Low Interest Rate Loans

Plan ahead if you want to get loans with low interest rates. Having an excellent credit record will help you obtain offers for credit at the lowest possible rates. Credit records are an indicator to lenders of how credit worthy a person may be, based on past financial history.

Most reputable lenders that offer loans do take into consideration credit history when someone applies for a loan. If they have very good to excellent credit ratings, those persons will get offers of loans with low interest rates. As the credit rating deteriorates down through good to fair, poor and bad, interest rates get higher because those persons present a greater risk to the lender.

The reasons why a person may have a lower credit rating do not matter to the lenders. They look at the facts, which is why it is very important to monitor your credit records frequently to watch for errors and fraudulent use by criminals. If someone steals your identity, they will open credit accounts in your name at any interest they can get. They take the money or goods purchased with that credit and disappear. The damage done to your credit report can take months to years to straighten out.

Errors happen in credit reporting to the big three credit reporting agencies: Equifax, Experian and Trans Union. Someone may have simply made an incorrect entry or typo. These mistakes can be cleared up, but if you are in the midst of trying to secure a home mortgage loan at low interest rates, it can cause heartache and delay or a denial of credit. That then goes onto the credit reports and your history looks even worse than before.

Many things on the credit report could count against you when it comes to getting a low interest rate loan. Here are some:

• If your balance due amounts are higher than 30% of your total credit limit.
• Having too much credit available for your income level. Lenders fear you may run everything up and then be unable to pay.
• Too many applications for new credit.
• Delinquent accounts and late payment histories.
• Not enough different kinds of credit accounts, such as credit cards, bank loans, mortgages.
• No credit history at all.
• Frequent job changes and residence changes; these may signal instability.

When seeking a new loan, do the following:

• Check all three credit reports at www.annualcreditreport.com.
• Plan as far ahead as possible to consistently clean up credit accounts by making timely payments.
• Do not give your Social Security Number or Driver’s License to anyone until you have decided who to work with.
• Increase income while decreasing debt levels.
• Pay off smaller accounts but do not close them; leave them open.
• Do not change jobs.
• List all current expenses and bills owed.
• Have a current bank account with a positive balance.
• Ask for low rates on existing accounts. Some credit lenders will offer you a lower rate rather than risk losing your business.

These are things that can help you find low interest rate loans that you are seeking.