The first offer you see is rarely the best one. Rates and fees vary a lot from lender to lender, so comparing a few offers is one of the easiest ways to save money. Here’s how to do it without hurting your credit.

Step 1: Prequalify first

Many lenders let you check your rate with a soft credit check. Soft inquiries don’t affect your credit scores.¹ A hard inquiry happens when you formally apply, and that one can affect your score.¹ So shop around with prequalification, then apply for real only with the lender you pick.

One catch: a prequalified rate isn’t a final offer. The lender confirms everything when you apply, and your final rate can change.

Step 2: Compare APR, not the interest rate

The APR includes fees like origination charges, so it shows the true cost of the loan.² Two loans with the same interest rate can have very different APRs.

Step 3: Check how much cash you’ll actually get

If a lender takes a fee out of your loan, you’ll get less than you borrowed. If you need exactly $10,000, you may need to borrow more to cover the fee. Our calculator shows the cash you’ll receive.

Step 4: Line up the details

• Monthly payment and total cost over the full term
• Fees: origination, late payment, and whether there’s any prepayment penalty
• How fast you get the money
• Whether the lender can pay your card companies directly, if you’re consolidating
• Autopay discounts, and whether the quoted rate already includes one

Step 5: Read the final offer before you sign

Make sure the numbers match what you were shown. If anything changed, ask why. You’re not obligated to take a loan just because you applied.

Start comparing: Check rates from multiple lenders (paid link)

Sources

1. What is a credit inquiry?, Consumer Financial Protection Bureau.
2. What is the difference between a loan interest rate and the APR?, Consumer Financial Protection Bureau.

Advertiser disclosure: Personal Loan Time may earn a commission when you click some links on this page. That never changes what we say. We are not a lender, and this isn’t financial advice.