APR vs interest rate
The interest rate is the cost of borrowing the principal. APR includes the rate plus most fees, making it the better number for comparing offers.
Common loan types
- Personal loans — fixed payments, often unsecured.
- Auto loans — secured by the vehicle.
- Mortgages — long-term, secured by property.
- Business loans — including SBA-backed options.
- Credit-builder loans — for establishing credit.
Fees to watch
Origination fees, prepayment penalties, late fees, and add-on products can raise your total cost. Ask for the full fee schedule.
Shop smart
Many lenders offer prequalification with a soft credit check. Compare at least three offers on APR, term, and total repayment amount.
Improve your odds
Pay bills on time, keep credit utilization low, and check your credit reports for errors before applying.
Avoid predatory lending
Be wary of upfront fees, pressure to sign immediately, and lenders who don’t check ability to repay. Check that the lender is licensed in your state.