With interest rates rising, we recommend shopping around for the least expensive personal loan. Your credit score is the main criteria lenders will use to determine your loan APR, or annual percentage rate, which is the amount of interest and fees you'll pay a lender over the duration of your loan. We recommend comparing APRs and loan terms to find the best option for your budget.
For example, borrowing $10,000 at a 9.99% APR paid back over five years would require 60 monthly payments of $212.42 -- and would cost you $2,745.27 in total interest. However a $10,000 loan at a lower rate of 8.99% APR, repaid over seven years would require 84 payments of $160.84 -- and would cost you $3,510.56 in interest overall. So, even though the APR on the first loan is higher, because the loan terms are shorter, you save on interest. You can use a loan calculator like Bankrate's to help you compare personal loan offers.
Some loans may offer perks, such as autopay discounts. On the flip side, pay special attention to any origination fee, loan application fee, prepayment penalties or rejected payment fee. And be aware that submitting a loan application will trigger what's called a hard pull, which may temporarily impact your credit score, even if you aren't approved or decide not to take out the loan.