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.
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.
The table below shows the relationship between your repayment term, interest rate, monthly payment, and total interest charges. The interest rates in the table are hypothetical and for illustration purposes only.
A good rule of thumb, if you’re seeking to minimize total repayment costs, is to select a loan with the biggest monthly payment and the shortest repayment term you can afford.
Tip: Use our personal loan calculator to get an idea of what your monthly payment and total cost (including total interest) will be.
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.99-% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan https://cashcentralpaydayloans.com/payday-loans-mi/ purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of %, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,. As of , none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.