A fast online loan can cost considerably more than expected when fees are added to the interest charges. Depending on the lender and product, you may encounter origination or administrative fees, application fees, late-payment fees, returned-payment fees, or other charges.
Some fees may be deducted from the money you receive rather than added directly to your loan balance. For example, you might be approved for a certain amount but receive less after an upfront fee is deducted.
This is why the APR and total repayment amount are important when comparing offers. Don’t judge a loan by its advertised interest rate or monthly payment alone.
Before accepting an offer, ask the lender to explain every fee and when it applies. Read the loan agreement carefully and confirm how much money you’ll actually receive and how much you’ll eventually repay.
If the lender cannot clearly explain its charges, consider that a warning sign. Our guide to online loan mistakes covers issues borrowers should watch for before accepting financing.
