2. Fees
The next thing to look out for is fees. To help you understand the impact of any additional fees and expenses over the life of your loan, lenders are required to factor them into another calculation called the annual percentage rate, or APR.
Also, comb the fine print and ask your lender about any prepayment penalties, which are charged at the end of your loan if you decide to pay it off early. Prepayment penalties aren’t factored into your actual APR because you might not have to pay them. Credible’s partner lenders, for example, don’t charge prepayment penalties.
3. Repayment term
Your repayment term is the amount of time you have to pay back the money you’ve borrowed. The cost to repay the loan depends not only on the loan amount you borrow and at what interest rate, but on how long you take to repay your loan.
Keep in mind: The longer your repayment term, the more interest you’ll pay over the life of your loan; the shorter your repayment term, the lower the interest rate offered by most lenders.
Another consideration should be your monthly payment. You should make sure a personal loan will fit into your budget. If it seems that the monthly payment will eat up too much of your paycheck, you can look at loans with longer repayment terms.
If you stretch your payments out over seven years instead of five, you’ll make 84 payments instead of 60, so each payment will be smaller. Just remember that the longer the repayment term, the higher the interest rate and total repayment costs will be.
Cost to repay a $10k loan
The table below shows the relationship between your repayment term, interest rate, monthly payment, and total interest charges. Continue Reading Origination fees, for one, are taken out of your loan proceeds before you even see them
