Americans are so used to take loans and credits during their life that it has recently emerged a frequent tendency. No matter what reasons made you apply for a bank or other financial institution, you can always be offered a low interest loan.
A personal loan with low interest rates is quite a convenient option for people planning to take a long-term loan. This option is winning only if you have excellent credit records. In case of poor credit rating, there’s hardly a chance to receive this type of loan unless you are ready for a collateral deal.
Not only does your credit history matter – in fact, you should meet several more criteria that higher your chances to get approved the lender.
To those we would include meeting your state’s requirement regarding the minimum age to apply for the loan (in most states this is 18 years); remaining an American citizen or in some cases a permanent US resident and having a stable source of money income.
Take a close look at some of the most important aspects of low interest rate personal loans you have to remember before you apply.
- Interest. Certainty, everyone is mostly interested to know the annual percentage rate of a loan. Low-interest APRS are indeed the most attractive and beneficial for those, who want to borrow a decent amount of money for a prolonged period.
- Secured vs. Unsecured. As mentioned earlier, collateral would be necessary only when you have poor credit history, although providing at least some kind of security can lower your APR. For unsecured personal loans online complete an application at Personal Money Service.
- The amount of your loan. Depending on your lender, you can be offered a different amount of your loan, but most of them vary between $500 and up to $50,000. The higher creditworthiness you may show to your lender, the more amount of credit you would be able to receive.
- Terms of your loan. With the existence of traditional banks, private lenders and online loan providers your choice in regulating the loan period is unlimited. All of them can offer their customers different terms, from a minimum of 2 years and up to 5 or even more. Be sure to use your personal loan wisely.
- Approval time. Approval times is also different at any lender: banks, credit unions have the longest processing time – in some cases, it could last for several weeks. Private lenders can be a little quicker, although the fastest response comes from online loaning companies.
Advantages of Low-Interest Loans:
- Low interest in comparison to other types of lenders. This would surely play in your favor when you’re stuck with the loan for several years and have to pay interest out of your monthly payments.
- Simplified application process. This is especially evident when applying to an online lender through Internet. The application process there can’t be even easier than up online: if you have all the necessary information close to you, it won’t take you more than 10 minutes to submit the application form. Learn how to fill out a loan application online.
- Relatively flexible way of repayment. Personal loans of this particular type don’t set you specific requirements about the payment process. You can negotiate the way you will be repaying the loan individually with the lender. Payments can be done weekly, fortnightly or monthly.
Disadvantages of Low-Interest Loans:
- Penalties regarding prepayment. Yes, sometimes you can receive a penalty for paying your loan ahead of time. Therefore, discuss the terms of the prepayment with the lender as well. So you may want to check alternatives to these small online loans.
- Distrustful services. Unfortunately, more and more scams occur all around, especially in the banking industry. Make sure the lender of the institution you want to apply to is legitimate, otherwise you risk to be deceived.
- Low acceptance of people with bad credit records. The only solution for those customers would be taking a secured loan plan.