If you are lucky enough to get a personal loan on low-interest rates, you can save a huge amount. But this benefit cannot be availed in a single day. It takes years to establish a good financial record that can help you to save digits on the interest rate at times. Note that different banks follow different interest rates on personal loan applications.
Things to know about a low-interest personal loan:
The low-interest personal loan is a special type of personal loan that has an interest rate lesser than 12%. Note that it functions same as other personal loans where an individual simply borrows some money from a bank or any other financial institution and then repay it back with some calculated interest rate including loan fee. But as they have lower interest rates, they usually cost lesser than the regular personal loans.
In order to quality to achieve low-interest rate for the personal loan, it is important to have a strong financial history with a credit score higher than 720. Some of you might be interested to know about how lenders calculate the interest rate for such personal loans. There are four major terms that are utilized to determine interest rates. They are credit score, credit report, debt to income ratio, and non-conventional factors.
Some of you may think that it is possible to get a low-interest rate of around 2.99% for a personal loan with a good credit score but in actual, very few people are able to qualify for such loans at the desirable interest rate. The lenders prefer to offer such loans to a few ideal candidates only. In most cases, they are people with six-figure income, no debt and who borrow a smaller amount of money. In most cases, people having excellent credit history can get interested rates as low as up to 9%.
Where you can avail low-interest rate personal loans except banks?
You can go through following authorities to get low-interest rate personal loans:
- One of the most common options is peer to peer lenders that connect investors with the borrowers. Those who have good credit score can easily get a loan on the competitive interest rate.
- Many credit unions do not have any shareholder in their premises. Hence they often prefer to lend their profits to the members on reasonable interest rates with little or no fees. However, all credit unions are not interested in providing membership to the public.