If an email from a friend has kindled your interest in traveling this winter what can stop you other than the paucity of funds? If you want to apply for a personal loan to cover the costs you must know that you will end up paying more than the actual loan amount. How much you pay will depend on the rate at which you get a loan. There are several factors that determine the rate and hence a loan rate is not fixed and varies from lender to lender and even between financial institutions.
Therefore, when applying for a loan your focus must be in garnering a loan that has the lowest APR or the Annual Percentage Rate which determines how much you will pay for each year your loan is active. The lower the APR the lesser you will pay. Here are a few tips that will help you get low rates on your loan.
- Improve your credit score: The first thing a creditor will check is your credit score; the higher and the healthier the credit the lesser the rate of interest charged on a loan. You can improve your score by paying your bills on time, minimizing credit card use.
- Don’t apply for multiple loans: Every loan that you apply for is recorded on your credit report and you cannot deny its existence. Hence, do not apply for multiple loans at a time because it is very unlikely that all of your loans will be accepted; if you have rejected loan applications this will affect your credit score. You can overcome this hurdle by indulging in soft searches wherein you will be able to find out where your loan is most likely to be accepted and this will not leave a mark in your credit report either.
- Show employment records: Lenders like to be assured that you have a steady source of income and you are capable of repaying a loan. A steady work history will provide the necessary proof.