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Tips to Get Lower Loan Interest Rates

buying your first homeWhether you need a loan for a major upcoming event, such as a marriage; because you want to make a major purchase; or because you want to consolidate debts; you should try to ensure that you get the best deal possible. Whether you are looking for a secured or unsecured loan, or even shopping for a mortgage, you could potentially save thousands of pounds just by following a few relatively simple steps.

Clean Up Your Credit File

Accessing your credit file is surprisingly easy using companies like Equifax, and potential lenders will do the same. Lenders not only use credit files to decide whether or not to offer a person a loan, but in some cases to decide on the interest rate and the terms of the loan that they do offer. Some credit files contain errors, while a forgotten debt, no matter how small, could be ruining your file. Get a copy, pay off what you can, have any errors removed, and aim to improve your score before applying.

Specialist Mortgages And Loans

There are specialist loans and mortgages available that could offer you improved rates and better deals. For example, the self-employed might find that specialist self-employed mortgages offer better rates than if they were to apply for a standard mortgage, while professionals like doctors may be able to get lower rates by applying for mortgages that are geared primarily towards qualified, high earners.

Secured Loans

Secured loans almost always offer better value and lower repayments that unsecured or personal loans. The lender knows that they have the security of the property to fall back on if you fail to make repayments. Always be aware that, if you fail to make repayments on time you do risk losing the property against which the loan is secured, but if you know that you will be able to make all the repayments then this can provide a beneficial way of making savings.

Loan Amount

The amount you borrow will also dictate the level of interest that your loan attracts. Surprisingly, however, it may be that smaller amounts lead to higher interest rates. Always request prices for loans for smaller and larger amounts than you need. You can always put the extra in a savings account, or use it to make an overpayment on your account straight away so that you won’t be tempted to spend it.

Early Repayments And Overpayments

The laws on overpayments and early repayments have changed and in a lot of cases, you cannot be charged for making overpayments of several thousands of pounds a year or for making full repayment of smaller loans even if you repay the amount early. This could mean that you can save a lot of money on interest repayments, but you do need to provide notice that you will be making an overpayment.

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AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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