How to read a loan offer before you sign

A loan offer is a promise of specific terms. Before you e-sign anything, take five minutes to read every number. Here's what each one means.

The key numbers

• Loan amount: how much you're borrowing. Check whether any fee is deducted from it before you receive the money.
• APR: the yearly cost of borrowing including most fees. Use it to compare offers.
• Term: how many months you'll make payments.
• Monthly payment: the amount due each month. On a fixed-rate loan it stays the same, though the last payment can differ by a few cents due to rounding.
• Total interest and total repaid: what the loan costs over its full term if you make every payment on time.

The payment schedule

A good offer includes a schedule showing every payment, its due date and how much goes to principal versus interest. Early payments are mostly interest; later ones are mostly principal. This is normal for an amortizing loan.

Fees and penalties

• Origination or setup fees, and whether they're deducted up front.
• Late fees: how much, and how many days of grace you have.
• Prepayment penalties: whether you're charged for paying off early.

Questions to ask yourself

• Can I afford this payment every month, even in a tight month?
• Would a shorter term save meaningful interest at a payment I can still afford?
• Do I understand how and where to make payments?

At LoanEase, your offer page shows the APR, monthly payment, total interest, total repaid and the full schedule before you sign. There's no origination fee or prepayment penalty, and the late fee ($25 after a 10-day grace period) is listed on our rates page.