly more interest over the life of the loan.
6. Social responsibility score ? Is your lender contributing to the destruction or prosperity of the planet? When the data is available, we will provide you with sustainability scores for each lender.