6 Ways to Reduce Loan Interest Rate
Loan Interest Rate | Reduce Loan Interest Rate.
As the topic implies, I will be discussing the top 10 methods to reduce loan interest rate. Everyone needs money to pay for one or two bills. However, in some cases, loan may be the best option to get such money. And when opting in for loan, you have to make smart financial decisions.
Basically, you need to ensure that the interest rate on the loan you choose to take is low so repaying will be convenient. A well-managed loan makes a life goal easily achievable and it's a preferred option. Fortunately, there are several ways to reduce the interest on your loan and I will be discussing it in this post.
6 Best Ways to Reduce Loan Interest Rate.
To reduce your loan interest rate, use the methods highlighted below to help you repay your loan easily and conveniently.
Manage a Good Credit Score
First of all, a credit score is a history of all your financings, and it's also an important factor that determines the interest rate of your loan.
Credit score is calculated to 100 percent and the higher it becomes, the lower your loan interest rate.
However, you need to maintain a good credit score to helps in your financial support such as reduction in loan interest rate, fast approval of loan, high amount of loan disbursement, issuance of credit card etc.
To start improving your credit score if it low, you need to start paying off pending debt or loan. Secondly, you need to start paying some certain amount into your account especially when you know you're going to opt-in for loan in the future.
Compare Lender Rate Online
Before you opt-in for loan, it's advisable to do little research online about two or more lender to compare their interest rate.
Nowadays, it's very easy to check loan interest rate online and their are lots of lending platforms available online who offered products/service reviews before user go for it.
Apart from that, there are lots of online portal that gives quick and brief review of lenders and their interest rate.
So your purpose of researching is to get lender with the lowest loan interest rate.
Make Regular Repayment
It's very important to avoid late payments at all costs. One common mistake that borrowers make is late payments or even defaulting on loans, which is not suppose to be so. You must pay them off at the right time.
Defaulting loan repayment makes the lender levy a late payment fee, hence, making you pay above the original interest rate. Also, this can negatively affect your credit score, which ultimately affects your rates on any loan you will take in the future.
Refinancing Your Loan
Refinancing simply means revise of an existing loan, such as interest rate, payment schedule and other terms regarding loans.
So when you refinance your loan, you'll get cheaper interest rate and more time for repayment.
Decrease Loan Repayment Tenure
The tenure of your loan is one of the major factors responsible for how much interest you will be paying. The faster you repay your loan the lower interest rate you get.
For instance, when you opt-in for shorter tenure, your overall interest payable will come down drastically.
Negotiate Loan Interest Rate with Lender
This is the last on my list. You can negotiate the loan interest rate with the lender if you have a good credit score.
However, before you can choose to do that, you should have had an existing relationship with the lender. It is possible that sometimes if you negotiate and have a steady source of income, you might get loans at a highly competitive rate. This saves you a whole lot of money.
