It was recently revealed that the average unsecured loan balance in the US is $9,896.
Loans are seen as a big, scary monster hiding in the bedroom closet. It can be extremely stressful to take out a loan, especially if you aren’t quite sure how to pay it back.
But loans can also be helpful tools when used properly. They can help you buy a new home or invest in a new car. That’s why it’s important to carefully choose your lender!
Below is a loan comparison guide that helps you better choose a lender and loan. Make sure to keep reading if you’ve been needing extra money in your pocket.
Gather Your Quotes
When learning how to compare loans, you’ll first need loan offers to compare.
Take a day to explore your lender options, such as fastloandirect.com. Once you’ve gathered a list of strong options, ask for loan offer quotes. This allows you to see what each lender can offer you.
Make a comparison spreadsheet once you have all of the numbers to start comparing the details of the loans.
Interest Rates
You’ll first want to find the best interest rate among your options.
The total amount you plan to borrow will affect your interest rate. And if you’re not careful, you could spend longer paying off the interest than you do on the actual loan.
Clarify with the lender company whether the interest rate is a fixed rate or a variable rate. A fixed-rate won’t change, but a variable rate might change as you work to pay it off.
Lender Fees
Another tip you need when figuring out how to compare loans is: always double-check your lender fees.
Lenders are sometimes sneaky about the fees that come with taking out a loan. It’s the fees that can sink your ship if you aren’t cautious.
Many lenders charge processing fees when taking out a loan. And other lenders may even charge fees for paying off your loan early! (That’s a whole other can of worms.)
Loan Terms
The typical loan term for a personal loan can range anywhere from 12 months to nearly 4 years.
Seeing a loan with a longer-term might seem appealing due to the low monthly payments, but these long-term loans often come with high interest rates that will accumulate over time.
Always do the math for the future when comparing loan types.
Choose Wisely: Loan Comparison
Don’t let loans intimidate you! Use the above loan comparison guide to help you make an informed choice when selecting your loan and lender.
Always compare interest rates, loan term options, and lender fees. Do the math for the future, and choose what fits your lifestyle and income the best.
Are you searching for other helpful guides? You’ve come to the right place. We have guides on everything from choosing the best wine subscription box to buying the cutest handbag for this fashion season.
