Want to get a loan without overspending on rates and fees? Find out what cheap personal loans are available.
If you’re in the market for a personal loan, one of the most important features consider is the cost of the loan. In this guide, we take you through what to look for when it comes to cheap personal loans and what to consider before you apply.
How cheap is a “cheap” personal loan?
This depends on the type of loan you’re looking to apply for. For example, a secured car loan will usually have lower rates than an unsecured personal loan with no collateral. Interest rates as low as 5% aren’t unheard of in the personal loans market.
Compare cheap personal loans
How to find out if a personal loan is competitive
You need to compare more than the interest rate to make sure a loan is competitive. You can look at:
- Upfront and ongoing fees. These fees will be added onto your principal loan amount and will therefore affect your repayments and the interest you have to pay.
- APR. The Annual Percentage Rate incorporates the fees as well as the interest rate to show you the true cost of the loan.
What else should you consider besides the cost of the loan?
Besides the interest rate, fees and APR, you can consider the following:
- Repayment flexibility. Check whether you’ll be able to make additional repayments or pay off the entire loan amount early without penalty.
- Loan terms. Some lenders offer shorter loan terms than others. This affects the monthly repayment amount.
- Type of interest rate. Your loan can either be fixed or variable, and both of these rates will come with different features.
- Loan amount. Check what the minimum and maximum borrowing amounts are and if they meet your needs.
Are you eligible for a personal loan?
Lenders have different criteria to determine your eligibility for loans. Generally, to be eligible for a personal loan you’ll need to be 18 years old or older, a US citizen or permanent resident and earning a regular income.
You’ll then need to prove your ability to manage the loan repayments by providing income, asset and employment information. Secured personal loans will also require details of what you’re using as security, and this secured asset will also need to meet certain eligibility criteria.
If you find you don’t meet all the eligibility criteria on your own, you could consider a joint application personal loan to increase your chances of approval.
How to apply for a cheap personal loan
After you’ve found a personal loan using our comparison table above, you can follow the secure link to the lender’s online application form. The specific information you’ll be required to submit will differ between lenders, but it’ll usually be something along the lines of:
- Personal details including your name, contact details and proof of your identity
- Details of your employment including your income and type of employment
- Financial details including your assets and debts