Tired of having to pay high-interest rates on loans? It’s possible to borrow money without the extortionate APR. Here are just a few ways in which you can borrow money and pay less interest.
Improve your credit score
It used to be almost impossible to take out a loan with a bad credit score. Nowadays, there are lots of payday loans that will pay you regardless of your credit score, however, the condition is that they come with sky-high interest rates. These loans are best avoided – improving your credit score could allow you to apply for a low-interest loan from a bank or specialist lender.
Sites like fixmy.credit can help you to repair a bad credit score with various credit-builder schemes. There may even be simple things you can do yourself such as putting yourself on the electoral register and getting rid of unused credit cards.
Offer a higher down payment on mortgages
When it comes to big loans like mortgages which require a down payment, the more money you can put down initially the better the deals you can get. In other words, don’t settle for a 5% down payment if you can save up for a 10% down payment – you could end up saving thousands in interest in the long run. The same rule applies to remortgaging – sites like remortgagequotesonline.com can help you to find cheap interest remortgage options.
Opt for short loans and avoid extending them
The shorter a period in which you can pay off a loan, the less interest you’ll pay in the long run. This does mean paying off the loan in larger instalments, so it’s important that you budget effectively so that you’re spending more than you can afford. Try to avoid extending loans if you can as this will raise the interest that you’re currently paying.
Don’t miss payments
Try to ensure that you’re making each loan repayment – missing a payment could increase the amount of interest that you’re paying dramatically. This can result in a vicious circle of high debt payments and not enough money to pay them. Set reminders on your phone before loans are set to go out of your account so that you’ve always got money to make these payments.
Use a broker to find specialist lenders
If you’re thinking of taking out a big loan like a mortgage, a business loan or a car loan, consider using a broker. These professionals may have access to low-interest loans that you can’t get on the high street. If you can’t afford to pay a broker for advice, there are many free loan advisors out there that can help you to find a suitable loan. Totallymoney.com is a site that you can use for free advice that could save you huge amounts in interest.