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How to Snag the Best Rate on a Personal Loan

Posted September 11th, 2009
by PersonalLoans.org Staff

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Not all personal loans are created equal.  Although the credit crisis has certainly affected the availability of personal loans, they are still available for those of us who have maintained a competitive credit score.

The Fine Print Makes a Large Difference

However, like any other type of unsecured loan, personal loan rates, fees and terms can vary widely from one lender to the next. It is, therefore, important to compare loan products and rates through a number of lenders before deciding on a personal loan.

Questions to Ask

When researching personal loans, there are a number of questions to ask the lender to guarantee that you have found the best personal loan with the best terms:

  • What is the interest rate on the personal loan?
  • What is the personal loan’s term (i.e., how long do I have to pay off this loan)?
  • What will my monthly payment be, based on the interest rate and the length of the personal loan?
  • What will my monthly payment be if I choose to extend the personal loan’s term? What will my monthly payment be if I choose to shorten the loan’s term?
  • How much will I pay in interest over the life of the personal loan?
  • Do you charge a penalty fee if I choose to pay off the personal loan early?
  • What are the associated fees with this personal loan product? In other words, what is the loan origination fee, the application fee and the processing fee?
  • What are the late payment fees for this personal loan? How many days do I have to pay the personal loan each month?
  • Can I set up an automatic payment plan for this personal loan?
  • Can I pay my personal loan online through your website?
  • Are there any perks associated with setting up an automatic payment plan?
  • Are there any exclusions for this loan? In other words, am I limited regarding what I can use this loan for?

It is wise to approach your personal loan shopping the way you would any other type of loan: by researching your options and educating yourself on the personal loan process.

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