The higher interest rate will only cost you an extra $13 per month, but that small difference amounts to $780 over the life of the loan. For more information on finding the best loans with low interest, check out our guide to good interest rates for personal loans.
If you have bad credit, you might need to pay a higher interest rate for a loan. If this is your situation, you have two options. The first is waiting until your credit score is higher. The second option is to get a loan now, then refinance your personal loan later (when your credit score is higher and you can get a better rate).
Loan terms that work for you
A loan term is the period of time you have to repay the loan. The longer the loan term, the lower your monthly payment — but the more you’ll pay in interest overall. Look for your personal loan term sweet spot, which is the shortest term with the most affordable payment. After all, the best loans fit your budget and timeline.
The lowest personal loan interest rate means little if it’s coupled with expensive fees. The best personal loan lenders won’t charge an origination fee and work to keep other expenses — like prepayment and late fees — to a minimum.
For example, many lenders charge origination fees to cover the cost of processing and distributing your loan. Origination fees range from 1% to 8% of the amount you borrow. Using the scenario above, if you borrow $20,000 to replace a roof, that means you could pay between $200 and $1,600 in origination fees alone.
View more information: https://www.fool.com/the-ascent/personal-loans/