When you’re looking for the best personal loans for fair credit, make sure you shop around. Find out which lender offers an interest rate and loan term that works for you. You can also compare loan amounts between different personal loan lenders.
How to compare personal loans
There are a few important parts of a loan offer every borrower should compare before agreeing to work with a personal loan lender:
Loan amounts offered
How much do you need to borrow? Some lenders specialize in larger loans, while others offer small or mid-range loans. Knowing how much you need to borrow ahead of time can help you narrow down your list of lenders.
Interest rate and other fees
The interest rate is the fee your lender charges you for the service of lending you money. In general, it’s good to look for a low-interest personal loans.
An origination fee is something you pay the lender for the service of processing your loan application and funding your loan. A prepayment penalty is a fee you’ll pay if you pay off your loan before the loan term ends. The best personal loans for fair credit won’t have these fees, or will not charge much for these services.
When you’re comparing loans, look at each loan’s annual percentage rate (APR). The APR combines interest with other fees to give you the true, total cost of getting a loan.
If you repay your fair credit loan over a long period of time, your monthly payments will be lower. However, you’ll end up paying more in interest over the life of the loan. If you instead get a loan with a short repayment term, you’ll have a higher monthly payment — but you’ll pay less in interest long-term.
Missing loan payments can hurt your credit score, so it’s important to pick a loan term and monthly payment that fits your budget. But if you can repay the loan quickly, you’ll save yourself hundreds (or thousands) in cash by the time the loan term is up.
View more information: https://www.fool.com/the-ascent/personal-loans/best-personal-loans-fair-credit/