How to Find the Best Personal Loan Rates – loan rates are determined by the lenders in accordance with the regulations governing those institutions.
Banks are regulated by banking norms and would base their rate on the lending rate of the central bank. Private financial institutions don’t have to adhere to such norms unless they are non-banking financial organisations in which case there are certain regulations of their own.
Searching for Best Personal Loan Rates?
There is a large unregulated lending industry that does not have any such regulations. In effect, they can lend at whatever rate they find suitable or profitable.
Representative 277.5% APR - Representative Example: Amount of credit: £750 for 12 months at £119.21 per month. Total repayment of £1430.52. Interest: £680.52. Interest rate: 140% pa (fixed). 277.5% APR Representative.
For instance, banks will always have personal loan rates a tad higher than the rate pre-set by the central bank. Private lenders may have higher personal loan rates or lower.
Usually, private loan lenders UK capitalise on the provisions of all credit types and try to make more money so their rates would typically be higher than banks.
Different loan rates
Also, since banks don’t entertain all applications, there are innumerable borrowers who would turn to private lenders and thus they would be willing to pay higher personal loan rates.
Secured personal loans have lower rates than unsecured personal loans. Pay day loans are usually dearer than title loans. Loans for all credit types applicants have higher rates of interest than for those with good credit.
These are the realities that you would have to consider while looking for personal loans and while assessing the personal loan rates being offered to you.
It is necessary to not confuse all personal loan rates since not every type of loan will be available for you. What you must focus on is the exact type of personal loan you would qualify for and thus their rates of interest. You cannot compare unalike types of personal loans and their rates of interest.
Choose your loan type
To find the best personal loan rates, you must first choose the kind of loan that will be suitable for your needs. Check the lenders who would be willing to entertain your application.
Once you get the lenders zeroed down, you can check out their rates of interest. Most lenders will have a fixed personal loan rate that would be non-negotiable.
Some lenders will be willing to reduce their best personal loan rates for applications with better credit or for shorter repayment terms.
These will however be only available when you opt for private loans, from pay day loan companies or peer to peer lending networks.
Institutionalised lending will seldom be flexible with its personal loan rates.