At Moolr, we are committed to finding loans at competitive rates for those that require them. But we are equally committed to not providing loans when we think they should not be supplied. And we always try to minimise the extra costs that inevitably come with a loan, even if it costs us money. So here is some advice on how to pay less interest on your loan.
How To Pay Less Interest On Your Loan – Short Repayment Terms
Forget the days of ghastly payday loans with eye watering interest rates. It is safe to take out loans with short repayment periods and not expect to pay a huge amount on top in interest charges. Truth is, you have to find the balance to get the best deals. Long term loans come with lower interest rates. However, because of the much longer repayment period, you will usually still end up paying more in interest charges than if you paid off the same loan over a shorter period despite the higher interest rates. So do the maths and find that balance to save yourself as much money as possible.
How To Pay Less Interest On Your Loan – Borrow Less!
Well that seems a bit obvious. But the fact is, many people borrow more than they absolutely need to. So they end up paying interest on all the additional funds they could have done without. Always borrow the absolute minimum amount you need for the situation you find yourself in. And not a penny more.
Use A Broker
Shop around is the general gist of this message, as we would never want to push our own service in a blog. But the plus of a broker site like Moolr is that the best lenders have been congregated together in one handy location so you can garner what is available to you. But if you want to shop around yourself then it helps to compare rival offers. Just do not use a scattergun approach and make loads of full applications. This sends a bad message to prospective lenders as it makes you appear desperate. Get no obligation quotes instead, as these do not leave markers on your credit report.
Improve Your Credit Score
If you have applied for loans and find the interest rates too high for your liking, then the best policy may be patience. Lenders tend to offer lower interest rates to those with higher credit scores. This is because such people are deemed to be more trustworthy. And thus more likely to make repayments on time and in full. Those with a mixed history, if lenders will accept them for credit, will attract higher rates. This is in a away an insurance for the lenders should there be problems with payments. So work on your credit score, pay existing debt on time and check your report for mistakes.
Check Terms And Conditions
When you take out a loan, you do not know what the future holds for you. There is a chance that during your repayment period your financial situation improves. Thus you may be in a position to pay off your loan early. Naturally this would mean you avoid future interest charges. However, it is vital you proceed with caution. When taking on credit, always check your terms and conditions fully before going ahead with a loan. Some lenders actually do not allow early repayment of loans, or charge fees for allowing you to do so. So only take this route if there is no penalty for doing so.
