Compare APR, Not Interest Rate
The interest rate is only part of what a loan costs. APR (annual percentage rate) folds in origination fees and other mandatory charges, which is why federal law requires lenders to disclose it — it's the one number designed for apples-to-apples comparison. An offer with a lower interest rate but a high origination fee can carry a higher APR than an offer with a slightly higher rate and no fee.
Check the Term Length Behind the Payment
A lower monthly payment usually means a longer term — and a longer term means more months of interest. When two offers show different payments, multiply each payment by the number of months and compare the totals. The "cheaper-feeling" monthly payment is often the more expensive loan.
Find Every Fee Before You Sign
- Origination fee — often deducted from the amount you receive, meaning a $2,000 loan with a 5% origination fee puts $1,900 in your account but you repay interest on $2,000.
- Late payment and NSF fees — these vary widely between lenders and matter most if your income timing is tight.
- Prepayment penalty — some lenders charge you for paying off early. If you expect to repay ahead of schedule, an offer without one can beat an offer with a lower APR.
A Quick Comparison Checklist
| What to Compare | Why It Decides the Winner |
|---|---|
| APR | The one all-in number built for comparison |
| Total repayment (payment × months) | Reveals the true cost behind a "low" payment |
| Origination fee handling | Determines how much cash you actually receive |
| Prepayment terms | Matters if you plan to pay off early |
| Funding speed | Matters if the money is time-sensitive |
Every matched lender is required to disclose APR, fees, and terms before you accept anything — so you can run this comparison on real numbers, not estimates, before committing to any offer.
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