Getting the best rate loans depends on a variety of factors ranging from personal responsibility to what tools are available. It also depends on the economic climate.
In South Africa, you’re in the minority if you haven’t borrowed money in the last year. In fact, an Economist report from January 2018 places the borrowers figure at around 86 percent.
But borrowing in itself isn’t a bad thing. In the following article, we’ll be discussing tips and tricks to secure the very best loan APR. Let’s go!
1. Look for Ways to Improve Your Credit Score
Lenders have to know they’re going to get their money back (with interest) in a reasonable amount of time. The more risk they take, the higher your rate will be.
A credit score is crucial to earning their confidence. Fortunately, we’ve charted this territory before, offering some pretty ingenious ways that you can increase your score. A quick recap:
Keep utilization low (i.e., the amount of credit you use compared to the amount that’s actually available to you). Pay off any collectors. Also, keep open old accounts, protect your identity, and use secure credit cards to build or rebuild credit.
2. Explore Credit Unions
Another way to get the best personal loan rate is to go the credit union route instead of through a traditional bank. The drawback here is that credit unions can be exclusive about who they serve.
For example, a large transportation company may have a credit union exclusive only to employees and their family members. While you could get more favorable terms and lower rates going through them, you’re out-of-luck if you don’t meet either of those criteria.
3. Consider Online Loans
Online lending has become a more popular avenue for finding the best interest loans, thanks to the Internet. More choices equal better terms in many cases.
There also is a better opportunity to actually get the money you need with a lower barrier to entry. LittleLoans, for example, requires only South African citizenship, a regular income, and minimum 21 years of age.
4. Take Advantage of Special Offers and Situations
A fourth way of getting quality interest rates on loans is to look into special offers and circumstances. Think home equity line of credit or 0 percent introductory offers on credit cards.
Of course, these methods have their drawbacks, namely above average credit scores and homeownership. While they theoretically could result in the best personal loans, they’re more exclusionary in nature.
5. Shop Around
Finally, the best way to get a great rate is to run different calculations. That means checking with more than a single lender. If you go this route, make sure you don’t actually apply to more than one place.
Multiple applications lead to more credit checks, which can negatively impact your credit score. Also, the final terms likely will differ if you’re doing a soft search instead of a full application.
Going Short Term for the Best Rate Loans
At LittleLoans, customers have found our unique payday loans to be their best rate loans option. That’s because we offer a free service with money you can count on, usually within the hour.
To understand more about how this process works, we’ve put together this beginner’s guide for short-term loans.