Getting the best personal loan rates is not always easy. If a borrower has some type of collateral to offer for security on the personal loan they are seeking there is a good chance they can get some of the best loan rates. Those individuals are considered a low risk therefore lenders offer lower interest rates.
The best way to get the lowest loans rates is to be sure that you have an excellent credit score. Quite often people have no clue what their credit score is. All individuals looking to take out a personal loan with low personal loan rates will want to request a copy of their credit report before they begin applying to lenders.
It is crucial for those looking for the best rates to review their credit report for any inaccuracies or credit issues that need resolving. Inaccuracies are the cause of approximately 25% of all the lowered credit scores. The other reason is not enough credit. The borrower needs to make sure they have a way to raise their credit score before applying if they would like to get the best possible rates available.
The quickest way to raise your credit score to get the best loan rates is to pay down all the balances on your credit cards to a minimum of 20% of their limits. You can get a leap in credit score from this in as little as 30 days to up to 30 points. It is always important to do this prior to applying for a loan because you lose a point on your credit score for each application you submit without including an accurate credit report. It is safe to say that if the borrower tries to lie about their credit score the lender will not give them good loan rates.
Finding Good Rates When Your Loan Is Unsecured
For those consumers looking into unsecured personal loan rates, do not be surprised if they are a bit higher than those for a secured personal loan. Borrowers must have excellent credit to get low rates without any collateral. It will be difficult for some lenders to offer you low loan rates that are the same as those with collateral. For loan companies and lenders, an unsecured loan is a much higher risk.
Quite often lenders will raise loan rates to protect their investment. Your best bet is to shop around for many lenders. The market is so competitive today you will be able to find some lenders willing to give the best unsecured loan rates available. It is wise to shop not only through local banks, but also to do comparison-shopping on the Internet as well.
The borrower's credit report is what will determine what loan rates are offered to him or her. Be sure to check your credit score for mistakes that might make your loan rates go up before applying for your unsecured personal loan. If there are some errors that need to be cleaned up to lower your rates, wait approximately 1-2 months to apply. This will make sure your credit score is the best it can be so you can get the best personal loans rates available to you at the time.
Paul Rogers writes general finance and loan articles for the Loans UK Online website at http://www.loansukonline.co.uk