If you’re in the market for a personal loan, you might be wondering if now is the right time to apply. Many factors play into whether or not now is the right time, including the interest rate and your credit score, among others.
These reasons below should help you decide if applying for one of these loans is a viable option or if you should continue saving until you can pay off what you already owe on credit cards and other lines of credit.
Credit Score Does Not Matter
While you want to keep a good credit score, it is unnecessary to qualify for a low-interest loan. Banks are more concerned with your ability to pay back loans than with your credit score. So long as you have a steady income and do not have any major debts, most banks will be willing to work with you.
No Prepayment Penalty
If you can’t pay off your loan quickly, your bank might charge you a fee. But some banks don’t have prepayment penalties, which means you could pay off your loan early without incurring extra costs. It’s always worth checking with your lender to see if they offer no-penalty loans.
Not sure if you’re dealing with a lender that offers no-penalty loans? Look for N/A in their list of fees. If it isn’t there, it might be worth calling them to ask about prepayment penalties.
Choose Your Own Maturity Date
For example, if you have a $10,000 loan for five years with a 4% APR, that comes out to $170 per month. With 60 months in five years, that’s an average of $27 per month. According to the experts at SoFi, “If you’re looking for lower monthly payments, consider choosing a longer maturity date or borrowing more money upfront.”
Affordable Monthly Payments
Because of low-interest rates, monthly payments for loans are often lower than those you’d have to make with a credit card. This can be helpful if you’re looking to consolidate debt or pay off high-interest credit cards without resorting to other methods such as personal loans.
Many Loan Options Available to Choose from
When deciding between multiple loans, it’s vital to find a personal loan with low interest. The most important aspect of a loan is its interest rate. Types of loan options available include:
- Unsecured Personal Loan
- Secured Personal Loan
- Signature Loan
- Credit Card
- Home Equity
- Balance Transfer
If you have a high credit score, an unsecured personal loan is likely your best option. However, it’s important to keep in mind that not all lenders offer these types of loans.
Competitive Rates of Interest
When it comes to borrowing money, lower is always better. Lower interest rates can save you hundreds of dollars a year. If you’re looking for low-interest loans, check out your credit union or local bank. They may offer special deals that are only available to their customers.
Loan Amounts Are Significant
If you find yourself in need of a significant amount of cash quickly, low-interest loans may be an attractive alternative to other forms of financing. Many institutions are willing to give personal loans of $10,000 or more.
When you’re looking for a great low-interest loan, it helps to keep your options open and shop around. Luckily, there are plenty of websites that can help with that.