However, although there are plenty of low loan rates available, they can still vary significantly between providers.
We look at how to compare low rate personal loans and find the best way to source cheap loans with low interest rates.
Secured or unsecured loan?
Before you start searching for the best low rate loans, it's important to firstly consider what type of loan you want.
Secured borrowing normally offers the cheapest low rate loans but you will need to provide some collateral to be eligible. This usually comes in the form of equity within a property but it's important to fully understand what this involves. If you fall behind with your loan repayments, your home will be at risk. Therefore, whilst no-one can predict the future, if there's even the slightest chance that you might experience some financial volatility this might not be the right option for you to find a low rate loan.
Although as a general rule of thumb secured loans are cheaper than unsecured loans low interest rates can still be found on the latter. You won't need any assets in order to qualify and providing you have the means to repay it and have a good credit record, you should have little problem in securing one.
How to get the best low interest rate personal loans
When you are looking for personal loans low interest rates are likely to be one of the most important criteria. Therefore, when preparing to make your application it's worth considering exactly how much you want to borrow.
Whilst it's never a good idea to take out a loan for more than you need, if you are on the threshold between two interest rate brackets, it may be worth opting for the slightly higher amount.
This may seem like a bad idea, but if you are teetering on the brink of two brackets, you could find yourself qualifying for a loan with a low interest rate simply by opting for the higher of the two sums. The lowest loan interest rates are typically found for loans between £7,000 and £15,000. However, this doesn't mean you should borrow more money than you need just to get a more competitive APR!
Making sure you keep your credit record clean is another way of qualifying for a very low rate personal loan. Although many people know that having a less than perfect credit score can stop them being approved for a loan, not everyone realises that it can affect the amount you have to pay too.
Whatever type of borrowing you are looking for, including online loans low interest rates are usually reserved for applicants with the best credit history. If yours has a few black marks, you may find that you aren't offered the advertised rate, even if you are approved.
Finding the best loan deal
A low rate personal loans comparison is the quickest and simplest way to find a lender offering the best rates. However, before you do so it's worth understanding what you are qualifying for before proceeding.
Even if you have never had any credit problems, it's always a good idea to check your record, just in case information has been filed in error. Once you know your credit score, it is much better to find the lender most suited to your needs.
Some lenders tend to only offer competitive rates to customers who are unblemished credit histories whilst others are more lenient. There are others who specialise in offering bad credit loans for individuals who have had problems in the past. A comparison table will help you zone in to the lenders who are most likely to offer you the best deal for your circumstances, whatever they may be.