Life is one and must live with joy, which means that postponing important purchases until the end of your life is not worthwhile. If you are looking to take out a loan, use our simple and effective tips to lower your credit rate and make your dreams come true right now .
The first and most important principle is that the lower the risk of non-repayment of a bank’s cash, the easier it is to grant a loan, which means the more favorable conditions it can offer the borrower. To understand what this is about, it is sufficient to look at the experience of microfinance organizations – you get your money quickly and with a minimal package (that is, with the maximum risk to the bank), but credit will be expensive, frustratingly expensive. Otherwise – serious banks, which require different forms of guarantee for the issuance of funds to the borrower.
Another important principle: limiting the term of credit. How to reduce your loan rate if your bank is taking a serious risk when issuing a long term loan. Who knows what’s going to happen in a year, two, three ? Loss of capacity for work, dismissal and even the death of the payer are potential risks for the long term.
Therefore, the lower the loan repayment term, the lower the service interest you will pay. You will get the lowest interest if you take out a loan for up to 3 years. Understanding these two principles will allow us to move on to discussing how to reduce the credit rate on a case-by-case basis. Let’s look at a few tips.
1. Submit the maximum package of documents to the bank
What documents are involved? Of course, the ones that prove your ability to pay. As we said before, when issuing funds, the bank always takes risks. Risks are reduced if the guarantees for repayment of these funds are greater. How do I reduce my loan rate with this tip?
Carefully consider what pledge property you can offer – apartment, car, any other property. Analyze your income, find the most complete range of references that certify all of your income – including extra income. Collect all existing guarantees and go for the credit ready.
2. Attract guarantors
If you are looking for ways to reduce your credit rate, the ability to attract other people as guarantors of your credit is an important tool. The guarantor must document his agreement to repay the loan in the event of your insolvency. In fact, the guarantor is as responsible for the credit as the principal borrower. This is the only step, and many banks today limit the number of individuals who can act as guarantors. At the same time, if you manage to secure such support, you can expect a significant reduction in the interest rate.
3. Insure your life and health
To insure your life and health is to help the bank reduce the risk of temporary disability, illness, dismissal and even the death of the borrower. You may not have thought that much about how to lower your credit rate. But bank experts testify – this technique works.
4. Keep track of your credit history
Every person who ever becomes a bank customer and has taken out a loan goes to the Credit Information Bureau database. Before approving a loan, the bank applies to this Office for information about the loans issued, the outstanding cancellations, the loans that you have canceled and the outstanding maturities. How to reduce the loan rate in this case? Keeping track of your credit history, preventing overdue payments, disciplined repayment of loans granted to you. The better you do it, the more you can expect in the future for more credit and lower interest.
5. Use the bank’s complex services
Refinancing takes the last place in our advice on how to reduce your credit rate. Refinancing is a way to reduce the repayment of existing loans. You take one new loan to cover any existing credit. In addition, for a variety of reasons, a new credit may be issued at a much lower credit rate (for example, if you have used all our tips to obtain it). In the case of refinancing, it is very important to pay attention to the calculation of all fines for early repayment of old loans as well as to the schedule of new payments.
Once you swim in these waters (and you will need a lot of paperwork to refinance), do so for your own benefit. And the most basic and simplest advice on how to lower your loan rate: Do not take loans impulsively, analyze existing offers, and choose a credit organization wisely. Good luck!