Best Practices for Best Loan Rates

When a person wants to borrow money, he looks for a loan with the best terms – a low interest rate, reasonable loan amount and sufficient time to repay the loan.

Best Practices For Best Loan Rates

A person can get the best loan rates by following certain practices:

  • Maintain a Reasonable Credit Score

A person with bad credit can never get a loan at a good rate.  He would either be declined the loan or charged an exorbitant rate of interest.  A person, who is likely to need a loan in the future, would do well to maintain a good credit score by paying his bills regularly and making his loan payments on time.

  • Borrow from well Known Lenders

Little known lenders generally charge a higher rate of interest.  So it would be advisable to borrow from lenders who would lend at market rates.

  • Borrow when Rates are Low

When loan rates are high, it is better to postpone borrowing if possible.  Interest rates are generally cyclical and fall after some time.  If taking a loan at such a time is inevitable, it would be better to borrow a loan with a floating rate of interest.  So when the rates fall, he would have to pay interest at a lower rate.  It should be noted however that when interest rates are very low, loans with fixed rate are the better option.

  • Research Thoroughly

To get the best loan rates, the prospective borrower should research thoroughly.  For this, he can personally meet lenders or he can conduct an online research, look at the terms offered by different lenders, study comparison tables and decide which loan would be the most suitable.

  • Read Reviews

Loan reviews are very helpful for a person who plans to take a loan.  He gets to know about the positive and negative aspects, variety of loans and can make use of others experience for his benefit.  Newspapers, magazines and web sites generally carry these reviews.

By following these best practices for best loan rates, it is surely possible to get loans on very reasonable terms.