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Comparing personal loans is simple once you compare the right numbers in the right order. This guide gives a repeatable five-step method and a worked example, so the cheapest offer is obvious before you submit a full application.
Step 1: Pre-qualify with several lenders
Use soft-check pre-qualification at three to five lenders: your own bank, a credit union and two or three online lenders. It takes minutes and does not affect your score. Our eligibility guide lists what you will need.
Step 2: Line up the APRs for the same amount and term
Request the same amount and term from each so the APRs are comparable. Ignore the interest rate and the monthly payment at this stage; APR already includes most fees.
Step 3: Check fees that APR may not capture
- Origination fee amount and whether it is deducted from the disbursement
- Late and returned-payment fees
- Prepayment penalty
- Optional add-ons pre-selected in the application (insurance, memberships)
- Autopay discount conditions
Step 4: Compare total repayment
| Offer | Amount | APR | Term | Monthly | Total repaid | Fee | Net received |
|---|---|---|---|---|---|---|---|
| Bank | $7,000 | 11.5% | 36 mo | $231 | $8,310 | $0 | $7,000 |
| Online A | $7,000 | 10.9% | 36 mo | $229 | $8,239 | $350 (5%) | $6,650 |
| Online B | $7,000 | 14.9% | 48 mo | $194 | $9,330 | $140 (2%) | $6,860 |
Illustrative. Online A has the lowest APR but, after the fee, costs more than the bank for the money actually received; Online B has the lowest payment and the highest total cost. Our rates and fees guide explains the arithmetic.
Step 5: Apply to one lender
Submit a full application only to the winning offer. A single hard inquiry has a small, temporary effect; several in a short window may be treated as one for scoring, but there is no reason to collect them.
Red flags
- You are asked to pay a fee before receiving the loan
- Approval is ‘guaranteed’ regardless of credit
- The lender is not licensed in your state or country
- Terms are only available by phone or in a hurry
- The contract includes products you did not ask for
Weighing a loan against other credit? See reward card or personal loan and car loan vs personal loan.
Frequently asked questions
Part of our complete guide to personal loan options.
Independent educational content. Not affiliated with any lender. Not financial advice; terms vary by lender, location and applicant.
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