Fees and interest can make personal loans expensive— here are 4 ways you can cut down on the cost

The tried-and-true advice on covering a large (and planned) expense is to gradually save for it (preferably in a high-yield savings account). But sometimes the cost of a home renovation or unexpected medical procedure can overwhelm even the most prudent saving plan or emergency fund. That's when personal loans can really shine as a valuable financial tool.

These loans come with all sorts of different terms and conditions, which can stick even the shrewdest shopper with unnecessary fees and interest payments. CNBC Select has four tips that will help you save as much money as possible on your next personal loan, so you get the most out of these products.

Some — but not all — personal loan lenders may charge fees for submitting an application and originating the loan. The exact fee varies from lender to lender, but usually ranges from 0% to 5% of the money loaned (though some lenders may charge as much as 10%). If you're borrowing a large amount of money, this could cost you thousands of dollars which you have to pay upfront.

Fortunately some lenders, such as LightStream or SoFi, don't charge these fees. CNBC Select ranked LightStream as the best overall personal loan lender, since it gives eligible borrowers up to 144 months (12 years) to repay the loan and allows them to apply for up to $100,000.

Similar to LightStream, SoFi also doesn't charge any application fees and also provides funding up to $100,000. Eligible borrows have up to 84 months to repay the loan.

Of course, sometimes a lender that charges origination and other fees may also offer other benefits that make sense for your situation (such as a longer repayment term or less strict credit score requirements). If you must go with a lender that charges additional fees, try to keep them as low as possible — you're already on the hook for the loan's principal and interest, so the less you pay in fees the better.

Making extra payments will help you pay off your loan balance faster, which means you'll save on interest charges. Just make sure your loan lender doesn't charge any prepayment penalties.

A prepayment penalty (or early payoff fee) is an extra fee charged by some lenders if you pay off your loan early (which deprives the lender of your interest payments). The actual cost of the prepayment penalty varies depending on how it's being charged.

Depending on how it's charged, the prepayment penalty can cost you just as much (or more) than the interest you would pay if you hadn't made early payments. You can avoid this headache entirely by excluding lenders that charge this fee when shopping for a loan, unless you're certain you won't be able (or willing) to pay the loan back early (in which case it doesn't matter what fee the lender charges).

Late fees on personal loans are commonly charged as either a fixed amount or a percentage of the monthly payment. Similar to prepayment penalties, late fees can sometimes wind up costing you a significant amount of money.

The best way to avoid missing payments is to sign up for autopay. Autopay lets you make your monthly payments without having to manually transfer money from your account, ensuring you'll never risk forgetting to pay by the due date.

Some lenders, such as Upgrade, will actually give you a lower interest rate if you sign up for autopay (a 0.25% APR discount in the case of Upgrade).

Refinancing can help you save money with many types of debt (including student loans and mortgages). It involves replacing your current loan with a new one that carries a lower interest rate, saving you money on your interest payments.

You'll need to have good or excellent credit to qualify for most low-interest loans. If your credit score hasn't increased since you applied for your original personal loan, it's a good idea to take a few steps to improve it before refinancing.

*Experian Boost® could potentially help bump your score by a few points. This service scans your bank accounts for consistent on-time payments for expenses such as phone bills, utilities and streaming services. If you've been on top of those payments, your good deeds will be reflected in your credit report from Experian (though not the other major credit bureaus).

Knowing how to save money on a personal loan can help you get the most from this flexible financial tool. Watch out for loans that charge origination, application and late fees, as they can add up to a hefty amount. Additionally, making extra payments (on loans that don't charge an early payment penalty) and refinancing your loan can also make your loan more affordable.

As always, just be sure to do your homework before applying for a loan — or any financial product for that matter. This way you can be sure it genuinely fits your needs.

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*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.