Shopping around for the most attractive interest rates is the obvious move to make for most people looking for a loan. Lower interest rates mean you pay less every month, and you reduce your total debt amount faster.
To that end, we thought it would be useful to share with you some essential tips to follow when looking for the best interest rates for your loan.
1. Know what to shop for
Before you even go looking around for the bestinterest rates, take some time to really consider the kind of product that suits your situation best.
If the amount you need is only a little more than your current monthly salary, perhaps a credit card would work better. Or, if you’re looking for funds to start a business, a business loan would be more appropriate than a personal loan.
Both these options are better alternatives for their purpose because they would be cheaper, have features that suit their intention, and in many cases, would offer more attractive interest rates than personal loans.
2. Know where to shop
Calculating interest rates can be confusing and getting the right information from different lenders’ websites can be challenging. What you can do is use a comparison site.
Such sites often have a helpful loan calculator for you to find out exactly the kind of loan from which bank that can offer you the best deal for your needs.
3. Don’t apply for multiple loans
Each time you apply for a new loan or credit card, it counts as a hard inquiry in your credit report. If too many of these appear too close to each other in your credit report, it might indicate to lenders and banks that you are a high-risk customer, short on cash or getting ready to rack up a lot of debt. This, in turn, may affect the interest rate you’ll get when you apply for a loan.
4. Make sure your credit score is healthy
Speaking of credit reports, be sure to check your credit score via CTOS to ensure that your credit health is in good shape. If it does not look that good, lenders and banks might offer you a lower interest rate. Remember to pay all your credit obligations on time and avoid missing payments.
How to check your credit score?
An easy and convenient way to do this is to visit the CTOS website and sign up for a CTOS User ID online or via their mobile app. If you are not familiar with CTOS, it is a credit reporting agency that helps to compile and provide credit information in Malaysia.
It offers MyCTOS Score report – a comprehensive credit report that can help you understand your credit health better and help identify the areas you need to work on to improve your creditworthiness.
Your updated MyCTOS Score report will contain your personal details, CCRIS records, directorship and business interest details. The number of times you have been searched, as well as your CTOS Score – a credit score that ranges between 300 (lowest) and 850 (highest).