Obtaining low rate personal loans are one of the best available ways to meet all our long term or short term financial needs. Unlike the credit cards in personal loans fixes your loan amount and interest rates. Your personal loan interest rates will be based on your credit worthiness and the collateral value. Normally when you have a credit score above than 600 you can get any low rate personal loans easily.
Secured Personal Loans
When your credit score does not meet the requirements of the lender then you will be required to produce any collateral against your loan. These types of loans are known as collateralized loans. Here the risk of lender when offering the loan is minimal so they will even offer best personal loan rates when compare to the one which is a offered as unsecured loan with good credit. When the borrower defaults on the loan the lender can claim the collateral property to repay the loan amount. Since these types of loans are guaranteed one to the lender you can get even 5% reduced rates of personal loans.
When you obtain a loan for home or car you are buying an asset. But what when you use the borrowed money to some other purposes? These kinds of personal loans are known as Signature Loans. Here the lender has nothing to claim against the loan so lenders are tightening up in providing these kinds of loans. In order to obtain this loan you need to have a very good credit score (greater than 600) and stable and good income source. When you satisfy these criteria they will offer you the small personal loans at best possible rates. These signature loans are limited in size. The maximum limit is $15,000 as of now.
Home Equity Loan
To obtain a home equity loan the borrower can make use of the home equity as collateral. Home equity loans are low rate personal loans but the lender will consider providing you some high amounts on your home equity loan. Money which is borrowed from this loan is often used by many of the people for renovating, paying medical bills, debt consolidation and mainly for home repairs.
Debt Consolidation Loan
These loans are offered for the people who are struggling to manage their high interest rate credit card bills. When you approach the debt consolidation companies they will help to merge all of your debts into one single low rate manageable monthly payment. These loans are go by several different names. Qualifying for these best personal loan rates are quite difficult though. Two well known reasons for this scarcity are “People who sign up for these loan programs used to have a bad or poor credit score and Offering these loans to are less secure to any lender”.
As per the Financial Web, unsecured loans or personal loans offered to any borrower with the faith of saving the borrower’s promise to repay. Thus the loans interest rates used to be very high. If you can produce any collateral against your loan chances are there for you to secure the best personal loan rates and in most cases maintaining a good credit score will help you to get the small personal loans at low interest rates without requiring any collateral.