When you have a history of bad credit, most lenders would try to make the most of the situation by offering you a steep rate of interest for personal loans. Please be prudent while taking these loans, as steep rate of interest might trap you to defaulting once again. To ensure that this time you actually service your personal loan and improve your credit score keep an eye on the rate of interest.
# Do a research on the various rates of interest offered by the banks and financial institutions and freeze on the one that would actually help you to repay the loan faster and on track.
# All banks or lending institutions offer a tier based interest system. In other words the bigger the loan, the cheaper would be the rate of interest. See the slabs and then freeze on the amount you would want to borrow. Like, in case of $ 1000 loan, you might have to pay an Accounting rate of return (ARR) of 17%, while when you borrow $ 5000, you only have to pay an ARR of 12 %. Find out which slab is more lucrative for you in the long run before freezing on it.
# certain factors like coming with a guarantor or mortgage actually helps to lower the rate of interest. Find out how you can save on ARR. Often, banks prefer people with bad credit to come with a guarantor as a security. Coming with a guarantor actually ensures that your credit rating gets increased and the ARR attracted on your loan gets decreased. This is a great way to ensure that you end up paying less amount of ARR as compared to others.