Before signing a personal loan, confirm the written APR, finance charge and amount financed, see every fee in dollars, test the payment against your budget and debt-to-income ratio, verify the lender is licensed in your state, and walk away from anyone who asks for money first or guarantees approval. This checklist covers all twenty checks.
On this page
Tick as you verify
The money
The fit
The lender
The red flags
The paperwork
How to use this checklist
Print it or copy it into a note. Fill in one column per offer so that you can compare them side by side. Each item has a reason, because a checklist you understand is one you will actually use.
The eight numbers to record from every offer
| Number | Where to find it | Why it matters |
|---|---|---|
| Amount financed | Loan disclosure | The money you actually receive |
| APR | Loan disclosure | Cost of credit as a yearly rate, including certain fees |
| Finance charge | Loan disclosure | Dollar cost of credit |
| Total of payments | Loan disclosure | All you will repay |
| Number and size of payments | Repayment schedule | Fit with your budget |
| Origination fee | Fee schedule | Often taken from proceeds |
| Late fee and grace days | Terms | Cost of an error |
| Prepayment terms | Terms | Whether you can pay early without a charge |
Three conversations to have before signing
With yourself. Could I make this payment if my income fell by a fifth for a month? What does the payment leave for food, transport and savings? If the answer is uncomfortable, ask for a smaller amount.
With the lender. Ask them to explain any fee you do not understand, to confirm when the funds will arrive and to state how payments are reported to the credit bureaus.
With someone you trust. A friend, relative or counselor can read the contract with fresh eyes. If a lender will not let you take a day to review it, treat that as a signal.
Documents to keep
Save the signed agreement, the disclosure, the payment schedule and any emails. Keep a record of each payment. If a dispute arises, these papers are your evidence. Note the lender's license number and where it was verified. You can verify with your state regulator or, for banks and credit unions, through federal regulators.
After you sign
Set up autopay for the due date, with a small buffer in the account. Put the first three due dates on a calendar. If your situation changes and you might miss a payment, call the lender before the due date, since many offer hardship options only to those who ask early.
Warning signs inside a contract
Watch for blank lines you are asked to sign, add-on products you did not request, a mandatory arbitration clause that limits your options, a prepayment penalty that was not disclosed up front and a payment schedule that differs from what you were told. If the amount financed on the disclosure is less than you expected, ask what was deducted and why.
Frequently asked questions
Can I back out after signing?
Not always. Federal law gives a three-day right to cancel for certain loans secured by your home, but most unsecured personal loans have no automatic cooling-off period, so check before you sign. Ask the lender what its cancellation or prepayment terms are.
What if the lender will not give me the APR in writing?
Treat that as a deal breaker. Lenders must provide Truth in Lending disclosures before you are obligated.
Is the APR the only number I need?
No. The APR helps compare costs, but you also need the total dollars repaid and the payment size that fits your budget.
How long should I take to review an offer?
At least a day for a significant loan. A lender that refuses to let you review a contract is a warning sign.
What if the lender's final terms differ from the quote?
Ask for an explanation in writing. You are not obligated until you sign, so you can walk away.
Should I sign an e-contract on my phone?
You can, but read the full document on a large screen first and save a copy.