Senin, 23 Januari 2012

Low Interest Personal Loans: Just Rewards for Financial Discipline

With the commitment a borrower shows in making monthly repayments on time every time, there needs to be a reward at the end of it all. After all, spending 4 or 5 years of ones life - perhaps even as many as 10 years - repaying a loan without so much as a hiccup, is no mean feat. For many, the fact that low interest personal loans are made available is reward enough.
This might sound fairly meagre, but the benefits that come with qualifying for loans available at low interest rates are arguably far greater than any cash prize or free vacation. The reason is that, with an excellent credit history, even large loans become very affordable to the borrower.
However, such a reward does not mean that approval on low interest loans are not simply handed out freely. As with every loan, there are strict criteria that must be met.
How It Works
The most important factor to consider when it comes to low interest personal loans is that there is some careful calculations behind the rate offered. It might seem the lender is making very little out of the deal, but statistics show that people who clear their debts more often than not sign up to another loan within a few months.
What this means is that, just like any other business owner, lenders know that their customers will come back to them. Once that 3-year $10,000 loan is cleared, the borrower is likely to seek a new loan of perhaps $15,000. So, making loans available at low interest rates actually generates business for the lender.
Also, since approval is only available to those who have very high credit scores, the risk of loans being defaulted on is practically nil. The practical guarantee of being repaid in full means the lender can afford to make a smaller amount on the loan.
Worth the Wait
Of course, if it takes 10 years for someone with a low credit rating to diligently repay their loan, only then to reap the chance at a low interest personal loan, there can be a question mark over just how worthwhile the whole deal is. Depending on the terms of the particular loan, it can be very good.
For example, a $10,000 loan over 3 years might mean monthly repayments of around $350 under normal circumstances, but similar sized loans available at low interest rates could mean as much as $50 less each month. If the loan is larger, the savings are obviously higher.
Still, approval on low interest loans is not given indiscriminately. So, in seeking a guaranteed approval on a $100,000 loan, disappointment is the likely outcome.
Finding the Best Deal
Of course, while rewards are likely to come from your existing lender, there is no reason why a search for better terms on a low interest personal loan cannot be carried out. The lending industry is so competitive, that a lender can be happy for an applicant with such excellent credit history to come along.
Taking to the internet is usually the best strategy, with a myriad of lenders making loans available at low interest rates to those most worthy. It is important to check these lenders out with the Better Business Bureau, but approval on low interest loans should be fast and convenient.
Of course, the tried and trusted cannot be overlooked, and a good deal on a low interest personal loan can be negotiated with a local lender if they know your history at first hand.

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