Factors That Will Affect Your Interest Rate On A Personal Loan
A personal loan is a type of loan that you might need from time to time, and lenders issue these in exchange for no collateral. In other words, they are considered unsecured loans, and the interest rates on these loans vary. Here are some of the top factors that will affect the rate a lender offers you if you apply for a personal loan.
The Current Rate in the Market
Interest rates in the country vary all the time, and there are high points and low points. When interest rates are on the higher end of the spectrum, the rate you will get will be on the higher end. When rates are lower, you may get a lower rate.
Your Credit Score
A second factor that will affect your rate of interest is your credit score. Almost all loan rates are based on a person's credit, and lenders typically reward people who have excellent credit by offering them the lowest rates. People with lower credit ratings will end up paying higher rates, and this is because rates are highly based on a person's creditworthiness.
Your Income and Job
Your income and your job may impact the rate you get as well. If you have a high income coming in, you might qualify for a lower interest rate. Additionally, if you have a secure, good job, it may also help you qualify for a lower interest rate. If you have a job that does not appear safe or that does not yield a high income for you, your rate will likely be higher.
Your History With the Lender
Some lenders will also factor in a person's history with them. For example, if you borrowed money through a personal loan with the same lender in the past and paid it off as agreed, the lender might feel safer about loaning you money and may offer you a lower rate of interest based on your reputation with them.
On average, people typically pay an interest rate that is between 10% to 28%, but again this will vary. There may be times it is lower, but there may also be times when it is higher, and your lender may factor in things that are not listed here. If you are interested in getting a personal loan, you should contact a company like US Community Credit Union to find out how you can apply for a loan.