Loan seekers are lucky to have a wide variety of options for obtaining the money they need. However, not all loans are created equal. Some loans come with high-interest rates, monthly payments, and long repayment periods, while others come with low rates, flexible repayment schedules, and minimal fees.
Using a personal loan calculator can help you decide whether borrowing from a bank or credit union or taking out a loan from an online lending company is the best option for your situation.
That is because, depending on the amount of money you need along with how long you need it, different loans could be more attractive to you. A personal loan calculator can help you figure out how much money you can borrow from each lender, as well as the monthly payments each will require.
However, before you start using a personal loan calculator to make comparisons, you need to decide which type of loan could be the best match for your situation.
Personal Loans vs. Online Lending Companies
Personal loans and most online lending companies offer loans ranging from about $1,000 to more than $35,000. The annual percentage rate (APR) on these loans can range from 6 percent to more than 36 percent, although an APR of 18 percent seems to be fairly typical among both personal loans and online lending companies.
Personal loans are offered by banks, credit unions, and credit card companies, while online lending companies are more likely to operate on the Internet. Because personal loans and online lending companies offer a similar kind of service — they provide money to consumers with poor credit — they’re frequently compared by borrowers. Nevertheless, there are important differences between the two:
Interest Rate: Unlike many personal loans, online lending company rates are not fixed; they are variable rates that fluctuate over time. This means your monthly payment can increase if interest rates go up.
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