Most of us require loans at some time or the other. This may be to finance a house purchase, a vehicle purchase, to fund a holiday or the children’s education. There is little difficulty in getting loans these days. But getting the best loan deals is not so easy. A person’s loan request may be approved but he may not get a loan on the terms which he wants. The interest rate may be too high or the repayment period may be too short. One has to follow certain tips for best loan deals.
A person who wants to borrow a loan has to do a lot of research. A borrower can visit the websites of individual lenders and find the best loan deals. There are also websites which have tied up with a panel of lenders. Such sites offer comparison tables showing the terms offered by various lenders. So the borrower can look at the terms of each and decide the best loan deals.
Those who are looking for tips for best loan deals should also know the terms of the loan that is largely determined by the borrower’s credit score. Independent credit rating agencies assign a credit score to an individual based on his credit history. The person will be assigned a high credit score if he/she has been paying his credit card bills on time, never missing out on mortgage payments and regularly paying interest on any other loans. A high credit score is a kind of guarantee to the lender that the borrower will repay the loan on time. So the lender offers the best loan deal.
On the other hand, a person who has not been regularly repaying his loans is considered a high risk borrower; the lender tries to mitigate this risk by charging a high interest rate or limiting the loan period.
So a person who wants to get the best loan deals should first ensure that he has got a high credit score. If he has a low score, he should start making his payments on time and improve his score. He would then have a better chance of getting the best loan deals.
If he has a low score due to some unavoidable circumstance such as hospitalization of a family member, which prevented him from making the payment on time, he can explain the same to the lender if the lender is known to him or if he has done business with him earlier. The lender might then offer the best loan deals in spite of the low score.
If the borrower follows the above tips for the best loan deals, he is sure to get a loan on favorable terms.