Low Interest Loans
One of the oldest personal finance maxims out there is “avoid debt.” One of the other oldest is “if you’re going to take on debt, make sure it’s with low interest loans.” There are plenty of loans out there that don’t require you to pay double digit interest; you just have to look in the right places and have the right qualifications.
I’ll say this though. I’m afraid there are way too many people out there who have foolishly convinced themselves that they’ll be able to get a low interest loan even if they have terrible credit, no income, and no credit history – all they have to do is keep looking at websites until they find the one that says “Yes – we’ll loan you lots of money even though it would be incredibly stupid for us to do so!”
Just kidding. Well, partly kidding. You just might as well come to terms with the fact that you’re only going to get a loan with low interest if you meet a few very strict criteria:
1. You have to have a couple of years of credit history where you’ve had the opportunity to use credit, and you’ve proved that you can use it wisely.
2. Your actual credit score is over 700.
3. You have an income that far exceeds your monthly expenses and your current monthly debt service.
This is one of the great ironies of debt – those people that would clearly need to borrow the money the least are the ones who can easily get low interest rate loans the most esaily. Those that need to borrow the money the most are the least likely to qualify for the attractive loans. I’m sure there’s some profound life lesson in there.
What kinds of low interest loans are there?
All kinds, actually. Well, almost all kinds. Obviously you have your low interest home loans, low interest auto loans, student loans, etc. One thing I don’t really believe exist are low interest personal loans, although there are plenty of people hoping and dreaming to find them.
The moral of the story is you need to prepare yourself to be the kind of borrower that would qualify for an attractive loan. You need to manage your money and your credit wisely. Borrow no more than you need, make your payments on time, and put the credit agencies on your side. Soon you’ll have lenders beating a path to your door.