How to Find Cheap Loans

How to Find Cheap Loans

by Rebecca Hall on 14 Feb, 2011

Nowadays, it is more difficult to secure a cheap loan than it used to be due to ever increasing interest rates. Lenders are finding it hard to profit from the money they lend as more and more people begin to default on their loans. Although this might sound disheartening, it is still possible for you to secure a cash loan with low interest rates. There are many alternative sources of finance that can be exploited, all you need to know is how.

The majority of lenders that offer cheap lending rates are usually very strict when it comes to a person’s credit rating. Obviously, the better your credit rating, the better chance you have of securing a loan of this type. With this in mind, it is advised that you attempt to use services that could improve your credit rating prior to applying for a loan. However, if you are looking for a small amount of money, the options can be limited.

There are some companies, both on and off-line that may profess to provide financial assistance but you should always ensure that whoever is offering you these services is doing so directly. There is no need to work through a middleman, especially when it’s concerning something as important as your personal finances.

There are some companies that will put the lender in direct contact with the borrower in addition to ensuring that all borrowers make their payments on time. These companies can make it possible for people to get loans with cheaper rates than they would be able to from elsewhere.

Borrowers are typically categorised into three classes within credit ratings. These classifications relate to a person’s credit rating and how good their credit history is.

A good credit rating can often be seen as a sign of goodwill because a person with a good credit rating is unlikely to default on their loans. The faster a person repays their loans, the lower the interest rate it will attract so it is always advised that if you can pay back money earlier, then you should do so.

One of the easiest ways for people to attain short-term financing is by acquiring a credit card. If you can get a credit card with an introductory offer of zero interest on new purchases then this can be of benefit, but always be aware of what the interest rates will be once the introductory offer has run out, as you may find yourself paying over the odds further down the line.

About the Author

Rebecca Hall

Rebecca Hall worked as an independent mortgage adviser for 10 years before turning to financial journalism full time. She has strong links to the CAB advising families on mortgage refinancing.