When does a personal loan make sense?

Mostly for debt consolidation when you have high-APR credit card balances. A 12% personal loan beats a 22% credit card. Be careful with the other common use cases (home reno, weddings, vacations) — you're paying interest on something that doesn't generate income.

Secured vs unsecured?

Unsecured = no collateral, higher rate, no asset at risk. Secured (against a car, savings) = lower rate, but you can lose the asset if you default. Most online personal loans are unsecured.

Some lenders charge an origination fee (1-8% of the loan, taken upfront). A 5% origination fee on a 12% APR loan effectively raises the APR. Compare lenders on the all-in APR including fees, not the headline rate.

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Free personal loan calculator. Enter loan amount, APR, and term to see your monthly payment and total interest cost.

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