Finding a low rate from a lender can be a major feat. Between the competitive corporate banks and the pressure to have an impeccable credit score, it can be challenging to navigate all of your options. Here are six ways to find the best rate for your personal loan no matter what your position you’re in:
1. Avoid Corporate Banks and Big Name Lenders
Corporate banks, like Bank of America and Citizens, offer steep rates for a reason – the money they make on personal loans is insignificant. Since these big boys are set on making a profit, it is unlikely they’ll be flexible on a rate even if you have an in with the company. You’re probably inclined to go to big name banks first considering they may be most convenient to where you live, but before you open their doors, consider the alternatives.
2. Focus on Credit Unions
Credit unions are non-profit organizations that share profit with their members. Their status gives them flexibility to offer lower rates while offering quality service. Look into local credit union chapters or search the internet for organizations. Credit unions are generally known for putting people over profit, so they can also be a great source for tips and advice.
3. Shop the Internet
Recently, online banking has become a craze – and a savvy, money- saving one at that. A quick Google search will provide an assortment of options to choose from. When researching for the best personal loan rate, remember to also check out online credit unions and other financial institutions.
4. Borrow Unconventionally
Lending communities like ‘Peerformance’ are a great way to borrow funds without having an impact on your credit score. By receiving funds that are indirectly provided from other people, you can lock a personal loan without it showing on your credit report. This is best if you have a low credit score.
5. Take Advantage of 0% Promotional Rate Credit Cards
If you are looking for a very short term loan, consider using a credit card. Many credit card companies offer promotional rates at 0% for periods anywhere between 12 – 24 months. You can use promotions like these to take a cash advance. Before cashing in on this, it is important to make sure you can pay off your loan in full during the promotional period.
6. Time It Right
Many financial institutions run special promotions around the holidays. Check the internet, credit unions, and other lending sources, like credit cards, around Christmas, Thanksgiving, Labor Day, and the Fourth of July. By securing a loan at the right time, you may be surprised at your savings.
7. The Walkaway
Your options are many when trying to lock a personal loan rate. If you take the time to calculate how much you can spend on the purchase and in interest over the maturity of your loan, you will know which rates work for you and which ones don’t. Try to negotiate wherever you look, but don’t agree to a rate you can’t afford. Search for online financial institutions and credit unions and, if possible, time your loan with holiday promotions.
Sourced from: Investopedia
Photo: ThinkstockPosted on May 5, 2023