SuperMoney's Complete Guide to Loans

Find out how to get the best possible rates and terms.

Become an expert before you apply for your next loan. Learn how to save money on interest rates and fees.

Loans are one of the most intuitive financial products around. The lender gives you money. You repay it with interest within a set period. Easy.

However, don’t let their simplicity dupe into believing that all loans, or lenders for that matter, are made equal.

You can save a lot of money by investing a little time and effort into comparing lenders and checking what rates and terms they offer. However, every time you apply for credit lenders will take a hard pull on your credit report, which will ding your credit score.

SuperMoney’s loan offer engine allows you to see what rates and terms you qualify for without hurting your credit.

Other lenders entice borrowers with low rates but then add hidden fees, such as origination fees and prepayment penalties. SuperMoney’s loan offer engine specifies the fees included in each offer so you can make an informed decision.

What types of loan are available?

Auto Loans

A recent survey by the Federal Reserve reported that 76.1% of car buyers negotiated the purchase price with the seller, but only 31.6% negotiated the interest rate on their loan. It gets worse. 27.1% of car buyers considered the monthly payment on their auto loan as the most important factor, but only 6.1% considered the interest rate on the loan as the most important factor (source).

However, paying a high interest rate can cost you many times more than what you’re likely to shave off the purchase price of your vehicle, regardless of your negotiating skills.

Whether you’re looking to buy a new car or refinance an existing, SuperMoney’s auto loan offer engine is a no-brainer. Comparing options won’t hurt your credit score because SuperMoney’s lending partners perform a soft credit pull as part of the prequalification process.

Auto Title Loans

An auto title loan is a short-term loan that uses your car as collateral. You must own the title to the car for it to work. In other words, you can’t already have a loan out on the car. In exchange for this secured loan, you hand over your title and a copy of your keys to the lender until you pay it off.

Because you’re using your car as collateral, auto title loan companies typically don’t run a credit check. If your credit is bad enough that you don’t have any other borrowing options, an auto title loan can get you the cash you need. All you need is a working car.

The application and approval process for auto title loans is typically fast. In most cases, you’ll have the money in your bank account within 24 hours. The amount you can apply for is based on the value of your car. For example, the lender may cap your loan amount at 50% of your car’s value, or some other percentage.

SuperMoney’s auto title loan comparison tool provides a transparent list of fees and rates.

Business Loans

Choosing from a wide selection of online business loans online can be overwhelming, but there’s a right fit for just about any business owner. An online business can provide the money you need for expenses such as working capital, equipment, real estate or revolving funds. SuperMoney’s business loans comparison tools make it easy to compare terms and fin the best business loans available to you.

Payday Loans

Payday lenders try to address this market with a short-term (usually two weeks) fee-based loan. In a traditional payday loan, a customer writes a personal check made out to the lender. The lender agrees to hold the check for a specified period of time, usually until the customer’s next payday or for up to about two weeks, before depositing it. In exchange, the lender advances a cash payment to the customer that is the amount of the check minus a fee. For example, a borrower might write a check for $115 that the lender agrees to hold for two weeks. The lender provides the borrower with a $100 cash advance. So the borrower pays a $15 fee for a two-week finance charge.

When you do the math, it’s clear payday loans are an expensive source of credit. The average fee for a payday loan, for instance, is $15 for every $100 borrowed (source). That equates to 391% APR on a $100 loan with a two-week term.

In most cases, payday loans should be avoided. They are the loans of last resort that you should only consider in emergencies. However, not all payday lenders are created equal. Compare fees and read what other borrowers think of their customer service.

Personal Loans

Personal loans are a great tool if you want to make a big purchase or consolidate your debts into a single fixed monthly payment at a lower rate. However, the cost of a personal loan can vary greatly depending on your credit score, income level, loan amount, and other factors.

Unlike mortgages and auto loans, unsecured personal loans don’t require an asset as collateral, such as a car or a house. If you don’t make payments, the lender can’t immediately seize your property. Although defaulting on your loan payments will damage your credit score. What’s more, transferring credit card debt to an installment loan can improve your credit score because it lowers your credit utilization ratio and diversifies the types of credit on your credit report.

Once you decide a personal loan, you need to determine what type of installment loan is best for you. Check what interest rates and terms you qualify for and determine whether you can realistically afford the monthly payments before accepting a loan offer. SuperMoney’s loan offer engine sets out the rates, fees, and eligibility criteria of the leading online lenders.

Private Student Loans

If you’re looking for the right loan to help you pay for your own or your child’s college education, there are many options available.

It’s a good idea to look at several different lenders when considering a private student loan. Interest rates vary, for one thing, and you want the lowest interest rate possible.

There are many student loan lenders on the market. Each lender offers different terms and rates. It’s important to shop around and do your homework before committing to a particular lender.

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