How to evaluate the costs of personal loans

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When evaluating loan calculator, pay close attention to the interest rate, total cost of borrowing, and monthly payment.


Monthly payment: Making your personal loan payments on time can help you establish credit; missing or late payments will damage it. Your monthly budget should allow for the comfortable payment of your loans.

Total interest payments: Comparing the cost of a loan to another is made possible by examining the total interest paid on its own. It can also serve as a gut-check to determine whether the loan is worthwhile.

The best way to compare costs side by side is to use the annual percentage rate, or APR, which is a representation of the cost of borrowing. This number must be disclosed by the lender before you may obtain a loan. The APR and interest rate of a personal loan only alter if additional costs, such as origination