Personal loan offer checklist for Carolina borrowers

Before you compare numbers

• [ ] The lender's name, address and NC or SC license number are on the offer
• [ ] I confirmed the license with the North Carolina Commissioner of Banks or the South Carolina Commissioner of Consumer Finance
• [ ] The offer is in writing, with the date it expires

The numbers, in writing

• [ ] Amount financed (what I receive)
• [ ] APR and finance charge
• [ ] Origination or other fees, and whether they come out of the proceeds
• [ ] Number of payments and the payment amount
• [ ] Total I will repay, and the difference from the amount financed
• [ ] Late fee and grace period

The terms around the numbers

• [ ] Is there a prepayment penalty?
• [ ] When will the money arrive, and how?
• [ ] Will the lender pay my creditors directly?
• [ ] What happens after one missed payment?
• [ ] Is the rate fixed?

Red flags: stop if you see one

• A fee demanded before funding
• Pressure to sign today
• A guarantee of approval
• A lender that will not give a license number
• Wire, gift-card or crypto payment requests

Carolina-specific checks

• Is the lender licensed in North Carolina or South Carolina, if required for its type of lending? Verify with the state regulator.
• Does the contract include any provisions that look unusual for a consumer loan, such as a mandatory add-on product?
• Does the lender's address match what is on the license?
• Does the loan disclosure show the APR and finance charge?

Time to decide

Plan on a day. If you are borrowing after a storm or for a time-sensitive repair, still take the time to read the disclosure and compare at least two offers. Scammers count on speed.

Fill-in checklist for each offer

Use a separate sheet for each lender if you prefer; the aim is to have every figure in writing before you decide.

Reading a loan disclosure

Federal law requires lenders to provide a disclosure with the APR, finance charge, amount financed and total of payments before you are bound. The finance charge is the dollar cost of the credit. The amount financed is the credit you actually get after prepaid finance charges. If the amount financed is lower than what you asked for, find out why. The CFPB explains APR and how it differs from the interest rate.

Questions for the lender, in order

1. Are you licensed in my state, and what is the license number?
2. Is the quoted offer final, or can the terms change after underwriting?
3. How are fees taken, and what will I receive?
4. When will the money arrive, and how?
5. How do you report payments?
6. What are my options if I cannot pay one month?
7. Is there a penalty for paying early?

Red flags that mean stop

A request for payment before funding, a lender that will not give a license number, pressure to sign immediately, a request to send a gift card or wire, a request for access to your bank account, a contract with blank spaces and a disclosure that does not match what you were told. If you see any of these, stop and verify through the state regulator, then report problems.

After you decide

Save every document. Set autopay for the due date with a small buffer in the account. Put the first three due dates in your calendar. If your situation changes, call the lender before a payment is missed.

Keeping a loan file

Create a folder, paper or digital, with the disclosure, agreement, payment confirmations and lender contact details. Update a simple log each time you pay.

One last question

Would I be comfortable explaining this loan to a family member? If the answer is no, find out why before you sign.

Printing and sharing

You can print this page or save it as a PDF to review with a family member, a counselor or a credit union loan officer before you sign.