7 Features of Personal Loans to Compare
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1. APR
- Interest, which is a charge for borrowing money. Part of your monthly personal loan payment goes toward repaying the principal amount you borrowed, while the remainder goes toward interest.
- Origination fee, an upfront fee that some (but not all) lenders charge. A typical origination fee is 1% to 10% of the loan amount. It’s often subtracted from the loan before you get it, though some lenders may include it in the monthly payments.
2. Other fees
- Late fees. You’ll often owe a late fee if you don’t make your monthly payment by the due date, though many lenders offer a grace period of around 15 days. Your lender may charge a percentage of the past-due payment (usually 5% to 10%) or a flat fee (about $10 to $40).
- Non-sufficient funds fee. Your lender may charge this fee if your loan payment is rejected because you don’t have enough money in your bank account. A typical non-sufficient funds fee is around $20.
- Prepayment fee. Lenders make money by charging you interest over the life of the loan – and they earn less when you pay off a loan early. Some lenders recoup this lost revenue by charging a prepayment penalty. These charges are more common with mortgages and auto loans than with personal loans. Lenders may assess this fee as a percentage of your remaining balance (such as 1%), a flat fee or a specific time period’s worth of interest (like six months or a year).
3. Rate discounts
4. Funding time
5. Loan term and monthly payment
6. Lender flexibility
7. Customer experience
Article sources
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- 8. Federal Register. Federal Interest Rate Authority: A Rule by the Federal Deposit Insurance Corporation on 07/22/2020. Accessed May 2, 2025.
- 4. Federal Reserve. Military Lending Act. Accessed May 2, 2025.
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- 13. Center for Responsible Lending. Payday and Other Small Dollar Loans. Accessed May 2, 2025.
- 2. Consumer Financial Protection Bureau. What is a payday loan?. Accessed May 2, 2025.
- 15. Federal Reserve Bank of St. Louis. Finance Rate on Personal Loans at Commercial Banks, 24 Month Loan. Accessed May 23, 2025.
- 16. National Credit Union Administration. Credit Union and Bank Rates 2024 Q4. Accessed May 23, 2025.
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- 17. Consumer Financial Protection Bureau. Consumer Use of Buy Now, Pay Later and Other Unsecured Debt. Accessed Jan 24, 2025.
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- 21. Administrative Office of the U.S. Courts. Bankruptcy Basics. Accessed Apr 8, 2025.
- 22. Internal Revenue Service. Canceled debt – Is it taxable or not?. Accessed Apr 1, 2025.
- 2. Consumer Financial Protection Bureau. What is a payday loan?. Accessed Apr 17, 2025.
- 24. Consumer Financial Protection Bureau. Truth in Lending Act (TILA) examination procedures. Accessed May 2, 2025.
- 25. Experian and Oliver Wyman. Financial Inclusion and Access to Credit. Accessed Jan 23, 2025.
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