Finance a new car, start a new business, or maybe just to fund a few long-overdue home improvements… There are lots of reasons why you might want to take out a loan. But whatever the case, you want to find the cheapest option available; a loan that won’t burn a hole in your wallet when it comes time to repay. Or don’t you? These simple tips will help you in your quest for low-interest rate loans.
Improve Your Credit Score
The higher your credit score, the better your chances of qualifying for low- interest rate loans. Likewise, a less-than-stellar score will see you quoted higher rates, or even cause your applications to be denied altogether.
Okay, but haven’t you heard this too many times already? The thing with credit scores is that you just cannot get around them as far as loans are concerned. Lenders use your score to determine how reliable you would be as a borrower. There’s a chance that you’ll be forced to settle for those shady “Cheap Loans for Bad Credit” if your score isn’t high enough.
So, unless you need the money urgently, you’ll want to take a few steps to improve your scores before anything else:
- Pay up your credit card debt (plus any other outstanding dues) once and for all.
- If that’s not possible, perhaps it’s worth taking out a debt consolidation loan to amalgamate your debts.
- Pay your bills on time consistently.
The best deals are seldom easy to find — this is true for loans as it is for everything else (credit cards, savings accounts etc). You must skip the easy options, roll up your sleeves, and do a bit of digging. It’d also help to compare loans from multiple sources; banks, credit unions, plus all other accessible lenders. And do keep in mind that loans aren’t just about interest rates. Look out for processing and handling fees, as well as applicable penalties.
Use Soft Searching
This is where you obtain loan quotations from multiple lenders without actually sending applications. Soft search tools use your key details to work out which products you’re likely to be eligible for. This eliminates the hassle of having to fill out multiple forms when shopping. More crucially, the tools don’t send your information to lenders; this means there’s no risk of having your credit scores plummet due to multiple application checks carried out in quick succession.