Everybody wants to get the cheapest loans! I mean, who doesn’t? If we can get away from high interest rate loans and unnecessary fees and charges, we would do everything in our power to do so. Now, if you are aiming for this, read on to learn how to get cheap loans in the market.
Getting Cheap Loans
You should know by now that the best cheap loans are often the loan with the lowest annual percentage rate or APR. The lower the APR, the less costly the loan is. However, you need to consider other factors such as the loan term, other fees and charges, and the loan features.
The loan amount is how much you can borrow, which depends on your personal circumstances and the lender as well. Your repayments will be spread evenly throughout the loan repayment period, so you pay the same each month. However, if you take out a loan with a variable interest rate, your monthly cheap loans repayments may change.
The loan term is how long you have to pay back the loan. Most short-term loan lenders offer terms of one to five years, and long-term loans are over five to ten years or even up to three decades. Note that a shorter repayment period costs less than a longer term because you pay less interest overall.
Those with flawless credit history often obtain cheap loans. In other words, the easiest way to obtain cheap loans is to have good credit rating. However, if your credit rating doesn’t make a good impression, you may still be able to get cheap loans approved, but it comes with a higher interest rate.
Your personal circumstances and your credit score have a great influence over the interest rate or APR of cheap loans you are offered. The higher your credit score and your income, the greater chance you have of being approved of a loan with a cheaper interest rate.
Determine the amount you want to borrow and the period you want to pay it back. It will be easier for you to search, compare, and find the cheapest loan option in the market. Compare the rates of different cheap loans lenders on the same amount you want to borrow and the cheap loans repayment period you desire.
Furthermore, cheap loans aren’t just about the APR or interest rate. Ask about the features of the loan such as early loan settlement or other fees and benefits involved. Therefore, it is also important to compare lenders’ fees and extra charges included in the loan agreement.
Familiarise yourself with all cheap loans types to know which one best suit your current situation. Decide whether a short-term loan will work for you best or perhaps a longer-term loan will do. If you only need a small amount and your credit is good, maybe using a credit is cheaper than getting a loan in the first place. See also whether a secured or guaranteed loan is more viable for you than an unsecured loan.
If you have a poor credit score, you could try taking some actions to improve your credit score before you apply for a loan. Once your credit score improves, you can get a cheap loan. However, if your financial need is urgent, you can take out a bad credit loan.
Cheap loans with bad credit
Having poor credit history doesn’t necessarily mean you can’t get a good loan deal. You’ll find a handful of cheap loans lenders cater to different types of credit ratings, and many specialises on bad credit.
Bad credit lenders look at your capability of repaying the loan as agreed on time and at the amount. These lenders will consider your employment status and your monthly income. If they are satisfied, you’ll be granted cheap loans, and they’ll offer good rates and more options.
Cheap Loans with a Guarantor
If you are borrowing money for the first time or if you have a poor credit history, a guarantor loan could help you get the loan you need at a lower cost. A guarantor loan is similar to unsecured cheap loans. The difference if that, with a guarantor, a friend or family member is making a promise to be responsible for paying back your loan if in any case you cannot make the repayments yourself.
The loan becomes less risky for the cheap loans lender because a person with good credit guarantees the loan. In effect, the loan will have a lower interest rate than that of an unsecured loan for bad credit. Guarantor loans may be cheap in general, but you should still look for the one that is cheapest to pay back.
Guarantor cheap loans can help you borrow more money if you are struggling to get an unsecured loan especially when you have a poor credit or thin credit history. Guarantor cheap loans can also help you build or improve your credit score. Nonetheless, you should only borrow what you can afford to pay back.
You can ask anyone to be your co-signer or guarantor. He or she may be a friend, family member or work colleague, but he or she must be at least 18 years old or over 21 for some cheap loans lenders, in full-time employment, someone other than your spouse or someone who is not financially linked to you. Your guarantor will have to pay back your loan if you cannot make it yourself. So, make sure your guarantor understands his or her responsibility and the risk involved before you apply for this type of loan.
Important Points as regard to cheap loans
For you to get the cheapest loan possible, know how much you want to borrow, how long you want to repay it, and shop around and compare as many lenders as possible. Always consider how much you can afford to repay each month. Note that quicker you repay the cheap loans such as those in shorter terms, the less you will pay, but the larger the monthly repayments will be. Ultimately, you want to keep up with your payments to maintain or improve your credit score. This will help you get the cheapest loans in the market in the future.