It is an installment loan in which the borrower has to pay a pre-fixed amount plus a set rate of interest on a monthly basis for a certain period of time. There are two kinds of personal loans: secured personal loans, and unsecured personal loans. The former uses the collateral like a property or a car, to back up the financing, and the latter does not use collateral.
Here is how you can get better rates.
Check Your Credit Score
As they say, “The higher the credit score, the lower the rate.” This still holds true. Banks are happy to help you, but they do not want to take a lot of risks. Have a good look at your credit score before applying for loans. Be prepared with at least three copies of your credit report to present it to the bank.
Improve Your Credit Score
If you have a low credit score, now is the time to improve it. Rectify any errors before shopping around. An error simply like an unpaid account that you do not actually remember could be resulting in lowering your credit score and hampering with your opportunity to get a low-rate personal loan that you need. Also, make sure you have paid off all the credit card debt and look after the collection accounts that reflect poorly on you.
Every loan you apply for triggers an inquiry into your credit. And this also lowers your credit score to a limit. If you are sending multiple loan applications at the same time, your credit score is bound to take a hit. So, be quite selective when it comes to choosing the loan you are applying for, especially the ones whose credit standards you will be able to meet. Look out for your credit score anyway.
Tips for Finding the Best Bank
A bank which manages all your checking and savings account is a good place to start with. Check out if your bank offers a discount on interest rates with additional banking relationships like deposit accounts or a first mortgage. Credit unions are deemed to be famous for their affordable rates. If you are one of the members, or anyone in your family is, you can also check out their rates on personal loans. Or if you are looking for a company that comes with all such features, BC-Loans Fast approval loan is one such place to be.