Offer guide
Read a loan offer one line at a time.
A loan offer packs the decision into a few lines of figures and conditions. These six lines are the ones to find first. The words around each figure matter as much as the figure itself.
Six lines
Find these six lines first.
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Amount financed
The amount of credit the lender actually provides on your behalf. It can be lower than the sum you asked for when some charges are paid up front. Find the figure with that label and compare it with what you expected.
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Rate and APR
The interest rate sets the interest. The APR is designed to show a broader yearly cost. If the two figures differ, the disclosure should explain what the difference includes.
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Term and payment schedule
How many months the loan runs, how often payments fall due, and whether each payment is the same. Check the first due date and whether the schedule can change.
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Fees
Origination, application, late, and other charges. Ask which are paid at signing, which are added to the balance, and which apply only if something goes wrong.
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Early and late payment terms
What happens if you pay early, pay late, or skip a payment. Look for prepayment penalties, grace periods, and how a payment is applied to interest and principal.
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Security and default
What the loan is secured by, whether the lender can pursue anything beyond it, and what the agreement counts as default. Also look for clauses that let the lender change terms after signing.
Questions
Ask in writing, then compare the answers.
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What is the total I will have paid by the final payment, and what does that figure include?
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Which fees are paid at signing, which are added to the balance, and which apply only if something goes wrong?
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Can the rate, a fee, or the payment change after I sign? If so, under what conditions?
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If I pay the loan off early, is there a charge, and how are extra payments applied?
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What exactly counts as default, how much notice is given, and what can the lender do next?
Ask for the answers in writing. A reply in an email, or a corrected disclosure, is easier to compare than a summary given out loud.
Check the arithmetic
Run the numbers yourself.
Take the amount, rate, and term from the offer and run them through the payment command in the Desk Terminal. The form is payment <amount> <rate> <months>, where the rate is a yearly percentage and the term is a whole number of months.
The result is an estimate for a level-payment loan at a fixed rate. If the payment on your offer differs, the gap is a question to ask, not a verdict. Fees, rounding, and the way interest accrues can all explain a difference.
This page explains how offers are read. It is not financial, legal, or medical advice, and it cannot tell you whether a particular loan is right for you.