Cost to repay a $5,000 personal loan

Cost to repay a $5,000 personal loan

To get the lowest interest rate, it’s important to compare the rates and terms you can qualify for with multiple lenders. For example, although you might be able to get a $5,000 loan with poor credit, expect to pay a higher interest rate than you would with excellent credit.

Repayment terms

Repayment terms for personal loans are typically two to seven years. The shorter the loan term, the lower the interest rate offered by most lenders. But because you’ll be making fewer payments, you’ll also have a bigger monthly payment.

Choosing the loan term with the shortest repayment term and highest monthly payment you can afford can help you get a better interest rate and pay less in interest.

Fees and total cost

Although it’s easy to get fixated on interest rates and monthly payments, you should also keep a close eye on fees and total repayment costs.

Review the federal Truth in Lending Act (TILA) disclosure provided by your lender. When comparing loans, there are two numbers in the disclosure that are typically helpful:

  1. The finance charge: This outlines the costs associated with your loan, including interest and fees.
  2. Total payments: This is how much you’ll pay back altogether, including the loan principal and finance charges.

The table below shows the relationship between the loan repayment term, interest rate, monthly payment, and total interest charges. The interest rates in the table are hypothetical and are for purposes of illustration only.

You can use our personal loan calculator to estimate the monthly payment and total interest charges for loans with other rates and terms.

With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.

Personal loan alternatives

If the limits on your credit cards are high enough, or you have multiple credit cards, you can consider using them for the amount you need – especially if it’s on the lower end, like $5,000 or less. But make sure you’re able to pay off your balance in full each month. If not, you’ll end up paying a lot in interest.

Since personal loans typically have a much lower interest rate than credit cards, getting a personal loan might be the better choice if you don’t expect to be able to pay it back quickly. Just make sure to do your research and choose whatever makes sense for your finances.

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About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.99-% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 8%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of %, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,. As of , none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.

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