Influences on personal loan rates
Low APR loans are based upon how you have handled your credit obligations in the past, how much debt you have and whether or not you are providing the lender with any security. Most people can get lower loan quotes if they are prepared to fix their credit before submitting their application for an unsecured or secured loan.
What affects personal loan rates?
Credit history
How you have managed your credit obligations during the last seven years will enable you to qualify for the best loan deals. The longer it has been since you last defaulted, the greater the likelihood that you will get approval for credit.
Amount of debt
Everybody has a maximum credit limit which is based on how much one earns relative to his outgoings. If you do have some money in the bank, use it to reduce your secured and high interest credit obligations.
Newness of credit
The longer a credit agreement has been active, the more it affects your credit rating.
Recent credit searches
Making too many applications for loans, credit cards and mortgages in a short period of time will hurt your credit rating.
Type of credit
You will need a form of both revolving and installment credit. Revolving debt lacks a defined term, such as a credit or store cards. Installment debt involves making a regular payment to a creditor. This includes car loans, student loans and mortgages.
How to get approval for low APR loans
Pay your debts punctually
How you manage your credit agreements will affect your credit score. Credit reference agencies record the information which lenders and issuers provide for the next seven years, and this has a huge bearing upon whether you will get credit approval.
Correct errors on your credit report
Before you apply for a cheap home loan, you need to make sure that the information Experian, Equifax and TransUnion hold about you is 100% accurate. Under the Fair Credit Reporting Act, you are legally entitled to receive this information once a year for free. You must correct any mistakes before you apply for an unsecured or secured home loan.
Distribution of credit
Even if you earn rewards or pay a low APR, do not use your favourite card to make all of your purchases. It is better to distribute your credit obligations across several different cards. Avoid using more than 30% of your credit limit in one month.