Finding the Best Low Personal Loan Interest Rate

When it comes to making the best deal on a personal loan, one of the key factors will be the type of interest rate that comes with the terms of the loan itself. Here are some ideas on how to get a low personal loan interest rate that will be acceptable to both you and the entity that is extending the loan.

If you have a long-standing relationship with your bank, the chances that you can get a personal loan with a low interest rate are pretty good. This is especially true if you are working with a bank that is a regional one rather than one of the larger more impersonal conglomerates. When working with a financial institution that knows you both as a customer and as a local citizen, you may find that it takes less time to make the decision, as well as being able to obtain a very nice interest rate for your personal or signature loan.

For persons who are not lucky enough to have this sort of resource, you may have to seek your personal loan from private sources, such as your credit union or even friends or relatives who are in a position to help you out for a specified period of time. In the event that you receive your personal loan from a loved one, make sure that the terms of the agreement are spelled out clearly, and that each of you understand fully what is to transpire. Don't do everything with a handshake and a promise. Write out specifics of the loan agreement, including the below market rate of interest for the personal loan. Specify the frequency of payments and if possible the exact due dates for each payment and the amount including principle and interest. Both you and the lender will sleep much better at night if you treat this as a business transaction and not one friend helping out another.

When you determine the low personal loan interest rate for the agreement, remember that you want to be fair with your friend and at the same time obtain an interest rate that you can reasonably repay with the principle. Ideally, this will be roughly a half to three fourths of the best interest rate you would be able to command for a personal loan from the bank or credit union. Your willingness to repay a decent and still competitive rate will help to keep your personal loan on a business level and just might make it possible for you to do business with your friend again in years to come.

A low personal loan interest rate in many ways in simply indicating the level of trust that an entity or an individual has in your integrity and in your ability to repay the loan. Consider it a vote of confidence in your abilities and use each payment as an opportunity to reinforce that good will.