If You Have Good Credit
If you have a good credit score and excellent credit history, typically defined as above 690, there are many more options for you to choose from. For example, there are such lenders as Freedom Plus, Markets, SoFi, and Discover, that can offer a variety of rates. Most of these lenders will offer better rates for those who choose to enroll in autopay, sometimes offering as much as 0.5% off the typical rate. It should be noted that interest rates can run the gamut from 5% to much higher levels, so obviously it pays to shop around.
There is also the case of LendingClub. This is an interesting development over the last couple of years, as it allows people to become creditors and loan money to other individuals. Typically, people are willing to take a chance on other people if the interest rate is good enough. For example, if I had money to invest, one of the best places to look into is the credit world. This is because you have the ability to weigh credit risk on your own and do your due diligence. It’s an excellent investment, because their payment rate is extraordinarily high. As a borrower, you can quite often get rates that banks won’t give you, and sometimes, you can even get better terms overall.
For Those Who Have Less Than Perfect Credit
So, let’s say that your credit score is under 690. This means you have less than perfect credit, and as a result, you will most certainly have to pay more interest on your loans.There is Upgrade, Avant, LendingPoint, OneMain Financial, and many others out there that are willing to give you a loan. However, recognize that your starting interest rate will probably be closer to 15% or more. It is this situation that people begin to understand the value of a strong credit history. Ironically, it is this tier of lenders that far too many find themselves looking at. The interest rates on these loans are quite often similar to credit cards.
Quite often, people with a poor credit score, might already have substantial debt. The lender demands more of a return for taking the risk on betting that they will be repaid. Alot of times, this is the area people find themselves in when looking to consolidate debt that they have overextended themselves into.
Overall, online lenders tend to be a better option as far as getting a small loan is concerned; if for no other reason than the ability to check your rate without affecting your credit. It doesn’t hurt to apply for a loan at multiple lenders to see if you qualify, and then choose the correct loan for your needs. Keep in mind that you should never borrow more than you need, even if the online lender offers you substantially more.
Unfortunately, a lot of people will look at these loans as a bit of a windfall and find themselves in the same situation again. Please be careful about taking these loans out to pay other debts, and make sure that you use them for the debts specifically. This is no time to go looking for new toys. Quite often, it’s that type of behavior that has led people into this situation.
Saving is Always the First Option
The cheapest rate that you can get money for is 0 percent. This involves saving, something that obviously isn’t always easy to do, but if it is an option for you, it’s the one you should choose. If this is not an option, you can look around online and find a decent interest rate to consolidate debt, or perhaps, to pay off some unforeseen financial disaster, such as medical bills.
Keep in mind that the loan size available will always vary from lender to lender, and of course, interest rates do rise and fall, based upon the central bank policy at the time. The lower the Federal Reserve interest rate, the lower the interest rates will be of your loan. Only take out a loan that you can afford to pay back; you definitely do not want to get caught up in a downward spiral of debt!