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Compare Personal Loan Rates – Free Personal Loan Calculator
Personal Loan Fees Explained
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Origination Fee:
A one-time fee charged by the lender to process your loan application, usually a percentage of the loan amount (e.g., 1%–8%). It is typically deducted from your loan proceeds.
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Prepayment Fee:
A fee charged if you pay off your loan early. Some lenders use this to compensate for lost interest. Not all loans have this fee—check your loan terms.
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Late Fee:
A penalty charged if you miss a payment or pay late. The fee amount and grace period vary by lender, so review your agreement carefully.
What to Know Before Getting a Personal Loan
1. Your Credit Score
- Your credit score affects your interest rate, approval odds, and loan terms.
- Check your score and credit report for errors before applying.
2. Interest Rates & Fees
- APR (Annual Percentage Rate): This is the total yearly cost, including interest and most fees.
- Origination fee: Some lenders charge 1–8% up front, deducted from your loan amount.
- Late fees & prepayment penalties: Understand what happens if you pay late or want to pay off the loan early.
3. Loan Amount & Purpose
- Borrow only what you need. Lenders may ask your reason (debt consolidation, emergency, home improvement, etc.).
- Make sure the amount fits your purpose and your ability to repay.
4. Loan Term
- Shorter terms = higher monthly payments but less total interest.
- Longer terms = lower payments but more total interest.
5. Monthly Payment
- Use a loan calculator to estimate your monthly payment.
- Be sure your budget can comfortably handle this payment.
6. Lender Comparison
- Shop around—compare rates, terms, and lender reputations (bank, credit union, online lender).
- Read reviews and check for complaints with the CFPB or BBB.
7. Impact on Credit
- Applying triggers a hard inquiry, which may temporarily lower your score.
- Missed payments can seriously damage your credit.
8. Loan Approval Process
- Lenders will require proof of income, employment, ID, and sometimes reasons for borrowing.
- Pre-qualification can show your likely rates without affecting your credit.
9. Scams & Fine Print
- Beware of lenders that guarantee approval or require upfront fees.
- Read the entire contract. Watch for hidden fees, insurance add-ons, or mandatory products.
10. Repayment Plan
- Set up automatic payments if possible to avoid missed payments.
- Know the total cost of the loan, and consider if early payoff is possible and advantageous.
Questions to Ask
- What is the APR and are there any fees?
- Is there a prepayment penalty?
- What happens if I miss a payment?
- How will this loan affect my credit?
- Can I change my payment due date?
- Are there discounts (auto-pay, loyalty, etc.)?
