Woman using binoculars to find the best online personal loan for her

You might think that finding an online personal loan would be easy, and you’d be right. But there’s a big difference between finding a loan and finding the best loan for you. Running a general online search will give you dozens of pages worth of results. And even if you narrow your search down, you’ll still get hundreds of options, and many of the top results will be there because of paid placement. So, when it comes to finding the best 2020 online personal loans, we want to help show you exactly what to look for.

Finding the best online personal loan for your needs goes far beyond clicking the first link you find or going to the “winning” bank on a website’s Top-10 list. What’s best for someone else might not be the best choice for you depending on several factors.

What to look for in an online personal loan

First things first, finding the online loan that’s best for you is going to take some research and patience. Sometimes the most important part of the research is going to be looking at your own information. 

Hopefully you already know your credit score before loan shopping, but you should also get a full copy of your credit report. That’s the only way you can know if your score is accurate, so be sure to check your report for incorrect information, and fix anything that’s incorrect as soon as you can.

Find and compare terms and conditions

The second most important information to find are the lenders’ terms and conditions. Unfortunately, that information is often difficult to find. So, do some digging! This is the only way to legitimately compare all of your options.

Take the time to read and understand the full terms and conditions to know what you might be getting into, and don’t just apply to the first lender you find. Figure out the cost of your loan via the annual percentage rate (APR) offered along with any setup fees and other potential fees. Keep in mind that APR does not reflect the true cost of a loan if you’re only borrowing money for a month or two or less. And always make sure the APRs you compare between lenders are relevant to your credit score. Remember, APR can vary greatly depending on your credit worthiness, hence the value in ensuring that your credit report and score are accurate.

Read the reviews!

One of the greatest things about internet research is the availability of genuine and unbiased user reviews. But even though online reviews are an indispensable resource for decision making, proceed with caution.

Read all the reviews you can find, from negative to positive and everywhere in between. Know that some overly positive reviews could potentially be manufactured, and the same is true for overly negative reviews. Get a feel for the tone of what’s been written, and pay extra attention to trends for any given lender. And don’t skip the lukewarm reviews. Sometimes those are the most honest and even-handed.

There are several online review resources, and you can also use trusted online forums where people tend to be a bit more upfront with their opinions. The BBB (Better Business Bureau) approach is worthwhile and often has real-world input, and many online personal loan shoppers don’t even realize the Consumer Financial Protection Bureau (CFPB) is a great U.S. government resource for data and research, including a full consumer complaint database.

Just be sure to choose multiple sources for your information to ensure balanced feedback, and don’t forget one of the most valuable resources around—your personal network. Talk to friends, family, friends of friends, and acquaintances to find people with real-world experience they can share with you.

What will I be paying?

Sure, you won’t find a specific payment breakdown when you’re comparing shopping for the best online personal loan, but you can at least get an idea of what your payment will be as well as where the money from each payment will be going.

Remember when we said to read and understand the terms and conditions? Well, that’s not only to learn about potential late-payment or returned payment fees. You also want to factor in origination fees that might be part of your payments as well as anything else you might find in the fine print.

Once you’ve added up any fees you’ll be paying monthly, you can figure out a good approximation of what your full monthly payment will be. With your APR or the range of APRs offered by each lender, along with the amount you’ll be borrowing, and for how long, you can use an online amortization calculator to figure out almost exactly what your payments will be. The calculator will show you what percentage of each payment is going to interest compared to the principle, and you can make note of the monthly fees you’ll need to add in. 

Keep in mind that while the APR is a great tool for comparing loans, it’s not something to be afraid of when you see a higher number. Remember that APR represents the cost to borrow a specific dollar amount for a full 12 months—it’s not a monthly interest rate. APR isn’t a number to cause panic but rather a number to give you more information for comparison purposes.

With all that information in hand, as well as all the reviews you’ve read, you can truly compare one lender to another and get a very good idea of exactly what you’ll be getting into every month for the life of your loan.

Short-term vs. long-term: What’s better?

When you’re armed with the terms and conditions from your prospective lenders, be sure to consider the full length of your term. As tempting as it is to compare only your monthly payment, don’t forget to consider the full cost of borrowing the money over the life of the loan; meaning–  how long you need it for.

A long-term loan is often appealing to many borrowers simply because you can more easily afford the monthly payment. And there’s nothing wrong with that approach if it’s the best option for you and your budget. However, you must keep in mind that the longer it takes you to pay for a loan, the more that loan costs you over time. A short-term loan might leave you with a tighter monthly budget, but it won’t last as long and will cost you less in the long run.

When weighing your options, consider every factor you can into your decision. Avoid getting into a short-term loan if you won’t realistically be able to keep up with the payments, and don’t get into a long-term loan without fully understanding how much it will cost you, including any potential early-payoff fees if you plan to pay it off sooner to save. Again, read and understand your terms and conditions. Did you know that there are loans out there with no early-payoff fees? Yes, and Helix is one of them!

Personal loans for fair credit scores

After you’ve done all your loan research and know you’ve done everything you can to be armed with your best credit score for the time being, you might feel like you’re stuck with no choices because you have a fair credit score (or even if you have a poor credit score).

There’s no arguing that an excellent credit score will result in the most favorable interest rates, but a poor to fair credit score doesn’t mean you won’t qualify. There are plenty of options for personal loans with fair credit scores, and upon approval and spending the several months of making your payments on time, you’ll no doubt be able to build your score up in the process.

Plus, applying for online personal loans from reputable lenders like Helix by Lead Bank won’t affect your FICO score. That means you can apply and find out if you’re approved without worrying about the process hurting your score in the long run.