• Questionnaire
  • Save

At one point in life or another, you might find yourself short on cash. It might be unavoidable to look for a personal loan to sort out your financial situation.

Needless to say, it's not always possible to find a loan with all attractive terms put in the same package. Using a loan comparison calculator helps to ensure that you sign up for the deal that's best for your situation.

The process of taking out a personal loan with the best rates can be easy if you know the right questions to ask. Keep on reading to learn more.


Why use a loan comparison calculator?

As you shop for a personal loan, you'll want to make sure that you're weighing each option accordingly.

That's where a loan comparison calculator comes in handy. It allows you to consider your circumstances and financial needs to make the right choice.

This tool is designed to compare up to three loan options. You can use the calculator to narrow down loan products you found online or to compare personalized offers from different lenders.

After using the calculator you will have a clear idea of closing costs, monthly payments, and your loan annual percentage rates (APRs). When you know your options right, you'll be in a better position to pick the best personal loan rates and terms.

Getting Started

To get started, you'll have to enter details like the loan amounts, loan durations, and lender specific fees.

While you can speculate, without the necessary details your comparison will not be as accurate.

Should I become pre-qualified for a personal loan?

Getting pre-qualified for a loan is leeway to getting a sneak peek into the available offers. In most cases, lenders will perform a background check of your credit status.

If you complete the check in advance, you will be in a better position to win. Some of the details that will be required during the prequalification process include:

  • Monthly financial obligations
  • Your income
  • Social security number
  • Work address and employer
  • Your phone number

Some of the reasons why you may not pre-qualify for a loan include

  • Low credit score
  • Lack of work history
  • Too little income
  • A debt-to-income ratio that's too high
  • Too many credit applications

What is the average personal loan interest rate?

Personal loans come with lower loan rates, currently averaging at 9.76%, which is below the usual 14.9%. These numbers are according to figures released by the Federal Reserve Bank on consumer credit.

Do not rush to take the first option that you come across. Being in dire need of money is no justification for high-interest rates.

Take your time to look at the options available for different personal loan features. Most importantly, ensure you work on your credit score.

It speaks volumes about your financial management and capabilities. An excellent credit score can attract lenders to you.

It also puts you in a position to negotiate personal loan interest rates. Taking out a personal loan is as hard or simple as you make it.

It is unlikely you will not find a lender if you have your documents and financial records right. A co-signer can enhance your chances of being approved further.

To pinpoint differences in loan offers, be sure to use our comparison calculator.

What are some other options?

0% Introductory APR Credit Card

Before you settle for any options for a personal loan, first, consider getting a 0% credit card.

Depending on the amount of money you need, you can easily qualify for one if you have a good credit score. The credit card allows you to make purchases for one year or more.

If your financial status allows you to repay the loan within the 0% APR timeframe, the card could be your best option.

Secured Loans

Additionally, be sure to check if you can afford a secured loan. A secured loan could be an option for you if your credit score is not good.

A car or savings account could act as collateral. Home equity may also be a cheaper option if you own a house.

Co-Signed Loans

If you do not qualify for a loan on your own, give thought to a co-signed personal loan. If the co-signer has a better credit history, chances of you being approved for the loan are higher.

What should I look for in the fine print?

If you are successful in finding a personal loan offer so far, there are only a few more things you need to do. Many of these factors can make or break a seemingly good deal.

Read through the terms of the loan and be on the lookout for:

Possible penalties

-- check to see if you will be charged a penalty if you make your prepayments early. Generally, most lenders do not charge prepayment or exit fees.

Automatic withdrawals

-- some lenders will require that payments are automatically withdrawn from your account. If such is the case, always ensure you get low balance alerts from your bank. You will avoid overdraft charges.

Total loan charges

-- you do not want surprise charges popping up after you have signed the loan papers. Check to see that the total cost of the loan is disclosed and accounted for in the percentage rate. Verify these details using a loan calculator.

Other friendly aspects of the loan that you need to check are:

The flexibility of repayments

-- with some lenders, you will be allowed to choose your repayment dates. They may forgive late payments (to an extent) and may allow you to skip payments when in hardships.

Direct deposit to creditors

-- if you are taking out a personal loan to pay another creditor, it is essential that the funds are paid directly. This will be beneficial to you as loans will not pile up.

What's the approval process?

Once you have decided on the lender that you want to borrow from, there are documents that you will provide. They include:

  • Your identification document like a social security card, passport, or driver's license.
  • Address verification document like a copy of a lease
  • Proof of income like bank statements or tax returns

After this, the lender will conduct a credit check before extending the loan to you. Once the loan has been approved, it will be credited to your account, in most cases within a week.

Before the approval, you can negotiate your terms. Many lenders can offer discounts on personal loan rates or on certain closing costs.

If you enroll in automatic debit payments, you could benefit from the discount.

Tell your friends about us!