Net amount received, after all fees
Effective annual rate, fees included
Term length and maturity date
Lines to fill in
- Net amount received, after all fees
- Effective annual rate, fees included
- Term length and maturity date
- Required monthly payments
- Prepayment penalty
- Total paid over the life of the loan
The deciding line
Compare the total paid, not the posted rate. Two close rates can hide a real gap.
Reducing everything to a monthly cost
Divide the total paid by the number of months in the term.
Two very different offers then compare on a single line.
Clauses that weigh as much as price
- The ability to repay early
- The right to renew on known terms
- The scope of the personal guarantee required
- The grace period allowed on a late payment
Getting both offers in writing
A verbal offer often shifts at signing. Ask for the full document.
Asking both lenders the same question
Ask each for the net amount advanced and the total repaid.
Those two figures are enough for an honest comparison.
A lender who refuses to give them has already answered your question.
Keeping a written record
Keep both offers, including the one you turn down.
They serve as a reference for your next financing.
A record of terms obtained helps in later negotiations.
