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While personal loans are such versatile financing options due to the flexibility they offer, it is also a fact that they can be difficult to obtain. Lenders tend to impose strict requirements for anybody interested in taking one out. The chance to borrow a large sum for a reasonable term and at a competitive rate is usually just reserved for the borrower with a spotless credit record.
Understanding How Personal Loans Work
If you wish to borrow £10,000, an unsecured personal can be a great option to consider. The fact that it does not require you to present collateral makes it a convenient option when you do not have an asset valuable enough to be used to secure a loan. Here are some of the things you can do to improve your chances of getting approved.
Borrow what you can afford
Before making up your mind on how much you want to borrow, make sure first that you can afford the subsequent repayments. You will be expected to make fixed monthly payments moving forward. You wouldn’t want to start paying late or missing payments when you get approved for the loan because this will only ruin your credit score as a result.
Make sure your credit score qualifies
Most lenders would require you to have a certain credit score in order to qualify for a loan of this amount. Good to excellent credit scores are usually considered ideal by lenders as this gives them the assurance that you can pay the loan back. They will be looking into your credit history so it will help if you can show proof that you are a creditworthy, trustworthy borrower. If your credit score is bad, take the time to fix it.
Consider the loan term
Ideally, you’d prefer a longer term because this helps you spread the costs considerably, making the monthly repayments easier to afford. However, this could mean getting charged more for interest as a result. This is why for a £10,000, it is always best to go for a shorter term as long as you can conveniently afford it.
When looking for the cheapest personal loan, what you need to look for is a personal loan that has the lowest interest rate that you can find. Getting one can potentially save you hundreds – if not thousands during the entirety of your loan. A lot of work goes into finding a single digit interest rate, one of them is to compare your options and improve your application.
What is a low-interest personal loan?
A low-interest personal loan is like any other loan, you still have to pay interest and some fees but as the name implies, it only has an interest rate of below 12%
A personal loan is usually an unsecured loan, which means the lenders only have your promise of paying as security, which makes it riskier for them – add having a very low interest rate and you’d need to have a pretty good excellent credit rating to be approved.
Having an excellent credit score, no matter what your situation is, you’ll surely find an option that is for you.
Top providers for low-interest personal loans.
Monevo – Which offers 3.99 to 35.99% APR and a loan amount of $1,000 to $100,000.
Monevo offers one of the most competitive and low rates in the market. They offer an online service that allows you to compare lenders anytime. Monevo’s partners have a wide range of options for loan amounts, rates, and terms.
Prosper is a peer-to-peer lender which uses the funds of investors to fund your loans. The interest rate that they’ll offer you will entirely be based on your credit score and your income. So if you want to get a very good interest rate, you must have an excellent credit score.
Even Financial uses a network of lenders whom offer fixed-rate term loans. Using their service would allow you to prequalify for loans and find one that fits your needs the most.
That’s just 3 of the many lenders out there that are willing to provide you with a low-interest cheap personal loan.