When it comes to loan interest, the lower it is, the better our lives are. You already are low on cash if you are applying for a loan and then to make it worse these days banks charge a far-fetched interest on them.
So, what do you do? You cannot stop taking loans. The best thing you can do is to get smart and follow some hacks that will help you get the best loan rates.
Here are five handy tips that will help you get low-interest loans:
Evaluate your credit score
The first thing you should do before you apply for a loan is to check your credit score. You won’t go far if you have a horrific credit score. On the other hand, if you have a good credit score and you earn decently, it will open many doors for you and you can take a loan from almost any bank, online lender, or credit union.
Understand the loan terms carefully
If you manage to find a low-interest loan lender, make sure that before you sign the deal, you understand all the terms mentioned in the fine print. Make sure that you can manage the payment terms that are mentioned by the lender. Be aware of the penalties that you are accountable for if you are late or early in paying off your loan.
Research extensively
Enough emphasis cannot be put on this tip. You should never take a loan from the first bank you enquire at. Make sure you browse, seek expert advice, and then decide from whom you want to take the loan from.
Consider borrowing a little more
This might sound like a bizarre thing to do, but it is observed that if you borrow a small amount, you must pay more as interest than if you borrow a little more money. This is because by borrowing more money your loan shifts to the next annual percentage rate bracket, which lowers your interest rate.
Low interest is not the end
Yes, agreed that finding a low interest is one of the top priorities when you are looking for a loan. However, don’t get blinded by this single factor. There are many other important factors that you need to consider along with getting a low interest. One such factor is whether you pay off your loan quickly. This would make a big difference as if you are paying a high handling fee just to return the loan early, you are better off taking some other loan with a slightly higher interest rate.
Taking a loan is a big financial decision. Just don’t be in a haste and know what you are getting yourself into before you sign the deal.
There are companies that work on collecting and maintaining credit information of consumers. These are known as credit reporting agencies (CRAs). There are three such major CRAs in the country, namely Equifax, Experian, and TransUnion. Apart from these, there are other smaller-scale agencies too that specialize at the job. If you’re worried about “where to get my credit score?,” the larger CRAs are the most reliable bets.
These major CRAs obtain information from companies that you hold business and transactions with. People or companies that lend you money regularly report to these CRAs on your repaying status. There is also detailed information on the amount you are indebted and whether you have ever defaulted on your payments. Aside from the reports obtained from lenders, these companies also tally your general records based on certain other aspects. Some of these aspects are your public records from the local and state judiciary. These include your tax records and bankruptcy information. This information makes up an important chunk of your credit score and its report.
Equifax
Present in 24 countries, Equifax is an agency that offers consumers protection against identity theft and credit fraudulence. They also sell credit reports and credit monitoring assistance to businesses.
Experian
Experian started off in London and is now a trusted agency in 39 different countries. It provides you with a credit score, credit report, and even credit tracker on subscription. The agency uses FICO 8 system of credit score calculation. Experian was a part of Forbes’ “World’s Most Innovative Companies” in 2018.
TransUnion
Based across 30 countries with a database of over 1 billion consumers, TransUnion is another CRA giant. The agency, like the other ones, will provide you with your credit score and your credit reports. In case you decide to freeze your TransUnion credit report, it will also go the extra mile to notify Equifax and Experian, which frankly is a big help especially in case of identity theft and credit fraud.
So, the next time you are sat wondering “where to get my credit score?,” think of these three giants that provide you with an annual credit score and credit report for free once each year. However, if you are looking for more frequent updates, you can subscribe to their services and receive your monthly updates.
Did you know that you have more than a single credit score? Agencies calculate your credit score based on the data in your credit reports. If you are wondering, “where to get my credit score?,” there are three main credit reporting agencies. These can have different credit scores for you if your information on each of their credit reports is different. Also, these agencies charge a fee to reveal your credit score.
Recently, it has become easier to track and get hold of your credit score without paying any fees. You can get it from your credit card company, your loan provider, and even from a non-profit counselor. Here are a few tips you can use to check your score.