How to Find Lending Institutions with the Lowest Interest Rates

Lenders are in the business of making loans that they will receive back. Many financial institutions are willing to approve a loan which has a near perfect repayment probability for a much lower return. Lending institutions with the lowest interest rates are only going to approve loans to those who have good credit scores and are responsible with their finances.

Some of the institutions with the lowest rates are those which are small and local to the area. These smaller banks and credit unions do not have to worry about their profit margins or shareholders like a chain bank does. They can focus on providing loans to local residents who are responsible with their money, have a good credit score and do not have a large debt to income ratio.

When an individual steps into a bank to inquire about a loan, the bank will require several documents. These documents include personal identification, pay stubs from work and releases to allow the bank to pull a credit report. Some lenders are willing to sit down with an individual whenever they walk in and go over their eligibility while others may require a meeting to be scheduled. There are online services that can be used to determine which lenders are offering the best rates. Most of these services are free and allow you to enter your zip code to determine which of these lenders are available in your local area. Call other local lenders that you may know and see what rates they can offer you. Ask if the lender match the rates of other lenders or is even willing to beat them.

Lending Institutions and Your Credit History

Lending institutions with the lowest interest rates are going to focus quite heavily on the information on a credit report. Currently, you can obtain a free credit report from to get a list of credit inquiries, loans and mortgages in your credit history. But this is only one part of the credit information.

The lenders will also look at your credit scores. It is important you learn how to clean up your credit scores for a better loan. A credit score to qualify for the best rates needs to be over 700 and in most cases over 750. Customers who have anything below this may still qualify for a loan but will not be granted the best rate. Do you know your own credit score?

The other factor to get a low interest rate from a lending company is to have an existing relationship with the lender. This might give you an upper hand when you are attempting to apply for a loan. The more experience lenders have with you, the more willing they will be to lower their rates. This means you must be persistent on getting that loan. Make sure the lenders know your face, your situation and give them as much information as necessary that will improve your lending case.

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