If you are in the market for a loan, you definitely want to secure the lowest rate possible. While loans all have their specific loan rate range, you can actually get the lowest rate possible using these tips and tricks. Try each one to make sure the rate you get is as low as possible!
Improve Your Credit Score
If you want the best rate possible, you need to have an excellent credit score. The lowest rates always go to those who have good credit and great credit history, keeping their scores high over time. If you know you are going to apply for a loan soon, check your credit and try to raise it, if possible. Make any monthly payments on time and keep your credit card balances low to help maintain good credit. If your credit is not as high as you need it to be, check your credit report and fix any errors or mistakes that may be on it. Immediately pay any accounts that have gone into collections to instantly boost your credit. You can also try to open a new credit card if you just need to add to your credit. Once your score goes up, you should easily be able to get those desirable, low loan rates!
Best Loan Providers
There are many companies out there who can give you loans. However, some loan companies are better than others and different lenders will be able to meet different needs. Some may offer longer loan terms with lower monthly payments while others can give you a lower interest rate. Check lender reviews online as well as read each lenders loan terms thoroughly before applying. Do your research and you will surely find the best low rate loan for you!
Look At APRs
While the interest rate you pay on your loan is a huge factor, you should also consider the annual percentage rate (APR). The APR is calculates by adding all the loan fees, application fees and the interest rate all together and combining that cost with the amount of your loan. This will give you the real cost of your loan. Those fees can add up! So be sure to look for a loan that has a low interest and also low fees and a lower APR. All of these little factors will matter to the life of your loan.
Shorter Loan Terms
It is very beneficial for a lender to get their money back quickly so it is in their best interest to offer loans with a shorter term in years. In fact, lenders will likely give you a much better interest rate for loans that will be repaid in under 5 years. Choosing a short loan will give you a low rate so definitely opt for this option if you are able to afford the monthly payments.
Add a Cosigner
If your credit score is only okay, you may want to have someone with a great credit score sign on to your loan. Having a cosigner will make you look less risky to a bank, giving them more incentive to lower your interest rate. The lender will look at the cosigner’s credit history and take this into consideration when assessing your loan. Their good credit will get you that low rate you want! Just be sure to make your monthly payments on time as the new loan will not only affect your credit score but theirs as well.
Getting the lowest loan rate possible is imperative when applying for a loan. Check your credit, look for shorter loan terms and check each loan a lender is offering to see what suits you best. These tips will help you get a low-interest loan and pay less over time!