What a personal loan really costs
A personal loan is a fixed-rate installment loan, usually for $1,000 to $50,000 or more over one to seven years. Many lenders charge an origination fee of about 1% to 10%, and most take it out of the loan before sending the money. Borrow $15,000 with a 3% fee and you receive $14,550 but repay the full $15,000 plus interest.
The calculator shows your monthly payment, total interest, the cash you actually receive and the APR including the fee. That APR is the best number for comparing loan offers, because it combines the interest rate and the fee.
How to get a better rate
- Prequalify with several lenders – most use a soft credit check that does not affect your score.
- Improve your credit first – lower card balances and on-time payments can move you into a better rate tier.
- Choose the shortest term you can afford – shorter terms often have lower rates and much less total interest.
- Check credit unions – federal credit unions cap most loan APRs at 18%.
Frequently asked questions
What credit score do I need for a personal loan?
Many lenders approve scores in the 600s, but the best rates usually go to scores of about 720 and up. Lower scores mean higher APRs and fees.
Does a personal loan hurt my credit?
Applying causes a hard inquiry and a small, temporary drop. Making every payment on time builds your credit, and paying off card balances with the loan can lower your utilization.
Can I pay off a personal loan early?
Most personal loans have no prepayment penalty, so paying early saves interest. Check your loan agreement to be sure.