Choosing a Loan is About More Than APR

You’ve decided to shop for a personal loan. That’s great! Now you need to ask yourself: which features make up the best loan terms?

Fiona matches you will personalized loan offers, making it easier than ever! 

You probably know a bit about APR—annual percentage rate. This calculates the interest rate and applicable fees to show you the true cost of your loan. However, depending on your needs and financial situation, a lower APR might not be the silver bullet you need to reach your goals.

What else is there besides a low interest rate? Some lenders offer flexibility in loan terms, like letting you pick a payment due date, or waiving the occasional late fee.

Consider this: if you take out a 5-year, $5,000 loan, a .5% increase in the interest rate will cost you about $1 more per month—or about $60 total over the entire loan term. For some borrowers, that $60 over 5 years is more than worth the ability to schedule an occasional late payment or avoid a late fee—actions that could lower your credit score and ultimately cost you more in the long run.

Knowing and understanding your own financial capabilities and limitations will help you decide which loan features best meet your needs and goals. You’ll need to ask yourself a series of questions, and we’ve provided a few below to help get you started.

You’ll want to consider your financial past, present and future to decide what loan terms best fit your current needs and future plans.

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First, consider your financial past. Did you need flexibility for payments, or have you always made on-time payments? Also, understand your credit report and score. This data is critical to lenders, and you should know how you’ll be evaluated.

Next, consider your financial present. Do you have the income to pay back this loan? Will you have the money by the time the first loan payment is due? Do you have a backup plan—another potential income source or a co-signer who can support you?

Lastly, consider your financial future. How do you imagine your financial reality one year from now, two years from now, five years from now? Determining your goals will help you find the loan that best accomplishes the goals. Fiona can help you find a brighter financial future, with personalized recommendations that suit your needs.