How to compare loan offers

Put competing offers on the same footing before choosing. Rate matters, but term, fees, amount received, and total repayment often decide which offer is actually cheaper.

Start with the same amount

Compare offers for the same net proceeds and purpose. An origination fee deducted from proceeds can mean borrowing more to receive the same usable cash.

Use APR carefully

APR is designed to represent annual borrowing cost including certain finance charges. Confirm which fees it includes so manually entered fees are not counted twice.

Compare term and total repayment

A longer loan usually lowers the payment while adding months of interest. Review both monthly affordability and total dollars repaid.

Read the features and risks

Check whether the rate is fixed, whether prepayment penalties apply, how late fees work, and whether collateral or a co-signer is involved. A calculator cannot price every contractual risk.

Primary source

Consumer Financial Protection Bureau: interest rate versus APR