On the downside, Experian reports that personal loan balances are rising, too, from $192.9 billion in 2024 to $207.1 billion in 2025.
The report noted consumers are drawn to personal loans due to multiple financial factors, including stubborn inflation, sky-high credit card interest rates, and tighter household budgets. They see them as “a strategic option not only for emergencies but also for budgeting, refinancing high-interest debt, and planning ahead for major financial decisions,” the study noted.
One particular loan commodity, known as fixed personal loans, is particularly popular with loan consumers.
“A fixed rate personal loan is essentially borrowing a lump sum of money where the interest rate remains the same the whole time,” Matt Cairns, vice president of marketplace at JG Wentworth, told NTD News. “This means your monthly repayments remain the same with no hidden surprises of changes to interest rates.”
Three Things to Know About Fixed-Rate Loans
Don’t go into a fixed personal loan experience unprepared. Take these tips to the table with you.Here’s what borrowers should look for in a good fixed-rate personal loan
When looking for a good fixed-rate personal loan, borrowers should focus on a few key factors to ensure they’re getting a fair deal, and interest may top that list.“The interest rate (or APR) is one of the most important factors, as it determines the overall cost of the loan. A lower rate can save you money in the long run,” Cairns said. “It’s also important to check for any fees, such as origination charges, late payment penalties, or early repayment fees, as these could add unexpected costs.”
The loan terms matter too, since a shorter term typically means higher monthly payments but less interest overall, while a longer term spreads out payments over a longer period, but can increase the total amount repaid.
Expand your loan options
It’s wise to shop around when looking to land a good personal loan. “Check with your local bank or credit union, but also check in with other banks as well to see if they have any promotions or can offer a lower rate,” Cooper Bradfish, a certified financial planner in Wausau, Wisconsin, told NTD.Focus on the loan’s annual percentage rate, not just the interest rate
The APR folds in the origination fee, which matters enormously when looking for a good fixed-rate personal loan.“Origination fees commonly range from 1 to 10 percent of the loan amount, so a loan advertised at a low rate but carrying an 8 percent origination fee can end up costing more than a slightly higher-rate loan with no fee,” Olle Pettersson, personal finance expert at Finansplassen, a Europe-based data and financial research organization, told NTD.
Prepayment penalties matter too, so check them out.
Ask These Questions Before Agreeing to a Personal Loan
Before signing the dotted line on a personal loan, there are a few key loan factors to clarify:- "Are there any prepayment penalties?" – It’s important to ask to ensure the consumer can pay back the loan sooner if desired without being penalized, Bradshaw said.
- "How soon can I get the funds?" This issue cannot be overlooked, “especially if the lump sum will go towards an upcoming bill or time-sensitive expense,” Bradshaw noted.
- "How do I set up autopay?" "This is a great question to ask to ensure the borrower can automate their repayments,” Bradshaw added. “Autopay also helps avoid paying late fees and damaging their credit score.”