Anyone who needs to borrow money should spend some time comparing the terms and conditions offered by local lenders, including online lenders. As you may very well know, lenders usually charge different interest rates based on their needs. Some lenders are more affordable than others, so you need to carry out a little bit of research before committing yourself. To find the best personal loan interest rates, it may be a good idea to consult a loans broker. There are many brokers in the industry, so it is recommended you spend some time looking for the right broker. Once you do, you can be assured of finding the cheapest personal loans on the market.
It is important to note that there are numerous factors affecting the interest rates charged by lenders. They include:
i) Credit Rating of the Borrower
Consumers with a bad credit rating can expect to pay a higher interest rate than those with high credit scores. Therefore, your credit score will have the biggest impact on the interest rate you will be required to pay. It is recommended you check the credit report for errors and have them fixed before you apply for a loan. Be sure to also service all outstanding loans without default to ensure you have good credit. Lenders usually hike interest rates to cover themselves against the risk of lending to habitual defaulters or persons with a history of defaulting on loans.
ii) Choice of Lender
Obviously, the rate of interest charged by one lender will not be the same as the rates charged by other lenders. Therefore, it is crucial you take your time to compare the rates charged by different lenders before you make your final decision. Simply visit their sites or call the shortlisted lenders to ask for their quotes. Once you get them, do a comparison and choose the most affordable lender for your financial needs.
iii) Government Policy
If there is excess liquidity in the market or shortage of cash circulating in the economy, the government can decide to lower or raise rates to restore normalcy. These changes will have a huge impact on the cost of borrowing. Property timing, therefore, is necessary.
The easiest way to find the lowest personal loan interest rates is to work with a loans broker. There are many brokers in the industry and they all have access to useful market information that you may not be able to access. Therefore, it is crucial you work with a broker.