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A personal loan is a lump sum you repay in fixed monthly payments, usually over 2 to 7 years. Here is what to know before you sign, in plain English.
The interest rate is what the lender charges to borrow. The APR is the rate plus fees charged when the loan is made, like an origination fee. Compare APR to APR (CFPB).
A one-time fee, often a percent of the loan. Most lenders take it out before they send the money, so you get less than you borrow. Published ranges run from 0% (Discover, Citi, Navy Federal) up to 9.99% or more (Upgrade, Prosper, Best Egg, Avant, Rocket Loans).
Borrow $10,000 with a 5% fee: the fee is $500, you receive $9,500, and you repay the full $10,000 plus interest. Need $10,000 in hand? You'd borrow $10,526.32.
FICO scores run 300 to 850: below 580 poor, 580 to 669 fair, 670 to 739 good, 740 to 799 very good, 800 and up exceptional (myFICO). The lowest advertised APRs go to the top bands. Few lenders publish a minimum; Achieve says 560 (660 for debt consolidation loans of $35,000 or more).
The lenders we checked say they charge no prepayment penalty. Your loan disclosure must say whether one can be charged (Reg Z 1026.18). Paying early cuts the interest you pay.
A co-signer must repay the whole debt if you don't, and the lender can collect from them without trying you first. By law they get a written Notice to Cosigner (FTC). Some lenders allow joint applications (Upgrade, LendingClub); Citi does not.
Most personal loans are unsecured: no collateral. A secured loan is backed by something you own, like a car or savings, and can have better terms, but you can lose that item if you don't pay. OneMain and Upgrade may offer car-secured loans; Navy Federal has savings-secured loans.
A lender that guarantees approval no matter your credit, then asks you to pay a fee before you get the money, is a scam. Real lenders check your credit and disclose fees, which usually come out of the loan. It's illegal for telemarketers to promise a loan and ask for payment first (FTC).
For active-duty servicemembers and their dependents, most consumer loans can't carry a military APR (MAPR) above 36%, counting interest, most fees and add-on products like credit insurance (32 CFR 232.4). The lender can't charge a prepayment penalty or force arbitration (32 CFR 232.8). More: SCRA and MLA protections.
Federal rules count a regular loan's APR as accurate if it's within 1/8 of a percentage point of the true figure (Reg Z 1026.22). Our calculator uses the same formula (Reg Z App. J).
| Loan | You receive | Monthly | Total interest | APR |
|---|---|---|---|---|
| 12%, 36 months, no fee | $10,000.00 | $332.14 | $1,957.18 | 12.00% |
| 12%, 36 months, 5% fee | $9,500.00 | $332.14 | $1,957.18 | 15.61% |
| 12%, 60 months, 5% fee | $9,500.00 | $222.44 | $3,346.77 | 14.28% |
Same rate, but the fee raises the APR from 12.00% to 15.61%. Stretching to 60 months lowers the payment by $109.70 but adds $1,389.59 of interest. Try your own numbers.
| Score | Band |
|---|---|
| 800 to 850 | Exceptional |
| 740 to 799 | Very good |
| 670 to 739 | Good |
| 580 to 669 | Fair |
| 300 to 579 | Poor |
Source: myFICO: credit score ranges. Each lender sets its own rules; checking your rate with a soft pull doesn't affect your score. How credit scores work · Check your score free.
Facts and math only, not financial advice. Your real rate, fee and term come from the lender's offer and its Truth in Lending disclosure. No lender pays to be on this page, and there are no partner links.
The interest rate is the cost of borrowing. The APR adds fees charged when the loan is made, such as an origination fee, so it's the better number to compare (CFPB).
It's a major warning sign. The FTC says legitimate lenders don't guarantee a loan before checking your credit, and it's illegal for telemarketers to promise a loan and ask you to pay first.
Most consumer loans to active-duty servicemembers and their dependents can't exceed a 36% military APR, which counts interest, most fees and add-on products (32 CFR 232.4).
Estimates, not financial advice. Taxes, insurance, PMI and fees vary by lender, county and city; confirm with your lender, dealer and state agency before acting.