In order to get a low-interest personal loan, applicants should research financial institutions that offer low-interest personal loans, compare loan offers and increase their credit rating as much as possible before applying. If the applicant is willing to put up his house, car or another type of collateral, he might be able to get a lower interest rate on a loan.
Since personal loans don't require collateral, the interest rate is often determined by the applicant's credit history. Applicants need to check their credit report for discrepancies and errors before applying for a personal loan.
Applicants should start their search at their current bank since the institution already has information about the applicant's spending and saving habits. Other places to apply include credit unions, peer-to-peer lending institutions and credit-building organizations. Since credit unions are not-for-profit institutions, they usually offer some of the lowest rates. Even though payday lenders offer quick and easy personal loans, they usually come with very high interest rates and fees.
While researching low-interest personal loan offers, it's best to compare them to see which offer has the lowest interest rate and the best terms. While one offer may have the lowest rate, fees and penalties could actually make the loan more expensive than an offer with a slightly higher rate.