Finding the right loan company for you can take a little bit of work, but having the comfort of knowing you found the best offers from a reputable company will be worth it. Fortunately there are a variety of resources available that can help.
What to Look for in a Loan Company
Interest rates typically have the largest impact on what you will be paying over the life of the loan, which means you want to try to find the best rate possible. Rates depend on the lender, your creditworthiness, and a variety of other factors. The range of interests for personal loans is also very broad, usually from 5% to 36% ARP. Borrowers with better credit scores can usually qualify for lower interest rates, but lenders have different approval criteria, which is why it’s best to shop around.
Fees can be another large factor that affect the overall cost of your loan. While some companies claim there are none, they may just be hidden. If this is the case, the company is probably not reputable. Some fees may include:
- Origination Fee: Which is a fee for processing your loan application and disbursing the funds. With major lenders, they typically range from 1% to 8% or more of the loan amount.
- Processing Fee: This is for processing your payment each month.
- Prepayment Penalties: While paying off your loan early may seem like a good thing, some lenders charge you for paying off your balance before the end of the loan term.
- Late Fee: All loans agreements have a late fee, but many lenders differ in the amount, so this is something you want to look into.
Loan Amounts and Repayment Terms
Personal loan amounts usually range from $1,500 to $100,000, with 18 to 24 month repayment terms, all depending on the lender. Choosing a lender with shorter terms usually means paying less interest overall, but monthly payments will usually be higher. In contrast, longer payment periods mean lower monthly payments, but more interest over the life of the loan. It’s best to find a company with flexible repayment terms. One that not only offers competitive rates, but will work with you and allow you to set your own payment date.
It’s worth doing business with a lender that’s known for its great customer service and ethical business practices, even if it means paying slightly higher rates. Some red flags to look out for may include that the lender isn’t registered in your state, they offer loans over the phone, they offer guaranteed approval, or ask you to wire money or pay a specific person. For more information on what to look out for when it comes to loans, check out our blogs on no credit check loans and payday loans.
Where to Start Shopping
Even if you think you’re getting the best rates and terms right off the bat, it’s best to continue to shop around. Comparing multiple lenders is an important part of the process to ensure you know what you’re getting and that it really is the best for you. Here are a few resources that can help you get started.
Referrals can be a great shortcut to finding a loan company. Working with someone that was recommended by someone you trust can make the whole process much more comfortable. Talking with professionals that are financially knowledgeable, such as lawyers, accountants, or financial advisors, is also a great way to find trusted lenders. But still stay skeptical, especially when it comes to people who may receive commission when recommending financial products. Still take the time to research and compare as many lenders as possible to ensure you’re getting the best rates, terms, and structures for you.
Many companies have websites where you’ll find details about loan products offered and their rates, terms, fees and more. And you’ll typically find the lender’s contact info online as well, so you can reach out if you need more info. If you can’t find any rates or terms on the site, it’s most likely not a reputable company, and you should leave that option behind.
Better Business Bureau
While getting the best deal you can is important, working with a trustworthy institution is just as important. One resource that can help you research lenders is the Better Business Bureau, a nonprofit dedicated to helping people find reputable businesses to do business with. Through their website, you can search for companies to find out what BBB rating they’ve earned and whether they’re accredited by the Better Business Bureau. You can also read customer reviews and complaints and check out scam alerts that consumers have reported to the BBB.
Consumer Financial Protection Bureau
The CFPB is a U.S. government agency created to ensure consumers are treated fairly by financial services companies. The site contains a searchable database where consumers can look for complaints filed against companies.
While finding a loan you can afford from a loan company you trust may require you to do your homework, there are a variety of resources and reliable options. Our final piece of advice is to always read the fine print and personally review all rates and terms before signing any documents.
Personal Loans with TLC
At Total Loan Company, LLC the loans we make are as individual as the people who apply for them. If you need a personal loan, we can help. Application is quick and painless, and no need to worry about secret or hidden costs. With TLC you know exactly what you pay with fixed rates and absolutely no extra fees. You are with a reliable company that has 24/7 customer support and data protection.