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Thinking about a personal loan?

If you're thinking about a remodeling project or consolidating your credit card payments into one lower interest rate loan, then a personal loan might be the way to go. A personal loan is fixed amount of money borrowed from a financial institution or an online lender and is paid back in fixed installments. With interest on top.

A personal loan is clear-cut. There’s a beginning and an end.

In most cases, you’ll have two to five years to pay it back the loan in monthly installments at a fixed amount with interest. Payments will be the same every month for the life of the loan. You’ll always know exactly what you owe and how long you have to pay it back.

Interest rates on personal loans can be significantly lower than rates on credit cards. Personal loan rates often start as low as 6% APR, but they can also range up to 36%, with the average being around 10.21%, according to Federal Reserve data. Your rate will depend on your history with credit, your income, and other factors. (note that car loans usually have lower interest rates than personal loans, so this is usually not the way to pay for a car.)

Best advice: shop around. Your bank might be the first place to start, since you know them, they know you, etc. But then check other sources as well. A simple Google search will give you lots options. Note that origination fees for processing the application are common, but watch out for prepayment penalties. You shouldn’t be punished for getting out of debt as quickly as possible. So, read all the fine print, and don't be afraid to ask questions. For more help with your personal finances, contact Stevie Swain at


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