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Personal Loans Rates

Personal loan rates are usually high, but you can search online to find a rate that is comparatively lower and may be your best option. As most personal loans are unsecured, the lenders keep the cost higher than what they offer with a secured loan option. This is in order to reduce the risk they might have in case a borrower fails to repay.

While the current interest rate on mortgages, home equity loans and other secured loans hover around 6 percent, the personal loan rate can go beyond 10 percent. This means an unsecured loan may cost you nearly double the cost of a secured loan. Despite this, you might face a situation where you have no other option than to try for it. Debt consolidation and urgent funding requirements are two typical situations when you find this option useful.

If this is the case, you must make it a point to shop around a few lenders and compare their terms and rates before finalizing a deal. Here are some tips to shop for the best personal loan rate:

  • Rate Comparison: It is the key to find out the best option. You can find online tools that allow you to compare rates offered by different lenders.
  • Personal Loan Calculator: This is a tool that allows you to calculate the monthly payment on a personal loan. Use this tool to know what it costs to accept an offer of a lender.
  • Fixed Option: Personal loan rates are generally fixed for the term. This allows you to know in advance how much you need to keep aside each month in order to stay current on payment. This becomes extremely important if your credit standing is not good or you are a bad credit borrower.
  • Bad Credit Lenders: If you have a problem with your credit report, you can turn to bad credit lenders who are specialized in granting loans to such people. The rates they quote may be high, but you can negotiate with various lenders to get a rate that you are comfortable with. Applying for an unsecured loan with a cosigner who has a good credit rating can help you lower the rate even further.
  • Good Credit Report: If you have a FICO score that is more than 650, you stand a good chance to get the lowest possible rate. Do not compromise on what a lender quotes, but rather negotiate well to get the maximum benefit possible.
  • Loan Contracts: Finally, you must read and understand fully the contract documents before putting your signature there. You can even take the help of an attorney to understand the fine prints and wipe off the chance of getting caught off guard.

The above tips can help you get the best deal when you need a personal loan to consolidate high-interest debts or meet some urgent financing requirements.

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