Unfortunately, the great deal that low interest unsecured loans offer is not available to anyone who wants one. Because of the great interest rate, these loans are limited only to those with good credit ratings. Therefore, if you have bad credit, it is best to look for secured (collateral-backed) loans that can offer the same low interest rates while giving lenders some additional protections.
Finding a Low Interest Loan
Those with good credit scores need not look far for small low interest loans. Generally both traditional banks and employment-sponsored credit unions offer these loans. A great start is talking to the loan officer at your personal bank. Sometimes, holding a checking or savings account can entitle you to a small bonus (up to.25%) on your interest rate.
However, traditional lenders are only one option when looking for low interest personal loans. Many lenders online can and do offer better deals than traditional banks because they are not as adversely affected by the current economic climate. In addition, using the internet to find small personal loans is a great way to compare rates among lenders to make sure that you are getting the best deal possible.
Uses for Small Low Interest Personal Loans
There are many reasons that taking a small unsecured personal loan can be the right choice for you. Many of them have interest rates at around 6% which is better than most major credit cards. Consider if you can use a small personal loan for any of the following:
Consolidating Debt – put all of your credit card balances into one easy, payment. This will put you on an honest track to being debt-free and will also aid you in budgeting for each month since all of your payments are condensed into one.
Big Purchases – since these are personal loans, they can be used for purchasing anything you may need for your life or home. This can include appliances, furniture or car repairs.
Start an Emergency Fund – if you anticipate upcoming need for money on the spot, creating an emergency fund that is already in place will help you weather the storm without making rash decisions.
Home Improvements – if you need to fix a roof, replace a boiler or want to add a central air conditioning unit, personal loans can help to get those projects done without risking your home in a secured loan.
Make Wise Decisions
At the end of the day it is important to weigh the pros and cons of all alternatives in terms of loan offers, rates, fees and ultimate use. Only you know what you can afford, and as long as it is in your budget, then an unsecured low interest personal loan can be a great tool to help you help yourself.