Every lender has a different personal loan interest rate. The rate charged for personal loans also varies from one client to the other in a lending institution and such things as a person’s credit score as well as their relationship with the lender determine it. If you want a low rate, you should consider taking a secured personal loan. With a secured personal loan, you guarantee the loan with your property and hence lowering the rate. With unsecured personal loans, there is no collateral and the lender charges a higher interest because of the increased risk.
Peer lending is one way to guarantee low interest rate. Although this is a relatively new way of lending and borrowing, it is very popular, especially given the high interest rates of mainstream lending institutions. Peer lending, as the name implies, is done between individuals, usually online, where the borrower and the lender meet through a peer lending company. The loans do not need to be secured and the lenders do not even consider the borrower’s credit score. The SEC controls peer lending ensuring that the process is legitimate and it can be trusted. Other advantages of peer lending over getting a personal loan from mainstream lenders is that there is no paperwork involved, meaning you can get money immediately and with very flexible terms of lending.
An important consideration to reduce the monthly repayments is to use a loan calculator. These are available on the internet and they are very easy to use as all you have to do is enter the amount you want to borrow, the repayment term and the interest rate. This is important because even with a low personal loan interest rate, the amount you will end up paying is still dependent on the repayment term.
Since different lenders had different rates, you should consider as many of them as possible. The internet makes everything easy because many lenders give their interest rates online. Comparing interest rates online is convenient since you do not have to leave your office or home or from wherever you are. It is also cheap since there is no travel involved and the information is available free of charge, it is anonymous, it is current and you get to compare hundreds if not thousands of lenders, hence increasing your chances of getting a good deal. Many online forums that discuss interest rates are available and you can go through their reviews to get information.
When getting a loan, it is important that you do not consider the rate only. You should look at all aspects of the agreement to reduce the risk of getting scammed and incurring hidden charges. You should have an accountant go through the agreement with you if the lingo is too technical. You should only go for well-established lenders because they are less likely to engage in fraudulent activities. To get a low rate, you should consider working on your credit score and maintaining it at 700 points or above that. All major lenders consider this score when determining the interest rate charged.