Wondering how to get a loan? We all know that to borrow money it costs even more money in the future. With the addition of interest rates and various charges applied to the loan, the amount you have to pay back becomes an outright frightful figure.
Banks, saccos, credit cards, money lenders and many other money-lending companies charge you a yearly fee which is basically the interest of the loan. If you want to a low interest loan or wish to lower the interest on your current loan, you’ll have to work on some carefully planned strategies.
“Best loan rate”- what does it mean?
Often the best loan rates are the ones which have lower APR. Don’t recognize the term “APR”? It actually stands for Annual Percentage Rate and refers to how much you have to pay on a yearly basis for the loan.
First and foremost, you have to know and decide what you want from your loan and understand its various related payments. Think about how much money do you need to borrow and the time needed to pay it back. We are asking you this because the longer you take to repay the loan, the more it is going to cost you.
In this case, you also need to be familiar with the term amortization, which is the number of years used in calculating the monthly payment.
Now, here are the strategies and tips you have to work on in order to get a low interest rate on your loan:
· Research and know all the facts
Different banks or money lenders make different decisions as per their policies when they are giving you the loan. Don’t get carried away and just grab the first offer you get. Look around you a little more and try to research on the banks or the money lenders. In comparison you’ll see that some will offer higher interest loans and some will offer much lower interest loans.
Moreover, loans aren’t just confined to interest rates. We strongly suggest you to find out if there are any hidden charges included and if you can payback your amount earlier than the estimated time of the loan repayment.
Sometimes certain loans become more expensive due to these tiny factors so comparing same sounding loans can be a good option for you.
· Make Saccos the first choice
Usually, saccos and small banks offer loans at a low interest. But sometimes to get a loan from your local sacco, you have to become a member by living in a certain area or working for a certain company.
You can also research different local banks for their interest rates, mostly targeting small banks. Believe me when we say this is going to save you a decent amount of cash over time, especially on larger loans. The current offered rate of interests can be found at the bank’s website.
· Apply for one loan at a time
Avoid the temptation of applying for multiple loans at a time because every time you apply for a loan, a check is executed on your credit report by the lender. These leave a rather daunting mark on your file and can damage your credit score record. It happens mostly when your loans are unsuccessful.
· Secure credit card debt
You can pay off your loan at a low interest rate by looking for a credit card that accepts balance transfer at a 0% interest rate. If you have been paying your credit card bills on time then a decent credit score is a good way to go. A credit card is a little more flexible than a loan. You can borrow money whenever you want and pay it back as soon as you can!
· Improve your credit score
Have an excellent credit score? Then your chances of getting a low interest loan are higher. Don’t worry if you don’t, because you can always improve your score before applying for the loan.
You can start with paying off your previous dues, spending less on your credit card and moreover by making sure to keep your old credit cards running since you will be applying for a loan in the future. These are just some of the simplest ways through which you can easily improve your credit score.
Hopefully, these strategies and tips will help you get a low interest loan in the future. You could also save yourself all this hassle and simply resort to Mombo Sacco for a smart and simple low interest loan. Get digital and build a bright future for yourself and your family from the comfort of your own home!