It is easy to get loans today, but not easy to get low-interest loans. Today banks charge a huge amount of money in the form of interest, which will give you cold feet even before you meet the bank manager to approve your loan.

The truth is that lower your interest rate, the easier it gets to pay off your loan. There are certain loan strategies that you need to learn if you want to save up on your loan interest amount.

Read on to find out how you can get low interest on loans.

Repair your credit score
One of the best ways to get low-interest loans is to have a decent credit score. If you have bad credit and are planning to apply for a loan soon, try to repair the score as much as you can. You can do so by catching up with past payments that you are yet to clear. Another way to do so is by limiting your credit card use and spending less.

Irrespective of where you take the loan from, it is in your best interest to keep your credit score good from day one.

Pay attention to whom you borrow from
A common mistake many people make is that they go to big banks to get a loan from and settle for the first quote that they come across. This is the worst thing to do. Most of the times, big banks charge a fortune in the form of interest on small mortgage loans. Instead, you should check with local credit unions and small banks that are most likely to give you better low-interest loans.

Consider setting up an automatic payment
Banks appreciate when you as a customer sign up for automatic payment option. Thereby, you do not have to worry about the payment deadlines and personally making the payments. It is noticed that because the banks want people to pay their money on time, they come up with beneficial offers that will give you a lower interest rate if you set up an automatic payment option while taking a loan.

Search for online lenders
Today, there are many digital lenders who give you a loan at a much lower interest rate compared to the traditional lenders like banks and credit unions. Search for an online lender who is affiliated with a reputed physical financial institution if you are planning to consider online lenders as your option.

Take your time to do thorough research before you sign the fine print and take the loan.

When it comes to loan interest, the lower it is, the better our lives are. You already are low on cash if you are applying for a loan and then to make it worse these days banks charge a far-fetched interest on them.

So, what do you do? You cannot stop taking loans. The best thing you can do is to get smart and follow some hacks that will help you get the best loan rates.

Here are five handy tips that will help you get low-interest loans:

Evaluate your credit score
The first thing you should do before you apply for a loan is to check your credit score. You won’t go far if you have a horrific credit score. On the other hand, if you have a good credit score and you earn decently, it will open many doors for you and you can take a loan from almost any bank, online lender, or credit union.

Understand the loan terms carefully
If you manage to find a low-interest loan lender, make sure that before you sign the deal, you understand all the terms mentioned in the fine print. Make sure that you can manage the payment terms that are mentioned by the lender. Be aware of the penalties that you are accountable for if you are late or early in paying off your loan.

Research extensively
Enough emphasis cannot be put on this tip. You should never take a loan from the first bank you enquire at. Make sure you browse, seek expert advice, and then decide from whom you want to take the loan from.

Consider borrowing a little more
This might sound like a bizarre thing to do, but it is observed that if you borrow a small amount, you must pay more as interest than if you borrow a little more money. This is because by borrowing more money your loan shifts to the next annual percentage rate bracket, which lowers your interest rate.

Low interest is not the end
Yes, agreed that finding a low interest is one of the top priorities when you are looking for a loan. However, don’t get blinded by this single factor. There are many other important factors that you need to consider along with getting a low interest. One such factor is whether you pay off your loan quickly. This would make a big difference as if you are paying a high handling fee just to return the loan early, you are better off taking some other loan with a slightly higher interest rate.

Taking a loan is a big financial decision. Just don’t be in a haste and know what you are getting yourself into before you sign the deal.

To save money on your loans, use the various loan calculators available online during the preparatory phase. Using these calculators gives you an idea of how much you can afford, how much you can borrow and an approximate monthly repayment figure.

Personal loan calculator
A personal loan is an excellent tool to revive your finances, like consolidating your credit card debt and to meet the exigent needs. Personal loan calculators available online, use interest rate, loan term and principal amount as variables to calculate the total loan repayment amount. Interest rates vary from lender to lender. It is possible that some online lenders do not consider any fees that may be a part of the loan. The purpose of the personal loan calculator is to estimate monthly payments and total interest paid. Use the available online tools as a part of you loan pre-work and not as an abiding agreement.

Student loan calculator
When it comes to repayment of student loans, the annual salary required to match the monthly loan repayments has to be considered by the student borrower. Some federal student loans require a fixed minimum monthly payment, like 50$. Separate calculators are available for those with multiple student loans (look for Weighted Average Interest Rate Calculator). Some student loans allow the borrower to pay extra payments when possible thereby reducing their interest pay back load. Most online calculators do not factor this.

Most common variables used for calculation are your loan balance, interest rate and the term of your loan. The main assumption of these online calculators is that the entire loan balance will be repaid within the specific repayment term. Student loan deferment calculators will help you arrive at the interest you will acquire while deferring your student loans.

Public service loan forgiveness calculator
Those working in particular non-profit and government sector jobs may be eligible to have their federal student loans forgiven after having repaid the loan for at least ten years. This loan calculator lets you know the approximate amount of money that can be forgiven. The assumptions made by the calculator are generic in nature, and thus the results are not accurate.

Car loan payment calculator
The variables used are the principal amount, the term of the loan, interest rate and rebates. The term of the loan and down payment amount affects the monthly payment.

Mortgage calculator
The variables considered are the principal amount, balance amount, interest, property tax, fees applicable, loan term, PMI (property mortgage insurance), LTV (loan to value), homeowners insurance, and HOA (home owners association) dues. There are certain calculators that provide amortization schedule too.

Loans provide a financial cushion to the borrower. Before availing a loan, it is prudent to look at all the available options and choose the one best suitable to your needs. Loan payment calculator, available aplenty online and also with your lender’s website, lets you determine the monthly repayment amount just with the help of few criteria like loan amount, term, interest rate etc. To understand the dynamics of repayment, understanding this is a crucial step in the loan process.

The key terminology used by lenders:

Principal amount – The amount of money you borrow is called as the principle amount. Purchase price, rebates (if any), cash down payment and trade in value (if any) are the various components of the principal amount.
Loan term – The period of time that the loan will be outstanding, is referred as the loan term. Longer the term, more is the interest on the principal amount.
Interest owed on the loan – Your interest rate for one month is known as a monthly interest rate. Interest rate multiplied by the outstanding principal amount, is the interest you owe for a particular term. A loan with a shorter term has a lower interest. A larger amount of monthly payments reduces the principal amount faster, thus reducing the interest paid on the loan.
Amortization calculator – For a loan that is amortized, the borrower pays a fixed amount monthly, which includes repayment of both the principal amount and the interest owed. As time progresses, the principal amount repayment becomes larger and the interest amount lower.
Total interest paid – Subtracting your principal amount from the total value of payments, gives you the total interest paid.

A commonly used formula for loan payment is:

Monthly payment = [ r+r / ( (1+r)^ months 1) ] * principal loan amount
where r = decimal rate / 12

As with any other loan, paying a higher sum every month pays off the loan faster. While using an online loan calculator, please be aware of the following:

Use this tool only as a planning guide. The final figures need to be worked out with your lender.
Results are based on a standard repayment plan where a fixed amount is paid every month for the duration of the loan.
If you are planning to use other repayment plan options, a separate calculation has to be done for the same.
Please note that the interest rates vary from lender to lender and depend on eligibility.
Many calculators do not factor in any fees that may have been included in your loan.

Financial hardships arising from being unemployed can be avoided by applying for specific loans for unemployed or seeking federal unemployment benefits. The government also offers loans to individuals as a means of financial assistance. The loan, per usual, has to be repaid its interest. Applying for unemployment benefits or worker’s compensation has its own set of stipulations and the eligibility criteria are determined by state law.

Procuring an unemployment loan might prove quicker in many cases. Financial assistance during this time of crisis may come from various sources, such as:

Friends and family Shout out for help, just do
Using credit cards to get a cash advance – Albeit being a quick way to get cash, the interest rate is usually high.
Borrowing against your home insurance – If you have decent real estate equity and some form of income, like unemployment benefit, this may prove to be a viable option. This loan is like having a revolving credit card debt. It is usually mid to long term loan.
Borrowing against your life insurance – If your life insurance policy has a provision, you might be allowed to borrow a small sum of money against it.
Applying for a loan with co-signer – A friend or family member with a good credit score as a co-signer, might up the probability of you procuring a loan.
Car title loans – This is another quick option for securing cash if the current value of your car is more than its current debt. The car title loan lender holds the title of the car till the loan is repaid in full.
Debt consolidation loans – They provide an opportunity to the unemployed person to pay off their debts and to minimize monthly payment.
Pawnbroker – If you have absolutely no income, then pawning off your valuable belongings might be best or only option. Any item that you bring in is appraised by the pawnbroker, and an appropriate amount of money is paid for it. The appraisal value is usually a lot less than the item’s original value. Upon repayment of the loan in full along with the interest, the item is returned to you. In the case of default, the item is kept by the pawnbroker. Availing money from a pawnbroker does not affect your credit.
Payday loans – These are short term loans requiring you to repay the loan amount with interest on the next pay day. Any source of regular income, like paychecks, alimony, disability is accepted by the lenders in lieu of the loan amount.

Always explore various options before zeroing down on the one that suits your current needs.

To those having an unstable source of income or no income, finance holds a place of prominence in their lives. Being without a job, and thus no income leaves you financially stranded. There are online lenders who might offer loan to the unemployed with homes or other sufficient collateral. Having good collateral cancels out the absence of income and thus makes you eligible for a loan. The equity of the house gets considered in the loan process. Home equity is the value that the home can fetch upon sale.

If you are not responsible for your unemployed status, insurance companies may step in to help. Their terms and conditions are strict and it also means that you accept the next job offer coming your way, no matter it’s detailed. In case, your credit score is good and all your previous loans have been repaid on time, you might be eligible for an unemployment loan. Even if there is no collateral for you to provide, there are lenders who would give you an unsecured loan. The interest rates will be high and the amount of money available as the loan is dependent on the lender and your personal financial condition.

Types of loans for unemployed:

Secured loans require that you provide the lender with a collateral (any valuable asset) such as a car, home, stock, bonds etc.
Unsecured unemployment loans are for those who are unable to provide any collateral. The interest rates are higher when compared to the other loans. The loan has to be repaid as soon as you find a new job. If you are able to convince the lender of securing a job soon, the loan approval is quicker.

Even those with poor credit, bankruptcies, loan defaults, and other ill financial habits apply for unemployment loans. In case you are on income support, benefits or living allowance, then it will be counted as declared income thereby bringing down the interest rate. In the absence of these, the interest rates will be higher. As a borrower, opt for flexible repayment term instead of a fixed term in such time as there’s no fixed income.

Students who are unemployed and require money for their higher studies, also avail loans for unemployed. Unemployment loans can also be a means to consolidate debt thereby improving your credit score.

Similar to any other loan, it is advised that you explore all the available options and choose the loan most suitable to you. Choose the right loan and it will take care of you till you find a new job.

Applying for a loan is a brain wrecking process in itself with all the paperwork and jargons involved. This becomes even more difficult if you have a poor credit score. Credit scores range from 300 to 850. Having a FICO score of 579 and below means you have poor credit score. A FICO score of 580 to 629 means you have a bad credit score. To qualify for loans, your goal should be to improve your credit score (ideally it should be above average, i.e. FICO score of 630 and above).

Other than credit score, other factors like debt to income ratio, determine the terms of your loan. Having a poor or bad credit score almost always means a higher interest rate. If you have poor credit, but have a steady income and low debt levels, the probability of you securing a personal loan is higher.

As a borrower, you may have bad or poor credit due to one or more of these reasons:

• Default in making any of the repayments
• Shopping extensively for a loan but getting rejected repeatedly.
• Has never taken a loan in the past and there’s no credit history to validate.

To procure a loan in spite of having poor credit:

The first step should be to contact your local bank and apply. If you already are their customer, chances are they might offer you an unsecured personal loan. There are some financial institutions which specialize in offering bad credit personal loan. The banks look for – your length of credit history, fair to bad credit score, collateral in case the loan gets defaulted.

In most cases, traditional banks do not offer loans to those with poor and bad credit. That being the case, you can always look for online lenders. Benefits of procuring a loan from online lenders are the convenience and swiftness of process, flexible repayment tenure etc.

Approaching peer to peer lenders. These companies use technologies and data analytics to more accurately assess whether the borrower is deserving of the loan or not. Credit score is not the only guideline they use. The data points they usually consider are “ income, expenditure trends, educational qualification, any assets and investments etc.

Technological developments have inadvertently made lending money, especially for those with poor and bad credit, a simpler task. As internet security has grown in leaps and bounds, money gets transfer to the borrower’s bank account seamlessly and swiftly. Online also provides the convenience of gathering data from multiple sources and thus making an informed decision.