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Comparison Shopping

Now that you have your credit score, have challenged any errors on your report, and have worked to build up your credit, it is time to get that loan you've been dreaming of. But … wait! There's one more important step to make sure you get the best loan for you -- comparison shopping.

To compare loans, you need to understand APR or annual percentage rate. APR is a standard term in lending and is defined as "the actual cost of borrowing money, expressed in the form of an annualized interest rate." Why is APR important? Having a simplified rate to look at helps show the true cost of credit. That rate can also be fixed or variable, change when certain things occur (i.e. late payments), be low for only an initial period of the loan, and more.

Fees are another important point of comparison among various loans. All fees that are charged should be disclosed in loan promos, so be sure to read all the fine print and ask if you don't understand something!

You can save money -- sometimes a lot of money -- by taking the time to weigh more than just your monthly payment. Review the fees and the interest rate you will pay (both now and in the future), as well as the other factors that impact pricing on your loan. Comparing loans can also help you avoid taking what looks like a good deal, only to end up paying more over time than you had intended.

If you have a monthly payment budget, you can focus on finding a loan that fits. But don't let someone talk you into a loan that you can afford now, but keeps you paying for more years or months than intended. If you're not aware, the interest you pay in those extra months can be a hidden cost that adds up quickly. You do not have to disclose your budget in discussions with a salesperson. 

Talk to your credit union about their loan options and see how they compare to other loan options you are considering. As we explore the topic of Preparing for a Loan this month, here are some additional resources to consider.


Montana Credit Unions for Community Development (or MCUCD) is the award-winning, charitable arm of the Montana Credit Union Network. A state-wide nonprofit organization, MCUCD works together with the state's credit unions to improve the lives and financial independence of all Montanans.