[ad_1]
You want to borrow responsibly but are not sure what kind of personal loan you can afford. That’s where U.S. News comes in. Our personal loan calculator can help you understand whether a payment will comfortably fit your budget – no math required.
Enter a few details about the personal loan into the calculator for your estimated monthly payment, total interest and total loan cost. What information to have handy: your desired loan amount, loan term and interest rate. Now you’re ready to begin.
1. Input the loan amount. Borrowers can find personal loans from less than $100 up to $100,000, depending on the lender. Generally, the higher your credit score, the more you may be able to borrow.
2. Add the repayment term. You can typically choose repayment terms from one to five years – sometimes longer. Longer loan terms mean lower monthly payments but higher overall interest costs. Look for the shortest term you can get with a manageable monthly payment.
3. Enter the interest rate. Your rate will depend on factors such as your credit history and credit score, your loan amount, and your debt-to-income ratio. Typically, the higher the credit score, the lower the interest rate.
4. View your payment details. These details will automatically populate after you enter your loan information into the calculator. You will see your estimated monthly payment, total interest, total loan cost and loan payoff date. The calculator also breaks down your monthly payment to show you how much of it goes toward interest.
5. Try different combinations. Experiment with repayment terms and rates to see how they affect your monthly payment. Testing different combinations can help you figure out what might work for you.
Find the Best Personal Loans for You
|
|||||
|
|||||
|
Now that you’ve estimated monthly payments and interest charges with the loan calculator, you can compare rates and terms from the Best Personal Loan Companies, as ranked by U.S. News. Look for lenders that allow you to prequalify, which checks your loan eligibility and previews terms with a soft inquiry that does not hurt your credit.
Assess the pros and cons of a personal loan as well as alternatives before you borrow. Review your monthly budget and consider your DTI ratio, or the percentage of gross monthly pay you put toward your monthly debts. Generally, you want to keep your DTI at 35% or less.
Don’t forget to compare common fees, including origination fees. Lenders can charge up to 10% of the total loan amount for this upfront processing charge. You can find loans without this fee.
Only apply for a personal loan after you’ve researched your options and selected the best deal for your financial situation. Do not take out a loan if you can’t afford to repay it, because your credit score will suffer if you miss payments or default.
A good interest rate on a personal loan is typically one that is lower than the national average. Personal loan interest rates can range from 6% to 36%, however, based on creditworthiness and other factors.
The average personal loan rate is 11.56% as of January 3, 2024, according to a Bankrate survey. Personal loan interest rates are trending higher over the past six months, increasing by about half-a-point since July 2023:
Personal loan rates vary widely based on creditworthiness. Borrowers with very good or excellent credit scores will see much lower interest rates than those with fair or poor credit. Often, borrowers with bad credit will apply for a secured personal loan that uses an asset as collateral in order to achieve lower rates:
A personal loan delivers a lump sum that you repay with interest in fixed amounts over a specific period of time.
You can use the loan calculator to see your monthly interest rate without doing any math. Your annual percentage rate, which includes all costs of borrowing, and interest rate can also be found in your personal loan agreement.
Options include making payment arrangements with creditors, looking at home equity loans or lines of credit, seeking a 0% APR credit card to pay down debt or make a large purchase, or borrowing from a family member or friend.
[ad_2]
Source link
