Start with APR, then check total cost
APR helps compare loans because it reflects interest and certain fees. But APR alone is not enough. A longer term can reduce the payment while increasing total interest.
Origination fees matter
Some lenders subtract an origination fee from the funded amount. A $10,000 loan with a 5% fee may only deliver $9,500 before repayment begins.
Compare these numbers
- Amount received
- Monthly payment
- Term length
- Total repayment
- Prepayment rules
Bottom line
The best loan is not always the one with the lowest monthly payment. It is the one with a payment you can afford and the lowest reasonable total cost.
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