To get a low-interest rate, you want to show the lender you are a great personal loan applicant. Some tips before applying for a personal loan include paying off outstanding debt, looking for sources of income and making sure your monthly budget is well-balanced.
If you cannot pay off debt or earn more, you may consider putting one of your assets up as collateral. This will make your personal loan a secure loan.
For instance, your vehicle or home may make the lender feel more at ease. The lender will only take possession of the collateral if you are unable to pay back the loan.
With all of this in mind, you can put together your personal loan application. However, before you turn in your application, you might want to ask your potential lenders some questions too.
Now that you know what lenders will look for, make sure you know what to ask for. Here are some questions to ask the lender to ensure you are getting the best personal loans with low interest rates:
- Is the interest rate fixed or variable? A fixed interest rate means it will never change during the life of the loan. A variable interest rate will and often starts very low and then increases.
- What are the repayment terms? Get the details on what is expected of you, such as how long you have to pay the loan back and how frequent your payments are.
- Would a cosigner help? If you have poor or new credit, having your parents or someone cosign can help you secure the loan and possibly get better terms.
Are there any fees? Some loans have additional fees for the lender’s efforts to write up the loan. Make sure you know what you agree to.